Sitting of 23 February 1953

Preamble
The House net at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  TEES CONSERVANCY SUPERANNUATION SCHEME &C. BILL (by Order)
  Read a Second time, and committed.
  BRITISH TRANSPORT COMMISSION BILL(by Order)
  Second Reading deferred till Monday, 9th March.
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF MATERIALS

    Public Trading
    Mr. Nabarroasked the Minister of Materials what materials and commodities are still the subject of State trading by his Department; what was the aggregate value of stocks held in respect of these materials and commodities at the latest convenient date; to what extent such stocks are progressively being liquidated in favour of private traders' stocks; whether a time-table has now been established to end State trading in each of these materials and commodities and return the business to private traders; and when he estimates that his Department will be extinguished.
    The Minister of Materials (Sir Arthur Salter): In addition to selling the output of some Government-owned plants, my Department now imports and distributes copper, aluminium, magnesium, tungsten ore, jute and imported jute goods, and sulphur and pyrites. A similar exclusive responsibility is undertaken for soft hemp. Other hemps have been in private hands for some time. The aggregate value of the public trading stocks of all these commodities held at 31st December last was approximately £80 million. While
    1698
    public trading continues to be necessary, a general liquidation of stocks cannot be pursued as an independent operation.
    It is the Government's policy to restore private trading as soon in each case as our balance of payments position and other important considerations permit. I hope that it will be possible to make further progress in this direction during the forthcoming financial year; but no precise time-table is possible.
    As regards the last part of the Question, my hon. Friend will be aware that the Ministry has other important duties outside the sphere of State trading.
    Mr. Nabarro: Is not this rather unsatisfactory? Has my right hon. Friend observed the curious habits of the Minister of Food, who is busily engaged in expurgating controls, eliminating his Department, and extinguishing himself, and would not my right hon. Friend have a little more enthusiasm towards these very worthy objectives?
    Sir A. Salter: Within the last few months, we have returned to private trading zinc, lead and timber, which account for a considerable proportion of the total. We are actively examining each particular case where public trading remains.
    Mr. Shinwell: Will the Minister please not take any notice of what his hon. Friends on the other side say? They are just talking a lot of nonsense.
    Mr. Nabarro: Is my right hon. Friend aware that the elimination of State trading was one of the principal objectives of this Conservative Government when it took office?

    Staff
    Mr. Nabarroasked the Minister of Materials the annual cost of his Department; how many officials it employs including ancillary staff; and to what extent this number will be reduced during the period to 30th June, 1953, in view of his proclaimed intention to end State trading in materials and commodities as rapidly as possible.
    Sir A. Salter: The administrative cost of the Ministry of Materials during the current financial year will be approximately £1,100,000. A provision of £1,220,250 was taken in the Estimates for

    1699
    the current financial year based on a total staff of 1,854 at the beginning of the year and an estimated total staff of about 1,420 at 31st March next. The actual reduction in staff has been greater than estimated with consequent savings on the Vote. The total staff on 30th June next will be about 1,050 and the further reductions will be reflected in the Estimates for the forthcoming year.
    Mr. Nabarro: Can my right hon. Friend give an assurance that there will be no repetition of the very sad loss, at the taxpayer's expense, which occurred in last year's Estimates amounting to no less than £44 million, and will he show a little more enthusiasm to get rid of these 1,050 officials?
    Sir A. Salter: As I explained at the time of the Supplementary Estimates, the losses to which my hon. Friend refers— his figure is not quite correct—were due to the fact that after the profits had been made when prices had been going up, there had been a season of falling prices.
    Mr. Beswick: Is the Minister aware that he could have saved the cost of his Department had he more energetically attempted the development of the material which is mentioned in Question No. 3? Will the right hon. Gentleman apply himself to his real task, which is the acquirement of new and substitute materials?
    Sir A. Salter: I shall be answering a Question about that new material in a moment.
    Sir H. Williams: Will my right hon. Friend give an assurance that at least one of the 1,050 will on the next occasion produce a document which is more intelligent than the one we discussed recently?

    Newsprint (Bagasse)
    Mr. Speirasked the Minister of Materials whether his attention has been drawn to the growing use in the United States of America of bagasse as a raw material for the production of newsprint and paper; and whether, in view of the fact that half the world's bagasse is produced within the British Commonwealth, he will take steps to save dollar expenditure on importing newsprint by encouraging the more extensive import of this new raw material.
    Sir A. Salter: I understand that experiments in the United States of America have established the technical possibility of successfully manufacturing newsprint, as well as other kinds of paper, from bagasse; but the possibility of producing them on a commercial scale has yet to be demonstrated. I am afraid, therefore, it is premature to consider saving expenditure of dollars on newsprint by using bagasse in this country for newsprint manufacture. I should add that I cannot accept my hon. Friend's statement as to the proportion of bagasse produced in the Commonwealth.
    Mr. Speir: Is it not a fact that machinery in the British paper mills can employ this material without alteration? Is it not also a fact that paper produced by this method in America is of excellent quality? In view of the shortage of world newsprint owing to increasing literacy in Asia and Africa, is it not important to press on with this new material?
    Sir A. Salter: Experiments are continuing, but at present undoubtedly the ordinary form of newsprint is cheaper than newsprint manufactured from bagasse.

    Purchases
    Lieut.-Colonel Liptonasked the Minister of Materials the total amount of the purchases he has made since 1st January, 1953, to date; and what materials were involved in those purchases.
    Sir A. Salter: A very large proportion of the purchases made by my Department are covered by standing contracts. The total payments for new supplies during the period mentioned, including supplies coming forward under these contracts, are of the order of £30 million. The materials involved are set out in the Ministry's printed Supplementary Estimates (Class IX, Vote 6, Subhead A). If, however, the hon. and gallant Member is referring to new purchase commitments made during the period the total would be about £6 million, of which about half was in respect of jute and jute goods.
    Lieut.-Colonel Lipton: Would the right hon. Gentleman confirm that these transactions could not have been properly, safely, nor efficiently left to private traders? Is he aware that if that confirmation is forthcoming some of us

    1701
    on this side of the House will support him against the raucous and doctrinaire critics on the other side of the House?
    Sir A. Salter: Every one of the cases of public trading where public trading remains has been examined and is being examined very carefully, and at the moment we think that the reasons for continuing public trading are temporarily decisive in favour of doing so.
    Colonel Gomme-Duncan: Are not the figures my right hon. Friend has just given a further indication that this Department could be made a sub-department of another Department with a very large saving to the taxpayer?
    Sir A. Salter: That is a very different question, and I am not at all convinced that there would be any saving.
    Mr. Shinwell: Is the right hon. Gentleman aware that we on this side of the House are very glad occasionally— although infrequently—to hear some commonsense from the Front Bench opposite?

    EUROPEAN COAL AND STEEL COMMUNITY
    Mr. H. Hyndasked the Secretary of State for Foreign Affairs whether he will now make a statement about British adherence to the Schuman Plan; and whether the British Mission to Luxembourg has yet reported on progress already achieved.
    The Joint Under-Secretary of State for Foreign Affairs (Mr. Anthony Nutting): Although the United Kingdom cannot become a member of the European Coal and Steel Community, Her Majesty's Government have made clear on a number of occasions their desire to establish the closest possible association with it. Practical co-operation with the High Authority has been achieved by the establishment of a United Kingdom Delegation at Luxembourg which reports regularly upon the progress of the Community.
    Mr. Hynd: Why does the hon. Gentleman say so definitely that the United Kingdom cannot become a member? Are the Government studying the remarkable progress which is being made in regard
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    to the Schuman Plan and taking precautions in case British industry finds itself up against a very serious competitor?
    Mr. Nutting: It really does not lie in the mouth of any hon. Member opposite to criticise Her Majesty's present Government for not taking any part in the Coal and Steel Community. It might also not have escaped the attention of the hon. Member that the Coal and Steel Community, as indeed the Defence Community, is intended to be the forerunner of a European Federation which organisation we could not join.
    Mr. Noel-Baker: Will the hon. Gentleman consider giving us a White Paper about the present development and work of the High Authority itself and about the practical relations of our delegation with that Authority?
    Mr. Nutting: I will certainly consider that. I do not know whether it would be too early to give very much real information to the House about the working of our relationship, but I will certainly consider that.
    Mr. Brooman-White: Is my hon. Friend aware that in the steel-producing areas there is widespread hope that practical working arrangements with the High Authority will be concluded as soon as possible and that they have considerable confidence in that particular Mission to achieve that?
    Mr. Nutting: There is already a practical working arrangement, but we should prefer to wait for a while to see how it develops before considering any further development towards linking up.

    GERMANY (HERR KRUPP)
    Mr. E Fletcherasked the Secretary of State for Foreign Affairs if he is now in a position to announce what arrangements have been made to prevent Herr Krupp from re-entering the coal, iron and steel industries.
    The Secretary of State for Foreign Affairs (Mr. Anthony Eden): I have, as yet, nothing to add to the supplementary answer given to the hon. Gentleman on 11th February.
    Mr. Fletcher: Is the Foreign Secretary aware that reports are constantly appearing in the Press—two in today's morning

    1703
    newspapers—purporting to give details of the terms which have been agreed to? If those terms are correct they will cause very great anxiety in this country, but, if one has to assume from the answer that the terms have not yet been agreed, may we have an assurance that the right hon. Gentleman will secure the maximum cooperation of America to prevent Herr Krupp from again attaining a dominant place in German industry?
    Mr. Eden: What I can tell the hon. Member is that negotiations are now making good progress and I hope to make a statement in the very near future. I cannot give him a date, but we will make a statement as soon as we can.
    Mr. Bellenger: May we take it that the Western German Government are giving Her Majesty's Government every cooperation in this matter?
    Mr. Eden: I think it would be fair to say: Yes, Sir, within the limits of their own statutory obligations.

  CHINA

    British Shipping (Interference)
    Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he will now give details of the compensation arrangements and the accompanying apologies from the Chinese Nationalist authorities in Formosa as a result of their interference with British shipping.
    Mr. Eden: I presume the right hon. and learned Gentleman is referring to the attack on the "Rosita." As I said on 16th February, the Nationalist authorities have accepted responsibility and Her Majesty's Consul at Tamsui has been instructed to claim compensation. He gave oral notification of the claim on 27th January and is awaiting certain supporting documents from the ship's owners in Hong Kong before submitting it formally. The tone of the Chinese Nationalists' reply was conciliatory and I am informed that those responsible are being tried by court-martial.
    Mr. Henderson: In view of the fact that this incident took place more than two months ago. could the right hon. Gentleman agree that the Chinese Nationalist authorities have been most dilatory in their handling of this case?
    1704
    Would he not also agree that it is their deliberate policy to attempt to disrupt all legitimate shipping with Chinese Communist ports and that so long as this policy remains their policy these incidents are likely to recur?
    Mr. Eden: I really do not think the right hon. and learned Member is being quite fair in this matter. I believe he was ill and put off his Question himself. We did receive this reply from the Chinese Nationalist authorities some time ago. We are now engaged in preparing the details of our claim which we will submit to them. I am bound to say that I wish in all cases where we have claims we could have such a response and know that those responsible were tried by courtmartial.
    Mr. Henderson: Will the right hon. Gentleman answer the second part of my supplementary question? Are these incidents not likely to recur so long as the Chinese Nationalist authorities disrupt all legitimate shipping with Chinese Communist ports?
    Mr. Eden: The House ought to bear in mind that we have only two claims— this claim and one other, which was also admitted, but has not been settled, although payment has been promised.
    Mr. Henderson: Forty cases.
    Mr. Eden: Only two claims.

    H.M. Chargé d'Affaires, Peking
    Mr. E. Johnsonasked the Secretary of State for Foreign Affairs whether Her Majesty's Chargé d'Affaires in Peking has yet been received by the Foreign Minister of the Chinese People's Government; and whether that Government is represented in the United Kingdom.
    Mr. Nutting: The answer to the first part of the Question is, "No, Sir." Her Majesty's Chargé d'Affaires has, however, had interviews with the Chinese Vice Minister for Foreign Affairs. The answer to the second part of the Question is, "No, Sir."

    Consulates
    Mr. E. Johnsonasked the Secretary of State for Foreign Affairs how many consulates Her Majesty's Government maintains on the mainland of China and on the island of Formosa, respectively.
    Mr. Nutting: Her Majesty's Government maintain a consular post at Shanghai on the mainland and at Tamsui on Formosa. There is also a consular section in Her Majesty's Embassy at Peking.
    Mr. Johnson: Would it be true to say that Her Majesty's representative in Formosa enjoys very reasonable facilities for looking after the interests of the British on that island?
    Mr. Nutting: I think that Her Majesty's consul at Formosa is both well treated by the provincial authorities to whom he is accredited and is discharging an important and useful function in that capacity.

    S.-E. ASIA (DEPUTY HIGH COMMISSIONER'S STATEMENT)
    Sir R. Aclandasked the Secretary of State for Foreign Affairs whether the statement by Sir John Sterndale Bennett, Deputy High Commissioner for South-East Asia, at the Economic Co-operation Asia and Far East Conference to the effect that there ought to be a reduction in development programmes, was made with his authority.
    Mr. Nutting: Sir John Sterndale Bennett was misreported. He emphasised the importance of development in South-East Asia, but pointed out that deficit financing might endanger development by causing inflation, and thus necessitate a reduction of some programmes.
    Sir R. Acland: Can the hon. Gentleman say that all the quotations from his speech, as reported in the Press, which indicated the damping down of development, the postponement of ail projects which would not lead to increased production of food within two years, and the need for financing what remains by reduction in the people's consumption, were all misreported and that he did not say anything to discourage development and economic expansion in South-East Asia?
    Mr. Nutting: If it would satisfy or comfort the hon. Baronet in any way, I should be glad to send a copy of the speech to him from which he will see that my answer is substantially correct.

  KOREA

    Armistice Negotiations
    Mr. Hector Hughesasked the Secretary of State for Foreign Affairs if he will make a statement on the present prospects of peace in Korea; and what advances towards peace have been made there recently.
    Mr. Eden: I regret that I have no progress to report since my statements of 21st and 28th January. The Chinese and North Koreans have made no move to accept any of the United Nations' proposals for an armistice. In the meanwhile, Her Majesty's Government welcome the initiative taken by General Mark Clark in his statement of 21st February in which he asked the Commander of the North Korean and Chinese Communist forces in Korea whether they are prepared to proceed with the repatriation of seriously sick and wounded prisoners of war. Her Majesty's Government would warmly welcome any such development.
    Mr. Hughes: Is it not a fact that the outstanding questions are mainly of a juridical and justiciable character, and, if that is so, why not refer them to some judicial tribunal to solve?
    Mr. Eden: The hon. and learned Gentleman will be aware that several proposals have been made to reach agreement on this difficult question of the prisoners of war, the most important being the Indian proposal, which received overwhelming support at the United Nations. I cannot believe that if the North Koreans and the Russians wanted an armistice they could not accept that proposal.

    Koje Island (Incident)
    Mr. S. O. Daviesasked the Secretary of State for Foreign Affairs to make a statement on the shooting of prisoners of war on Koje Island, South Korea, on Monday, 9th February, when one was killed and 38 wounded, 13 seriously.
    Mr. Eden: Yes, Sir. As is now usual in these incidents, the prisoners started a demonstration in deliberate defiance of orders from the camp authorities, and attacked their guards with stones. After three unsuccessful attempts to restore order by the use of what are officially termed "non-toxic irritants"—I understand this is a form of tear gas—United

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    Nations troops entered the compound, and, on orders from the Camp Commander, made use of tear gas and concussion grenades and opened fire with light weapons. Order was restored when the troops forced entry into the prisoners' huts. Casualties were one prisoner killed and 50 injured, of whom four have since died. There were no United Nations casualties. Subsequent inspection showed that the prisoners had made careful preparations for the incident, including the piling of stones inside the compound.
    Mr. Davies: Is not the right hon. Gentleman aware that, according to responsible American newspapers who had their representatives on the spot, the only disturbance, or the only crime, that was committed by those who were massacred in this particular massacre was that they sang some of their folk songs and their own national songs? Is not it time that the right hon. Gentleman should, at long last, protest against these recurring massacres of unarmed prisoners?
    Mr. Eden: I can only doubt that the hon. Gentleman's account of what happened is entirely accurate, because if one wants to sing folk songs one does not either have to pile up stones to do it or throw them at other people in the melee.
    Mr. S. Silverman: Would the right hon. Gentleman not agree that whether one piles up stones when considering the desirability of singing folk songs or not may perhaps depend on what happened on previous occasions when one wished to have a perfectly innocent demonstration? Can the right hon. Gentleman tell us what was the character of the demonstration on 9th February which the United States authorities thought it fair and legitimate to prevent, and can he further state whether we have yet had any information whatever about the incident that took place on 1st October last year?
    Mr. Eden: Yes, Sir. On the last part of the question, we have had a full account of the October incidents. I think that it has been made available in the Library. I have asked for a fuller report of this incident. Of course, it is not easy for anyone who is not present on these occasions to pass judgment, but it is fair to say that my impression of these incidents is that they are carefully prepared Communist demonstrations for a deliberate political purpose.

    BRITISH TROOPS, SUEZ CANAL ZONE
    Mr. Wyattasked the Secretary of State for Foreign Affairs whether he will make a statement on the negotiations with the Egyptian Government with regard to the position of British troops in the Suez Canal Zone.
    Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs, in view of the agreement reached with the Egyptian Government over the Sudan, what arrangements he proposes to make to expedite the withdrawal of British troops from Egypt.
    Mr. Eden: No negotiations have yet taken place between Her Majesty's Government and the present Egyptian Government on this subject. As has been previously stated, however, it is our policy to arrive at a general settlement of the whole question of defence by negotiation with the Egyptian Government.
    Mr. Wyatt: Can the right hon. Gentleman state the principles on which we are to proceed in this matter? For instance, can he clearly state that even though British troops may to a large extent, be evacuated from the Canal Zone the responsibility of Britain for the defence of the free world will demand a continuing British interest in the preservation and maintenance of the military base in the Canal Zone?
    Mr. Eden: However much I may agree with the last part of what the hon. Gentleman has said, I do not think I should be acting wisely by anticipating negotiations which have not yet opened.
    Captain Waterhouse: In view of the statement constantly being made by General Neguib, would my right hon. Friend reiterate the statement made on 15th October, 1951, by the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) in which he made it absolutely clear that there would be no question of evacuating Egypt without agreement? Will he, further, make it abundantly clear that that agreement will depend on the security of the Middle East and the safety of international communications generally?
    Mr. Eden: I think it is clear that from what I said that our object is to seek

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    agreement upon defence arrangements, in general, covering that area. I do not think that I have any reason to challenge the supplementary question of my right hon. and gallant Friend.
    Mr. Hughes: Will the Minister take into account that there are 80,000 British soldiers in that area, the great majority of whom are anxious to come home, and that the energies of these 80.000 people would be better devoted to building up industry in this country?
    Mr. Eden: However we may view this matter, I think the House would desire to reach agreement if we can, and I do not think it will help to reach agreement to anticipate the opening of negotiations by a series of questions which may make them rather more difficult.
    Mr. Shinwell: In these negotiations will the subject of the Middle East Defence Force be considered?
    Mr. Eden: I think that is covered by the answer I have given, but if the right hon. Gentleman wishes to have a detailed answer perhaps he would be good enough to put down a Question.

    EUROPEAN DEFENCE COMMUNITY
    Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he can now state the further proposals of the United Kingdom Government for a closer efficient working relationship between the forces of the United Kingdom and of the European Defence Community.
    Mr. Eden: The details of our proposals are under discussion with the six Governments concerned. They include suggestions for the provision of training facilities, advice on training matters and tactical demonstrations, the exchange of officers for command and staff service, joint training exercises, the interchange of air force squadrons and co-ordination of the systems of air defence.
    Mr. Henderson: In view of the fact that the Foreign Secretary is proceeding on Thursday to the United States and, presumably, this is the last occasion on which he will be present to answer Questions,—
    Mr. Eden: Until I come back.
    Mr. Henderson: —will he consider proposing to the United States Government that both Governments should jointly recommend to the North Atlantic Treaty Organisation Council that the N.A.T.O. Treaty should be made co-terminous with the projected E.D.C.?
    Mr. Eden: That is an interesting proposal which, from time to time, I have seen ventilated in the Press, but I do not think it is the same as the Question on the Order Paper.
    Mr. Shinwell: Now that the right hon. Gentleman and the Government have agreed to promote closer association with the European Defence Community, is it also intended that there shall be uniformity in the conditions of National Service, having regard to the shorter period of operation in the other countries?
    Mr. Eden: The right hon. Gentleman will know from his experience that it does not lie within our power to determine the length of national service in other countries.
    Mr. Henderson rose—
    Mr. Speaker: Order. We must get on.
    Mr. Wyattasked the Secretary of State for Foreign Affairs if he can now say what reply he has made to the French Government's proposals for a closer British association with the European Defence Community.
    Mr. Eden: No, Sir. The additional measures which we have in mind for establishing a close association with the European Defence Community will have to be discussed with the French Government and with the other Governments who signed the European Defence Community Treaty before any statement can be made.
    Mr. Wyatt: Why cannot we be told something about what is going on in this matter? Is it true, for example, that the French have asked us to extend our guarantee to E.D.C. from 20 years to 50 years? Is it true also that they have asked us to leave our Forces in Germany for so long as the European Defence Community wishes them to be there? Can we be told nothing of the negotiations?
    Mr. Eden: I can tell the hon. Gentleman that the reply to the first part of his

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    supplementary is, "No, Sir." We have not been asked to do that. He will understand that the general negotiations are not merely matters between us and the French Government. They concern the whole European Defence Community. I cannot make a statement except with their full knowledge and consent. An important meeting is taking place in Rome between the E.D.C. Powers, and nothing could be more unfortunate than that I should say anything which would make the matter more difficult.

  UNITED NATIONS

    Refugee Fund (Contributions)
    Mr. J. Hyndasked the Secretary of State for Foreign Affairs what amounts were contributed, respectively, by the United States of America, the United Kingdom and the Union of Soviet Socialist Republics, to the work of relief, rehabilitation and resettlement of refugees and displaced persons through the International Refugee Organisation; and what are the amounts they are now contributing to the work of the United Nations High Commissioner's Office for Refugees.
    Mr. Nutting: During the lifetime of the International Refugee Organisation the following contributions were made by the countries concerned: United Kingdom, 76 million dollars; United States, 237 million dollars. The U.S.S.R. was not a member of the International Refugee Organisation and did not therefore contribute. The United Kingdom contribution to the Refugee Emergency Fund of the United Nations High Commissioner for 1952 was £100,000. To date, no contributions have been made by the United States or U.S.S.R.

    Backward Areas Development (Contributions)
    Mr. J. Hyndasked the Secretary of State for Foreign Affairs what amounts are contributed, respectively, by the United States of America, the United Kingdom and the Union of Soviet Socialist Republics to 'the work of developing the world's backward areas through the food and agricultural, health and other organisations of the United Nations.
    Mr. Nutting: Since the reply is long and involves a number of figures, I will.
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    with permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    The United Nations and several Specialised Agencies undertake work to this end as part of their normal activities, financed from their regular budgets. It is impossible to identify the exact sums so spent. In addition, the Expanded Programme of Technical Assistance, administered by the United Nations and the Specialised Agencies, is devoted entirely to development work: it is financed by voluntary contributions. The relative contributions to all this work made by the United States, the United Kingdom and the U.S.S.R. are shown below for 1952:

    Organisation

    Total assessment in US $

    Percentages

    UN

    42,940,000

    36·90

    10·56

    11·49

    FAO

    5,225,000

    30·0

    14·37

    Nil

    WHO

    8,600,000

    33·33

    11·25

    Nil

    UNESCO

    8,561,100

    33·33

    11·59

    Nil

    ILO

    6,156,369

    25·0

    13·15

    Nil

    ICAO

    2,834,191

    24·97

    8·05

    Nil

    The International Bank for Reconstruction and Development is a Specialised Agency whose main function is to give capital aid for development. The United States have paid up 635 million dollars on account of their subscription to the Bank's capital stock, and have agreed to the release of the whole of this amount. The United Kingdom has paid up £93 million on account of her subscription (including a portion in gold or dollars); and in addition to certain small sums previously released the United Kingdom has, as my right hon. Friend the Chancellor of the Exchequer announced on 3rd February, agreed to release up to £60 million for Commonwealth Development over a period of years. Apart from the above subscriptions the Bank has borrowed 510 million dollars and £5 million in the capital markets of the United States and United Kingdom respectively. The U.S.S.R. is not a member of the Bank.
    As the hon Member is aware Her Majesty's Government have also undertaken large commitments in respect of development outside the sphere of the United Nations.

    Children's Emergency Fund (British Contribution)
    Mr. Hamiltonasked the Secretary of State for Foreign Affairs what contribution Her Majesty's Government is making to the United Nations International Children's Emergency Fund in the financial year 1953–54; and what is the policy of the Government with regard to the future of this fund.
    Mrs. Castleasked the Secretary of State for Foreign Affairs what financial contribution Her Majesty's Government is prepared to make during 1953 in order to enable the United Nations International Children's Emergency Fund to continue its work.
    Mr. Nutting: Her Majesty's Government propose to ask Parliament for £100,000 as their contribution for the coming financial year. As regards the future of this fund, the United Nations General Assembly is due to discuss this topic at its next session in September of this year. This discussion will be preceded by consultations between Governments and, in the meanwhile, I am not in a position to say what Her Majesty's Government's policy will be.
    Mr. Hamilton: While the House will welcome this restoration of the cut made last year, may I ask the Minister whether he does not agree that over the years our contributions to this fund have been comparatively small? Will he undertake to make representations to the Treasury on the extreme importance of our supporting actively and with adequate finance causes such as this? Does he realise that it would help enormously in the ideological struggle which is now going on?
    Mr. Nutting: I fully share the hon. Gentleman's desire to give the utmost help to this organisation, but I cannot accept his rather disparaging remarks about the contributions that have been made in the past. Up to the end of August, 1952, total contributions from this country, including private contributions, were in the neighbourhood of 8.800,000 dollars, making the United Kingdom the fourth largest contributor.
    Mrs. Castle: As the future of this fund is to be discussed at the Assembly with the idea of putting it on a permanent basis, would the hon. Gentleman consider the possibility of our also putting
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    our financial contribution on a rather more regular and assured basis—perhaps a five-year basis or something of that kind—because that helps the organisation' concerned to do much better planning?
    Mr. Nutting: I will certainly consider the suggestion, but the hon. Lady will realise that these matters do not lie entirely within the province of the Foreign Office.

    FALKLAND ISLANDS (DEPORTED ARGENTINIANS)
    Captain Pilkingtonasked the Secretary of State for Foreign Affairs whether he will make a statement concerning Argentine activities at Port Foster. South Shetlands.
    Mr. Eden: Yes, Sir. As the answer is rather long, I will, with permission, give it at the end of Questions.

    THE PHILIPPINES (BRITISH BONDHOLDERS)
    Mr. Teelingasked the Secretary of State for Foreign Affairs the present position concerning the official negotiations with the Philippine Government for the repayment of monies due to British holders of Manila Railway Bonds and other shares.
    Mr. Nutting: I am not aware of any official negotiations with the Philippine Government. Negotiations for payment of the money owed to the bondholders of the Manila Railroad Company is, I understand, being undertaken by the bondholders direct with the Company.
    Mr. Teeling: Why are not the British Government supporting our people in this matter? Is not my hon. Friend aware that the Philippine President and Government have stated that they are responsible in dealing with the matter at their end, and that on American questions the American Government take an active part in supporting their citizens? Why should not we support ours?
    Mr. Nutting: For the very simple reason that we have not been asked by the bondholders.
    Mr. Teeling: Could not my hon. Friend try to find out and do something about it?
    Mr. Nutting: It is for the bondholders to ask the Government if they wish our aid.

    ARGENTINA (BRITISH UTILITY COMPANIES)
    Mr. Teelingasked the Secretary of State for Foreign Affairs what is now the position concerning the official negotiations for compensating the British holders of shares in confiscated Argentine Utilities.
    Mr. Nutting: My hon. Friend is no doubt referring to the Joint Committee which the Argentine Government stated they intended to convene by the 31st January to consider the claims of certain British utility companies. The Committee has not yet been convened. Her Majesty's Embassy are continuing to press the matter with the Argentine Government.
    Mr. Teeling: Can my hon. Friend tell me why this is being done in the Argentine but not in the Philippines? Has not the same situation developed? Could not he let us know why the letter to the British Government which was sent at the time of the agreement has not been published when all other documents have? Exactly what is it proposed to do for our people?
    Mr. Nutting: The letter has not been published in full because this was a confidential exchange of letters with the Argentine Government. I have already given my hon. Friend and the House full information about all material and substantial points in the letter. The difference between this and the Philippine situation is that the Government were concerned in the negotiations with the Argentine Government of which this exchange of letters formed part. That is why the Government are engaged in this matter and will continue to press it.
    Mr. Teeling: Is not it true that the present situation as it has developed in the Argentine has resulted because of troubles in the past similar to those in the Philippines, and that it is only now that the British Government are taking up the
    1716
    question of our bondholders? Would not my hon. Friend try to do something for all bondholders abroad?

    ICELANDIC FISHERIES DISPUTE
    Mr. Hector Hughesasked the Secretary of State for Foreign Affairs to state in detail what proposals were contained in the British Government's Note of 21st January, 1953, to the Icelandic Government concerning the fisheries dispute between those two countries; what reply he has received; and if he will make a full statement on the present state of this dispute.
    Mr. Eden: A reply to our proposals was received from the Icelandic Government on 18th February and is under immediate consideration. I should prefer to reserve any detailed statement until I have had an opportunity to give the reply full study, but the House will be informed of the position with the least possible delay.
    Mr. Hughes: Is the right hon. Gentleman aware—of course, he is—that this has been dragging on for a very long time and that it would be very much in the interests of consumers of fish in this country, and others, to have it determined as quickly as possible? Will the right hon. Gentleman expedite his study of this abstruse document?
    Mr. Eden: The answer is, of course, that I am.
    Mr. Younger: Is the right hon. Gentleman aware that while the British trawler owners, and no doubt also the British fishermen and trawler officers, may be content to see this dispute drag on for some time, there are many other interests affected, and that, for instance, in my constituency, the losses in the town from one cause or another due to the dispute have been estimated at £500,000 since the ban was imposed? Will the right hon. Gentleman expedite the matter? In particular, may I ask him whether, unless he has taken some other action, he will bring the matter up on 4th March at the Overfishing Conference in conjunction with the French Government?
    Mr. Eden: I have had a reply from the Icelandic Government and I must give it consideration. On the last part of the

    1717
    question, the right hon. Gentleman will know that the Icelandic Government themselves resist discussion at this forum. I would rather consider what they propose before I say more.

    U.S.A. (BRITISH AIRCREW)
    Mr. Beswickasked the Secretary of State for Foreign Affairs what representations he has made about the political interrogation of British aircrew landing in the United States of America; and if he is satisfied that no difficulties will arise in the event of any crew member being found to hold un-American political opinion.
    Mr. Nutting: No representations have been made about aircrews who, I understand, have encountered no difficulties with the United States immigration authorities. It is already the established practice of the British Overseas Airways Corporation to ensure that their crews going to the United States are provided with passports and United States visas.
    Mr. Beswick: Is the Joint Under-Secretary aware that a British captain of an airline landing in the United States is liable to be asked to assure the immigration authorities that he is in full possession of his mental faculties, and that an air hostess is also liable, under the McCarran Act, to assure the interrogating officer on rather offensive questions about her moral conduct? Are we making any representations about these possibilities?
    Mr. Nutting: I do not agree with the hon. Gentleman that these hypotheses are likely to arise. As I have already indicated, the provisions of the McCarran Act which are offensive to the hon. Gentleman do not apply in the case of aircrews, because they are provided with passports and with visas before they leave this country.

    MARSHAL TITO (VISIT TO UNITED KINGDOM)
    Mr. Teelingasked the Secretary of State for Foreign Affairs if he will now state the capacity in which Marshal Tito will be visiting this country; and what programme for his visit has been arranged up to the present.
    Mr. Eden: Marshal Tito is President of the Federative People's Republic of Yugoslavia, as well as President of the Federal Executive Council. He is, therefore, both Head of the Yugoslav State and Head of the Government. Since it would be inappropriate for a State visit to take place before the Coronation, Marshal Tito's visit will be a private one. He comes, however, as the guest of Her Majesty's Government.
    The details of the programme for the Marshal's visit are still under discussion. The Marshal will, however, take luncheon with Her Majesty The Queen, and will be appropriately entertained by Her Majesty's Government. Time will also be reserved for discussions between the Marshal and his advisers and Her Majesty's Ministers.
    Mr. Teeling: Does that mean that, if there are any requests for statements to be put to the Marshal or any other messages to be given to him, there will be an opportunity for that to happen, either by means of a joint meeting of Parliament or in some other way?
    Mr. Eden: I do not think I could possibly give any undertaking of that kind. because I think it would be entirely unprecedented. I think my hon. Friend will have to leave it to Her Majesty's Ministers to express any views which they may feel it appropriate to express on the wide range of international topics which will. no doubt, be before us.
    Mr. Hastings: May I ask the right hon. Gentleman if he will take all appropriate steps to show honour to a representative of a country which lost more in fighting on our side in the late war than any other?

    SOMALIA (ITALIAN DEBTS)
    Mr. F. M. Bennettasked the Secretary of State for Foreign Affairs what payments were due from the Italian Government to Her Majesty's Government in respect of the Anglo-Italian Agreement of 20th March, 1950, about the transfer to Italy of the provisional administration of Somalia; and what sums have been received.
    Mr. Nutting: Two payments are due, one of a net sum of nearly £623,000 which represents (in the form of East

    1719
    African currency redeemed in Somalia) an appropriate return for the waiving of certain claims by Her Majesty's Government. The second is of some £158,000. the value of certain supplies and services which were provided to the Italian Armed Forces in connection with the hand-over, and for which receipts or acknowledgements are held. No payment has yet been received on either account.
    Mr. Bennett: Does not my hon. Friend agree that this is a rather unsatisfactory state of affairs, and may I ask him what steps the Government are taking or considering to extract these overdue debts from the Italian Government?
    Mr. Nutting: Representations have been made to the Italian Government at intervals since the ratification of the Trusteeship Agreement regarding Somaliland, the latest approach from us being on the 9th of February this year. Our concern over the delay has been urgently represented to the Italian Government.

  MINISTRY OF FOOD

    Food Hygiene
    Mr. F. Wileyasked the Minister of Food whether his attention has been drawn to the investigation recently held in North-East England about food hygiene, details of which have been sent to him by the hon. Member for Sunderland, North; and what further steps he proposes to take to ensure cleaner food handling.
    The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill): Yes, Sir. I welcome the newspaper articles to which the hon. Member refers. We hope to introduce legislation to amend the Food and Drugs Act as soon as Parliamentary time permits.
    Mr. Willey: Does the Parliamentary Secretary realise that the sooner that happens the better, because it will leave him less time for certain things which we dislike intensely?
    Dr. Hill: I share the hon. Gentleman's desire for such legislation, but for quite different reasons.
    Sir H. Williams: Is my hon. Friend aware that there was much less influenza in that part of the world than in any other, and will he therefore be careful ill any changes he makes?

    Meat Ration
    Mr. Lewisasked the Minister of Food if he is aware that for the years 1946–50 the approximate average consumption of ration quality carcase meat was 1,059,000 tons per year whereas for the years 1951–52 the average consumption had fallen to 882,000 tons per year; what was the reason for this short fall in consumption of 177,000 tons per year during 1951 and 1952; and what steps he is taking to enable domestic consumers to take up their full ration of carcase meat.
    Dr. Hill: Yes, Sir. The average for 1951–52 was low mainly because 1951 consumption was abnormally low. This was due in part to reduced imports and partly to a running down of stocks in 1950. These figures have no connection with the take-up of the carcase meat ration.
    Mr. Lewis: Surely, the Minister has left out the most important cause, which is this question of increased price? Is it not the fact that, due to the rapid rise in the cost of foodstuffs, people cannot afford to take up their meat ration? Is it not a fact that the Minister has dodged it, as he dodged it all the way through?
    Dr. Hill: What is a fact is that the take-up of rationed meat is almost 100 per cent.

    Imported Eggs
    Mr. Snowasked the Minister of Food (1) the estimated average cost of imported Danish eggs; and what proportions of such cost represent freight, insurance, subsidy and production; and
    (2) what proportions of his estimated average total cost of 3s. 6½d. per dozen imported eggs represent freight, insurance, subsidy and production costs.
    Dr. Hill: Of the 3s. 6½d., about 4.2 per cent. represents freight, 0.1 per cent. insurance, and 1.0 per cent. landing charges. I cannot estimate production costs in supplying countries, nor disclose details of particular egg contracts.
    Mr. Snow: Unless I misheard the hon. Gentleman, he did not mention the subsidy, which is part of my Question.
    Dr. Hill: There is a small subsidy on Danish eggs, not included in the cost of 3s. 6½d. per dozen.
    Mr. Snow: I asked Questions about the subsidy on imported eggs and on imported Danish eggs, and, since the hon. Gentleman has asked permission to answer the two Questions together, could he not give me an answer now?
    Dr. Hill: There is a small subsidy on all imported eggs, and there is a small subsidy on Danish imported eggs. Both figures relate to the current financial year.

    Tea
    Mr. F. Willeyasked the Minister of Food whether, in view of the fact that during November last, the latest month for which figures are published, the consumption of tea was less than for November, 1951, he will consider introducing price controls.
    Dr. Hill: No, Sir. Consumption figures shown in the Monthly Digest of Statistics relate to deliveries from stocks and should not be confused with retail purchases.
    Mr. Willey: Is this not largely the effect of the October price increase? Would the Minister not agree that it is not surprising, now that rationing has been abolished, that our consumption is substantially below pre-war consumption?
    Dr. Hill: To quote the month of November, to which the hon. Gentleman has referred, the average retail price of tea at the end of November was lower than on the day of de-control.
    Mr. Gower: Will the Minister not agree that the de-rationing of this commodity has been a complete and remarkable success?
    Mr. S. Silverman: In view of the fact that the House apparently has to understand by the Minister's recent reply that the consumption of food has no relation whatever to its price, will he tell us what has now happened to the price mechanism of which his party was once so fond?
    Dr. Hill: I was asked about the price of tea, and I have replied on the price of tea. The fact is that, two months after de-control, the price was lower than on the day of de-control.
    Mr. Willey: Is the hon. Gentleman aware that the Minister of Labour, in the
    1722
    Cost of Living Index, states that the cost of 21 brands of tea has gone up by 16 per cent.?
    Dr. Hill: My right hon. Friend stated the figures as between January, 1953, and January, 1952, but, as the hon. Gentleman knows, the subsidy on tea of 8d. per lb. was removed in June last year.
    Mr. Willey: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

    Milk
    Mr. F. Willeyasked the Minister of Food whether as the trend towards increased fresh milk consumption has now been reversed and as less fresh milk was consumed in 1952 than in 1951 and 1950, he will now reduce the price of milk to promote greater consumption.
    Dr. Hill: No, Sir.
    Mr. Willey: Could the hon. Gentleman say why he regards as satisfactory the consumption of milk, since it has now been reduced below the consumption of the past two years, in view of the fact that his right hon. Friend the Chancellor of the Exchequer, when in Opposition, said that he regarded milk consumption as the cardinal point of our food policy?
    Dr. Hill: The fall in the consumption of liquid milk in the country last year, as compared with the year before, was 1.6 per cent., and all such milk found its way into manufacture and thus to consumption. My right hon. and gallant Friend is not prepared to increase the subsidy on milk, which already stands at approximately £90 million.

    Domestic Pig-keeping (Relaxation of Controls)
    Mr. Nabarroasked the Minister of Food whether he will now relax and simplify the regulations governing rearing, fattening and slaughter of backyard pigs for owner consumption.
    Dr. Hill: I am glad to say that we can now simplify the scheme. From 1st March, registration will no longer be required, and a licence to slaughter will be issued on a simple declaration that the pig has been kept under the appropriate conditions for two months.
    Mr. Nabarro: Is my hon. Friend aware that large numbers of pigs and sows, as well as their owners, will welcome this statement, and, in view of the very important appeal made by my right hon. Friend the Prime Minister at the National Farmers' Union dinner last week to wring every additional ton of food from our soil, will my hon. Friend make haste to remove the remainder of these controls at the earliest possible moment?

    Cream
    Mr. Crouchasked the Minister of Food the date on which the sale and manufacture of cream will be permitted.
    Dr. Hill: My right hon. and gallant Friend hopes to make an announcement on Wednesday next.

    Cold Storage
    Mr. Hurdasked the Minister of Food if he will arrange for the Inter-Departmental Committee, which is to consider the siting and design of slaughterhouses, to take into account the desirability of providing cold storage for some of the heavy supplies of home-killed meat at the end of the grazing season.
    Dr. Hill: Experiments in the freezing of home-killed meat are continuing, coupled with investigation into the nature and extent of the facilities required in the special conditions of this country. Such technical problems which have first to be solved cannot appropriately be considered by the Inter-Departmental Committee.
    Mr. Hurd: While the problem of cold storage may not be an appropriate one for this Committee, will the Minister see that a proper inquiry is made into the economy of cold storing some of our home killed meat in view of the fact that we have today very heavy peaks and troughs of supply?
    Dr. Hill: Yes, Sir.

    Sausages (De-control)
    Mr. Webbasked the Minister of Food (1) whether, following his decision to end the price control of sausages, he will discontinue the payment of the subsidy in respect of meat supplied to butchers for manufacturing;
    (2) if, in the light of his decision to free sausages from price control, he will alter the agreed estimated annual income
    1724
    of butchers; what estimate he has formed of the adjustments which must be made to their rebates or surcharges; and at what date these consequential adjustments will begin to operate.
    Dr. Hill: The butchers will not benefit by the subsidy on meat used in sausages. The rebates or surcharges on butchers' wholesale purchase of meat will be adjusted in the light of the periodical costings investigations. Butchers' profits from manufacturing sausages are taken into account in these investigations. There is no subsidy on manufacturing meat supplied to manufacturers.
    Mr. Webb: That seems to be a rather evasive reply. Will the Parliamentary Secretary say on what estimate it is now proposed to withdraw the supplies of manufactured meat which are subject to subsidy?
    Dr. Hill: Today, as in the time of the right hon. Gentleman, there are periodical costings investigations which cover the whole of the butchers' income from all sources including, for example, sausages. Such an investigation will take place, and if it reveals recoupment above the fixed level a corresponding change will be made in the rebate.
    Mr. Webb: Does that mean that the price of the sausage will be increased to the consumer and that the butcher will still get subsidies from the Exchequer?
    Dr. Hill: The price of the sausage will be determined by competition.

    DESERTERS (CORONATION AMNESTY)
    Sir T. Mooreasked the Prime Minister whether he will recommend a general amnesty to war-time deserters in connection with the Coronation celebrations.
    Lieut.-Colonel Liptonasked the Prime Minister whether he will now reconsider the question of an amnesty for deserters.
    The Prime Minister (Mr. Winston Churchill): Her Majesty's Government have decided that, in the circumstances referred to by the hon. and gallant Member for Ayr and as a special measure which will not be regarded as a precedent for the future, there will be no further

    1725
    prosecutions of members of the Armed Forces who deserted from the Services between 3rd September, 1939, and 15th August, 1945. Men who wish to take advantage of the amnesty will be required to report themselves in writing to a Service authority. They will then receive a protection certificate and will be transferred to the appropriate Reserve to which men were transferred on demobilisation. Men who claim the benefit of the amnesty will not be prosecuted for certain offences consequential upon desertion, such as subsequent fraudulent enlistment, or the possession of identity documents in a false name, but the amnesty will not cover other offences against the criminal law.
    Full details will be announced in due course of the steps which men will be required to take and of the consequential measures which will be applied to men who have been convicted of desertion and are still serving, but any men who are awaiting trial or serving sentences for desertion during the 1939–45 war will be released from custody.
    Sir T. Moore: Does my right hon. Friend appreciate that though this generous decision will, I suppose, be welcomed with mixed feelings throughout the country, it will, at the same time, restore thousands of men once again to family and community life and thereby, perhaps, give them an opportunity to justify this clemency?
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that while his statement today—which is much more satisfactory than the answer he gave me on 29th January, 1952—will require a little study, it will be appreciated by all those who have long felt that this eight-year old man hunt should have come to an end long since?
    Mr. Langford-Holt: Can my right hon. Friend say to how many men it is estimated that this amnesty will apply? His hon. Friend the Under-Secretary of State for War stated the other day that there were 10,000 deserters. Is it a fact that the numbers involved under this proposed act of clemency will be in the neighbourhood of only 2,000 to 3,000?
    The Prime Minister: I should like notice of questions of detail.

  ROADS

    Accidents
    Mr. Crouchasked the Minister of Transport the number of road accidents in which no mechanical vehicle was involved, for the years 1949, 1950 and 1951, respectively; and what was the corresponding figure for 1938.
    The Parliamentary Secretary to the Ministry of Transport (Mr. Gurney Braithwaite): I regret that statistics are not available to provide a complete answer. Accidents involving pedal cycles but no other vehicle totalled 17,276 in 1949 and 17,207 in 1951; I cannot give similar figures for 1938. In addition, there were some other accidents not involving mechanically propelled vehicles which have not been separately analysed, for example those involving horses and horse-drawn vehicles, but these were relatively few.
    Mr. Crouch: In view of the fact that in 1938 figures were available for accidents involving non-mechanically propelled vehicles—I believe about 10 per cent. of the accidents were caused by such vehicles—and in view of the increased number of accidents on the road, could my hon. Friend get these figures made more readily available?
    Mr. Braithwaite: The statistics for 1938 were not analysed in sufficient detail to enable the information requested for that year to be given.
    Mr. Bowles: Will the hon. Gentleman consider the question of compulsory third-party insurance for non-mechanically propelled vehicles?
    Mr. Braithwaite: I should like to see that question on the Order Paper.

    Crofter Counties Scheme
    Mr. John MacLeodasked the Minister of Transport to give a list of the road work being carried on at the present time under the Crofter Counties Scheme.
    Mr. Braithwaite: The following works are in progress: The reconstruction of the bridges at Strathan, Strathkanaird and Drumrunie on the Ullapool-Drumrunie Road; the improvement of about five

    1727
    miles of the Tarbert-Rodel Road, north of Rodel; and the improvement of the Portree-Staffin road.
    Mr. MacLeod: Could not the Minister see that this scheme was restarted? It was a completely false economy to cut this Crofter Counties Scheme, and the Government are ill-advised to follow the misapplied cuts that were made by the previous administration.
    Mr. Braithwaite: The works included in my reply represent a total cost of £121,886. About 50 per cent. of this scheme has been completed, and to carry out the remainder would cost between £8 million and £9 million, for which funds are not at present available.
    Sir D. Robertson: Does the Minister realise that skilled road men have been paid off in the Highland counties in the last few weeks while essential repairs to dangerous roads remain undone?
    Mr. Braithwaite: I will certainly take note of what the hon. Gentleman says.

    RAILWAY WORKERS (ACCIDENTS)
    Mr. Beswickasked the Minister of Transport how many workmen employed by the British Transport Commission have been killed within the most recent ascertainable 12 months whilst working on the permanent way; and what additional steps have been taken to reduce the number of these accidents.
    Mr. Braithwaite: During the 12 months to 31st December, 1951, my right hon. Friend has received reports of 46 fatalities to railway servants who were struck by engines or trains while working on the permanent way, compared with the average of 59 for the five years 1946–50. The final figure for 1952 is not yet available, but it will be about 60. The majority of these regrettable accidents are caused by want of individual care and disregard of simple safety rules, and prevention is largely a matter of discipline. Inquiries are held by the Railway Employment
    1728
    Inspectors into all the fatalities and injuries reported, and their recommendations invariably receive the close attention of the railway authorities. Educative measures include the wide circulation of the reports among the staff.
    Mr. Beswick: Would not the Minister agree that to have 60 people killed like this in one year is a deplorably high figure? Is he aware that a number of people think that the British Transport Commission are rather complacent about this? Would he see whether anything more can be done to provide distinctive clothing or colouring to men working on the permanent ways so that drivers may have a better chance of picking them out?
    Mr. Braithwaite: I will pass that suggestion on to the Commission.
    Mr. Popplewell: Would the hon. Gentleman suggest to the Railway Executive that instead of its being the responsibility of the ganger to appoint a look-out man from among those working on the track it should be the responsibility of the management to provide a look-out man to give protection to these men on every occasion?
    Mr. Braithwaite: As the hon. Gentleman knows, that suggestion has been considered time after time over a considerable number of years, and the general feeling is that if a look-out man were on duty as a matter of routine he would be less alert than if he were appointed to guard against a particular danger. It is important that those who work on the lines should also remember their individual responsibility for looking out for danger.
    Mr. Popplewell: Would the hon. Gentleman have inquiries made to find out how many men were killed on occasions when there was a look-out and how many when there was not a look-out? Is he aware that if he does he will prove that his argument is wrong?
    Mr. Braithwaite: Perhaps the hon. Member will put that question down.

FALKLAND ISLANDS (DEPORTED ARGENTINIANS)
Mr. Eden: I will, with permisison, now answer Question No. 22.
At the beginning of this month Her Majesty's Government were informed that Argentina and Chile had established naval parties on the airstrip adjoining the British base at Port Foster, Deception Island, which is British territory, and that permanent buildings had been erected. These encroachments represented not merely an infringement of our sovereignty on the Island, but a nuisance and an obstruction to those who were maintaining our base. Instructions were accordingly given to the Acting Governor of the Falkland Islands to dismantle the buildings which had been erected and to arrest and deport under the Falkland Islands Aliens Ordinance any occupants found in them.
These instructions were carried out on the 15th February by the British Magistrate assisted by constables of the Falklands Islands Police. Royal Marines from Her Majesty's Frigate "Snipe" were available if needed in support of the civil power. Two occupants of the Argentine hut were arrested, without resistance, and the Argentine and Chilean huts were dismantled. The Chilean hut was unoccupied. The two arrested men were handed over at South Georgia on 18th February to the master of an Argentine vessel bound for Buenos Aires.
Her Majesty's Ambassadors at Buenos Aires and Santiago presented Notes on 16th February informing the two Governments of the action we have action taken and protesting against the infringement of our sovereignty by the Argentine and Chilean parties. Replies were received on 20th February asserting the Argentine and Chilean claims to the territory, protesting against our action, and calling upon us to restore the dismantled buildings and return the arrested men.
In taking the steps I have described Her Majesty's Government have been concerned to dispel any doubt about their attitude to encroachments of this type on
1730
British territory. At the same time they have repeated the offer made to both countries by the late Government to refer the conflicting claims to territory in the Antarctic to the International Court of Justice. I am sorry to say that both countries, in their Notes, have seen fit once more to reject this offer.
Captain Pilkington: Is my right hon. Friend aware that there will be widespread approval of the action which has been taken and that this action shows to these two Governments that it is high time to stop this childish trespassing on other people's territory?
Mr. A. Henderson: Can the right hon. Gentleman say whether, apart from rejecting the offer of the British Government to refer this matter to the International Court, either of the Governments concerned has made any alternative suggestion for obtaining a peaceful solution?
Mr. Eden: There is nothing appertaining to a peaceful solution. I think that they have suggested reference to another authority, which in our view would not be covered by this matter.
Brigadier Prior-Palmer: Would my right hon. Friend say whether this action in any way constitutes a breach of the Tripartite Naval Declaration covering the movement of ships south of the 60th latitude?
Mr. Eden: No, we have not in any way infringed the arrangements under the Tripartite Naval Declaration. We adhere to those, and the presence of a British frigate South of that latitude is quite customary during the Antarctic summer. I ought to add, to make the position quite plain, that these men were expelled not as invaders but as illegal immigrants. They were dealt with under the civil law of the Dependencies themselves.
Sir Edward Keeling: Can my right hon. Friend say whether the Argentine and Chile are rival claimants, or did they intend to go shares?
Mr. Eden: My hon. Friend must address that question to the Governments concerned.

FLOOD RELIEF (U.S.S.R. GIFT)
Mr. C. Davies(by Private Notice) asked the Prime Minister whether his attention has been drawn to the generous gift of money for the Flood Relief Fund from the people of Russia and what steps he is taking to express to them the thanks of the British people?
The Prime Minister: I asked Monsieur Gromyko, the Soviet Ambassador, to call upon me so that I might express personally my thanks for this act of kindness, which is warmly appreciated by the British nation. Accordingly he visited me at 10, Downing Street this morning for the purpose. He undertook to convey my thanks and those of Her Majesty's Government to all concerned.

ORDERS OF THE DAY

  IRON AND STEEL BILL
  Considered in Committee. [Progress. 18th February.]
  [Sir CHARLES MACANDREW in the Chair.]

  IRON AND STEEL BILL

    Clause 16.—(DUTY OF IRON AND STEEL HOLDING AND REALISATION AGENCY TO RETURN IRON AND STEEL UNDERTAKINGS TO PRIVATE OWNERSHIP.)
    Amendment proposed: In page 13, line 30, at end insert:
    "and
    (b) in such cases and to such extent as the Treasury may determine, shall make provision for securing that persons who immediately before their appointment as members of the Agency had pension rights by virtue of a pension scheme applicable to their office or employment, continue to enjoy pension rights not exceeding in value those which they would have enjoyed if they had remained in the said office or employment during the period of their service as members of the Agency:"—[Mr. BoydCarpenter.]
    Question again proposed, "That those words be there inserted."
    3.38 p.m.
    Mr. G. R. Mitchison: I have meditated upon this matter and I am somewhat less puzzled than I was on Wednesday.
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. G. R. Strauss: We oppose this Clause, which is the kernel of the Bill, the purpose of which is to set up an Agency whose duty it will be to sell the publicly-owned steel industry to private shareholders.
    I do not propose to argue the case against that de-nationalisation on this Clause because the principle has been contested already on Second Reading and we have to accept the fact that Parliament has agreed to sell the iron and steel industry, which is now under public ownership, to private owners. My purpose in rising to oppose this Clause is not so much to say that we object to it in principle, but to point out the clumsy way in which the Government are proposing to carry out their purpose. We maintain

    1733
    that if units of this industry, whether companies as a whole or assets now belonging to the Corporation, are to be sold to private owners it should not be by setting up an independent and separate body called the Holdings and Realisation Agency under another Minister, but by a body which is already existent, either the Board or, as we would have preferred it, the Corporation, allowing the Corporation to remain in existence until their duty had been done in this respect.
    But here it is suggested that a new organisation should be set up under the control of a Minister who has no responsibility whatsoever for the welfare of this industry, and, consequently, we get a fantastic diffusion of authority and responsibility over the industry. It will be the duty of these people who form the Agency—chosen, no doubt, because of their knowledge of finance, city ways and the promotion of private companies —not only to regroup the companies where necessary and to bargain with individuals or groups or insurance companies or the old owners of the companies on financial matters, but also to promote the efficient direction of their subsidiaries —the companies under their control. We believe that those subsidiaries are likely to form the major part of the units in the iron and steel industry.
    Here we get a body to be set up not only under the Minister of Supply, who has some knowledge of the iron and steel industry, but also under the Chancellor -—a body consisting of people with knowledge of finance, whose duty will be to promote the efficiency of a huge section of the iron and steel industry. We do not believe that it is possible that people chosen for the main purpose of selling these companies at the best possible price will be properly equipped, if equipped at all, to promote the efficiency of such a complicated industry as the iron and steel industry.
    Be it noted that the duty given to the Agency
    "to promote the efficient direction of their subsidiaries"
    is almost the same instruction which is given to the Board in respect of the industry as a whole. There is, therefore, bound to be here, to put it at its lowest, a substantial overlapping of authority and responsibility, and we think that that is a most undesirable thing to happen.
    1734
    The splitting of responsibility and authority goes very much further than that as a result of establishing the proposed Agency. It splits the responsibility in the industry not just into two—the Board and the Agency, as I have already mentioned—but, over a whole range of important matters, it splits the responsibility in the industry into six.
    Under the Nationalisation Act the responsibility for the welfare of the industry was divided into two; I think that was reasonable, and it is common in ordinary industrial practice. It was divided between the Board of the companies concerned, who had responsibility for the welfare of their workers and the efficient running of the works, and the Corporation which was the holding company and which had a broad responsibility for the efficiency of the whole industry—for planning and things of that sort. That responsibility, as I say, was divided into two, with a reserve responsibility of authority in the Minister who might come in and give a general direction to the industry if he wanted to do so.
    But consider what happens under this new set-up. Take one example, of which I could quote many. A certain company believes that a development scheme is desirable. It believes that it would be in the interests of the workers, the shareholders, potential shareholders and the company as a whole to undertake a substantial development scheme. First of all, the board of the company have to consider the matter and come to certain decisions. They decide that they ought to proceed with a development scheme. This will inevitably go for vetting and confirmation to the Iron and Steel Federation at Steel House, to see whether, under the authority of the planning body there, this proposal fits in or not.
    I do not think that anybody will deny that under the new set-up envisaged by the Bill the authority and the powers of Steel House will be substantial and very much enhanced. Therefore, Steel House will not be able to avoid some responsibility in either approving or of disapproving the scheme. Those are two authorities who will have a say in the matter. Then it will go to the Board—that is the third authority— and they will have to consider the proposition. After considera-

    1735
    tion, the Board may say, "No." That is not the end of it, however.
    The company can then appeal to the Minister of Supply who will have responsibility. Suppose he says, "Yes, I think this is a development scheme which I ought to endorse." That is No. 4. But then if this company is still a subsidiary of the Agency, as it very likely will be, and as we believe most of them will be for a long time, the Agency may say, "It does not fit in at all with our plans for selling and with our re-grouping proposals. We do not think that this development should be put into operation. It will interfere with our main duty of selling at the best price all the subsidiaries that we own, and it does not fit in with our co-ordination or regrouping arrangements." That is No. 5.
    Finally, I suppose, the Chancellor will come into it, because he can give general directions to the Agency over which he has general authority; the authority of the Chancellor will be invoked. There are, therefore, six different bodies which will have substantial responsibility for deciding an important issue of this sort.
    3.45 p.m.
    I quoted a development scheme because I thought it was important, but I can envisage all sorts of other situations in which up to six people will have a say in the matter. In short, that responsibility for coming to major decisions will be diffused over a large number of bodies and individuals. If there is criticism at the time about delay in coming to a decision, or if there is criticism afterwards on the grounds that the decision was wrong, everybody will blame everybody else.
    Mr. Raymond Gower: Would the right hon. Gentleman agree that under any system while a firm or unit is owned by the State, the Chancellor would have to be consulted if development were envisaged?
    Mr. Strauss: I am not sure the Chancellor need he involved if development were envisaged. The Chancellor does not come in at the moment under the nationalisation set-up. It is a matter for the Corporation to settle and, therefore, the Chancellor does not come into it at all. I do not think there is anything in the hon. Gentleman's point.
    1736
    We say that the Government, in introducing this Agency under the authority of the Chancellor, are responsible for an exceedingly messy set-up which will lead to bad consequences; organisationally it offends against every canon of good administrative practice. We object to it on those technical grounds, quite apart from the general reason that we do not want any organisation to be set up to sell this property at all. We say that this structure is bound to lead to confusion and to a large measure of irresponsibility amongst the various bodies concerned, because no one, with the possible exception of the Chancellor, would be finally responsible.
    Another reason why we object to this Clause is that we think it is wholly wrong that decisions about selling these immense properties of very great value should be taken by the Agency—with or without Treasury approval—without any Parliamentary authority or public knowledge of what is happening until many months —we do not know how long—after the transaction has taken place. We say that the sale of these iron and steel units cannot be compared with the ordinary sale of property held by a Government Department. It cannot in any way be compared to the sale by the Ministry of Supply of the substantial war surplus material which they owned and which they have disposed of exceedingly well— if I may say so with all due diffidence— to a large number of buyers over the last five or six years.
    There is a very real difference between these two types of sale. First, there is a difference in the size of the units. When the Ministry of Supply were selling war stock of various sorts they never had sales of any one particular item worth millions of pounds—certainly not worth tens of millions of pounds. Some of the big iron and steel units are worth tens of millions of pounds. The size of the unit itself creates a difference of principle when we are considering this problem. Whereas it is quite right for a Government Department to sell goods worth a comparatively small sum of money—such as £100,000—according to normal commercial practice, and it would be perfectly correct to trust them to do so, when it comes to selling public property in units of £5 million or £10 million we say that the difference is such that Parliament should be informed before

    1737
    the bargain is made, because the amount of public money involved is so substantial.
    When a Government Department are selling surplus property they nearly always have a number of buyers bidding against each other, and the responsible civil servants exercise commercial intelligence and ask for tenders, or whatever is the system, and, finally, sell the property to the highest bidder. But that is not to happen when the large iron and steel units are sold off. Does anybody suggest that a large number of people will be bidding against each other for Margam or Stewarts & Lloyds, or any of those units which are worth millions and millions of pounds? It will not happen in that way.
    A group of people will get together— possibly the former owners and insurance companies or other groups—and they will say to the Agency, "We are prepared to buy back this property on such and such terms." In most cases, certainly where very valuable property is concerned, there will be no rival bidding. I do not know whether anybody thinks there will be. In fact, it is likely that there will be only one buyer in the market and that buyer will probably be associated with the old owners.
    For that reason the set-up will be a quite different one; the market will not be tested at all. When the Agency is selling these properties they will not be accepting the highest of a number of bids and saying, "This is what rival groups of people have offered." There will be only one buyer in the market, and the Agency will have to judge whether or not their bid is a good one. That makes it desirable for abnormal procedure to be brought into operation to protect these large public properties, and that procedure, we suggest, should be disclosure and report to Parliament of any proposal which the Agency consider it may be desirable to accept. Parliamentary consent should be obtained in one way or another.
    Our third reason for objecting to this Clause is that sales of big steel works cannot be considered as ordinary commercial matters. They are substantially political matters. There is a danger that what will happen is that a bid will be made by one of the big groups I have just mentioned for a particular big steelworks; the Treasury and, no doubt, the people on the Agency whom they have
    1738
    appointed, being exceedingly able and conscientious people, will say, "We really do not think this offer is a fair and reasonable one "; but there will be only one buyer on the market, the former owners will want to buy back their property at as low a price as possible. They will be encouraged by the fact that they have no competition. They will put in a price which on many occasions the Treasury will think is well below the real value of the property. The situation may well arise where, after six months or a year have passed—if the Government are still in power—very few of the substantial assets held by the Agency will have been sold off.
    What will happen then? The Prime Minister will say to the Minister of Supply or to the Chancellor, "What has happened to the resale of the steel industry to private owners?" The answer will be, "We have not been able to sell off much. We have still got most of it on our hands because in the view of the experts the prices offered have been too low." The Prime Minister's reply to that will probably be, "This is an impossible situation. The Government and our party have promised to sell back this industry to private owners and here we are, a year after the Act was passed, and nothing has been sold back. You must, therefore, go into the matter again and try to meet these people and accept any price they put forward which is tolerable or in any way defensible, so that we can not only claim that we have sold back substantial units of this industry to private owners but show that we have done so." Otherwise, how ridiculous it will appear if, a year after the passing of this Act, nothing has happened at all and perhaps 90 per cent. of the industry still remains public property under the aegis of the Agency.
    There will be pressure, first of all, on the Chancellor and then, by the Chancellor, on the Agency, to induce them to sell back these units at prices well below what the Agency and the Treasury think are proper. I do not think that that picture of probable events will be challenged by anybody as being impossible or even improbable. That is the sort of development which I and my colleagues think is likely to arise. That is what we fear will happen, at any rate, and I think it is a very reasonable fear.

    1739
    For that reason, as well as the other two which I have just mentioned. we say that it is wrong that the public sale of this property—worth anything up to £50 million in the case of Margam and the Steel Company of South Wales, or even £5 million or £10 million in the case of some of these big works—should be the sole responsibility of the Agency, without any public check on their actions and in such a way that the public and Parliament will know about it only afterwards, when the bargain has been sealed and it is too late to do anything about it.
    We are opposed to the Clause, not only because of its fundamental purpose, but because the way that it proposes to achieve that purpose is, in our view, clumsy, politically dangerous, and, indeed, indefensible.
    4.0 p.m.
    Mr. I. Mikardo: I should like very briefly to underline two of the points which have been made by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss). The first is in connection with what will be the administrative structure of the industry under the Bill. Although this matter has been discussed before, it is particularly appropriate in respect of this Clause, which lays down the major powers of the Agency. I think that nobody who looks at the thing as an exercise in managerial organisation would dispute the contention of my right hon. Friend that all the diffusion of power and responsibility as between Ministers, Agency, Board, companies and the rest, represents something like an administrative nightmare.
    I remind hon. and right hon. Gentlemen opposite that one of the justifications which they urged for the Bill is that the industry as at present organised is, as they put it, divided into two parts: the part which falls within the aegis of the present Iron and Steel Corporation, and the part which falls outside. In urging this, hon. Members opposite have chosen to forget that these two parts are vastly different in size; but, nevertheless, they have said that the previous Government created an impossible situation in the steel industry by dividing it into a publicly-owned and a privately-owned sector.
    1740
    Let us look at the effects on the industry of the provisions of the Clause. Clearly, we are to have for as far ahead as anyone can envisage, under the terms of the Act, a publicly-owned sector of the industry and a privately-owned sector. The only change which will be made in this regard by the Bill is to make these two parts more nearly equal to one another than they otherwise would have been; in other words, to emphasise rather than diminish any ill-effects which might flow from this division in two parts.
    While I do not want at the beginning of the day's Committee stage to generate any heat, it is not an unfair point to make that the very provisions of the Clause exhibit as doctrinaire and, one might almost say, dishonest nonsense the main argument which was used by the Government and their supporters in defence of the Bill.
    The second point to which I want to refer is the responsibility laid upon the Agency—as, indeed, it is also laid contradicatorily on other people as well— to look after the efficiency of that part of the industry which at any given moment lies in their hands. My right hon. Friend has pointed out, as has been pointed out at earlier stages of the Bill, that the members of the Agency will be chosen, quite rightly, in view of their duties, for their expertese in financial matters. Their principal responsibility is a financial responsibility. Their principal function will be as commercial travellers selling shares. They will be chosen for their competence in this matter. It would be extremely surprising—it would be an astonishing coincidence—if gentlemen chosen for their competence in that regard, no matter how competent in that field and how worthy they were in many other aspects, also happened to be people who knew the best way to run a steel industry.
    There lies here a very great danger to that part of the industry which remains at any given moment in the hands of the Holding and Realisation Agency, that in respect of that part of the industry the responsibility for efficient organisation will be placed upon people with, perhaps, no knowledge of, and expertese in, the operation of the industry.
    As we all know, on both sides of the Committee, very often in the running of any industrial organisation one finds

    1741
    short-term considerations and long-term considerations in conflict with one another and it is no small part of the art of industrial management to balance long-term and short-term claims when they conflict. We all know occasions when, for example, at annual general meetings, the chairman of a company and his board are often criticised by shareholders because they have refused to take action which appears to be beneficial to the company in the short-term, and have refused to take such steps because they have taken the long-term interests of the company into account.
    The Holding and Realisation Agency is charged with duties which really are short-term. Their task is to get rid of their functions as quickly as possible. They will get their biggest medal from the Chancellor of the Exchequer if they work themselves out of a job in the shortest possible time—indeed, it is their task to work themselves out of a job. It is their job to get rid of their responsibilities as quickly as they can. Therefore, they are enjoined by the duty laid upon them to be short-term thinkers and short-term planners. They are enjoined to carry out their functions only with regard to the extent to which any action which they take will or will not help them to make a sale of their shares as quickly as possible.
    How, in these circumstances, can they possibly hold a balance between the short-term needs and the long-term needs —above all, the long-term technical needs—of the companies which lie within their jurisdiction? They cannot do so if they are doing their duty. There lies within the Clause a very grave danger that technical damage will be done to the industry, because the responsibility, at least partially, for its efficient operation, or an operation of some part of it, is in the hands of people whose incentive is not to worry about technical damage and whose incentive is only to make a sale of shares. I should have thought that if on no other grounds, and leaving aside all political considerations, one would wish to oppose the Clause on that account alone.
    Mr. Spencer Summers: One would have thought, listening to the speech of the hon. Member for Reading, South (Mr. Mikardo), that those companies which may remain for a time as
    1742
    part of the public sector would have no directors. His description of the position was that because the members of the Holding and Realisation Agency were selected primarily on financial grounds, and for that reason would be unlikely to have technical knowledge, it would follow that those companies would not be run efficiently.
    In fact, the efficient running of those companies will be carried out, not by the Agency, but by the directors of those companies, following out the guidance and supervision of the Board which is set up to establish the efficiency of the industry.
    Mr. Mikardo: The hon. Member is, of course, aware that the Holding and Realisation Agency are the shareholders and that, therefore, they have the last word. They can sack the directors as they wish, as can the shareholders of any other company, and, therefore, they can control the directors. Although, as the hon. Member well knows, in ordinary commercial practice shareholders do not often behave in that way vis-a-vis their directors, that is generally because they are a disparate body without any corporate voice. What we will have under the proposals of the Bill is shareholders with a corporate voice, and with a ready instrument for using in their power. There can be no question that they will have the final authority.
    Mr. Summers: Of course, shareholders do have the final authority, and if they find that those who are in charge of the companies for which they are responsible are not doing their job properly, they will, no doubt, replace them by others. But the direct responsibility for making decisions along the lines of the efficiency of incoming companies will devolve upon directors and not upon the Agency.
    I should like briefly to try to correct the impression given by the right hon. Member for Vauxhall (Mr. G. R. Strauss)—
    Mr. Jack Jones: We want to get down to the roots of this matter now that we are in Committee. The hon. Member has just made a very important statement. He has just said something diametrically opposite to what the Government said when they were in Opposition and we were in the Government— that it is possible for a publicly-owned

    1743
    company to be run successfully in the national interest.
    Mr. Summers: It is only possible for directors to run companies under the nationalisation set-up satisfactorily if they are not prevented unreasonably from exercising their free judgment by those who own the shares. The complaint all along has been that under the set-up under nationalisation there has been interference with the day-to-day management by members of the Corporation— [HON. MEMBERS: "Where?"]. Because of the changes in the structure of the industry which, the hon. Gentleman, as well as I, knows, would have been the consequences of a further tenure of office of the Corporation.
    Mr. Jones.rose—
    Mr. Summers: No. I cannot give way again. The hon. Gentleman has made his point, and I think I have answered it. I do not want to be discourteous, but this has nothing to do with Clause 16, and, if I may be permitted, I will stick to Clause 16, from which I was diverted for a moment by the point that was raised. It is as well, I am sure you will agree, Sir Charles, that I should remain in order for the rest of my speech.
    Mr. Jones: On a point of order. The hon. Gentleman is saying that there has been interference since nationalisation came into being. Is it in order for the hon. Gentleman to make this statement without giving proof of what he says?
    The Chairman: That is not a point of order.
    Mr. Summers: That is what I thought you would say, Sir Charles.
    The point that the right hon. Gentleman has made is that the set-up inherent in Clause 16 is undesirable in that there are two instruments affecting the industry, one financial, in the Holding and Realisation Agency, and the other primarily technical, namely, the Board. I have always felt that the process by which this industry should be handed back could be carried out satisfactorily only if there were two distinct instruments charged with two distinct fields of policy, having all the time the Minister's powers in reserve to see that neither the one nor the other had unreasonable emphasis if they came in
    1744
    conflict, and that is why I think it will be demonstrated in the course of time that the decision to have two instruments for carrying out this process will be proved perfectly right.
    The right hon. Gentleman sought to illustrate his criticisms of that policy of two instruments by citing the instance which he thought might arise. Six different bodies, he thought, would come into the picture. Of course, there are very few pieces of organisation concerning which it is not possible to conjure up as a figment of the imagination a series of events which are not in the least typical of what it is reasonable to expect. I do not think for one moment that this mythical company of which he has thought will remain for a long time in the hands of the public sector, the Holding and Realisation Agency. Notwithstanding its ambitions and ability to develop, I should think that a very unlikely state of affairs. It is those companies with such proposals to put forward—development plans—to the Board that are less likely to stay long in the hands of the Agency.
    4.15 p.m.
    The right hon. Gentleman came back to the point which was raised earlier on an Amendment—the argument that it would be proper for the House of Commons to have a say before those major items of sale were made by the Agency. I heard nothing on that point to refute the self-evident fact that the House of Commons is not set up intelligently to comment upon a broad transaction of sales involving so many different aspects—counter offers, future prospects, present records, and so on.
    I do not believe for one moment that a proper decision in the name of the public interest could be made with the limited information which it would be possible to put before the House of Commons. To complete that point, if it were thought proper for the House of Commons to go into such matters, the argument would be equally true when the Government bought property, and not necessarily only when they sold it. The suggestion that the House is the judge whether Departmental Ministers acting in the name of the Government should or should not spend £30 million or £50 million or £100 million in this way or that way is, to my way of thinking, a perfect travesty of common sense.
    Mr. G. R. Strauss: I rise to make two points. The second is only a passing comment. The House laid down the principles, be it remembered, on which this property was to be bought. They were laid down by the House in the Act. It is not the same question, and it does not arise when the Government are selling property now, as when they bought it. But I really rose to ask a question on this point, that the hon. Gentleman says the House cannot judge whether a price is correct or not. I do not know why it should not be possible for me or my colleagues to ask the Government why, for instance, a concern which, it may be, cost £20 million has been sold for £10 million or £15 million, or some figure which appears to us to be wholly wrong and improper. Surely it is the function of the House to cross-examine Ministers when a sale has taken place which appears wholly wrong. If the House is satisfied, it is satisfied. If not, it can declare itself. Is that not the function of Parliament?
    Mr. Summers: The right hon. Gentleman says those assets were acquired by the State by prescribed methods of purchase, but I am not referring only to the acquisition of shares. I am referring to the acquisition of all sorts of property on behalf of the State. I should have thought it would have been quite impracticable to ask the House of Commons to judge whether too much or too little had been paid for it. Just because the House devised a formula, that is, the Stock Exchange values, as being the price at which those shares should be purchased, that has no bearing on the question of sale.
    As to the other point, what this Agency ought, in my opinion, to be charged with is to do its level best to see that this is handed back without loss to the taxpayer. If that process is accomplished, and some units of sale fetch more than it was thought likely that they would, and some fetch less than it was thought likely that they would, and the taxpayer knows that no loss accrues to him by the process of handing back, I should think that the Agency will have carried out its job to the satisfaction of this Committee and the country.
    If that is so, to come along and ask that each single transaction should be judged on its merits, irrespective of the larger picture, seems to me to lose sight
    1746
    of the essential factors of the situation on quite false premises. I hope, therefore, that the reality of this will be taken into account, having regard, all the time, to the importance of trying to realise these assets without loss to the taxpayer. That should be the guiding feature of the policy of the Holding and Realisation Agency.
    Mr. Mitchison: Behind the mask of the hon. Member for Aylesbury (Mr. Summers) there appeared for a brief moment the features of the man of common sense, for he thought it should be the duty of the Agency to sell these securities at an appropriate price. If he will turn to their duty—their only duty, for they are a one-duty body—he will find that doctrine takes the place of wisdom, and that what they have to do is to restore to private ownership the undertakings—
    Mr. Mikardo: At any price.
    Mr. Mitchison: —which, on the appointed day, were owned by their subsidiaries.
    Mr. Summers: The hon. Member has ignored, in his reference to what the Clause says, the time factor, and that it is their duty not to sell in any limited time but to obtain the best price they can secure, and that they are to discharge their duty as trustees for the public in the terms they accept.
    Mr. Mitchison: All I can say to the hon. Gentleman is that in that case it is not in the Bill. It is much too sensible to be in the Bill. What appears in the Bill is the one duty of the Agency, as I read it out—with the provision, to which he quite rightly called attention, about timing, and so on. Those are matters of method. This Agency, conceived in political prejudice out of parents into whose identity we had better not inquire, has only one duty. I am disturbed by the position into which it is being put. It seems to me like filling the shareholders' annual meeting with a collection of bull stockbrokers or stock jobbers. That, I think, is exactly the position. They are all concerned to boost up the shares as high as they can without any regard whatever to what may happen to the companies afterwards. That is the primary concern.
    Meanwhile, there is tacked on to it, under the very same subsection, the in-

    1747
    congruous duty of promoting the efficient direction of their subsidiaries. I thought it was a well-established principle, in some courts of law at any rate, that responsible people—public servants in this instance—ought not to be put in a position in which their two duties may well conflict—indeed, in a position in which their duties may conflict at all— and I should have thought that this was exactly that position.
    The essential weakness of the position previously was that for some uncertain time and to some uncertain extent they would, on behalf of the public shareholders, promote efficiency in the companies, so far as shareholders can do these things; and, at the same time, they were told that their primary duty was to get rid of the shares, and—as the hon. Member for Aylesbury rightly and sensibly added that must mean to get a proper price for them. I cannot see how those two duties can be reconciled.
    I should have thought that, in so far as the Agency were called upon to pro- mote the efficient direction of their subsidaries, they were called upon to do something which, so far as it was not done by the Board already—and I agree with some of what was said about that— it could be much better done, and ought to be done by the Board, which has some degree of technical competence and a general duty to review and report upon the industry, to take action in certain circumstances, and so on. I do not understand why the Agency has been given these two somewhat inconsistent jobs.
    If I may go on with my zoological metaphors, the last one will not take long. I remember that at one time there were wolves in the Saverne in France, and a worthy, distinguished and elderly member of the French nobility, a lady, was given the task of exterminating the wolves, as the Agency is given the task of exterminating what no doubt the Tory Party regard as wolves—the publicly-owned companies. She was in a difficulty, because, obviously, the number of wolves was limited and if she killed them off too quickly she would soon lose all the honour and distinction that went with the task. If, on the other hand, she did not kill them off at all, the inhabitants—in this case the Tory Party—might complain.
    1748
    I believe that the Agency is rather in that difficulty here. It fosters its little wolves, it keeps them going, these companies; it handles them along nicely, but all the time there are these murderous instincts in its heart. It is going to kill them as quickly as it can in the interests of political prejudice. It is really rather silly to put a body of public servants in that position.
    I hope that the Financial Secretary will excuse me if I say that it is just the kind of silliness to which the Treasury are occasionally rather inclined. The Chancellor of the Exchequer and the Treasury are extraordinarily wise about some matters; on most matters they are very learned; but there are some things about which they are just silly. This, I believe, is one, and the attempt on the Workers' Educational Association is another.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I imagine that I shall keep within the rules of order if I reply to one of the two charges the hon. and learned Member for Kettering (Mr. Mitchison) was good enough to level in his concluding observations.
    Perhaps I may begin by saying that I wholly agree with the right hon. Member for Vauxhall (Mr. G. R. Strauss) when he says that this Clause constitutes a crucial part of the Bill. As I understood, the criticisms the right hon. Gentleman himself levelled, which were supported by his hon. Friends, were really two. First of all, the right hon. Gentleman, in particular, disliked as a matter of organisation the administrative set-up of Agency and Board. As he himself said, given the purposes which we seek to achieve, in his opinion this was a bad administrative set-up. I think I have understood his argument aright. His second and quite different argument was to express doubts and apprehensions about what would be done with it, given this set-up. I will attempt, if I may, to deal mainly with those two arguments.
    There was also introduced, particularly by the hon. Member for Reading, South (Mir. Mikardo), the issue as to the price at which the Agency would dispose of the companies. I hope that the Committee will forgive me if I do not deal with that issue at any length, if only for the reason that certain proposed Amendments to the next Clause appear to me to raise

    1749
    that issue in a precise and definite form, and I never believe in inflicting my arguments on the Committee more than once if I can possibly avoid it. I am sure that the Committee will agree with me in at any rate that practice.
    Perhaps I might deal first with the organisational arrangements. It is a technique of administration which, I think hon. Members will agree, forms an interesting arrangement. On the one hand there is the Board with its supervision in technical matters, and the like, over the whole of the industry, publicly owned and privately owned companies alike, and responsible to my right hon. Friend.
    Then there is the Agency, equally with two functions the function of the disposal of publicly owned companies and the function of ownership of those companies pending disposal. That seems to me a clear-cut division of function which is wisely and properly put into the hands of two separate bodies. I thought that my hon. Friend the Member for Aylesbury (Mr. Summers) put the matter extremely well when he pointed out how different those functions are, calling for rather different qualities, and also calling for a separation of responsibility. That is the scheme as we put it to the Committee.
    It is, of course, not as neat an antithesis in practice as it no doubt sounds at the Dispatch Box, for the very practical reason that there will be discussions and consultations at all levels of this organisation. just as there will be between my right hon. Friends over the practical matters in which they are both concerned. Nevertheless, it is valuable that responsibility itself should not be blurred for these different functions, and that my right hon. Friend the Chancellor should be responsible to this Committee and to the House for the disposal, whereas my right hon. Friend the Minister of Supply, with all the technical advice that he has available, should be responsible for certain activities of the Board, and for the technical side of the industry as a whole, publicly or privately owned.
    4.30 p.m.
    The advantage, as it seems to me, of this administrative arrangement—what the right hon. Gentleman called this fantastic diffusion of responsibility—is that
    1750
    there is clear responsibility by my right hon. Friends for their particular sides of the matter specifically and, finally, to the House. That seems an advantage when one contemplates, as contemplate one must, the quite different nature of the functions involved.
    Now let me come to certain of the practical points which arose in the course of the discussion. In the first place, the right hon. Member for Vauxhall thought that there should be required the approval of Parliament for individual sales; at any rate, for individual sales above a certain magnitude. That is a matter which, as the right hon. Gentleman will recall, we discussed on a previous Amendment to some extent.
    The right hon. Gentleman, I thought, mobilised some new arguments this afternoon. His first point was that the size of the unit altered the principle. I can well understand his taking that line because, as he himself rather coyly told us, he has probably been responsible for the sale of more public property than any other right hon. Member of the Committee. But if one proceeds to that argument, it is rather difficult to apply it successfully to this subject-matter. After all, what will be disposed of are shares, in a very large degree.
    Mr. G. R. Strauss: And assets.
    Mr. Boyd-Carpenter: I agree that there are other matters, but the big item —and it was the right hon. Gentleman himself who wanted to concentrate attention on the big items, so I am sure he will allow me to take the same point— is shares. It may be that in certain cases there will be large purchases. It may equally be that in the case, possibly, of the property of big concerns there will be plenty of small, individual purchases. If the criterion of size is to be adopted, it is very difficult for the right hon. Gentleman to apply that criterion when disposing of blocks of shares, some of which may be disposed of en bloc and some of which may be disposed of in quite small, individual packages.
    It therefore seems that the right hon. Gentleman was seeking to create a quite artificial special case in order to deal with the manifest fact that Ministers of the Crown have in the past been allowed by the House either to dispose of or to acquire enormous blocks of property

    1751
    without the prior approval of the House. I stress the prior approval, because to listen to the right hon. Gentleman one would have thought that Ministers would not be responsible to the House for these transactions. That is not the case, because for the disposals the Agency must have the approval of my right hon. Friend. That clearly shows that my right hon. Friend is responsible to this House for the approval which he gives.
    If any of the suggestions that have been made were, in fact, to come about, and if, as the right hon. Gentleman himself suggested, property were to be disposed of at quite unreasonably low prices, my right hon. Friend would have to stand at this Box and justify that to the House. Therefore, it seems to me that the right hon. Gentleman has been a little less realistic than he sometimes is, if he suggests that the responsibility of Ministers, in the normal way for transactions they have approved was being diminished by the proposals in the Bill.
    The right hon. Gentleman also founded his argument on the assumption that there would be no bidding. When we are talking of the sale of shares, that seems rather a rash assumption to make. Again and again, speakers in this debate have pointed out the valuable nature of these properties. The hon. Gentleman the Member for Rotherham (Mr. Jack Jones) did this with his accustomed vigour the other night, and I agree with him. These are attractive and valuable properties, and I do not think that it should be assumed, as the right hon. Member for Vauxhall assumes, that they are so unattractive that there would be no bidding for them.
    Mr. G. R. Strauss: I think the hon. Gentleman has got my argument wrong. I did not suggest that the properties were so unattractive that there would be no bidding for them. I said that they were so vast that there would be no competitive bidding for them. Does he suggest that there will be competitive bidding for the Margam works?
    Mr. Boyd-Carpenter: The right hon. Gentleman is not facing up to the difficulties which I put to him. What we are disposing of in a very large degree are shares, and there would be competitive bidding for particular shares or blocks of
    1752
    shares in the perfectly normal way. I appreciate the right hon. Gentleman's experience, but I do not think that he had fully applied his mind to this difficulty in his criticism.
    Mr. Ivor Owen Thomas: Would the Minister make clear what he means by the disposal of blocks of shares in relation to the ownership of particular sections of the Corporation's assets? Does he mean that the transfer of these blocks of shares, having no relation to any particular section of the Corporation's assets, will not reach, at some stage, actual control of the industry, or part of the industry, as well as the ownership of particular blocks of the shares? If so, does that mean that ownership and control of any particular part of the industry will not be reached by the disposal of any blocks of shares?
    Mr. Boyd-Carpenter: I am sorry, but I do not follow the hon. Gentleman's argument. What I was intending to say—and if I did not make myself clear I apologise —was that in the case of a great many of these companies which, under the particular type of nationalisation for which the right hon. Gentleman was responsible, still exist, what we would dispose of would be the shares in the companies. The question of control arises when a sufficient quantity of the appropriate category of shares has passed into ownership of one sort or another. I hope that I have succeeded in making myself clear.
    Mr. Thomas: The hon. Gentleman is begging the question.
    Mr. Boyd-Carpenter: I have tried to explain the matter to the hon. Gentleman twice. I think, Sir Charles, that I should be flattering my powers of exposition by trying to do it a third time.
    Mr. Thomas: Will the Minister give way?
    The Chairman: If the Minister does not give way, the hon. Gentleman must resume his seat.
    Mr. Thomas: I think that the Minister has a good deal to explain about the real meaning of the disposal of what he calls these blocks of shares. I take it that they relate to assets now in the control and ownership of the Iron and Steel Corporation. They must, therefore, if blocks of

    1753
    shares are disposed of, have some relationship to a particular part of those assets. Therefore, I ask him to say by way of illustration, if nothing more, at what point in the disposal of these shares will any great block of these shares, such as those of the Margam works, pass into the hands of private bidders for these shares, and how does the argument of the arrangements made for the restriction of offers of these blocks of shares relate to an attempt to secure any particular block of these shares, such as those of the Margam works, by a particular part of the private interests involved.
    Mr. Boyd-Carpenter: I think the hon. Gentleman is under a misapprehension that we are talking of disposing of blocks of shares in the iron and steel industry as a whole. What is being disposed of are shares in the individual companies which, as I pointed out, the right hon. Gentleman, in his 1949 Act, preserved. I hope that the hon. Gentleman apprehends that, because the point I would put to him is that what is being disposed of are shares in the X steel company, and the question of control arises in the perfectly normal way when the shares of any company are dealt with. I hope that I have succeeded in explaining that to the hon. Gentleman.
    Mr. Thomas rose—
    Mr. Boyd-Carpenter: I have been very patient, but I must now return to the main points with which the right hon. Gentleman dealt. The function of the Agency will be, of course, the function of ownership. It will not be intended normally to interfere with the daily management of the companies. It will be responsible for securing the appointment of competent people to the boards and, in the unhappy event of that confidence not being proved justified by events, of replacing them by others. While the companies remain in its ownership that will be the main job and then its main task will be to dispose of them in the way we have been discussing. No doubt we shall have an opportunity of discussing the question of prices on the next Clause.
    I pay full attention to the considerations which the right hon. Gentleman was good enough to include in his speech. I appreciate that he has some experience of this industry as, indeed, have many of my hon. Friends, but I do think he will find that his apprehensions as to the organisational system are ill-founded. My right hon. Friend the Minister and all my right hon. Friends have been giving very close attention to the proper organisation of denationalisation, which gives rise to certain perhaps novel and interesting problems. It is so essential from our point of view that this system—this assay in denationalisation—should function efficiently and smoothly, that I am sure the right hon. Gentleman will take it from me that very careful thought has been given to the administrative problems involved.
    We have no more reason than he— indeed, less than he—to wish to subject this great industry to anything less than the best from the organisational point of view. We are at least as concerned as he is that it shall continue to make a great contribution to the economic wellbeing of this country. We have the incentive, which of course he has not, of desiring to see that the process of denationalisation can be effected smoothly and efficiently.
    I say to him with respect that although we have weighed and considered carefully the arguments that he and his hon. Friends have put forward on organisation, we are convinced as a result of very careful thought on this matter that this is in fact the most efficient way to do it. As he has said, this is crucial to the Bill. Therefore, I must ask him to accept from me that we honestly and sincerely believe that this is the best way to do it. I hope I can carry him with me in the hope that it will turn out that his apprehensions about it will prove, as I believe them to be, ill-founded.
    Question put.
    The Committee divided: Ayes, 250; Noes, 205.

    Division No. 101.]

    AYES

    [4.43 p.m.

    Aitken, W. T.

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Beach, Maj. Hicks

    Allan, R. A. (Paddington, S.)

    Astor, Hon. J. J.

    Beamish, Maj. Tulton

    Alport, C. J. M

    Baldock, Lt.-Cmdr. J. M.

    Bell, Ronald (Bucks, S.)

    Amery, Julian (Preston, N.)

    Baldwin, A. E.

    Bennett, F. M. (Reading, N.)

    Amory, Heathcoat (Tiverton)

    Banks, Col. C.

    Bennett, Dr. Reginald (Gosport)

    Arbuthnot, John

    Barber, Anthony

    Bevins, J. R. (Toxteth)

    Ashton, H. (Chelmsford)

    Baxter, A. B.

    Bishop, F. P

    Bossom, A. C.

    Hill, Dr. Charles (Luton)

    Orr, Capt. L. P. S.

    Boyd-Carpenter, J. A.

    Hill, Mrs. E. (Wythenshawe)

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Boyle, Sir Edward

    Hinchingbrooke, Viscount

    Osborne, C.

    Braine, B. R.

    Hirst, Geoffrey

    Peake, Rt. Hon. O.

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Holland-Martin, C. J.

    Peto, Brig. C. H. M.

    Bromley-Davenport, Lt.-Col. W. H.

    Hollis, M. C.

    Peyton, J. W. W.

    Brooke, Henry (Hampstead)

    Holt, A. F.

    Pickthorn, K. W. M,

    Brooman-White, R. C.

    Hopkinson, Rt. Han. Henry

    Pilkington, Capt. R. A

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Hornsby-Smith, Miss M. P.

    Pitman, I. J.

    Bullard, D. G.

    Horobin, I. M.

    Powell, J. Enoch

    Bullock, Capt. M.

    Horsbrugh, Rt. Hon. Florence

    Price, Henry (Lewisham, W.)

    Bullus, Wing Commander E. E.

    Howard, Hon. Greville (St. Ives)

    Prior-Palmer, Brig. O. L.

    Burden, F. F. A.

    Hudson, Sir Austin (Lewisham, N.)

    Profumo, J. D.

    Butcher, Sir Herbert

    Hudson, W. R. A. (Hull, N.)

    Raikes, Sir Victor

    Campbell, Sir David

    Hulbert, Wing Cdr. N. J.

    Rayner, Brig. R.

    Carr, Robert

    Hurd, A. R.

    Redmayne, M.

    Cary, Sir Robert

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Remnant, Hon. P.

    Channon, H.

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Renton, D. L. M.

    Churchill, Rt. Hon. W. S.

    Hutchison, James (Scotstoun)

    Roberts, Peter (Henley)

    Clarke, Col. Ralph (East Grinstead)

    Hyde, Lt.-Col. H. M.

    Robertson, Sir David

    Clarke, Brig. Terence (Portsmouth, W.)

    Hylton-Foster, H. B. H.

    Robinson, Roland (Blackpool, S.)

    Cole, Norman

    Jenkins, Robert (Dulwich)

    Robson-Brown, W.

    Colegate, W. A.

    Johnson, Eric (Blackley)

    Rodgers, John (Sevenoaks)

    Conant, Maj. R J. E.

    Jones, A. (Hall Green)

    Roper, Sir Harold

    Cooper, Sqn. Ldr. Albert

    Joynson-Hicks, Hon. L. W.

    Ropner, Col. Sir Leonard

    Craddock, Beresford (Spelthorne)

    Kaberry, D.

    Russell, R. S.

    Cranborne, Viscount

    Keeling, Sir Edward

    Ryder, Capt. R. E. D.

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

    Kerr, H. W.

    Salter, Rt. Hon. Sir Arthur

    Crosthwaite-Eyre, Col. O. E.

    Lambert, Hon. G.

    Sandys, Rt. Hon. D.

    Crouch, R. F.

    Lambton, Viscount

    Savory, Prof. Sir Douglas

    Cuthbert, W. N.

    Lancaster, Col. C. G.

    Schofield, Lt.-Col. W. (Rochdale)

    Darling, Sir William (Edinburgh, S.)

    Langford-Holt, J. A.

    Scott, R. Donald

    Davies, Rt. Hn. Clement (Montgomery)

    Law, Rt. Han. R. K.

    Scott-Miller, Cmdr. R.

    Deedes, W. F.

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

    Simon, J. E. S. (Middlesbrough, W.)

    Digby, S. Wingfield

    Legh, Hon. Peter (Peters eld)

    Smithers, Peter (Winchester)

    Dodds-Parker, A. D.

    Lennox-Boyd, Rt. Hon. A. T.

    Smithers, Sir Waldron (Orpington)

    Donaldson, Cmdr. C. E. McA.

    Linstead, H. N.

    Smyth, Brig. J. G. (Norwood)

    Donner, P. W.

    Llewellyn, D. T.

    Soames, Capt. C.

    Doughty, C. J. A.

    Lloyd, Rt. Hon. G. (King's Norton)

    Spearman, A. C. M

    Douglas-Hamilton, Lord Malcolm

    Lloyd, Rt. Han. Selwyn (Wirral)

    Speir, R. M.

    Drayson, G. B.

    Lockwood, Lt.-Col. J. C.

    Spence, H. R. (Aberdeenshire, W.)

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Longden, Gilbert

    Stanley, Capt. Hon. Richard

    Duncan, Capt. J. A. L.

    Low, A. R. W.

    Stevens, G. P.

    Duthie, W. S.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Stewart, Henderson (Fife, E.)

    Eccles, Rt. Hon. D. M.

    Lucas, P. B. (Brentford)

    Stoddart-Soott, Col. M.

    Eden, Rt. Hon. A.

    Lucas-Tooth, Sir Hugh

    Strauss, Henry (Norwich, S.)

    Elliot, Rt. Hon. W. E

    McAdden, S. J.

    Studholme, H. G.

    Erroll, F. J.

    Macdonald, Sir Peter

    Summers, G. S.

    Fell, A.

    McKibbin, A. J.

    Sutcliffe, Sir Harold

    Finlay, Graeme

    McKie, J. H. (Galloway)

    Taylor, William (Bradford, N.)

    Fisher, Nigel

    Maclean, Fitzroy

    Teeling, W.

    Fletcher-Cooke, C.

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Thomas, Leslie (Canterbury)

    Fort, R.

    MacLeod, John (Ross and Cromarty)

    Thompson, Kenneth (Walton)

    Foster, John

    Macmillan, Rt. Hon. Harold (Bromley)

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Fraser, Hon. Hugh (Stone)

    Macpherson, Niall (Dumfries)

    Thornton-Kemsley, Cot. C. N.

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Maitland, Comdr. J. F. W. (Horncastle)

    Tilney, John

    Fyfe, Rt. Hon. Sir David Maxwell

    Maitland, Patrick (Lanark)

    Turner, H. F. L.

    Galbraith, Rt. Hon. T. D. (Pollok)

    Manningham-Buller, Sir R. E

    Turton, R. H.

    Gammans, L. D.

    Marples, A. E

    Tweedsmuir, Lady

    Godber, J. B.

    Maude, Angus

    Vesper, D. F.

    Gomme-Duncan, Col. A

    Maudling, R.

    Wakefield, Edward (Derbyshire, W.)

    Gough, C. F. H.

    Maydon, Lt.-Comdr. S. L. C.

    Wakefield, Sir Wavell (St. Marylebone)

    Gower, H. R.

    Medlicott, Brig. F.

    Walker-Smith, D. C.

    Graham, Sir Fergus

    Mellor, Sir John

    Ward, Hon. George (Worcester)

    Gridley, Sir Arnold

    Molson, A. H. E.

    Ward, Miss I. (Tynemouth)

    Grimond, J.

    Moore, Lt.-Col. Sir Thomas

    Waterhouse, Capt. Rt. Hon. C.

    Grimston, Hon. John (St. Albans)

    Nabarro, G. D. N.

    Watkinson, H. A

    Grimston, Sir Robert (Westbury)

    Nicholls, Harmar

    Webbe, Sir H. (London & Westminster)

    Hall, John (Wycombe)

    Nicholson, Godfrey (Farnham)

    Williams, Rt. Hon. Charles (Torquay)

    Hare, Hon. J. H.

    Nicolson, Nigel (Bournemouth, E.)

    Williams, Gerald (Tonbridge)

    Harris, Frederic (Croydon, N.)

    Noble, Cmdr. A. H. P.

    Williams, Sir Herbert (Croydon, E.)

    Harrison, Col. J. H. (Eye)

    Nugent, G. R. H.

    Williams, R. Dudley (Exeter)

    Harvey, Ian (Harrow, E.)

    Nutting, Anthony

    Wills, G.

    Hay, John

    Oakshott, H. D.

    Wilson, Geoffrey (Truro)

    Heald, Sir Lionel

    Odey, G. W.

    Wood, Hon. R.

    Heath, Edward

    O'Neill, Phelim (Co. Antrim, N.)

    Higgs, J. M. C.

    Ormsby-Gore, Hon. W. D.

    TELLERS FOR THE AYES:

    Mr. Drewe and Mr. Galbraith.

    NOES

    Acland, Sir Richard

    Bacon, Miss Alice

    Beswick, F.

    Albu, A. H.

    Bellenger, Rt. Hon. F. J.

    Blackburn, F.

    Allen, Arthur (Bosworth)

    Bence, C. R.

    Btenkinsop, A.

    Anderson, Frank (Whitehaven)

    Benn, Hon. Wedgwood

    Blyton, W. R.

    Attlee, Rt. Hon. C. R.

    Benson. G.

    Boardman, H.

    1756

    1757

    Bottomley, Rt. Hon. A. G

    Holmes, Horace (Hemsworth)

    Porter, G.

    Bowden, H. W.

    Houghton, Douglas

    Price, Joseph T. (Westhoughton)

    Bowles, F. G.

    Hudson, James (Ealing, N.)

    Proctor, W. T.

    Braddock, Mrs. Elizabeth

    Hughes, Emrys (S. Ayrshire)

    Pursey, Cmdr. H.

    Brockway, A. F.

    Hughes, Hector (Aberdeen, N.)

    Reeves, J.

    Brook, Dryden (Halifax)

    Hynd, H. (Accrington)

    Reid, Thomas (Swindon)

    Brown, Rt. Hon. George (Belper)

    Hynd, J. B. (Attercliffe)

    Reid, William (Camlachie)

    Burton, Miss F. E.

    Irvine, A. J. (Edge Hill)

    Rhodes, H.

    Butler, Herbert (Hackney, S.)

    Isaacs, Rt. Hon. G. A.

    Robens, Rt. Hon. A.

    Callaghan, L. J.

    Janner, B

    Roberts, Albert (Normanton)

    Castle, Mrs. B. A

    Jay, Rt. Hon. D. P. T.

    Robinson, Kenneth (St. Pancras, N.)

    Champion, A. J.

    Jeger, George (Goole)

    Rogers, George (Kensington, N.)

    Chapman, W. D.

    Jeger, Dr. Santo (St. Pancras, S.)

    Ross, William

    Chetwynd, G. R.

    Jenkins, R. H. (Stechford)

    Shackleton, E. A. A.

    Collick, P. H.

    Johnson, James (Rugby)

    Shinwell, Rt. Hon. E

    Craddock, George (Bradford, S.)

    Johnston, Douglas (Paisley)

    Short, E, W.

    Crosland, C. A. R.

    Jones, David (Hartlepool)

    Silverman, Sydney (Nelson)

    Cullen, Mrs. A.

    Jones, Jack (Rotherham)

    Simmons, C. J. (Brierley Hill)

    Daines, P.

    Keenan, W.

    Smith, Norman (Nottingham, S.)

    Dalton, Rt. Hon. H.

    Key, Rt. Hon. C. W.

    Snow, J. W.

    Darling, George (Hillsborough)

    King, Dr. H. M.

    Sparks, J. A.

    Davies, Ernest (Enfield, E.)

    Kinley, J.

    Steele, T.

    Davies, Stephen (Merthyr)

    Lee, Frederick (Newton)

    Stewart, Michael (Fulham, E.)

    de Freitag, Geoffrey

    Lee, Miss Jennie (Cannock)

    Strachey, Rt. Hon. J.

    Deer, G.

    Lever, Leslie (Ardwick)

    Strauss, Rt. Hon. George (Vauxhall)

    Delargy, H. J.

    Lewis, Arthur

    Stross. Dr. Barnett

    Dodds, N. N.

    Lindgren, G. S.

    Summerskill, RI. Hon. E.

    Donnelly, D. L.

    Lipton, Lieut.-Col. M.

    Swingler, S. T.

    Driberg, T. E. N.

    MaoColl, J. E.

    Sylvester, G. O.

    Dugdale, Rt. Hon. John (W. Bromwich)

    McLeavy, F.

    Taylor, Bernard (Mansfield)

    Ede, Rt. Hon J. C

    MacMillan, M. K. (Western Isles)

    Taylor, John (West Lothian)

    Edelman, M.

    MacPherson, Malcolm (Stirling)

    Taylor, Rt. Hon. Robert (Morpeth)

    Edwards, John (Brighouse)

    Mainwaring, W. H.

    Thomas, Ivor Owen (Wrekin)

    Edwards, W. J. (Stepney)

    Mallalieu, E. L. (Brigg)

    Thomson, George (Dundee, E.)

    Evans, Albert (Islington, S.W.)

    Mallalieu, -. P. W. (Huddersfield, E.)

    Tharneycroft, Harry (Clayton)

    Evans, Edward (Lowestoft)

    Mann, Mrs. Jean

    Thurtle, Ernest

    Evans, Stanley (Wednesbury)

    Manuel, A. C.

    Tomney, F.

    Fernyhough, E.

    Mayhew, C. P.

    Turner-Samuels, M.

    Fienburgh, W.

    Mellish, R. J.

    Ungoed-Thomas, Sir Lynn

    Fletcher, Eric (Islington, E.)

    Mikardo, Ian

    Viant, S. P.

    Follick, M.

    Mitehison, G. R.

    Wallace, H. W.

    Foot, M. M.

    Monslow W.

    Watkins, T. E.

    Fraser, Thomas (Hamilton)

    Moody, A. S.

    Webb, Rt. Hon. M. (Bradford, C.)

    Gaitskell, Rt. Hon. H. T. N

    Morgan, Dr. H. B. W.

    Weitzman, D.

    Gibson, C. W.

    Morley, R.

    Wells, Percy (Faversham)

    Glanville, James

    Morris, Percy (Swansea, W.)

    Wells, William (Walsall)

    Gordon Walker, Rt. Hon. P. C.

    Morrison, Rt. Hon. H. (Lewisham, S.)

    West, D. G.

    Greenwood, Anthony (Rossendale)

    Mort, D. L.

    Wheeldon, W. E.

    Greenwood, Rt. Hn. Arthur (Wakefield)

    Moyle, A.

    White, Henry (Derbyshire, N.E.)

    Grenfell, Rt. Hon. D. R.

    Mulley, F. W.

    Whiteley, Rt. Hon. W.

    Griffiths, David (Rother Valley)

    Murray, J. D.

    Willey, F. T.

    Griffiths, Rt. Hon. James (Llanelly)

    Neal, Harold (Bolsover)

    Williams, Rev. Llywelyn (Abertillery)

    Hale, Leslie

    Noel-Baker, Rt. Hon. P. J

    Williams, Ronald (Wigan)

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Oliver, G. H.

    Williams, W. R. (Droylsden)

    Hall, John T. (Gateshead, W.)

    Orbach, M.

    Williams, W. T. (Hammersmith, S.)

    Hamilton, W. W.

    Oswald, T.

    Winterbottom, Ian (Nottingham, C.)

    Hannan, W.

    Padley, W. E.

    Winterbottom, Richard (Brightside)

    Hardy, E. A.

    Paget, R. T.

    Woodburn, Rt. Hon. A.

    Hargreaves, A.

    Palmer, A. M. F.

    Wyatt, W. L.

    Harrison, J. (Nottingham, E.)

    Pannell, Charles

    Yates, V. F.

    Henderson, Rt. Hon. A. (Rowley Regis)

    Paton, J.

    Younger, Rt. Hon. K.

    Hewitson, Capt. M.

    Peart, T. F

    Hobson, C. R.

    Plummer, Sir Leslie

    TELLERS FOR THE NOES:

    Holman, P.

    Popplewell, E.

    Mr. Pearson and Mr. Wilkins.

    Clause, as amended, ordered to stand part of the Bill.

    Clause 17.—(POWERS OF AGENCY IN RESPECT OF SECURITIES AND COMPANIES.)
    Mr. R. E. Winterbottom: I beg to move, in page 13, line 36, to leave out "or otherwise dispose of."
    This is an exploratory Amendment put down to get an explanation of the words we seek to delete. What does the Minister mean by "dispose of "? What other
    1758
    ways are there of the Holding and Realisation Agency disposing of shares than by selling? We suggest that these words are unnecessary from two points of view. First, this Clause refers to the power of the Agency in the sale of securities of the present Corporation, and gives sufficient indication of the powers of the Agency to sell without including the suspicious words "otherwise dispose of."
    The second point I want to emphasise relates to the definition. In the Inter-

    1759
    pretation Clause we are told that security means
    "any shares, stock, debentures, debenture stock, loan stock, mortgages, income notes, income stock, funding certificates and securities of a like nature."
    It seems to me that all these types of security can be disposed of only by selling. I do not think that the Government intended to set up an Agency through which the present shares owned by the Corporation would either be lost or stolen, and I do not think that the Minister wishes to create a filing cabinet in which he could conveniently file them all for further reference. We want a clear explanation of what the Government have in mind in including these words, for to us they seem to be nebulous and obscure. In view of what is contained in this Clause about securities, we should be told something further about the whole subject.
    Mr. Boyd-Carpenter: The hon. Member for Brightside (Mr. R. E. Winterbottom) was good enough to say that the Amendment was exploratory, and I will endeavour to be of assistance to him in his explorations. If the Clause were amended as this Amendment suggests, the only power given to the Holding and Realisation Agency would be to sell. In other words, we would be limited to outright sale. That would prevent a number of possible ways of making certain disposals of assets, temporarily or permanently. For example, it would completely rule out the exchange of the shares for Iron and Steel Stock which, the hon. Member will remember, was included in the White Paper.
    Then we are dealing here, of course, also with property other than shares. We are dealing, for example, with a terrace of houses, the former property of a steel company. If this Amendment were accepted all that the Agency could do would be to sell those houses over the heads of the tenants and the possibility of granting leases would be excluded. That is another complication which would arise, and which of course, did arise—
    Mr. G. R. Strauss: We are talking about securities.
    Mr. R. E. Winterbottom rose—
    Mr. Boyd-Carpenter: One interruption at a time, please. Perhaps it would be as well if the hon. Member would put his point now, provided his right hon. Friend allows him.
    Mr. Winterbottom: It seems to me that we are at cross-purposes here. We are talking about the new Agency disposing of assets and securities which they have. If, for instance, they have a row of houses and they intend still to collect the rents, they are not disposing of those houses nor would the question of disposal arise if they were talking in terms of sale. That is the position that is causing confusion at the moment when related to these words.
    5.0 p.m.
    Mr. Boyd-Carpenter: The confusion that has arisen between the hon. Member and myself is that I understand that we are discussing, at the same time, the Amendment, in page 14, line 8, to leave out from "sale" to "of". If we are not discussing that Amendment now, clearly the answer to the hon. Gentleman's argument will have to wait until we reach that Amendment. I am in the hands of the Committee.
    The Chairman: I had not intended to call the Amendment to which the Financial Secretary has just referred, because I think the two Amendments should be discussed together.
    Mr. Boyd-Carpenter: I am, then, at the disposal of the hon. Gentleman. Either I must answer that argument now or he will not have an answer to it.
    Mr. G. R. Strauss: Might I try to help the Financial Secretary and you, Sir Charles? It was our proposal. The words of the two Amendments are similar, but we are not moving the second Amendment. We are moving only the first one, dealing with the question of the sale or disposal of securities.
    Mr. Boyd-Carpenter: I am much obliged. I would not discourage the taking of these two Amendments together and I hope that nothing I have said indicates a contrary attitude.
    Acceptance of this Amendment would exclude other methods of disposal of the securities including that which, hon. Members will remember, was forecast as long ago as the White Paper. That would be an important defect. I am not

    1761
    going to say to what extent it may be desirable or desired that that method should be used. That is a matter which must await the event. It would be unfortunate, and so far as I can see would serve no useful purpose, to exclude it from the powers of the Agency. It would, obviously, be a convenient method in some cases.
    Then there is the question whether, more broadly, it will turn out to be reasonable to make an immediate sale or whether some intermediate stage might fall to be made. We must obviously deal with each case as it arises. If we want to make, as we do, the best disposal of these securities it will be wrong deliberately to limit ourselves to one method of doing so. I cannot see the sense of it. I will reassure the hon. Gentleman with this consideration: until, as the words of the Clause themselves say, the industry has been returned to private ownership, the duty of the Agency in this respect has not been discharged. "Private ownership" is defined in the definition Clause of the Bill Clause 31 if my memory serves me—and, therefore, any intermediate stage that may arise could only be on a temporary basis, because private ownership, as defined in the definition Clause, is the state which it is the duty of the Agency, in the very words of the Clause, to seek to achieve.
    All we are concerned with here, apart from the special point of exchange of stock, is a question of what intermediate arrangements might, in any particular case, be convenient. I come back to what I would have thought to be the wish of hon. Members that there should be no unnecessary rigidity, and certainly no artificial difficulties, put in the way of those who are charged with the duty of dealing with the disposal of this industry.
    As I said last week and repeat now, the Agency would have to bear in mind both the consideration of obtaining a fair price for the taxpayer for his very valuable property, and the equally important point of securing that the disposal leaves the industry in good shape and able, as far as possible, to carry out its heavy duties. Both those objectives will have to be borne very carefully in mind. I should have thought it was abundantly clear that we should be very foolish to limit to outright sale the things which the Agency might do. I see no useful purpose in
    1762
    imposing such a restriction. On the other hand, we should be in some degree prejudicing their capacity to carry out the true objective.
    Mr. Roy Jenkins: Surely the Financial Secretary is not going to sit down without telling us what he has in mind under this heading of "intermediate arrangement." It holds out a very wide prospect which I find it difficult to grasp. Surely he would like to tell us what the Government have in mind.
    Mr. R. E. Winterbottom: While to a certain extent the Government desire to avoid rigidity, nevertheless I think the Financial Secretary will also agree that it is equally undesirable to have ambiguous flexibility. The Clause is very flexible. There may be behind these words "otherwise dispose of" many possibilities that are not quite in line with the Government's own views. As we have a certain measure of agreement on terms of disposal—the Financial Secretary has agreed that we cannot finally dispose of them until the Agency has sold them—and as the word "dispose" is part of the subsection that we are discussing, the Government should seriously consider drafting into the Clause what they mean by "otherwise dispose of," or freeing the Clause from abiguity by withdrawing those words.
    Mr. Boyd-Carpenter: I gladly respond to the hon. Gentleman, but I do not know that I can help him very much. What is obviously desired in a case of this sort— the ultimate objective being settled by the Bill, namely, the return to private ownership—is to secure that during the period before that is completely achieved the Agency shall be as little handicapped in its sensible carrying out of its job as possible. It would be quite wrong for the Government to lay down in advance what particular alternatives, temporary expedients, interim measures—call them what you like—should be adopted.
    It would not only be wrong but it would be very unwise, because anything said in this Committee is said ultimately in the hearing of those who may be concerned to purchase. We do not in any way wish to weaken the hands of the Agency in dealing with these transactions. It is much the best way to leave the

    1763
    freedom which the Clause gives the Agency, and, at the same time, to recall to hon. Gentlemen that these disposals will be subject ultimately to the responsibility which Ministers have to the House of Commons. If any of the methods which may be used may seem in any particular case to be inappropriate, a Minister will have to answer for them. I am sure that that is the wise way to tackle the matter rather than to try to inhibit the Agency even before they start their business.
    Mr. Mitchison: Whenever I listen to the Financial Secretary to the Treasury I am not able quite to decide whether I am reading Gibbon or Samuel Johnson or listening to—no, not Mr. Gladstone; I would not put that on him—but another Conservative orator of the past. I sympathise with him today. It is very difficult to say, in that sort of language, "We want to 'pop' them."
    He could only give us one instance of what he wanted to do with these securities. He said, "If you want to exchange them for Iron and Steel Stock, you can only do it if you have these words in the Bill." Yet all we have to do is to sell the one and buy the other, and as we do not pay any Stamp Duty, the effect of the transaction is exactly the same. If that is what he is after, I should think he ought to accept the Amendment. The views expressed by the hon. Gentleman might have some relevancy when we come to the Finance Act, but I doubt if they make much difference here. The hon. Gentleman would not say that he might want to "pop" them or that he was going to "give them to the boys." I cannot see why these words are required.
    However, I do not think it is a matter of great importance and I hope that we shall not take long over it. Since this is supposed to be the place where the public, whose property this is, is represented, I feel that the Government might have told us what they meant to do with these shares if they were not going to sell them. I am disappointed with the reply we have received.
    Mr. Jack Jones: My hon. Friend the Member for Brightside (Mr. R. E. Winterbottom) said that this Amendment was an exploratory one. We realise that there are other things to be done besides
    1764
    selling the industry, and if we were asked to state what appropriate words we would introduce, it might lead to protracted discussions. We are afraid that the use of these words may lead to ambiguity.
    For instance, there has been a suggestion that when the Agency became tired of trying to dispose of the industry— or parts of it which we could mention— they might put the shares into a national lottery or raffle. That was perhaps facetious, but my hon. Friend is afraid that some part of our national assets might be dealt with in a manner detrimental to the public interest. On the understanding that what we have said will be borne in mind by the Government, namely, that even the least valuable assets should not be wasted, we shall not press this Amendment to a Division, and I suggest to my hon. Friend that his Amendment might be withdrawn.
    Mr. Boyd-Carpenter: I gladly give that assurance. Indeed, I think I have already done so. It is certainly not our intention to give away, with the proverbial half-pound of tea, valuable assets of this kind. I said previously that one of the main duties of the Agency will be to obtain a fair price for the taxpayer.
    Mr. I. O. Thomas: In Clause 31 there are several interpretations of terms used throughout the Bill. If the Financial Secretary and his colleagues are clear as to the meaning of the words "or otherwise dispose of," would he consider between now and Report stage putting that definition into Clause 31 in order to remove any doubt that may still remain?
    Mr. R. E. Winterbottom: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    5.15 p.m.
    Sir Frank Soskice: I beg to move, in page 13, line 37, at the end, to insert:
    (2) Notwithstanding anything contained in the previous subsection the Agency shall not have power to sell or otherwise dispose of any such securities except for a consideration which shall in the case of any such securities which vested in the Iron and Steel Corporation of Great Britain under the provisions of Part II of the Iron and Steel Act, 1949, be not less in value than the value of such securities as determined under or in pursuance of the said provisions, adjusted nevertheless upwards or downwards by such amount (if any) as the

    1765
    Treasury may determine to be reasonable to take account of any alteration which may since they were so vested have been made in the capital structure of the company or companies in which such securities are held.
    The Temporary Chairman (Colonel Gomme-Duncan): It may be for the convenience of the Committee if we discuss with this Amendment the next one in line 37:
    (2) Notwithstanding anything hereinbefore in this section or the previous section contained, the Agency shall not have power to sell or otherwise dispose of any securities of a company which are for the time being vested in them, or of any other assets unless the Treasury shall have before such sale or other disposal approved thereof, and the Treasury shall not give such approval unless it is satisfied that the price or other consideration to be received upon such sale or other disposal is adequate, regard being had in particular in the case of such securities to any improvement in the assets, financial position and earning power and record of the Company in which such securities are held since they vested in the Iron and Steel Corporation of Great Britain under or in pursuance o the provisions of Part II of the Iron and Steel Act. 1949.
    Sir F. Soskice: Clause 17 has the limited objective of dealing with the disposal of securities. We have spent a great deal of time voicing our criticisms of the arrangements which the Government envisage are to obtain between the Agency, the Board and the Minister, but when we come to Clause 17 we are dealing with something narrower in scope and on which it is easier for the Government to accept the proposals contained in this Amendment and in the next one also, in line 37.
    The standpoint from which we start in making these proposals is identical with the standpoint from which the Government start, namely, that the public is to get its full money's worth of what it parts with. Unless something has escaped my notice, there is nothing in the Bill to provide that not less than a certain minimum is to be obtained as the sale price of these securities. The only thing I have been able to discover is that Clause 16 (1) enables the Agency, instead of selling at once to postpone its sales, presumably in order to get the best price possible. Yet there is no provision for a lower limit below which that price must not fall. That is left entirely to the Agency which, in terms of the provisions of this Clause, is in that regard to act under the direction of the Treasury.
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    We seek to provide such a lower limit by two separate and independent provisions. We have embodied in our first Amendment what we conceive to be a simple test. In our proposal securities are not to be sold back at less than what was paid for them under Part II of the Iron and Steel Act when they were taken over. In the first place, I would remind the Committee that the Iron and Steel Act imposes as the compensation test, broadly speaking, the Stock Exchange price. When we were discussing that Act the present Government were in Opposition and they said that the Stock Exchange price was much too low. Well, let us assume for the purpose of argument that it was. If we take that price, which ex hypothesi was too low, as the price below which the assets should not now be returned, surely we should not be setting an unduly rigid test in putting that as the minimum price for which those securities are to be sold.
    I am sure that the Financial Secretary and the Minister will agree about the justice of that, though they may not agree with everything I say. If the compensation had been much too high, perhaps the test which we are now seeking to impose would be too exacting, but if the Financial Secretary and the Minister have both complained of that amount as being too low—as I am sure they have and certainly their associates were loud in their outcries in that regard they cannot now say that we, in saying that the compensation amount is to be the lower limit, are arguing for any unreasonably exacting test in formulating the price below which these securities should not be sold.
    Secondly, in replying to my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss), the Financial Secretary said not so long ago that all the public could expect for the securities as a whole would be to obtain what was given for them when they were taken over. He said that some might be sold below what they should fetch whereas some might be sold above that figure, but that the only concern which the public might legitimately have was that, taking all in all and adding the whole aggregate together, as much should be obtained on the sale as was given when they were taken over.
    I am saying, let us provide an objective low-level test. As the Bill stands, there is not the slightest guarantee that what

    1767
    the hon. Gentleman said was the public's legitimate concern will be safeguarded. When the many years have rolled by which are to roll by during the disposal, it may be found that the securities have been sold at a price which was, in fact, much too low. If that is the case, nobody can make a complaint under the terms of the Bill, because the Bill sets no lower limit. It seems to us that if the Bill is passed without such a safeguard, then it will be quite outrageous, because public assets will be in risk of being disposed of at a price far below what they ought to fetch.
    The Agency is not bound to dispose of them at once. In the case of the Transport Bill, the Minister of Transport said he wanted to get rid of the lorries and to hand them back to private ownership by the end of 1954, and when we proposed a similar test in the case of the disposal of road transport, the Government objected, presumably largely upon the basis that they wanted to get rid of the lorries very quickly. That is not the case under this Bill. The Agency can take its time. It is expressly empowered to create delays and to postpone individual sales. If it can take its time, then the Agency should be enjoined by the Bill not to sell at less than a minimum price; and that is what we propose.
    I call attention to some of the features of our proposals. Dealing first with securities which vested under Part II of the Iron and Steel Act, we say that the Agency should see what was the Stock Exchange compensation price paid for those securities. That is easy to ascertain; there is no practical administrative difficulty about it, for it is simply a matter of looking up the records. We then recognise that, since those securities were taken over, there may have been structural alterations in the capital build up of the company which may make it necessary to provide some adjustment upwards or downwards. To deal with that, we make what we consider to be an eminently practical proposal—that it should be for the Treasury to determine what the upward or downward alteration should be.
    There should be no difficulty about that. I hope the Minister will not give an answer on the basis that there is some administrative difficulty in carrying out
    1768
    this proposal, because I put it to both the Minister and to the Financial Secretary that there can be no such difficulty. It is for the Treasury to make a computation and to do their best to fix the upward or downward adjustment. That is what we propose in the first Amendment—a simple, objective test which is to have for its purpose the supremely important aim that the public should not be deprived of what ought to belong to it; and what ought to belong to the public is the full value of these shares, which ought to be obtained when they are sold.
    Our second proposal falls in line with the first and is designed to achieve the same end. Many of these companies which were taken over under the Iron and Steel Act, 1949, have shown very great improvement in their earning capacity. As earning assets, they are now far more valuable than when they were taken over. I cannot give details of individual records of individual companies, for it would not be right to do so, but I think it is right to point out that the total aggregate of the earnings of the companies concerned last year was very greatly in excess of their total aggregate for the previous year.
    It therefore stands to reason that when some of these companies are sold, they will have a much stronger financial standing than when they were taken over; they are earning more, they have expanded and they are much more valuable assets than when they were acquired under the Act of 1949. It therefore seems to hon. Members on this side of the Committee—and I can speak for all my hon. Friends—that there is no conceivable reason why those who dispose of these assets should not be enjoined by the terms of the Bill to have full regard to the effect of any change in the earning capacity of a company and in its financial strength. I can see no answer to that proposition.
    It may be that the Financial Secretary or the Minister will leap to their feet and say they are only too glad to accept the proposal, but having regard to the attitude which the Government have previously adopted I suspect that they may not be quite as forthcoming as that. In framing our proposals, we have carefully thought the matter out and have endeavoured to fall directly in line with

    1769
    what the Government are already proposing in the structure of Clauses 16 and 17. We say that the Treasury should be given the responsibility of saying whether or not they approve or disapprove of a disposal price and that they should not approve of a disposal price unless due regard has been paid to any improvement in the asset value of a company and its earning capacity.
    We are asking for only a very modest and limited extension to the provisions of Clauses 16 and 17. Already, under Clause 16, the Treasury are empowered to approve of or withhold approval of postponements and disposals under subsection (1). Equally, under Clause 17, the Treasury are empowered to give general directions to the Agency. We do not like the relationship between the Agency and the Treasury or the relationship between the Minister and the Board as at present formulated in the Bill, and we have voiced our criticisms; but if that relationship is to remain in its present form we say that we should fall in line to the extent that we couple our present proposals with the structure which the Government propose. All we say, therefore, is that as the Treasury already have the duty of approving or not approving the sales, then they shall not give their approval unless it is perfectly clear to the Treasury that due regard has been paid to the improvement in the asset value of the company concerned.
    Perhaps the Government will accept this proposal, although neither Minister has been particularly forthcoming. I see a very encouraging smile from the Financial Secretary, but I do not know what it presages. Perhaps I am unduly pessimistic in my attitude; certainly I hope I am. We feel that if the Ministers cannot accept the proposal, then they cannot base their refusal on any other ground than that they are oblivious to the public interest in this crucially important matter. How can they refuse to accept these objective tests unless they are prepared to say, "We do not mind whether what is obtained for these shares is less than what ought to be obtained"?
    I cannot impute any such motive to them. I am quite sure that no Minister harbours such a motive. Nevertheless, it is difficult in logic to reconcile any refusal to accept these proposals except with such an imputation—which I do not for
    1770
    one second make against either Minister. It may be that those experts who advise them—as they always advise Ministers who are hard pressed—have said that in this case, if the Amendments are dissected, the Minister can find something in the drafting which is wrong or some inconsistency or some anomaly which would result from the terms of the Amendment. May we say at once that we on this side of the Committee are not wedded to the terms of the Amendment. We have made the proposals in order to assert and emphasise the principle that the assets should not be disposed of at less than they ought to fetch.
    With that explanation, I commend the two Amendments to the Committee. I urgently ask the Government to think very closely before they say there is some difficulty in the way of accepting them, for, if there is a difficulty, they should remove it by altering the terms of the Amendments. I urgently press upon the Ministers that they should say that in principle they agree that these proposals are necessary to supplement an otherwise extremely defective Bill.
    5.30 p.m.
    Mr. Boyd-Carpenter: The right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) was quite right when he said that his standpoint on this matter was identical with ours. Indeed, the only criticism I have to make of his speech is that he paid me the compliment of attributing to me certain words spoken at an earlier stage by my hon. Friend the Member for Aylesbury (Mr. Summers). To have my hon. Friend's words about steel attributed to one is a very subtle compliment which I appreciate.
    The attitude of the Government on this matter has been set out as long ago as the White Paper which was laid last July. It says, in paragraph 34:
    "In deciding the price to be asked, regard will be had to all relevant factors at the time of sale. Account will have to be taken of the important changes which have taken place since nationalisation in the physical assets, capital structure, reserves and trading prospects of many of the iron and steel companies, together with other considerations such as the monetary and market conditions prevailing at the time."
    It is against that background that I wish to look at the two Amendments,

    1771
    the first of which the right hon. and learned Gentleman has moved in his usual persuasive and effective manner. They differ appreciably, as he recognises. The first seeks, subject to a qualification where the capital structure of the company has been varied, to tie the sales to the level of compensation. The difficulty of that as a test is that there have been changes upwards and downwards in the position and value of at any rate some of the companies since nationalisation. If we were to accept as the criterion the amount of compensation paid on nationalisation, we should be inclined to get into difficulties both ways.
    Some companies have had the advantage of recent modernisation showing itself in their going ahead and prospering. There is another category—here I reply to a whispered interjection by the hon. Member for Rotherham (Mr. Jack Jones)— that of the company which has made a large use of scrap and, owing to recent difficulties in getting scrap, of which the hon. Gentleman is well aware, has found that its position has worsened. Those are the sort of problems—
    Mr. Jack Jones: Is the hon. Gentleman telling the House that, arising from these technical difficulties, there has been a downward trend in capital valuation and capital structure? My whispered interjection was that we should like some evidence of a downward trend arising from the difficulties which the hon. Gentleman has mentioned.
    Mr. Boyd-Carpenter: I am sure the hon. Gentleman will accept that, during the intervening period, some companies have done better than others, quite independent of changes in capital structure, which is the only qualification in the Amendment.
    Mr. Jack Jones: They have all done better than they used to do.
    Mr. Boyd-Carpenter: I hope that the hon. Gentleman is right, but I do not think he is. It does not matter whether he is or is not right; what is important is that their relative position compared with one another has changed since nationalisation, quite apart from the capital structure. A test which might 'well impose too high a value for one would impose too ludicrously low a value for
    1772
    another and that is the great difficulty of the first Amendment.
    Sir F. Soskice: Our Amendment proposes only a lower limit. It does not advance the argument in the least to point out what the hon. Gentleman has been saying. We are proposing that there should be a lower limit below which we should not go.
    Mr. Boyd-Carpenter: What the right hon. and learned Gentleman does not appear to have appreciated is that if we put so precise a lower limit into a statute it often works out as something very near an upper limit too. The difficulty is that a potential buyer is able to point in the Act of Parliament to what was apparently considered as a reasonable level of price. [HON. MEMBERS: "No."] Indeed, that is the danger, and we should weaken considerably the bargaining position of the Agency, and that is precisely what the right hon. and learned Gentleman and all of us wish to avoid. The first Amendment seems to have very real difficulties because it takes insufficient account of the relative changes which have followed nationalisation.
    The second Amendment is less unattractive from that point of view because it does not seek to tie the conception of what is a fair price to the compensation value. The difficulty of the Clause with the Amendment would be that it would give undue prominence to the question of price compared with the other considerations which we have all so far been treating as similar in their importance. Indeed, it would do exactly what the hon. Member for Rotherham in a speech a little time ago accused the Government of wanting to do, of concentrating on the "brass" It would be a little objectionable to insert here the question of price as the only consideration to which statutory force is given while ignoring the other considerations, to which I attach considerable value, of the general overall national interest—[HON. MEMBERS: "Oh."]—most certainly—and of the overall capital resources for further development which purchasers may have available, another very important consideration in an industry the development of which we all want to see going on unchecked.
    Also, it does not make adequate allowance for the other consideration of —I hate the phrase, but it is the only

    1773
    one—re-integration, the shape of the industry or the arrangement of the industry in the most efficient form. We all know that that will be borne in mind —it has been said from this Box again and again, and I am sure all hon. Members accept it as so—but it seems to me that we should be running some risk of appearing to attribute excessive, indeed, unique importance to the consideration of price if we were to lay the price consideration by statute upon the Agency while leaving all the other equally important considerations outside.
    This is the way I have been looking at the matter. I am anxious, and so is my right hon. Friend, to reassure hon. Gentlemen opposite that there is no intention of any sort or kind to dispose of the assets at an unduly low price. Indeed, it is somewhat remarkable to have it suggested that that sort of thing is a habit of Her Majesty's Treasury, which is the Department of State responsible for the disposals. It is certainly a new line of attack upon the Treasury.
    Mr. John Hynd: Is it such a new line? Does it not depend on where the money is going? Has not the whole policy of the present Government since they were returned to power been to transfer wealth from the working classes to the wealthier classes?
    Mr. Boyd-Carpenter: The answer to that question is just "No."
    Mr. Hynd: It is not.
    Mr. Boyd-Carpenter: Our experience of attacks made upon the Treasury by the Opposition has made us attach excessive importance to this consideration. It really seems a fantastic suggestion to make. I am, however, anxious to reassure hon. Gentlemen opposite, even though their apprehensions strike me as fantastic. I appreciate there can be different views upon this matter; and, so far as possible, my right hon. Friend and I wish to meet genuine apprehensions which, although ill-founded, are sincerely and honestly held.
    If the right hon. and learned Gentleman will not press these Amendments, I should like, on Report stage, to introduce an Amendment to cover this point, that is, to lay down that a reasonable price must be one of the considerations
    1774
    before the Agency, and to meet the right hon. and learned Gentleman by putting that into the Bill. As has been said again and again, a provision in a statute is better than any Ministerial assurance. [HON. MEMBERS: "Hear, hear."] I have certainly said that when I was on the other side of the Committee, and I think I was right, and so I do not deny that the right hon. and learned Gentleman may be right as well.
    We are prepared to table an Amendment which while covering that point, would also not exclude, expressly or by implication, consideration of the other matters to which I have referred. I hope that, as it seems to me, unnecessary assurance—given squarely and fairly to meet genuine, if ill-founded apprehensions—will be satisfactory to the Committee. For reasons I have explained, it does not seem to me that either of these Amendments can be accepted as they stand. But, if hon. Members opposite can attain what seems to them the important objective of having this safeguard put in the Bill, I do not suppose they will care very much about that. In any event I am not in a position to give the proposed wording of my Amendment, because I have only very recently made arrangements to have the drafting commenced.
    I am assured that a possible form of words, not subject to the difficulties arising on these Amendments, can be evolved. Having met the right hon. and learned Gentleman in that spirit, I hope he is satisfied that we, just as much as himself, are determined to get a fair price for these assets.
    Mr. Roy Jenkins: We on this side of the Committee can agree with the Financial Secretary on one of his statements, if with no other, that a provision in a statute is better than any number of Ministerial assurances. We certainly feel very strongly about that. But I am afraid his assurance about a provision in this statute did not go very far to meet the case put by my right hon. and learned Friend the Member for Neepsend (Sir F. Soskice). As I understand it, we are to have some rather vague provision, ensuring that a reasonable price shall be paid for securities sold under this Clause, but there is to be nothing relating that in any way to the 1949 prices, and nothing taking

    1775
    into account the specific points put forward by my right hon. and learned Friend.
    Therefore, there will still be loopholes for sales to take place at prices which we should regard as thoroughly inadequate. I consider these two Amendments are absolutely crucial from the point of view of endeavouring to bind the Government. As the hon. Gentleman himself said, assurances are not enough. That is our view, and during this afternoon the hon. Gentleman has made me feel not less apprehensive, but more so, about the possible way in which these securities may be disposed of.
    5.45 p.m.
    When discussing the Amendment moved by my hon. Friend the Member for Brightside (Mr. R. E. Winterbottom), the hon. Gentleman suddenly introduced the most frightening concept that temporary arrangements might be made by which it would be possible for the Government to lease securities to a possible buyer, on very favourable terms, and allow that buyer eventually to buy the securities out of the profits accruing from the companies in which he held the securities. That would be a very easy way for someone to get the industry back, but not necessarily a very desirable way.
    The Financial Secretary said that, in selling these securities, we should take into account, not merely the prices offered, but also the capital resources of the people who made the offers. That opens up another whole new field. The hon. Gentleman cannot complain if we wish to tie up this matter a little more than by Ministerial assurances and a little more than will be achieved by his proposed Amendment on Report stage.
    My right hon. and learned Friend deployed a very powerful case. I do not want to go over it at great length, but merely to touch on one or two further points. Let us consider the first Amendment and relate this matter to the 1949 take-over prices. As I understood the argument of the hon. Gentleman, it was directed, not so much to any suggestion that this Amendment was impracticable as to the fact that it was undesirable, largely because of the changes in circumstances which have taken place since 1949, and which have affected different companies
    1776
    in different ways. I understood that to be his point, and not that it was impracticable to go back and uncover a few layers and get back to the 1949 position; it was not desirable to do so, because some companies have done much better than others during the intervening period I hope I understood the hon. Gentleman aright.
    I think, however, that we must turn our minds back to 1949 and realise that all we are asking here is that these 1949 prices should be a minimum. The hon. Gentleman's argument, that because a minimum was put in the Bill it would automatically become a maximum, was one of the weakest I have ever heard him deploy in this House. He paints a different picture of the way in which these securities will be sold according to the Amendment with which he is dealing. Sometimes he says, "Of course, what is going to happen is that we shall have a very competitive market, with a great number of buyers bidding against each other." He said that during our discussion on Clause 16 because it then suited him.
    Now the hon. Gentleman postulates a position in which we shall have only one possible buyer, and that he will point a pistol at the Government, because a certain sum is stipulated in the Bill, and will say that that is what Parliament thought to be not only the minimum but the maximum as well. It really is one of the weakest arguments I have heard. We must remember how strongly right hon. and hon. Gentlemen in the Conservative Party expressed themselves about these compensation terms in 1949. We must realise how very reasonable it is to put in those figures as being a minimum.
    I wish to weary the Committee with two quotations from the Second Reading debate. The Secretary of State for the Colonies (Mr. Lyttelton) said:
    "The Government have artificially depressed the shares and have relied on the co-operation of the industry not to increase its dividends and then bought the shares at the rigged market price. I consider the Government"—
    and here we have a little of the rather elephantine humour which we sometimes associate with the Colonial Secretary—
    "should consider altering the title of the Bill to the Iron and Steal Bill. So much for compensation."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 92.]

    1777
    Then we had the Prime Minister saying:
    "… in the case of steel, the conduct of the Government in buying compulsorily at the market value is not only unfair, but it seems actually dishonest. We assert, and it is our sincere belief, that by their threats of steel nationalisation they have artificially depressed the value of steel shares."—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 229–30.]
    We had the party opposite taking the view at that time that these were grossly inadequate prices. If they have changed their view I think they should tell us. That would be a very interesting consideration to have in mind in discussing this Amendment. But, if they have not changed their mind, in view of the strong language then used it is not good enough to say that because there have been a few relative changes it is impossible to put in these prices which were regarded as so disgracefully inadequate three years ago.
    In the four years since that debate we have not had any general fall in Stock Exchange values. They went down a bit first, then up substantially, then down and now they have gone up again. The "Financial Times" index of industrial ordinary shares is two points higher than it was when these very strong statements were made in November, 1948. There is no reason to suspect that general market conditions would have made unreasonable a minimum based on those prices.
    I should have thought that it would be accepted that the general prospects for the steel industry were, if anything, brighter now than in 1948. There has come to be more general agreement that we need to carry through a substantial increase in the size of the industry as quickly as we can. Therefore, the minimum we propose is very low indeed. Unless the Government have the most sinister intentions about the disposal of these shares, I should have thought that our suggestion could have been accepted. There are no great practical difficulties. Somebody has to make a reasonable valuation from time to time, and we are asking that the Treasury should do it.
    We were told by the hon. and learned Member for Middlesbrough, West (Mr. Simon) that Parliament could not pronounce judgment. I think the hon. Member for Aylesbury (Mr. Summers) said the same this afternoon. But somebody
    1778
    must do it if the Bill is to be made to work, unless everything is to operate in the dark, with great possibilities for private gain and public loss. Therefore, from the point of view of both the desirable and the practical, I should have thought that it was eminently reasonable to ask at any rate for the 1949 minimum to be put in. It is difficult to imagine a lower minimum. The Government's little concession to us, if it means anything at all, ought not to be confined to rather nebulous points about a reasonable price. It ought to bring in the 1949 minimum.
    The Minister of Supply (Mr. Duncan Sandys):There must have been some misunderstanding. Hon. Gentlemen opposite have always responded most generously to any sincere concession to their point of view from the Government benches. My hon. Friend the Financial Secretary went a long way toward meeting the point of the second Amendment. That was our intention. The first Amendment links the amount to be paid for the securities to the compensation paid under nationalisation. My hon. Friend explained why we did not feel that it was possible to accept that approach.
    He addressed himself to the other Amendment, which, I assume, is an alternative. It was our intention to go a long way toward meeting the principle. That Amendment asks that the Treasury should be;
    "… satisfied that the price or other consideration to be received upon such sale or other disposal is adequate, regard being had in particular in the case of such securities to any improvement in the assets, financial position and earning power and record of the Company in which such securities are held since they vested in the Iron and Steel Corporation of Great Britain …"
    That is in close accord with paragraph 34 of the White Paper, which says:
    "In deciding the price to be asked, regard will be had to all relevant factors at the time of sale. Account will have to be taken of the important changes which have taken place since nationalisation…
    That touches the same point as that of the Amendment:
    "… in the physical assets, capital structure, reserves and trading prospects …."
    Earning power is mentioned in the Amendment:
    ".…of many of the iron and steel companies, together with other considerations such as the monetary and market conditions prevailing at the time"

    1779
    This is a genuine point. We should not like it to be thought that we had any intention of selling the industry for a song. We went out of our way in the White Paper to say that it might take some years before the work of the Agency was completed. That showed that we intended to insist upon an adequate price. If we intended to sell the industry for a song there would be no difficulty in disposing of it overnight.
    We propose to introduce an Amendment on Report to incorporate the substance of paragraph 34. The only difference between that paragraph and the second of the two Amendments is that it recognises that there are other considerations which must be taken into account by the Agency. The Amendment recognises that this is not a comprehensive list. It uses the words, "in particular." There is not much between us in this matter. We are not linking up with compensation payments, but we are prepared to introduce an Amendment to give effect to paragraph 34 of the White Paper. I hope that I have removed any misunderstanding. What was said by the hon. Member for Stechford (Mr. Roy Jenkins) showed that he had not recognised how far we were prepared to go.
    Sir F. Soskice: The Amendments are not alternative: they are cumulative. The Minister made a most helpful intervention in which he regretted that there should have been a misunderstanding. If there was a misunderstanding, I venture to lay responsibility at the door of the Financial Secretary. He, in his usual persuasive way, tried to get us to accept an undertaking that the Government would put down an Amendment on Report stage which would provide—I think I quote his words accurately—that a reasonable price would be a consideration. Anything less than that under-taking it is difficult to conceive. We do not expect the Government to embody in the Bill a proposal that an unreasonable price should be a consideration.
    We thought that it was the minimum that anybody could contemplate that a reasonable price should be considered. We were far from satisfied with the proposal of the Financial Secretary. But the Minister has pointed out that the second Amendment incorporates what
    1780
    the White Paper specified. Therefore, the Amendment cannot be very far off the mark. I recommend to my hon. Friends that on the second Amendment we should wait to see what the Government do by way of implementing the undertaking given by the Minister. It may well be that the undertaking now amplified and illuminated by the Minister's intervention and extended from the jejune form in which it fell from the lips of the Financial Secretary may satisfy my hon. Friends.
    6.0 p.m.
    So far as the first proposal is concerned, my hon. Friends and I were in great difficulty in anticipating what answer we were to be given. We have heard of administrative difficulties being put forward, but the Minister, in trying to answer what we have put forward, was in a difficult situation and was looking up feelingly from a woefully inadequate brief, and hoping to get away with some sweet words, and nobody is a greater adept at that than the Financial Secretary. I used to try it myself before him, and I know the agonies of mind which he must have been going through.
    I think that the hon. Gentleman's brief, having regard to his very great intellectual equipment for the purpose, must have been unusually inadequate. All he said to us was that if we impose a reserve price, we shall never get more than the reserve price. That is really the substance of his argument, but it is not an argument that appeals to anybody on this side of the Committee, nor will it, I think, appeal to many hon. Gentlemen opposite.
    I therefore advise my hon. Friends, and I certainly desire myself, to signify our very severe disapproval of the answer which has been given to our first proposal. We think it is of great importance. We have not put down this Amendment for purposes of debate. We think the first proposal an important one, and, in these circumstances, I hope my hon. Friends will agree to the course I have suggested with regard to the first Amendment. With regard to the second Amendment, I hope they will agree with me that I should not press it, in anticipation of what the Government may do to implement the undertaking which the Financial Secretary and the Minister has just given.
    Mr. Wilfred Fienburgh: We really ought to weigh very carefully the results which will flow from the attitude which the Minister has taken up on these two Amendments. By accepting one Amendment which will put into the Bill the provision that an adequate price shall be sought, and, at the same time, refusing another Amendment which proposes that the 1949 compensation take-over price should be incorporated as a reserve, he has, in effect, admitted that an adequate price may very well be below the compensation price of the 1949 take-over. That is a point which I am sure will be regarded as of very great interest to those who may be thinking of buying their way back into the industry.
    The only thing which could prevent sectors of the old industry from taking advantage of the Minister's admission is if there were likely to be Teal and genuine competition for the shares of the establishments in the iron and steel industry. That, indeed, was indicated by the Financial Secretary when speaking on the previous Clause. He said that we must envisage that there will be competition for these shares. I suggest that that is an entirely mistaken appreciation. In fact, there will be no competitive bidding for these shares unless there are 105 people bidding for 100 shares; if there are only 99 bidding, there will be no effective competitive bidding increasing the value of the shares.
    I think we can rule out straight away the idea that the small investor is going to be falling over himself in his eagerness to buy his way back into the iron and steel industry. There will be those who are well satisfied with the compensation terms which were granted. They now, at least, have a long-term security for their assets, under the compensation granted in 1949, which they certainly would not have in an industry which is as susceptible to cyclical fluctuations as the iron and steel industry would be in private hands. The small man who is
    concerned in investing wisely will not be over-eager to buy his way back into the industry; the people who will be anxious will be those groups who still regard steelmaking plant and assets as one part of a vertical trust organisation and who will prepare their long-term policy on the assumption that losses on steel-making plants will be recouped elsewhere.
    Is there any likelihood that the larger groups concerned with buying their way back into the industry will be competing with one another to secure the assets of one particular plant or group? I suggest that there is not the faintest likelihood of that at all. Before nationalisation, they were very closely integrated by interlocking directorships, and they had working machinery through the conferences of the Federation. Their attitude will surely be, "I am interested in buying back part of plant A; if you, B, will lay off plant A and concentrate on plant B, all will be well." There is absolutely no likelihood that a big combine which was previously interested in Margam will suddenly start bidding to buy back the assets of a steel works in Scunthorpe or somewhere else. The whole thing will be very carefully apportioned and shared out beforehand.
    In the light of the statement which the Minister has made, and of his attitude to these two Amendments, we can rid our minds of the conception that these people will compete. They will decide what uncompetitive bids they are to make for these assets, and that, in the words of the Minister's definition, will mean an "adequate price," despite the increase in profitability, despite the additional investment and the new development which has taken place, and that "adequate price" in the Minister's own mind may well be below the price at which these assets were taken over three or four years ago.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 212; Noes, 252.

    Division No. 102.]

    AYES

    [6.8 p.m.

    Acland, Sir Richard

    Benn, Hon. Wedgwood

    Bowden, H. W.

    Albu, A. H.

    Benson, G.

    Bowles, F. G.

    Allen, Arthur (Bosworth)

    Beswick, F.

    Braddock, Mrs. Elizabeth

    Anderson, Frank (Whitehaven)

    Blackburn, F.

    Brockway, A. F.

    Attlee, Rt. Hon. C. R.

    Blenkinsop, A.

    Brook, Dryden (Halifax)

    Bacon, Miss Alice

    Blyton, W. R.

    Broughton, Dr. A. D. D.

    Bellenger, Rt. Hon. F. J.

    Boardman, H.

    Brown, Rt. Hon. George (Belper)

    Bence, C. R.

    Bottomley, Rt. Hon. A. G.

    Brown, Thomas (Ince)

    Burton, Miss F. E.

    Janner, B.

    Reeves, J.

    Butler, Herbert (Hackney, S.)

    Jay, Rt. Hon. D. P. T.

    Reid, Thomas (Swindon)

    Castle, Mrs. B. A.

    Jeger, George (Goole)

    Reid, William (Camlachie)

    Champion, A. J.

    Jeger, Dr. Santo (St. Pancras, S.)

    Rhodes, H.

    Chapman, W. D.

    Jenkins, R. H. (Stechford)

    Richards, R.

    Chetwynd, G. R.

    Johnston, Douglas (Paisley)

    Robens, Rt. Hon, A

    Collick, P. H.

    Jones, David (Hartlepool)

    Roberts, Albert (Normanton)

    Cove, W. G.

    Jones, Frederick Elwyn (West Ham, S.)

    Robinson, Kenneth (St. Pancras, N.)

    Craddock, George (Bradford, S.)

    Jones, Jack (Rotherham)

    Rogers, George (Kensington, N.)

    Crosland, C. A. R.

    Jones, T. W. (Merioneth)

    Ross, William

    Grossman, R. H. S

    Keenan, W.

    Shackleton, E. A. A.

    Cullen, Mrs. A.

    Key, Rt. Hon. C. W.

    Shinwell, Rt. Hen. E.

    Daines, P.

    King, Dr. H. M.

    Short, E. W.

    Dalton, Rt. Hon. H.

    Kinley, J.

    Silverman, Julius (Erdington)

    Darling, George (Hillsborough)

    Lee, Frederick (Newton)

    Simmons, C. J. (Brierley Hill)

    Davies, Ernest (Enfield, E.)

    Lee, Miss Jennie (Cannock)

    Smith, Norman (Nottingham, S.)

    de Freitas, Geoffrey

    Lever, Leslie (Ardwick)

    Snow, J. W.

    Deer, G.

    Lewis, Arthur

    Sorensen, R. W

    Dedds, N. N.

    Lindgren, G. S.

    Soskice, Rt. Hon Sir Frank

    Donnelly, D. L.

    Lipton, Lt.-Col. M.

    Sparks, J. A.

    Dugdale, Rt. Hon. John (W. Bromwich)

    MacColl, J. E.

    Steele, T.

    Ede, Rt. Hon. J. C.

    McLeavy, F.

    Stewart, Michael (Fulham, E.)

    Edelman, M.

    MacMillan, M. K (Western Isles)

    Strachey, Rt. Hon. J.

    Edwards, John (Brighouse)

    McNeil, Rt. Hon. H.

    Strauss, Rt. Hon. George (Vauxhall)

    Edwards, W. J. (Stepney)

    MacPherson, Malcolm (Stirling)

    Stress, Dr. Barnett

    Evans, Albert (Islington, S.W.)

    Mainwaring, W. H.

    Summerskill, Rt. Hon. E.

    Evans, Edward (Lowestoft)

    Mallalieu, E. L. (Brigg)

    Swingler, S. T.

    Evans, Stanley (Wednesbury)

    Mann, Mrs. Jean

    Sylvester, G. O.

    Fernyhough, E.

    Manuel, A. C.

    Taylor, Bernard (Mansfield)

    Fienburgh, W.

    Mayhew, C. P.

    Taylor, John (West Lothian)

    Flotcher, Erie (Islington, E.)

    Mellish, R. J.

    Taylor, Rt. Hon. Robert (Morpeth)

    Follick, M.

    Messer, F.

    Thomas Ivor Owen (Wrekin)

    Foot, M. M.

    Mikardo, Ian

    Thomson, George (Dundee, E.)

    Fraser, Thomas (Hamilton)

    Mitchison, G. R.

    Thorneycroft, Harry (Clayton)

    Freeman, John (Watford)

    Monslow, W.

    Tomney, F.

    Gaitskell, Rt. Hen. H. T. N

    Moody, A. S.

    Turner-Samuels, M.

    Gibson, C. W.

    Morgan, Dr. H. B. W.

    Ungoed-Thomas, Sir Lynn

    Glanville, James

    Morley, R.

    Viant, S. P.

    Gordon Walker, Rt. Hon. P. C.

    Morris, Percy (Swansea, W.)

    Wallace, H. W.

    Greenwood, Anthony (Rossendale)

    Morrison, Rt. Hon. H. (Lewisham, S.)

    Watkins, T. E.

    Greenwood, Rt. Hn. Arthur (Wakefield)

    Mort, D. L.

    Webb, Rt. Hon. M. (Bradford, C.)

    Griffiths, David (Rother Valley)

    Moyle, A.

    Weitzman, D

    Griffiths, Rt. Han. James (Llanelly)

    Mulley, F. W.

    Wells, Percy (Faversham)

    Hale, Leslie

    Murray, J. D.

    Wells, William (Walsall)

    Hall, Rt. Hon. Glenvil (Comm Valley)

    Neal, Harold (Bolsover)

    West, D. G.

    Hall, John T. (Gateshead, W.)

    Noel-Baker, Rt. Hon. P. J.

    Wheeldon, W. E.

    Hamilton, W. W.

    Oliver, G. H.

    White, Henry (Derbyshire, N.E.)

    Hannan, W.

    Orbach, M.

    Whiteley, Rt. Hon. W.

    Hardy, E. A.

    Oswald, T.

    Wigg, George

    Hargreaves, A.

    Padley, W. E.

    Wilcock, Group Capt. C. A. B.

    Harrison, J. (Nottingham, E.)

    Paling, Will T. (Dewsbury)

    Willey, F. T.

    Hayman, F. H.

    Palmer, A. M. F.

    Williams, Rev. Llywelyn (Abertillery)

    Henderson, Rt. Hon. A. (Rowley Regis)

    Pannell, Charles

    Williams, Ronald (Wigan)

    Hewitson, Capt. M.

    Pargiter, G. A.

    Williams, W. R. (Droylsden)

    Holman, P.

    Parker, J.

    Williams, W. T. (Hammersmith, S.)

    Holmes, Horace (Hemsworth)

    Paton, J.

    Winterbottom, Ian (Nottingham, C.)

    Houghton, Douglas

    Pearson, A.

    Winterbottom, Richard (Brightside)

    Hudson, James (Ealing, N.)

    Peart, T. F.

    Woodburn, Rt. Han. A.

    Hughes, Emrys (S. Ayrshire)

    Plummer, Sir Leslie

    Yates, V. F.

    Hughes, Hector (Aberdeen, N.)

    Popplewell, E.

    Younger, Rt. Hon. K.

    Hynd, J. B. (Atterliffe)

    Porter, G.

    Irvine, A. J. (Edge Hill)

    Price, Joseph T. (Westhoughton)

    TELLERS FOR THE AYES:

    Irving, W. J. (Wood Green)

    Proctor, W. T.

    Mr. James Johnson and

    Isaacs, Rt. Hon. G. A.

    Pursey, Cmdr. H.

    Mr. Wilkins.

    NOES

    Aitken, W. T.

    Bennett, F. M. (Reading, N.)

    Burden, F. F. A.

    Allan, R. A. (Paddington, S.)

    Bennett, Dr. Reginald (Gosport)

    Butcher, Sir Herbert

    Alport, C. J. M.

    Bevins, J. R. (Toxteth)

    Campbell, Sir David

    Amery, Julian (Preston, N.)

    Bishop, F. P.

    Carr, Robert

    Amory, Heathcoat (Tiverton)

    Bossom, A. C.

    Cary, Sir Robert

    Arbuthnot, John

    Bowen, E. R.

    Channon, H.

    Ashton, H. (Chelmsford)

    Boyd-Carpenter, J. A.

    Clarke, Col. Ralph (East Grinstead)

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Boyle, Sir Edward

    Clarke, Brig. Terence (Portsmouth, W.)

    Astor, Hon. J. J.

    Braise, B. R.

    Cole, Norman

    Baldock, Lt.-Cmdr. J. M.

    Braithwaite, Sir Albert (Harrow, W.)

    Colegate, W. A.

    Baldwin, A. E.

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Conant, Maj. R. J. E.

    Banks, Col. C.

    Bromley-Davenport, Lt.-Cal. W. H.

    Cooper, Sqn. Ldr. Albert

    Barber, Anthony

    Brooke, Henry (Hampstead)

    Craddock, Beresford (Spelthorne)

    Baxter, A. B.

    Brooman-White, R. C.

    Cranborne, Viscount

    Beach, Maj. Hicks

    Buchan-Hepburn, Rt. Hon. P. G. T.

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

    Beamish, Maj. Tufton

    Bullard, D. G.

    Crouch, R. F.

    Bell, Philip (Bolton, E.)

    Bullock, Capt. M.

    Crowder, Nitre (Ruislip—Northwood)

    Bell, Ronald (Bucks, S.)

    Bullus, Wing Commander E. E.

    Cuthbert, W. N.

    1784

    1785

    Darling, Sir William (Edinburgh, S.)

    Johnson, Eric (Blackley)

    Rayner, Brig. R

    Davies, Rt. Hn. Clement (Montgomery)

    Jones, A. (Hall Green)

    Redmayne, M.

    Deedes, W. F.

    Joynson-Hicks, Hon L W

    Remnant, Hon P.

    Dodds-Parker, A. D.

    Kaberry, D.

    Renton, D. L. M.

    Donaldson, Cmdr. C. E. McA.

    Keeling, Sir Edward

    Roberts, Peter (Heeley)

    Donner, P. W.

    Kerr, H. W.

    Robertson, Sir David

    Doughty, C. J. A.

    Lambert, Hon. G

    Robinson, Roland (Blackpool, S.)

    Douglas-Hamilton, Lord Malcolm

    Lambton, Viscount

    Robson-Brown, W.

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Langford-Holt, J. A

    Rodgers, John (Sevenoaks)

    Duncan, Capt. J. A. L.

    Law, Rt. Hon. R. K.

    Roper, Sir Harold

    Duthie, W. S.

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

    Ropner, Col. Sir Leonard

    Eccles, Rt. Hon. D. M.

    Legh, Hon. Peter (Petersfield)

    Russell, R. S.

    Eden, Rt. Hon. A.

    Lennox-Boyd, Rt. Hon. A. T

    Ryder, Capt. R E. D.

    Elliot, Rt. Hon. W. E.

    Linstead, H. N.

    Salter, Rt. Hon. Sir Arthur

    Fell, A.

    Llewellyn, D. T.

    Sandys, Rt. Hon. D.

    Finlay, Graeme

    Lloyd, Rt. Hon. Selwyn (Wirrat)

    Savory, Prof. Sir Douglas

    Fisher, Nigel

    Lockwood, Lt.-Col. J. C.

    Schofield, Lt.-Col. W. (Rochdale)

    Fletcher-Cooke, C.

    Longden, Gilbert

    Scott-Miller, Cmdr. R.

    Fort, R.

    Low, A. R. W.

    Shepherd, William

    Foster, John

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Simon, J. E. S. (Middlesbrough, W.)

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Lucas, P. B. (Brentford)

    Smithers, Peter (Winchester)

    Fyfe, Rt. Hon. Sir David Maxwell

    Lucas-Tooth, Sir Hugh

    Smithers, Sir Waldron (Orpington)

    Galbraith, Rt. Hon. T. D. (Pollok)

    Lyttelton, Rt. Hon. O.

    Smyth, Brig. J. G. (Norwood)

    Galbraith, T. G. D. (Hillhead)

    Macdonald, Sir Peter

    Soames, Capt. C.

    Gammans, L. D

    McKibbin, A. J.

    Spearman, A. C. M.

    George, Rt. Hon. Maj. G. Lloyd

    McKie, J. H. (Galloway)

    Spence, H. R. (Aberdeenshire, W.)

    Godber, J. B.

    Maclean, Fitzroy

    Spans, Sir Patrick (Kensington, S.)

    Gough, C. F. H.

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Stanley, Capt. Hon. Richard

    Gower, H. R.

    MacLeod, John (Ross and Cromarty)

    Stevens, G. P.

    Graham, Sir Fergus

    Macmillan, Rt. Hon. Harold (Bromley)

    Stewart, Henderson, (Fife, E.)

    Gridley, Sir Arnold

    Macpherson, Niall (Dumfries)

    Stoddart-Scott, Col. M.

    Grimond, J.

    Maitland, Comdr. J. F. W. (Horncastle)

    Strauss, Henry (Norwich, S.)

    Grimston, Hon. John (St. Albans)

    Maitland, Patrick (Lanark)

    Studholme, H. G.

    Grimston, Sir Robert (Westbury)

    Markham, Major S. F.

    Summers, G. S.

    Hall, John (Wycombe)

    Maude, Angus

    Sutcliffe, Sir Harold

    Hare, Hon. J. H

    Maudling, R.

    Taylor, Charles (Eastbourne)

    Harris, Frederic (Croydon, N.)

    Maydon, Lt.-Comdr. S. L. C.

    Taylor, William (Bradford, N.)

    Harrison, Col. J. H. (Eye)

    Medlicott, Brig. F.

    Teeling, W.

    Harvey, Air Cdre. A. V. (Macclesfield)

    Mellor, Sir John

    Thomas, Leslie (Canterbury)

    Harvey, Ian (Harrow, E.)

    Molson, A. H. E.

    Thomas, P. J. M. (Conway)

    Harvie-Watt, Sir George

    Moore, Lt.-Col. Sir Thomas

    Thompson, Kenneth (Walton)

    Hay, John

    Nabarro, G. D. N.

    Thornton-Kemsley, Col. C. N

    Heald, Sir Lionel

    Nicholls, Harmar

    Tilney, John

    Heath, Edward

    Nicholson, Godfrey (Farnham)

    Turner, H. F. L.

    Higgs, J. M. C.

    Nicolson, Nigel (Bournemouth, E.)

    Turton, R. H.

    Hill, Dr. Charles (Luton)

    Nield, Basil (Chester)

    Tweedsmuir, Lady

    Hill, Mrs. E. (Wythenshawe)

    Noble, Cmdr. A. H. P.

    Vesper, D. F.

    Hinchingbrooke, Viscount

    Nugent, G. R. H.

    Wakefield, Edward (Derbyshire, W.)

    Hirst, Geoffrey

    Nutting, Anthony

    Wakefield, Sir Wavell (St. Marylebone)

    Holland-Martin, C. J.

    Oakshott, H. D.

    Walker-Smith, D. C.

    Hollis, M. C.

    Odey, G. W.

    Ward, Hon. George (Woroester)

    Holt, A. F.

    O'Neill, Phelim (Co. Antrim, N.)

    Ward, Miss I. (Tynemouth)

    Hopkinson, Rt. Hon. Henry

    Ormsby-Gore, Hon. W. D.

    Waterhouse, Capt Rt. Hon. C.

    Hornsby-Smith, Miss M. P

    Orr, Cape. L. P. S.

    Watkinson, H. A.

    Horobin, I. M.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Webbe, Sir H. (London & Westminster)

    Horsbrugh, Rt. Hon. Florence

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Williams, Rt. Hon. Charles (Torquay)

    Howard, Gerald (Cambridgeshire)

    Osborne, C.

    Williams, Gerald (Tonbridge)

    Howard, Hon. GrevIle (St. Ives)

    Peaks, Rt. Hon. O.

    Williams, Sir Herbert (Croydon, E.)

    Hudson, Sir Austin (Lewisham, N.)

    Peto, Brig. C. H. M.

    Williams, R. Dudley (Exeter)

    Hudson, W. R. A. (Hull, N.)

    Peyton, J. W. W.

    Wills, G.

    Hulbert, Wing Cdr. N. J.

    Pickthorn, K. W. M.

    Wilson, Geoffrey (Truro)

    Hurd, A. R.

    Pilkington, Capt. R. A.

    Wood, Hon. R.

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Pitman, I. J.

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Powell, J. Enoch

    TELLERS FOR THE NOES:

    Hutchison, James (Scotstoun)

    Price, Henry (Lewisham, W.)

    Mr. Drewe and

    Hyde, Lt.-Col. H. M.

    Prior-Palmer, Brig. O. L.

    Mr. Richard Thompson.

    Hylton-Foster, H. B. H.

    Profumo, J. D.

    Jenkins, Robert (Dulwioh)

    Raikes, Sir Victor

    The Temporary Chairman: The next Amendment selected is that in page 14, line 7, and I think it would be to the convenience of the Committee if we also dealt with the Amendment in page 14, line 20, at the end, to insert:
    (5) In exercising the powers vested in them by subsection (1) of this section, the Agency shall not sell or otherwise dispose of to any purchaser or other person any securities of a company vested in them of a class carrying voting rights unless at the same time such
    1786
    purchaser or other person buys or otherwise acquires for a consideration which shall have been previously approved of by the Treasury an equivalent proportion of securities of that company vested in the Agency in each class of the securities of that company which do not carry voting rights.
    Mr. Roy Jenkins: I beg to move, in page 14, line 7, at the end, to insert:
    "so, however, that they shall not so exercise their powers as to produce the result that the nominal value of the shares in any such subsidiary other than the loan capital therein

    1787
    and the shares therein carrying preferential rights to a fixed dividend shall be less than fifty-one per cent. of the aggregate of the nominal values of such loan capital and of such shares carrying preferential rights as aforesaid."
    As this raises a fairly complicated point, I will begin by trying to explain the danger we are trying to meet in these two associated Amendments and will then go on to what we actually propose in them. Under the Clause, the Agency is given power to carry out any reorganisation of the capital structure of any of its subsidiary companies. The purpose of that reorganisation would be, presumably, to make the shares of the companies more readily saleable when the reorganisation had been carried out.
    My hon. Friends and I see a certain danger in that. It is our view—and we have consistently expressed it throughout the discussions on this Bill—that it may be very difficult to get great sums of private money back into the steel industry; but, none the less, there may be certain people who will be very anxious to come along with fairly limited sums of money with which to buy both the equity capital and the control of certain steel companies.
    We visualise the danger that, confronted with this situation, the Agency may carry through some rather surprising reorganisations which might take the form of a very highly geared capital structure in which there is a great deal of debenture capital, unsecured loan capital, preference capital, and only a very limited amount of ordinary share capital. As I understand it, there certainly would be nothing in the Bill as drafted to prevent the most extremely highly geared structures from being imposed upon certain companies for the simple reason that private firms without very large resources would be able to get hold of control and equity capital in the industry.
    I am sure that one of the arguments which the Financial Secretary will advance will be to say, "The people who will be in charge of this, and even more the Treasury officials, are reasonably minded people who will have the interests of the taxpayer and the public welfare in mind and will not dream of doing any such thing." I beg the Financial Secretary to realise that in all these
    1788
    matters he and those associated with him might be placed in a difficult position in which they might have a very sharp conflict of loyalty. That has worried us on this side of the Committee all through the passage of this Bill.
    The conflict will be this—no doubt, all things being equal, the Financial Secretary and the other Treasury people will desire to get a very good deal for the taxpayer and will desire not to do anything that will be regarded as unreasonable. But they want to sell off the industry into private hands. That is the meaning of this Bill. If they cannot do that, then this Bill will stand as one of the most unnecessary Bills to have taken up a great deal of Parliamentary time.
    There is, therefore, a possible conflict of loyalties which the Financial Secretary and others will have to face. It is no good the Financial Secretary saying, "You can trust me to look after this thing properly because I want a decent deal for the taxpayer." He does; but he may also want something which would conflict with the reasonable interests of the taxpayer. I am sure that the Financial Secretary and other hon. Members will agree that in the ordinary way it is undesirable that one should have a very highly geared capital structure of companies.
    That is the danger against which we seek to guard in this Amendment. The effect of the Amendment would be that those private buyers who want to get control and hold control of the company and want the equity must put into the company an amount of money going at least some substantial part of the way towards the real value of the company, and not an amount of money which is a very small fraction of the real value of the company. I must tell the Financial Secretary that in drafting the first of these two Amendments some certain amount of error crept in. I am sure that he will be sympathetic, because I remember that on the Finance Bill last year, even with the great resources behind the hon. Gentleman, there were drafting errors in some Government Amendments.
    As it now stands, the Amendment provides that when capital reorganisation has been completed, the ordinary share capital should be not less than 51 per

    1789
    cent. of the capital, other than ordinary share capital, including the debenture capital, whereas the intention which was more in our mind was that it should be 51 per cent. of the total capital, including the ordinary share capital. I naturally regret that this has arisen, but it is not a point of great importance because we are not so much wedded to a particular figure as to the principle that there should be inserted in the Bill some limitation upon the right of the Agency to secure a very highly geared capital structure. As the Amendment stands, it means that a third or a little more than a third of the capital structure, including the loan capital, of any company which was a subsidiary of the industry would have to be ordinary share capital after the reorganisation had been carried through.
    That is not an unreasonable position. I took the opportunity earlier this afternoon of looking at the existing capital structures of some of the most prominent subsidiary companies of the present Iron and Steel Corporation. In most of those cases the ordinary share capital amounted to substantially more than a half of the total issued capital and—though I do not suggest that it is true over the whole range in all of those at which I looked it was substantially over one-third. In the case of the Lancashire Steel Corporation Ltd. it is over 65 per cent. of the issued capital and I include the debenture capital here—in the United Steel Companies Ltd. it is also over 65 per cent., Richard, Thomas and Baldwins Ltd., over 45 per cent., Colvilles Ltd., over 65 per cent., John Summers and Sons Ltd., about 48 per cent., Stewarts and Lloyds Ltd., over 65 per cent., and Dorman, Long and Co., Ltd., over 45 per cent. Therefore, what we are pressing for is not in any way broadly out of accord with the present state of affairs in the industry.
    I hope, therefore, that the Financial Secretary will be able to go a very substantial way towards meeting us on this point. I hope that he will not say, "Of course, we will not carry through an unreasonable reorganisation," but that he will put a figure which will give us a specific guarantee that rather fantastic capital structures will not be worked out to make it easier to get rid of the industry into private hands.
    The second Amendment to which I have referred includes a provision by
    1790
    which a buyer when he buys equity capital, which for this purpose is defined as a class carrying voting rights, must also take at the same time an equivalent proportion of the shares or capital of other categories in the same company. This is an Amendment which, if our first Amendment were not accepted, would become even more necessary, because it would be a kind of second line of defence against the position in which one could have a very highly geared capital structure and control and equity interest passing over for a comparatively small sum of money.
    Even if our first Amendment were accepted, the second Amendment could still stand. Perhaps it would not be so necessary in those circumstances but it would be still workable and useful, because it would help to prevent a position in which the equity interest goes out to private buyers whereas the Government are left holding the fixed interest securities, which in certain cases may represent the most substantial part of the value of the company.
    6.30 p.m.
    Mr. Boyd-Carpenter: These two Amendments we are taking together raise, as the hon. Member for Stechford (Mr. Roy Jenkins) has properly said, different but inter-connected points. They both relate to restrictions which it is sought to impose upon the Agency in the disposal of the companies. The first one prevents what is described as a highly geared structure, and it is certain that in general it is unlikely that it would be thought either desirable or necessary to arrange so highly geared a structure as the hon. Member for Stechford seemed to contemplate.
    On the general issues which the hon. Member raised, I would not wish to join issue with him, but the Amendment raises two points of some importance. I leave aside the drafting error of which I am only too glad to acquit the hon. Member. I have had some experience of committing them myself, and I would certainly never seek to make a debating point about them. There is, however, an issue of some substance, namely whether it is right and proper to put into the Bill a restriction even against a fairly improbable event of this sort.
    We are anxious, as I have said more than once, to secure that the Agency has

    1791
    the greatest possible freedom. It is being called upon to do an important job, and the general principle, which I should have thought would have commended itself to all hon. Members, is that, having been given the job, it ought not to be inhibited by statutory restrictions of one sort or another. It ought to be allowed to do the job, and if mistakes are made my right hon. Friend is answerable to Parliament. But it is a very different thing to lay down in advance arbitrary things which in no conceivable circumstances may be done.
    We are here disposing of a large and complex industry. Probably no pair of these companies are precisely the same. It would be quite wrong—and this seems to me to be the right reply not only to this Amendment but to one or two others —to lay down these meticulous restrictions which would forbid the Agency to do in the odd case—perhaps the hundredth case—what might be right in that case. It is far better to leave it free to do it and let my right hon. Friend be answerable to Parliament for it having been done.
    A curious use is made of "nominal values" in this context. As the Committee are aware, nominal values may very well vary widely and, indeed, may bear no relation at all to the real value. Therefore, the precise degree of restriction which this Amendment would impose would vary from case to case, simply dependent on the extent to which the nominal value of the share differed from the real value.
    There is a wide variety of value between different cases, and indeed when compensation was assessed—and on a previous Amendment hon. Members showed enthusiasm for the basis upon which compensation was assessed—it was assessed relative to the nominal value over all the industry at 102 per cent. for debentures and 214 per cent. for ordinary stock—a difference of over 100 per cent. I think that indicates that if it were desirable—I do not think it is—to put a restriction of this sort upon the Agency, to tie it to the nominal value of the shares would be to tie it to a singularly elusive and unstable connection.
    The other Amendment imposes an even more damaging restriction upon the
    1792
    Agency in disposing of the shares. As I understand it, it would compel a purchaser to take something which he did not want in order to be allowed to buy something that he did—precisely that practice of ill-behaved traders in times of scarcity which I have heard denounced time and again in the House. It is another example of "If you want tomatoes you must buy potatoes." It seems to me a wholly unreasonable thing to do, whether as a trader or in disposing of shares.
    There is a certain type of investor who, for very good and proper reasons, wants debentures. Why should he be compelled, if he wants debentures, to take equities; and if he wants equities, to take debentures? There is a different type of investor. Whether they know their own business best I do not know, but they are inclined to think they do. They want one particular kind of security. I really cannot see how we could justify compelling them to take one because they want the other.
    I do not think any useful public purpose is served by this Amendment. Indeed, I think some public detriment would follow, because if there were anything calculated to diminish the price which we could get for the shares, it would be a provision of this sort. Hon. Members opposite have recently gone into the Lobby because they wanted something put into the Bill which they thought would secure that we should be able to get a better price for these shares than we otherwise would. They have just voted on that. It is inconsistent on this next Amendment to impose one of these restrictions which must diminish to some extent the attractiveness of these shares and, therefore, the price which they will fetch.
    The second Amendment seems to be subject to the criticism not merely that it would hamper the disposal of the shares but that it would be a restriction of a peculiarly damaging nature from the point of view of doing what we want and getting a reasonable price for the shares. Therefore, while I fully appreciate the spirit in which these proposals have been put forward, I am afraid they are quite unacceptable because they would work so directly against the objects of which hon. Members on both sides

    1793
    have expressed themselves in favour from time to time.
    Mr. Austen Albu: I do not think that the Financial Secretary did justice to the industry which we are discussing. His argument seemed to me to be directed towards what I might call normal Stock Exchange transactions, normal investment transactions which take place from day to day, whereas we are discussing the first transaction which will take place when the Agency starts to sell what I presume will be a substantial proportion of the industry—whole companies, I presume, with practically all the shares in a given company. This is a very different sort of operation from the normal day-to-day investment activities which the Financial Secretary was talking about.
    I think the Financial Secretary missed the whole point of my hon. Friend's Amendment when he referred to it as imposing meticulous restrictions. My hon. Friend was quite clear that there was a slight error in the drafting, although the principle was more important than the actual figures. The principle here is to safeguard ourselves against an operation of which we have all heard rumours, if we have not actually read it in the financial Press, namely, the proposal to turn this industry back to private enterprise. It has been suggested that a very small number of equity shares might be sold to a buyer who would then have complete control of the company and that this would then satisfy the Government's Election pledges that the industry was to be returned to private enterprise. I do not think that this would satisfy those pledges at all.
    As to the second Amendment, it has been suggested that this would be a conditional sale and that the acceptance of the Amendment might affect the view of investors. Surely the same point arises. If the Financial Secretary is thinking of a relatively small number of investors putting their money into normal Stock Exchange transactions there may be something in the argument. The object of the Agency, I presume, is to refrain from carrying out any sales until they are satisfied that a substantial part of the shares in a company will be taken up or, at any rate, that the shares they sell will give control over the company.
    1794
    In that case, the investor is not likely to be a private person or a group of private persons; it is more likely to be a large public body, another private company, an insurance company or something of that sort. Therefore, I cannot see that the Financial Secretary's argument about a conditional sale is of much importance.
    As to the question of the nominal or present quoted value of the shares, I would remind the Financial Secretary that the first Amendment deals with those cases in which the Agency are making a reorganisation or alteration of the share capital of a company by which a completely new share structure may come into being. The Amendment is directed to ensuring that in that new structure the relation between the nominal value of the ordinary shares and of other shares is of some relatively controlled order—not necessarily meticulously controlled, but not of such a nature that the control of a company could be sold for a mere bagatelle. I do not think my hon. Friend would say that that control would not be necessary if there were to be no alteration in the share structure; but when the structure is completely changed and when a new nominal value is given to the shares, surely the purpose of the Amendment is made completely clear.
    Mr. Roy Jenkins: The Amendment specifically refers to the cases where there is a reorganisation, and the Financial Secretary's point is, therefore, quite invalid.
    Mr. Albu: The Financial Secretary did not suggest that he accepted the view that these companies should not be sold for a mere bagatelle—for a very small equity shareholding. It would not do any good for hon. Gentlemen to say that when one has a highly-geared capital structure the risk is very great. It is perfectly true that if this were a case where a little man was putting a little money into the purchase of the equity capital and the number of ordinary shares issued was very small, the risk would be very great, but the chances are that the companies who will buy these steel companies will be very substantial ones and for them to put up a few thousand or a million pounds in order to acquire the equity capital would mean for them very little risk. Under these conditions some other large undertaking would be able to

    1795
    acquire control of a large steel company at a very small risk to themselves.
    This does not seem to be anything like private enterprise. But then, throughout this Bill, we have had some extraordinary anomalies. I have very much welcomed the contributions we have had in other debates in Committee of the hon. Member for Hall Green (Mr. Aubrey Jones). He does not really seem to believe in private enterprise in the steel industry. I do not know quite what we shall get out of this Bill in the end; but we must be quite certain that we do not sell off cheaply the right to control some of the major companies in the industry to other large private companies or City groups.
    This is only one of the Amendments which we have moved which might safeguard the position in that respect. The Financial Secretary did not address himself to that point. He made some interesting observations, but they were not directed towards the essential points of this Amendment. We say that it should not be possible to sell the control of a large and substantial company for a very small number of ordinary shares which, for the purchasing company, would be only a very small risk.
    Mr. Fienburgh: I shall start by being completely out of order and congratulating you, Mr. Hynd, upon your first appearance in the Chair. I hope that we shall in future see eye to eye on the range of debate and points of order as we do politically.
    I want to refer to two points which were made by the Financial Secretary. First, he argued that there is adequate political and Parliamentary control over the Holding and Realisation Agency to ensure that the bad effects we feel may follow from the Clause as drafted shall not ensue. He says that the Agency should have a reasonable degree of latitude so that it may go ahead with its job, and if it makes mistakes the Minister is responsible to the House and the House can exercise some control.
    But once a mistake of this nature has been made it is, in effect, beyond control. We may very well raise a complaint. We may very well—although this is doubtful—so carry hon. Members opposite with the content of our complaint that they fell like following us into the Lobby in defiance of their Whips: but
    1796
    even if that happened what could we do to correct a mistake which had been made because originally this Clause was too loosely drafted? Are we to pass another Act of Parliament repurchasing on the original terms the assets which have been sold in a mistaken way? We have no sanction, other than that which we are seeking to exercise here and now, which is to put into the Bill and the Clause a provision which might prevent undesirable mistakes from being made.
    My second point is in connection with the Financial Secretary's remarks about conditional sales. He had a smile on his face at the time, so I assume that he was making a joke; but his smile is so constant, because of his natural charm, that it is a little difficult to know whether it is to be regarded as the signal for a joke. He said we should abhor the conditional sale because we always grumbled when a greengrocer sought to force the sale of potatoes upon purchasers who wanted only tomatoes.
    That is a silly analogy and that is why I am being charitable in assuming that he meant it as a joke. When one buys tomatoes one does not buy control of the greengrocer's shop, not even when one buys all the potatoes or all the stock available on the shelves of the shop. But when one buys the majority of the equity holdings in a public company one does, in effect, buy control of that company, and in those circumstances we suggest that a conditional sale is a right and proper thing.
    6.45 p.m.
    We want a conditional sale which lays it down that if a person wishes to buy his way into control of a section of this industry he must also take a share of the debt burden and the loan capital of the industry. If he does not he is buying his way in on the cheap and, what is much more serious, the Agency and, through the Agency the taxpayer, are left shouldering most of the debt burden at a fixed rate of interest and with no semblance of control over the particular firms and concerns in which the agency may happen, in terms of capital to be the majority shareholders.
    That is why we reject entirely the Financial Secretary's amusing analogy of tomatoes and potatoes and insist that it will not be possible for the House of Commons to rectify a mistake which has

    1797
    been made, other than the ultimate rectification which will come when we wipe this particular Measure off the Statute Book when we return to power. In the terms of the Bill the House has no power to rectify these mistakes and, therefore, we must insist on using what power we have to make sure that these mistakes do not happen.
    Sir F. Soskice: We have not had a satisfactory answer to the case which has been made by my three hon. Friends. It is a perfectly simple and plain case. We do not want it to be possible under the Bill for a large body to buy control of these companies cheaply and without taking their appropriate share of the loan capital. That is the short case, and it has been made very clearly by my hon. Friends.
    The answer which we received was, in the first place, that it was not a good idea to bind the Agency by meticulous prohibitions. There is little I can add to what has been said, beyond this: we are not putting a whole host of prohibitions upon the Agency. Clause 17 is a crucial Clause, dealing with the disposal of securities, and the Financial Secretary will see, if he looks at the Order Paper, that there is a minimum of essential Amendments down to it. The Government have already rejected one. They have said that they will try to do something about a second. What is left is the minimum.
    The Financial Secretary says, "We have not encumbered the Agency with a whole host of prohibitions; we have simply left in the Clause a few things which we believe are absolutely indispensable." That is the first point which the Financial Secretary makes. The second point he makes is simply this: why should it not be possible to buy the equity capital without taking a fair proportion of the loan capital?
    That has been dealt with by my three hon. Friends, who made it quite clear that they are contemplating a case in which a large corporation buys its way to control on the cheap and without paying a fair price to the public. That is a complete answer to the question which the Financial Secretary put. The answer having been given, we are convinced that this, again, is a proposal by the Opposi-
    1798
    tion which is being cavalierly brushed aside with no possible reason.
    I hope that my hon. Friends will think it necessary to carry the Amendment to a Division, if only to ensure that we make clear to the Government and to the country at large the gross defects in the Bill and call attention to the way in which the Government are simply sweeping aside, without giving it fair consideration, the demand which we make to provide some modest safeguards to protect the public purse.
    Mr. Boyd-Carpenter: I hope that the right hon. and learned Gentleman will not think that, although I may disagree with him, I am brushing aside cavalierly anything which he or his hon. Friends say. That has not been the practice of either my right hon. Friend or myself in these discussions. Nevertheless, we must differ as to the desirability of putting what I described in my earlier speech, I think accurately, as meticulous prohibitions of this sort upon the Agency. I fully accept the concern expressed by the right hon. and learned Gentleman and the hon. Member for Islington, North (Mr. Fienburgh) about the possibility of a large business buying control of one of the companies on the cheap. I do not think they need be much concerned about that because, as has been said again and again, there is no intention to dispose of any of these assets on the cheap, and if a transaction in which control is involved is under consideration, then, quite clearly, that factor of control will be reflected in the price.
    I said before, and I say again, that in general there is no intention of disposing of small but controlling packets of equity capital, leaving the Agency with a large block of loan capital. There is no such intention. On the other hand, it is quite another thing to say that it is right to put prohibitions of this sort into the Bill to cover every conceivable case which could arise. Even if a restriction of this sort were desirable, it seems to me that it is framed in such a way, perhaps inevitably, as to have a serious effect upon the price we shall get for the shares.
    The right hon. and learned Gentleman brushed that aside. I would not say that he brushed it aside cavalierly, but, nevertheless, he brushed it aside, even though it is fundamental to the point with which

    1799
    we are all concerned. Would a restriction of this sort interfere with the disposal of the shares and adversely affect the price of the ordinary shares? The right hon. and learned Gentleman made no attempt to deal with that aspect.
    Mr. Mitchison rose—
    Mr. Boyd-Carpenter: Perhaps the hon. and learned Gentleman would not mind if I do not give way at this point. The hon. Member for Stechford said that the point of choice of nominal value did not matter. With great respect, it matters a great deal. It matters sufficiently to vitiate a large part of the control which it is sought to impose, because, presumably, during the rearrangement the nominal value could be anything which the Agency liked. It therefore seemed to me that his criticism showed that if a statutory safeguard is intended this is an inadequate safeguard.
    The hon. Member for Edmonton (Mr. Albu) said no small investors would
    invest in the shares of the companies. It is not given either to the hon. Member for Edmonton or myself precisely to foresee the future in all its complexities, but it is certainly highly probable that small investors will invest in these shares and, indeed, it is a little odd, when restrictions of one sort or another are being suggested on the Order Paper against big investors, that anything should be done which would have the effect of deterring the small investor.
    It is our hope and belief that the small investor will come into the picture. If he does, the argument of the hon. Member for Edmonton, being based on the hypothesis that he would not, falls to the ground. I am sure that the hon. Member would not wish to deter small investors. There is every likelihood that they will enter the field. We have every desire, for every reason, to encourage them.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes. 222; Noes, 244.

    Division No. 103.]

    AYES

    [6.58 p.m.

    Acland, Sir Richard

    Donnelly, D. L.

    Irving, W. J. (Wood Green)

    Adams, Richard

    Dugdale, Rt. Hon. John (W. Bromwich)

    Isaacs, Rt. Hon. G. A.

    Albu, A. H.

    Ede, Rt. Hon. J. C.

    Janner, B.

    Anderson, Frank (Whitehaven)

    Edelman, M.

    Jay, Rt. Hon. D. P. T.

    Attlee, Rt. Hon. C. R.

    Edwards, John (Brighouse)

    Jeger, Dr. Santo (St. Pancras, S.)

    Awbery, S. S.

    Edwards, W. J. (Stepney)

    Jenkins, R. H. (Stechford)

    Bacon, Miss Alice

    Evans, Albert (Islington, S.W.)

    Johnson, James (Rugby)

    Bartley, P.

    Evans, Edward (Lowestoft)

    Johnston, Douglas (Paisley)

    Bellenger. Rt. Hon. F. J.

    Evans, Stanley (Wednesbury)

    Jones, David (Hartlepool)

    Bence, C. R.

    Fernyhough, E.

    Jones, Frederick Elwyn (West Ham, S.)

    Benn, Hon. Wedgwood

    Fienburgh, W.

    Jones, Jack (Rotherham)

    Benson, G.

    Finch, H. J.

    Jones, T. W. (Merioneth)

    Blackburn, F.

    Fletcher, Eric (Islington, E.)

    Keenan, W.

    Blenkinsop, A.

    Follick, M.

    Kenyon, C.

    Blyton, W. R.

    Foot, M. M.

    Key, Rt. Hon. C. W

    Boardman, H.

    Fraser, Thomas (Hamilton)

    King, Dr. H. M

    Bottomley, Rt. Hon. P. G.

    Freeman, John (Watford)

    Kinley, J.

    Bowden, H. W.

    Gibson, C. W.

    Lee, Frederick (Newton)

    Bowles, F. G.

    Glanville, James

    Lee, Miss Jennie (Cannock)

    Braddock, Mrs. Eizabeth

    Gordon Walker, Rt. Hon. P. C.

    Lever, Leslie (Ardwick)

    Brockway, A. F.

    Greenwood, Anthony (Rossendale)

    Lindgren, G. S.

    Brook, Dryden (Halifax)

    Griffiths, David (Rother Valley)

    Lipton, Lt.-Col. M

    Broughton, Dr A. D. D.

    Griffiths, Rt. Hon. James (Llanelly)

    MacColl, J. E.

    Brown, Rt. Hon. George (Belper)

    Hale, Leslie

    McGovern, J.

    Brown, Thomas (Ince)

    Hall, Rt. Hon. Glenvil (Colne Valley)

    McInnes, J.

    Burton, Miss F. E.

    Hall, John T. (Gateshead, W.)

    McLeavy, F.

    Butler, Herbert (Hackney, S.)

    Hamilton, W. W.

    MacMillan, M. K (Western Isles)

    Castle, Mrs. B. A.

    Hannan, W.

    McNeil, Rt. Hon. H.

    Champion, A. J.

    Hardy, E. A.

    MacPherson, Malcolm (Stirling)

    Chapman, W. D.

    Hargreaves, A.

    Mainwaring, W. H.

    Chetwynd, G. R.

    Harrison, J. (Nottingham, E.)

    Mallalieu, E. L. (Brigg)

    Collick, P. H.

    Hastings, S.

    Mann, Mrs. Jean

    Cove, W G.

    Hayman, F. H.

    Manuel, A. C.

    Craddock, George (Bradford, S.)

    Henderson, Rt. Hon. A. (Rowley Regis)

    Mayhew, C. P

    Crosland, C. A. R.

    Hewitson, Capt. M.

    Mellish, R. J

    Grossman, R. H. S.

    Holman, P.

    Messer, F.

    Cullen, Mrs. A.

    Holmes, Horace (Hemsworth)

    Mikardo, Ian

    Daines, P.

    Houghton, Douglas

    Mitchison, G. R.

    Dalton, Rt. Hon. H.

    Hudson, James (Ealing, N.)

    Monslow, W.

    Darling, George (Hillsborough)

    Hughes, Cledwyn (Anglesey)

    Moody, A. S.

    Davies, Ernest (Enfield, E.)

    Hughes, Emrys (S. Ayrsh e)

    Morgan, Dr. H. B. W.

    de Freitas, Geoffrey

    Hughes, Hector (Aberdeen, N.)

    Morley, R.

    Deer, G.

    Hynd, J. B. (Attercliffe)

    Morris, Percy (Swansea, W.)

    Dodds, N. N.

    Irvine, A. J. (Edge Hill)

    Morrison, Rt. Hon. H. (Lewisham, S.)

    Mort, D. L.

    Rhodes, H

    Tomney, F.

    Moyle, A.

    Richards, R.

    Turner-Samuels, M.

    Mulley, F. W.

    Robens, Rt. Hon. A.

    Ungoed-Thomas, Sir Lynn

    Murray, J. D

    Roberts, Albert (Normanton)

    Viant, S. P.

    Nally, W.

    Roberts, Goronwy (Caernarvon)

    Watkins, T. E.

    Neal, Harold (Bolsover)

    Robinson, Kenneth (St. Pancras, N.)

    Webb, Rt. Hon. M. (Bradford, C.)

    Noel-Baker, Rt. Hon. P. J

    Rogers, George (Kensington, N.)

    Weitzman, D.

    Oldfield, W. H.

    Ross, William

    Wells, Percy (Faversham)

    Oliver, G. H.

    Shackleton, E. A. A.

    Wells, William (Walsall)

    Orbach, M.

    Shinwell, Rt. Hon. E

    West, D. G.

    Oswald, T.

    Short, E. W.

    Wheeldon, W. E.

    Padley, W. E.

    Silverman, Julius (Erdington)

    White, Henry (Derbyshire, N.E.)

    Paling, Will T. (Dewsbury)

    Simmons, C. J. (Brierley Hill)

    Whiteley, Rt. Hon. W.

    Palmer, A. M. F

    Smith, Ellis (Stoke, S.)

    Wigg, George

    Pannell, Charles

    Smith, Norman (Nottingham, S)

    Wilcock, Group Capt. C. A. B.

    Pargiter, G. A

    Snow, J. W.

    Wilkins, W. A.

    Parker, J.

    Sorensen, R. W.

    Willey, F. T

    Paton, J.

    Soskice, Rt. Hon. Sir Frank

    Williams, David (Heath)

    Pearson, A.

    Sparks, J. A.

    Williams, Rev. Llywelyn (Abertillery)

    Pearl, T. F.

    Steele, T.

    Williams, Ronald (Wigan)

    Plummer, Sir Leslie

    Stewart, Michael (Fulham, E.)

    Williams, W. R. (Droylsden)

    Popplewell, E.

    Strachey, Rt. Hon. J.

    Williams, W. T. (Hammersmith, S.)

    Porter, G.

    Strauss, Rt. Hon. George (Vauxhall)

    Winterbottom, Ian (Nottingham, c.)

    Price, Joseph T. (Westhoughton)

    Summerskill, Rt. Hon. E.

    Winterbottom, Richard (Brightside)

    Price, Philips (Gloucestershire, W.)

    Sylvester, G. O.

    Woodburn, Rt. Hon. A.

    Proctor, W. T.

    Taylor, Bernard (Mansfield)

    Wyatt, W. L.

    Pursey, Cmdr. H.

    Taylor, John (West Lothian)

    Yates, V. F.

    Rankin, John

    Taylor, Rt. Hon. Robert (Morpeth)

    Younger, Rt. Hon. K

    Reeves, J.

    Thomas, Ivor Owen (Wrekin)

    Reid, Thomas (Swindon)

    Thomson, George (Dundee, E.)

    TELLERS FOR THE AYES:

    Reid, William (Camlachie)

    Thorneycroft, Harry (Clayton)

    Mr. Wallace and Mr. Arthur Allen.

    NOES

    Aitken, W. T.

    Crowder, Petro (Ruislip—Northwood)

    Hopkinson, Rt. Hon. Henry

    Allan, R. A. (Paddington, S.)

    Darling, Sir William (Edinburgh, S.)

    Hornsby-Smith, Miss M. P.

    Alport, C. J. M.

    Davies, Rt. Hn. Clement (Montgomery)

    Horobin, I. M.

    Amery, Julian (Preston, N.)

    Deedes, W. F.

    Horsbrugh, Rt. Hon. Florence

    Amory, Heathcoat (Tiverton)

    Dodds-Parker, A. D.

    Howard, Gerald (Cambridgeshire)

    Arbuthnot, John

    Donaldson, Cmdr. C. E. McA

    Howard, Hon. Greville (St. Ives)

    Ashton, H. (Chelmsford)

    Donner, P. W.

    Hudson, Sir Austin (Lewisham, N.)

    Assheton, Rt. Hon R. (Blackburn, W.)

    Doughty, C. J. A.

    Hudson, W. R. A. (Hull, N.)

    Astor, Hon. J. J.

    Douglas-Hamilton, Lord Malcolm

    Hulbert, Wing Cdr. N. J.

    Baldock, Lt.-Cmdr. J. M.

    Drewe, C.

    Hurd, A. R.

    Baldwin, A. E.

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Banks, Col. C.

    Duncan, Capt. J. A. L.

    Hutshison, Lt.-Com. Clark (E'b'rgh W.)

    Barber, Anthony

    Duthie, W. S.

    Hutchison, James (Scotstoun)

    Barlow, Sir John

    Etudes, Rt. Hon. D. M.

    Hyde, Lt.-Col. H. M.

    Baxter, A. B.

    Fall, A.

    Hylton-Foster, H. B. H.

    Beach, Maj. Hicks

    Finlay, Graeme

    Jenkins, Robert (Dulwich)

    Beamish, Maj. Tuften

    Fisher, Nigel

    Johnson, Eric (Blackley)

    Bell, Philip (Bolton, E.)

    Fletcher-Cooke, C

    Jones, A. (Hall Green)

    Bell, Ronald (Bucks, S.)

    Fort, R.

    Joynson-Hicks, Hon. L. W.

    Bennett, F. M. (Reading, N.)

    Foster, John

    Kaberry, D.

    Bennett, Dr. Reginald (Gosport)

    Fyfe, Rt. Hon. Sir David Maxwell

    Keeling, Sir Edward

    Bevins, J. R. (Toxteth)

    Galbraith, Rt. Hon. T. D. (Pollak)

    Kerr, H. W.

    Bishop, F. P.

    Galbraith, T. G. D. (Hillhead)

    Lambert, Hon. G.

    Bowen, E. R.

    Gammons, L. D.

    Lambton, Viscount

    Boyd-Carpenter, J. A.

    George, Rt. Hon. Maj. G. Lloyd

    Langford-Holt, J. A.

    Boyle, Sir Edward

    Godber, J. B

    Law, Rt. Hon. R. K.

    Brains, B. R.

    Gough, C. F. H.

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

    Braithwaite, Sir Albert (Harrow, W.)

    Gower, H. R.

    Legh, Hon. Peter (Petersfield)

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Graham, Sir Fergus

    Linstead, H. N.

    Brooke, Henry (Hampstead)

    Gridley, Sir Arnold

    Llewellyn, D. T.

    Brooman-White, R. C.

    Grimond, J.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Browne, Jack (Govan)

    Grimston, Hon. John (St. Albans)

    Lockwood, Lt.-Col. J. C.

    Bullard, D. G.

    Grimston, Sir Robert (Westbury)

    Longden, Gilbert

    Bullock, Capt. M

    Hall, John (Wycombe)

    Low, A. R. W.

    Borden, F. F. A.

    Hare, Hon. J. H.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Butcher, Sir Herbert

    Harris, Frederic (Croydon, N.)

    Lucas, P. B. (Brantford)

    Campbell, Sir David

    Harrison, Col. J. H. (Eye)

    Lucas-Tooth, Sir Hugh

    Carr, Robert

    Harvey, Air Cdre. A. V. (Macclesfield)

    Lyttelton, Rt. Hon. O.

    Cary, Sir Robert

    Harvey, Ian (Harrow, E.)

    Macdonald, Sir Peter

    Channon, H.

    Harvie-Watt, Sir George

    McKibbin, A. J.

    Clarke, Col. Ralph (East Grinstead)

    Hay, John

    McKie, J. H. (Galloway)

    Clarke, Brig. Terence (Portsmouth, W.)

    Heald, Sir Lionel

    Maclean, Fitzroy

    Cole, Norman

    Heath, Edward

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Colegate, W. A.

    Higgs, J. M. C.

    MacLeod, John (Ross and Cromarty)

    Conant, Maj. R. J. E.

    Hill, Dr. Charles (Luton)

    Macmillan, Rt. Hon. Harold (Bromley)

    Cooper, San. Ldr. Albert

    Hill, Mrs. E. (Wythenshawe)

    Macpherson, Niall (Dumfries)

    Craddock, Beresford (Spelthorne)

    Hinchingbrooke, Viscount

    Maitland, Comdr. J. F. W. (Horncastle)

    Cranberne, Viscount

    Hirst, Geoffrey

    Maitland, Patrick (Lanark)

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

    Holland-Martin, C. J.

    Markham, Major S. F.

    Crouch, R. F.

    Hollis, M. C.

    Maude, Angus

    Crowder, Sir John (Finchley)

    Holt, A. F.

    Maudling, R.

    1802

    1803

    Maydon, Lt.-Comdr. S. L. C.

    Rayner, Brig. R.

    Studholme, H. G

    Medlicott, Brig. F.

    Remnant, Hon. P.

    Summers, G. S.

    Mellor, Sir John

    Renton, D. L. M.

    Sutcliffe, Sir Harold

    Molson, A. H. E.

    Roberts, Peter (Healey)

    Taylor, Charles (Eastbourne)

    Moore, Lt.-Col. Sir Thomas

    Robertson, Sir David

    Taylor, William (Bradford, N.)

    Nabarro, G. D. N.

    Robinson, Roland (Blackpool, S.)

    Teeling, W.

    Nicholls, Harmar

    Robson-Brown, W.

    Thomas, P. J. M. (Conway)

    Nicholson, Godfrey (Farnham)

    Rodgers, John (Sevenoaks)

    Thompson, Kenneth (Walton)

    Nicolson, Nigel (Bournemouth, E.)

    Roper, Sir Harold

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Nield, Basil (Chester)

    Ropner, Col. Sir Leonard

    Thornton-Kemsley, Col. C. N

    Noble, Cmdr. A. H. P.

    Russell, R. S.

    Tilney, John

    Nugent, G. R. H.

    Ryder, Capt. R. E. D.

    Turner, H. F. L.

    Nutting, Anthony

    Salter, Rt. Hon. Sir Arthur

    Turton, R. H.

    Odey, G. W.

    Sandys, Rt. Hon. D.

    Tweedsmuir, Lady

    O'Neill, Phelim (Co. Antrim, N.)

    Savory, Prof. Sir Douglas

    Vosper, D. F.

    Ormsby-Gore, Hon. W. D.

    Schofield, Lt.-Col. W. (Rochdale)

    Wakefield, Edward (Derbyshire, W.)

    Orr, Capt. L. P. S.

    Scott, R. Donald

    Wakefield, Sir WaveII (St. Marylebone)

    Orr-Ewing, Charles Ian (Hendon, N.)

    Shepherd, William

    Walker-Smith, D. C.

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Simon, J. E. S. (Middlesbrough, W.)

    Ward, Miss I. (Tynemouth)

    Osborne, C.

    Smithers, Peter (Winchester)

    Waterhouse, Capt. Rt. Hon. C.

    Peake, Rt. Hon. O.

    Smithers, Sir Waldron (Orpington)

    Watkinson, H. A.

    Peto, Brig. C. H. M.

    Smyth, Brig. J. G. (Norwood)

    Webbe, Sir H. (London & Westminster)

    Peyton, J. W. W.

    Soames, Capt. C.

    Williams, Rt. Hon. Charles (Torquay)

    Pickthorn, K. W. M.

    Spearman, A. C. M.

    Williams, Gerald (Tonbridge)

    Pilkington, Capt R. A.

    Spence, H. R. (Aberdeenshire, W.)

    Williams, Sir Herbert (Croydon, E.)

    Pitman, I. J.

    Spens, Sir Patrick (Kensington, S.)

    Williams, R. Dudley (Exeter)

    Powell, J. Enoch

    Stanley, Capt. Hon. Richard

    Wills, G.

    Price, Henry (Lewisham, W.)

    Stevens, G. P.

    Wilson, Geoffrey (Truro)

    Prior-Palmer, Brig. O. L.

    Stewart, Henderson (Fife, E.)

    Wood, Hon. R.

    Profumo, J. D.

    Stoddart-Scott, Col. M.

    Raikes, Sir Victor

    Strauss, Henry (Norwich, S.)

    TELLERS FOR THE NOES:

    Mr. Oakshott and Mr. Redmayne.

    Mr. Ian Winterbottom: I beg to move, in page 14, line 20, at the end, to insert:
    (5) In exercising their powers under this section to sell or otherwise dispose of securities vested in them the Agency shall use their best endeavours to prevent the control of any company in which such securities are held from passing to any person or persons resident outside the United Kingdom and any sale or other disposal of any such securities to any person or persons resident outside the United Kingdom shall unless such person or persons shall before the contract by or in pursuance of which such sale or other disposal is effected have disclosed to the Agency that he or they as the case may be is or are resident outside the United Kingdom be wholly void for all purposes.
    This subsection has the advantage over some of the other ones that, first of all, it reads like English, and second, it is a subject of which no technical knowledge is necessary to enable hon. Members to pass an opinion on it. It means what it says. Its intention is that when the Agency start to carry out their duty of disposing of the stocks and shares which they hold in the steel industry they should use their best endeavours to prevent the control of any company in which such securities are held from passing to any person or persons who are resident outside the United Kingdom; and the second half of the subsection demands that anybody applying to make such purchase should declare whether or not he is resident outside this country.
    1804
    It may strike the Committee that this Amendment is somewhat chauvinistic in its temper, that it runs somewhat contrary to those Amendments urging that the Board should set up close links with the international authority established abroad, and that, in fact, it is inspired by a narrow nationalism. I wish to assure the Committee that that is not the intention of myself or my right hon. and hon. Friends. We wish that at a rather critical and difficult time in the history of the industry, when the stock is being transferred from public to private ownership. a period which, I think, everyone will agree, will be politically charged, no unnecessary complication should be introduced by permitting substantial control of a section of the steel industry to pass abroad.
    I think this is important, for the following reasons. I am convinced the Minister hopes that this Bill, when it becomes law, will produce a final solution for the steel industry; that it will stabilise the position of the industry. In many ways that is a highly desirable state of affairs, but we on this side of the Committee feel that that state has not been reached yet. There has been a very remarkable evolution in Conservative thought on this subject, and the concept of public supervision of this great industry is now common philosophy on both sides of the Committee. We have argued that we expect the Minister will find, once he

    1805
    has brought this Board into supervision, that the powers he has given it in this Bill are too limited to enable the Board to carry out its functions of supervision, and that in due course we shall have to reinforce the powers it now possesses with the powers of ownership.
    As a result of this decision, the ownership of various steel companies may change hands once or twice more in the future. The transfer from private to public ownership under the Act of 1949 went off extremely smoothly. Parliamentary control is accepted by both sides of the industry. If, however, a small section of the industry passes into foreign ownership, two considerable complications may arise. The first complication may arise during the period of transfer from public to private ownership. The workers in the industry, prompted by a proper sense of national pride, might take exception to such a transfer. However, I am convinced that my hon. Friend the Member for Rotherham (Mr. Jack Jones) can speak with greater authority for the workers in the industry.
    On the other hand, in the second period, should there be a transfer back from private to public ownership, considerable complications may arise if a significant section of the industry has passed into foreign ownership. It is conceivable—though I think possibly a little far-fetched—that foreign capital might be attracted to this country to stabilise the position of the steel industry in private ownership because of the complications which might arise from large foreign investment in the British steel industry.
    Let me say in advance that I am not about to compare the British steelmaster with his German counterpart. I think they are very different kinds of animals. On the other hand, it is rather instructive to look at what has been happening in Germany during the last 18 months or two years. The future of the German steel industry is still not certain. It is conceivable that the German steel industry, as well as the British, may pass into public ownership.
    Some German steelmasters are very conscious of this possibility and they have been attempting to attract considerable American investment into the German steel industry. It is rather interesting to note that they employed a very wellknown American corporation lawyer,
    1806
    who was a member of the American Administration, to act on their behalf. There is no doubt that if there were substantial American investment in the German steel industry it would cause complications for the German Government when the time came for them to nationalise the German steel industry.
    Quite frankly, whatever hon. Members opposite may think of nationalisation in this country, I am sure they will agree that the activities we have observed of one of the German steelmasters in financing one of the more neo-National Socialist movements would have been avoided if this rather reactionary German industry were under public supervision.
    7.15 p.m.
    Whatever may be the case in Germany, it is desirable that any unnecessary complication in the transitional period of the steel industry should be avoided, if possible. It is conceivable that large capital investment might be made by, say, an international consortium of the European Iron and Steel Community, who may consider that a large shareholding in the British steel industry would give them an insight into the workings of various aspects of the steel industry over here which would be useful to them in their business on the Continent, and I think that this risk should be avoided if possible.
    I am sure that the Minister wants, just as much as we do, to avoid any unnecessary disturbance during the period of transfer from public to private ownership and back, and we advise him that the risks which heavy foreign investment in the British steel industry would bring are real and should be avoided. For this reason, we urge him to consider the safeguards contained in this Amendment.
    Mr. Jack Jones: I rise to support the plea made so eloquently and ably by my hon. Friend the Member for Nottingham, Central (Mr. Ian Winterbottom), and to take a rather different line from the one he took. This industry of ours is a proud heritage. It is not only a matter of bricks and mortar, girders, rolling mills and furnaces. It is a matter of a "belonging to"; an ownership of something that has grown up with the people of our country, and particularly the steel workers in it. I make no bones about saying that we are the best people in the world at making steel. Individually, man for

    1807
    man, there is none to beat us, and what we must do is see to it that no action of this or any subsequent Government alters that.
    We are gravely concerned about the disposal of our assets. This industry was built up over the centuries by extremely able people—not altogether the men on the shop floor, much as they took part in it. The inventive genius of individuals, subsequent discoveries and the carrying out of various methods of producing steel of all types, qualities, grades and prices has been something of which this country can be really proud. That might sound a little bit conservative; it might sound a little bit pro-British; but we on this side of the Committee are just as pro-British and just as proud of our achievements as anybody else in the country.
    I am very disturbed about, not the actual material affected but the psychological effect upon the workers of our industry were it to be known that some part of it had come under the control of a foreign agency or foreign speculators. This Bill provides not only for people to buy the industry, but also for people to hire it, to lease it; in other words, to be able to come along and. if it is not avoided, to use this great industry of ours, or parts of it, as a "guinea-pig"
    I could visualise a situation—and it may seem that I am being extreme—in which Germans, Japanese, Russians, may be, and certainly Americans, envying us the knowledge which we have in this great industry, would give a lot, and be prepared to sacrifice an enormous amount of wealth on a short-term policy to gain the long-term benefit that could accrue to them if they could come into possession of the "know-how" that we have in this country of steel-making. I know that it will be said from the Govment benches that the Germans are not too bad at making steel. That is true. The Germans are good workers. That is also true. They are some of the hardest workers in the world. When it comes to the actual individual knowledge of the making of advanced forms of steel and the higher grades of steel, however, we are still pre-eminent, in my opinion, in the world.
    1808
    We have to avoid at all costs unnecessary opportunities—and I say unnecessary opportunities—being given to the foreigner to take advantage of this Bill. I am an internationalist, and I claim to be a good Socialist. It may be claimed that we are now being a little parochial and a little isolationist, but in an industry of this kind which has done so much and made such sacrifices and such strides we ought not to be put into an uncompetitive situation in the world's markets.
    I have mentioned the question of Germany before, and it may sound to some people as if I have been rather overdoing it, but I have been seeking some advice. I have as yet no assurance that the money which is going to Herr Krupp, as a sort of incentive bonus for the destruction of his fellow men, cannot be used for this purpose. I do not know if that is so, but I hope not. Nothing worse could happen under this Bill than for the British steel workers to be told that as a result of it they will be working under a foreign boss, especially a boss of that type.
    It would not be so bad if it were American capital coming in, although that in itself would be bad enough. I beg the Government to take careful note. This is the Iron and Steel Bill of Britain and the Iron and Steel Corporation is to be disposed of. As Britishers who have a fundamental love of their country, we want to see this industry stay as it is. This nation is beset with enough troubles. I hope that we shall get an assurance from the Minister on this point. I say with emphasis to the Minister that there could be nothing worse than to allow a situation such as I have visualised to happen.
    I know something of the relationship that exists within the industry. I have been connected with it all my life, as was my father before me. I know something of the American attitude towards the trade union side of the industry. I also know something of American methods. I have been one of the most privileged workpeople in this country because I have seen every steel works in the world worth seeing, and that is saying a lot. I have seen the steel works in Russia, Germany, America, Luxembourg, France, and elsewhere. It has been my proud privilege to lead our workers in this country.
    We are asking the Government to say that so far as possible foreign capital shall

    1809
    not be brought into this country of ours. It will not be so much an effort made by outsiders to buy a part of this industry. It would pay them a handsome dividend to lease or hire parts of our industry and to take them over as a long-term or short-term policy. The knowledge and information of the industry that they would get would pay them handsome dividends in the years that lie ahead.
    This would not affect me at my time of life—although I am not an old man yet—but it would have a serious effect on the rising generation and a psychological effect on Britishers proud of their industry and proud of their heritage; and let us remember that they are the people who make steel second to none in the world. I know what the effect would be on myself if I had to go to work under those conditions next week. We may differ in this Committee politically, but I say to the Government, with all the strength of my convictions, that to allow this Bill to be used in the way I have described and as it may possibly be used, would have a serious effect on the industry.
    It may not have an overnight effect, but it would have a long-term effect. We want to keep the capital structure of the industry as we have it. We were told that good will, fellowship and the team spirit would be destroyed by nationalisation. They have not been destroyed at all. We have never had one word of evidence to prove that since the industry was nationalised they have suffered. I say that they have not, and I hope that this Amendment will be accepted and that they will not suffer.
    Mr. Boyd-Carpenter: I find myself in complete agreement with the sentiments expressed by the hon. Member for Rotherham (Mr. Jack Jones) in his own very effective way. The hon. Member for Nottingham, Central (Mr. Ian Winterbottom), in moving the Amendment, pleaded in its favour that it read like English. I can agree with him that far, although if I were to stretch that argument much further I might seem to be casting reflection on Amendments tabled by his hon. Friends, and I will therefore desist.
    He referred to the Amendment as setting up safeguards. The more one looks
    1810
    at it, the more illusory seem the safeguards. I have read it with great care and, as I see it, it does two things. First, it tells the Agency to use their best endeavours to prevent control passing to non-residents—not in itself a very easy thing to put into the statute, although comprehensible and it then proceeds to render void sales to non-residents if the fact that the purchaser is a non-resident is not disclosed. But there is nothing in it, the Agency having sold to residents, to prevent those residents selling next day to the foreigner. Therefore, it seems to me that as a safeguard the Amendment does not take us very far. Indeed it does not take us any distance at all.
    The point behind it is a serious one. I do not need the speech of the hon. Member for Rotherham to appreciate that but it certainly reinforces it. Quite apart from this Amendment, which I do not honestly think would help, there are fortunately other sources available to prevent the kind of state of affairs which he contemplates coming into being. Most important is Section 9 of the Exchange Control Act. Under this no security registered in the United Kingdom can be transferred to a transferee outside the sterling area without the permission of the Treasury. That is a general protection covering not merely steel but all quoted securities.
    There seems to me to be no particular reason to assume that the steel industry would be any more vulnerable to the risk of foreign control than any other of our major industries. Indeed, our experience up to nationalisation was that when the United Kingdom steel industry was in private hands foreign interests were extremely small, even though they could have dated back long before. There does not seem to be any particular reason to pick out steel as being particularly vulnerable and needing protection over and above that given to British industry in general.
    On the contrary, the British steel industry is to be subject to the supervision of the Board, under my right hon. Friend, and will, therefore, be subject to more skilled supervision than the majority of industries in this country. Accordingly it will, I think one can safely assume, be less vulnerable to the sort of risk which has been envisaged than many of our other industries. It

    1811
    seems to me that the case for providing special and peculiar safeguards for steel over and above those provided for British industry in general is not a particularly strong one. However, I can say that it is not our intention to see the industry fall under foreign control, and it appears to me that we have powers adequate to that purpose for the industry and other industries.
    Mr. Jack Jones: When the hon. Gentleman speaks of "the industry" not falling under foreign control, does he mean "the industry" or "any part of the industry"?
    7.30 p.m.
    Mt. Boyd-Carpenter: I am not saying that there will not be an odd share under foreign control—that might be a good thing—but I was referring to any substantial part of the industry. The hon. Gentleman is thinking in terms of the whole industry while I am thinking in terms of the major elements in it. I do not think he and I are very far apart.
    Quite apart from that, there is in any event nothing to be said for putting into the Bill what looks like a safeguard but is not one, for that would merely mislead people into believing that the position was safeguarded when it was not. For that reason alone the Amendment is unacceptable, although the point behind it is a real one. I hope that what I have said shows that on this point the Government do not find themselves at any great distance from the hon. Member.
    Mr. Mikardo: The Financial Secretary's speech has been a very disappointing one. As to his point that the position is safeguarded by exchange control legislation, that is only partially true. As he clearly pointed out, those regulations deal only with transactions outside the sterling area and do not in any way act as any preventive against sales inside the sterling area. The sterling area is a substantial area and it comprises a large number of countries, including Iceland, for a strange reason which I have never been able to discover. My hon. Friend the Member for Rotherham (Mr. Jack Jones) was worried about other countries obtaining substantial control of the steel industry, and I am sure that in that he would include Iceland. We are all hoping that the sterling area will be a dynamic,
    1812
    expanding institution and that more and more countries will join it. Consequently, a safeguard which does not cover the sterling area is incomplete.
    The Financial Secretary pointed out that the safeguard is not complete. It has not been put forward as a complete safeguard. The hon. Gentleman will agree that if we wanted a complete safeguard we should need a very long and involved Amendment and should need to set up enforcement machinery to ensure that it was carried out. While it is true that the Agency can sell to a British subject who can, the following day, sell to a foreign national, all we are seeking to ensure is that the Agency itself shall not give the cover and authority of its official existence to the beginnings of an action which transfers control of some part of our steel industry outside the country.
    It is not represented that the effect of the Amendment can be any more than a psychological one, but I put it to the hon. Gentleman that there really is a difference between a private individual exercising his right to sell shares to anyone he wishes within the framework of the law and an official body, set up by a Government under a highly controversial Bill, itself engaging in transactions which directly, and of its own volition, result in some part of the industry coming under the control of a foreign Government.
    While the Financial Secretary, with his usual logic and force, made out a completely convincing case for saying that this cannot be an effective safeguard, he could equally have made out a case for saying that it cannot possibly do any harm. I should have thought that he would be the first to say that it would exercise no more than a ha'porth of moral suasion in deterring anybody who was glibly rushing into transferring the securities of the steel industry to foreign hands, and I should have thought that he would he glad to accept this innocuous Amendment. He may find some fault with its wording but we should be happy to fall in with his wishes if he desired some alteration. The Amendment really cannot do any harm.
    What I have so far said has been 'rather unpretentious and conciliatory; what I now have to say may be less so. I address the Committee from a back bench and can, therefore, claim to speak for nobody

    1813
    but myself, but I think I know enough of the reactions of my hon. Friends to be able to say this without being really individual and fatuous. If there is any substantial transfer of the assets of the industry to foreign nationals that fact will not deter us, on returning to office as the Government, from carrying out our expressly stated intention and pledge to reconvert the industry to public ownership and to do that without further charges upon the taxpayer. I felt I ought to say this although it may disturb the harmony of the Committee a little and may sound pretentious coming from the back benches. I want to impress on the Committee that I have not said it just "off the cuff"; I have said it knowing the strong feelings of my hon. Friends.
    Mr. J. E. S. Simon: If he has considered the matter, does not the hon. Gentleman think that what he has just said is a breach of international law?
    Mr. Mikardo: I have not considered it; I am not competent to consider it. I am no authority on international law, as the hon. and learned Gentleman is, and I profoundly hope that I have not been breaking the law. What I have said is certainly not a breach of the feelings which I hold deeply and sincerely and which I know are held by many of my hon. Friends. If I get "run in" for that tomorrow morning, I shall rely upon the Solicitor-General, who is now listening with interest, to get me out of trouble.
    Having made that possibly illegal point, I turn again to the Amendment and plead with the Financial Secretary to consider whether this innocuous if not highly effective Amendment could not be accepted.
    Mr. Ian Winterbottom: The intervention of the hon. and learned Member for Middlesbrough, West (Mr. Simon) gives substance to our intentions. There are complications in international law in any system of nationalising assets owned by a foreign national, and that is what we are trying to avoid. I will say no worse than that the Financial Secretary's reply was legalistic. I agree with what has been said by my hon. Friend the Member for Reading, South (Mr. Mikardo). The point about the currency control is only a temporary safeguard, and I am afraid that the supervision by
    1814
    the Board of the Holding and Realisation Agency is not a satisfactory guarantee that the Agency will act in the way that the Opposition would like.
    The point is valid that a group of individuals or a large firm could go through the whole business of negotiating with the State and purchasing an undertaking and subsequently sell the undertaking to a foreign concern, but there is no doubt that if this intermediate stage had to be gone through it would be a hindrance and a deterrent to foreign capital coming to this country with the express intention of making a major investment in the British steel industry.
    If the Financial Secretary does not think that our Amendment is a good one, he might give an undertaking that his Department will give a directive to the Agency that they should watch purchasers and make full inquiries into their backgrounds to ensure that no section of the steel industry passes directly under foreign control as a result of an act by the Agency. I hope that he will be able to give the Committee that undertaking and will at least give the Agency a directive to that effect.
    Mr. Boyd-Carpenter: The hon. Member for Nottingham, Central (Mr. Ian Winterbottom) referred to the Exchange Control Act as only a temporary safeguard. It is not for me to speculate on its duration, but it is perhaps a less temporary safeguard than the one in this Amendment, which refers only to the moment of disposal and not to the subsequent transactions in shares. It is a much more temporary test for a particular point in time.
    In reply to the hon. Member for Reading, South (Mr. Mikardo), I should say that I am somewhat suspicious of psychological Clauses. I do not think it is a good thing in principle or in practice to put into an Act of Parliament something through which coaches and horses can be driven merely for a psychological reason. That creates in people's minds an illusion of security which is not there, and that is a bad thing to do. We have no intention of seeing parts of this industry pass into foreign control, nor have we any apprehensions that that will happen, but under the machinery set up in this Bill we have particular facilities for keeping the matter closely in view, and if it were seriously to develop then

    1815
    we should not hesitate, if the powers we have at present prove inadequate, to ask for more. That should really satisfy the apprehensions of hon. Members. At the moment, instead of the admittedly illusive safeguards of this Amendment, there is Section 9 of the Exchange Control Act.
    The hon. Member spoke in this context about the sterling area, and on that subject I should like to say a word. The greater part of the sterling area is the Commonwealth. This Amendment, if it were effective, would prevent Commonwealth citizens, as non-residents, from investing in British industry, and I am not sure that we want to put into a statute something which would have that effect. I do not think there will be very much of that because, generally speaking, the flow of capital tends to be in the opposite direction, but it would be a little offensive to the feelings of our fellow citizens under the Crown if there were an express prohibition put upon them holding shares or controlling interests in any section of the British steel industry.
    We are as conscious as the hon. Member for Rotherham (Mr. Jack Jones) of the unfortunate effect if this thing were allowed to develop, and it would be the responsibility of the Government, if any such serious threat developed, to prevent it happening. I do not anticipate it happening. It did not occur in all the years when the industry was quite free, and I do not see any particular reason to apprehend it now.
    Amendment negatived.
    Mr. Roy Jenkins: I beg to move, in page 14, line 20, at the end, to insert:
    (5) Notwithstanding anything hereinbefore in this section contained, the Agency shall not in selling or otherwise disposing of any such securities, sell or dispose of more than one-fifth of the shares of any one class in any one company to the same person and if any person purchases or otherwise acquires from the Agency any such shares as an agent or nominee for any other person in such circumstances as to produce the result that such other person would become the owner at law or in equity of more than one-fifth of any one class of the securities in any such company, such sale or acquisition shall be wholly void for all purposes.
    I commend this Amendment to hon. and right hon. Gentlemen opposite with a good deal of confidence, because it is an Amendment which should prove acceptable to the Conservative Party.
    1816
    Its purpose is simply to ensure that when the companies which are at present subsidiaries of the Iron and Steel Corporation pass under private ownership, their ownership should be reasonably diffused. We should not have one, two or three shareholders controlling very large sections of the industry; but the shareholding should be spread over a rather larger number. This Amendment is our contribution towards helping this Bill to make a property-owning democracy, and I hope that as such it will be accepted by hon. Members on the other side of the Committee.
    7.45 p.m.
    I hope that when the Financial Secretary replies to the debate he will not tell us that this is an unduly onerous restriction—a meticulous restriction as I think he called the last safeguard that we proposed. All that we are pressing in this Amendment is that no one shareholder should hold directly or through nominees more than 20 per cent. of the total shareholding of a particular iron and steel company. That is not an undue restriction. It means that there can be five owners of the biggest iron and steel company that there is, and even that would amount to quite a degree of concentrated ownership. What we are proposing in this direction is not anything at all extreme.
    What are we afraid of? What is the danger that we are here trying to safeguard against? I know of two considerations which one can put forward in this connection. First, it might be that this industry or large parts of it would pass into the control of insurance companies or of investing trusts. It would be a question of a big deal between the Agency and some large insurance companies or similar organisation, and I do not think that any hon. Member opposite would be ready to get up and argue that that sort of ownership was what the Government had in mind when they talked about private enterprise being in control of the industry, because that is not the kind of ownership for which we are going through the trouble of considering this Bill.
    The other possible development is what I might call vertical trusts, by which the ownership of steel companies passed, as was the case before nationalisation, into the hands of engineering companies which

    1817
    are to quite a substantial extent consumers of the products of that particular section of the steel industry. I am sure that the Financial Secretary is not a strong advocate of vertical trusts. Indeed, that form of control has certain disadvantages. It means that the holding company which owns shares in the iron and steel industry naturally buys its products from the company which it owns, and that is a great deterrent to competitive conditions in the industry. When hon. Members also talk about their desire to encourage as much competition as possible in this industry, they should bear that point in mind.
    It should also be borne in mind that the sort of ownership set up in the iron and steel industry will be very much a test of the good faith of the Government when they talk about widespread participation in ownership and all the rest of it. After all, in the case of other industries they have to accept the situation as its exists. There may be forms of ownership which may not be at all desirable to the Government, but here to a certain extent the Government are not dealing with a situation which exists. They are deliberately creating a new form of ownership for a large and very important industry, and it is, therefore, incumbent upon them to take what steps they can to ensure that ownership is in accordance with their expressed wish about the sort of ownership which they desire in private industry.
    From our experience earlier today, it is possible to imagine the sort of reply we will receive from the Financial Secretary. He courteously makes two speeches on these Amendments. In his first speech he will tell us that one really must not impose restrictions; he will also say that the Amendment complained of would be very unreasonable, and that a great many false points have been made in support of it. Then he will sit down and one or two other speeches will be made, after which he will make his second speech. He will tell us that the arguments advanced in support of the Amendment are most unreasonable, that of course the Agency and the Government would not think of doing anything of the sort, and even if they did then the House would have the Minister of Supply or the Chancellor of the Exchequer with whom to deal.
    1818
    I do not think that that is a very adequate safeguard. Even if we could be assured of that, I do not think we are prepared to accept a bargain by which the Agency would sell off this industry on very undesirable terms, in exchange for which we are offered the political help of the Minister of Supply. It is a bad bargain, because one is worth a good deal more than the other. Therefore, we cannot accept that sort of argument. Obviously this Amendment, if it were accepted, would not be a severe restriction on the sale.
    The point which the Financial Secretary made in reply to my hon. Friend the Member for Edmonton (Mr. Albu) on the last Amendment but one, that it would keep out a lot of small people whom it was hoped to get in, certainly cannot apply in this case. I hope that the Financial Secretary will not repeat his general point that it is incompatible for us, if we want to get a good price for the shares and assets of this industry, to put restrictions on the way in which they are sold, and indeed upon the price. If he thinks in those terms, it means that he accepts the alternatives that if the shares cannot be sold at a good price they have to be sold at a bad price, whereas we want the alternatives to be sale at a good price or no sale at all.
    This is a reasonable Amendment. It tries to stop up a loophole. I very much hope that the Financial Secretary will consider it in the same spirit as that in which he has considered previous Amendments this afternoon.
    Mr. Boyd-Carpenter: The hon. Member for Stechford (Mr. Roy Jenkins) was good enough not only to make his own very agreeable speech but also to make mine for me. I suppose that is a kind of dialectical vertical trust. The Amendment would impose a rather peculiar restriction upon the disposal of shares in the steel industry because it would be a restriction not found in other industries. Though his speech was as agreeable as usual, the hon. Gentleman did not advance any solid argument showing why this restriction should be imposed. So far as I can recall, his main argument was that it would appeal to the Comservative Party, which, in his mouth, had rather less weight than if it had come from one of my hon. Friends.

    1819
    He did not establish what terrible evil he was guarding against by restricting to one-fifth of the total the holding of any particular shares. He did not indicate what terrible evils would flow, or what horrors of monopoly could arise. He merely said that it was a good thing to have lots of small investors. Of course it is, and in many cases we shall no doubt have them. What is being argued is whether a restriction of that sort should be imposed on first sale.
    Mr. Roy Jenkins: Before the Financial Secretary leaves that point, he will no doubt remember that I did deal with the system known as the "vertical trust" and with the disadvantages which flow from it, and with the disadvantage of large insurance companies dominating private companies. It is not strictly accurate to say that I merely advanced the argument that the Amendment would appeal to the Conservative Party.
    Mr. Boyd-Carpenter: I was dealing with the hon. Member's most weighty argument first, and was proceeding in descending order of magnitude.
    His second argument was that the Bill would be a good thing for the insurance companies. I do not know how sound that argument is. It may be that the money available today for investment is in the hands of insurance companies, but I do not know of any particular reason why steps should be taken to divert its flow from the steel industry while it continues to flow in the direction of other and competing industries. The same argument applies to the question of vertical trusts. If that is a matter which ought to be dealt with by legislation, such legislation should be general. Advantage ought not to be taken of a denationalisation Bill to impose this limitation upon one industry.
    Picking out the steel industry for this restriction is of importance to those concerned with the well-being of the industry. There are occasions from time to time of scarcity of capital. Industries that have imposed upon them peculiar restrictions on investment will surely be handicapped at such times in comparison with industries that have not. What the hon. Gentleman does not appear to realise, even now, is that whatever may be his dislike of
    1820
    vertical trusts it is not a conclusive reason for putting special limitation upon an industry which, I think we all agree, will require a good deal of capital investment in the future.
    This limitation would have another disadvantage to which I must draw the attention of the Committee. I refer to the question of capital and investment, which I think most hon. Members know is extremely important. At an earlier stage of our debate I mentioned that one of the factors which would be important in the selection of possible buyers for particular parts of the industry would be the likelihood that the buyer would have sufficient capital available for future investment. That is a point which anyone concerned with the real future of the industry ought to bear in mind. It may be that such a buyer will want to buy more than one-fifth of the shares and I cannot see that the interests of the industry will be served by preventing him from so doing.
    Then there is the case which may arise—it depends upon the offers made—of the return of former subsidiary companies to their parent companies. It may be that that is the right solution for the future of those companies. It may be that there were sound economic reasons for their previous relationship and integration. I do not see why we should rule out in advance any possibilities of that happening. We must be free—the Agency must be free and the Chancellor of the Exchequer must be free—to consider what is the best transaction in each case, bearing in mind the future of the industry. The Amendment would prevent re-integration, it would prevent or discourage investment in steel companies by large concerns and it would impose—I would stress this point again—restrictions upon investment peculiar to the steel industry, restrictions not imposed upon other industries in the country.
    For all these reasons, although I appreciate what the hon. Gentleman has in mind, it would be very unfortunate to put into the Bill a limitation of the kind proposed. I hope that I have satisfied the hon. Gentleman about the unfortunate nature of his Amendment and about the inaccuracy of his forecast of my speech.
    Amendment negatived.
    Mr. George Chetwynd: I beg to move, in page 14, line 20, at the end. to insert:
    (5) Notwithstanding any provision to the contrary contained in the Articles of Association of any such company as aforesaid, so long as there remain vested in the Agency securities in any such company of a nominal value of not less than ten per cent. of the nominal value of the total authorised capital of such company, the Agency shall be entitled to appoint one director to the Board of such company unless they are already so entitled, in addition to any other directors the appointment of whom is already provided for in the Articles of Association of such company.
    Unlike some of the Amendments we have considered this afternoon, this proposal is simple and clear. It entitles the Agency to appoint a director to the Board of any steel company so long as the Agency retains not less than 10 per cent. of the capital of that company. The Amendment is designed to facilitate the work of the Agency, and to provide for the proper control by the Agency of companies for which it is responsible in whole or in part during the interim period of realisation, which I think we all agree is likely to be a long period. Unless there are to be large capital losses in the sale of these companies, it seems inevitable to us that this will take rather a long time. I believe that the Minister admitted that at an early stage of the Bill.
    The Agency has the duty of realising 290 companies and, as we see it, has complete freedom to sell £250 million of securities with power under a later Clause to lend a further £150 million. It is laid down in this Clause that it is a holding company for as long as it appears to the Treasury that its duties under Clause 16 have not been substantially discharged, and it must exercise its powers to promote the efficient direction of the subsidiaries. It is to that point I want to direct the attention of the Financial Secretary.
    8.0 p.m.
    The Agency must have the power to direct efficiently the action of the subsidiaries. There are three possibilities in this sale. First, it may be so arranged that all the securities of a particular company are sold outright. In that case, the Agency has no further responsibility for the conduct of the company which has reverted completely to private ownership.
    The second possibility is that there may be no sale at all, in which case the Agency
    1822
    retains full control and direction of that company. But in the vast majority of cases there may be a partial sale in which the Agency will be able to dispose of a considerable number of securities, but will also retain in its own hands for an indefinite time a substantial holding. The principle is quite clear that where there is a partial sale public money is involved, and it is necessary that it is properly used and safeguarded. The Agency will be in the position of a substantial shareholder and should have in those circumstances the right of representation on the board of the company.
    The Financial Secretary may say that this imposes a restriction on the liberty of the shareholders of that company to say what their board shall be, but it is common practice for a bank or an insurance company when it provides money for a company, as frequently happened in the 'thirties, to appoint a director to the board of the company. Indeed, if that had not been so, we might have been deprived of some of the most outstanding leaders of the iron and steel industry at this time because many of them came into the industry in the first place in the 1930s as nominees of the banks and the insurance companies to protect their interests. So there is no inconsistency in this argument.
    Another point which should appeal to the hon. Gentleman is an example from his own Department. Where the Development Areas Treasury Aid Committee lends money to a company in difficulties in a Development Area, it insists that it has the power and right to appoint a director to a board of that company specifically to safeguard the interests of the Treasury in that matter. That seems to be a perfect analogy. Here we have the Treasury, acting through the Agency, advancing money to what is in the main a private company to pursue certain clearly defined ends and retaining the duty of seeing that there is efficient direction of that company.
    Therefore, we ask that this sensible provision should be inserted into the Bill because it will protect the rights of the Agency and the Treasury and the taxpayer without any undue restrictions upon the rights of the public company or body of shareholders.
    Mr. Boyd-Carpenter: The purpose of this Amendment is excellent and, indeed,

    1823
    it refers to a practice which we have every intention of following in appropriate cases. However, it is unnecessary because not only have we all the powers that this would give us, but we have further powers which acceptance of this Amendment might be deemed to restrict. The matter is a little technical and if I do not succeed in making it as clear as I should, I hope that the hon. Member will be good enough to indicate that to me.
    Where the position is that public ownership in any substantial proportion of the shares remains, it will be necessary to consider protecting the public interest in the way we do in the D.A.T.A.C. cases, by having a Treasury-appointed director. It is not, of course, the only way as the hon. Gentleman will appreciate. Where it is desired to use the expedient of appointing a director, it is perfectly simple, before the transfer takes place, to use the simplified procedure for holding meetings of the company for altering the articles of association appropriately. As the right hon. Member for Vauxhall (Mr. G. R. Strauss) will no doubt recall, this was provided by the Ninth Schedule to his 1949 Act and it is continued by paragraph 15 of the First Schedule to this Bill.
    Where it is desired that on transfer of some part of the shares a director appointed by the Government is thought desirable, there is power to appoint one or, for that matter, to appoint two or three. The difficulty about this Amendment is that it might be thought, if these words were in the Bill, that our power to safeguard in these cases was limited to appointing one director. That is why I have come to the view that the purpose we all want to secure, that public money is properly protected, would be hindered by this provision. It is possible that as a matter of law it could be construed that we were limited to appointing the one director specified in this paragraph whereas, in its absence, our powers under the somewhat complicated chain of events which I have endeavoured to describe would remain.
    Mr. John Freeman: The hon. Gentleman was kind enough to say, when he began his explanation, that he hoped we would question him if he did not make himself entirely clear. I am
    1824
    looking as hard as I can at the Schedule which carries on the Schedule to the 1949 Act. I am not clear, however, what proportion of holding in a company the Agency must have before his words become true. While the Corporation exists, the Agency has a 100 per cent. holding, but as partial sales take place at what percentage do the words of the hon. Gentleman hold good? The Amendment of my hon. Friend is specific in bringing it down to 10 per cent.
    Mr. Boyd-Carpenter: As I understand, the position is that it depends on how the articles of association of the company are adjusted in any specific case at the meeting called under the simplified procedure.
    Mr. Freeman: Therefore, it would be fairly normal to refer to a majority shareholding. The words of the Financial Secretary would not hold good at anything like the figure in the Amendment.
    Mr. Boyd-Carpenter: Quite the contrary. I must have failed to make it clear. As the sole shareholders before disposal the Agency carries out the simplified procedure and it can fix what percentage they desire. Therefore, it could be 10 per cent. or 9½ per cent. as I understand the position.
    Mr. Jack Jones: Can we take it that if the Agency holding is a substantial or a reasonable proportion of the shares, there is power, as outlined by the Financial Secretary, to appoint one, two or even three directors so that a blood transfusion can take place in the case of a company which requires extra help. technical advice, and so on?
    Mr. Boyd-Carpenter: It would depend on what position the Agency took prior to disposal. This Amendment seeks to give the Agency an enabling power.
    Mr. Mitchison: I wish to raise a small point which occurs to me and which I would respectfully invite the Financial Secretary to consider between now and the Report stage. I appreciate myself, and no doubt my right hon. Friends do, the force of what he says, but it seems to me that this Amendment might provide for a case which would not be quite covered by the provisions of the 1949 Act.
    What I have in mind is this. Supposing the Agency starts to sell the shares of a

    1825
    company without having made any alteration in the articles, and let us suppose that they thereby deprive themselves of the requisite majority under its articles and under the Companies Acts, which, I imagine, still regulate these matters, to change the articles. Suppose the shareholders object, as they well may, without any change having been made, we might then get circumstances in which the Agency would hold a substantial shareholding and be unable to appoint a director.
    I merely put the point for consideration, because I quite appreciate the difficulty about this Amendment in its present form. Perhaps the Financial Secretary would consider that matter, and see whether that particular loophole could be stopped up, which, I am sure, as an enabling matter, he would like to do, and whether it could be dealt with by the insertion of a suitable form of words on the Report stage.
    Mr. Boyd-Carpenter: I will gladly look into that point. It may well be that, at the point at which disposal had started, the difficulty which the hon. and learned Member has pointed out may arise, but it is not a point upon which I should like to give a snap answer now, and, for that reason, I will take advantage of his invitation to consider it.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. R. Brooman-White: I want to raise one consideration which has not been touched upon, and that is the question of employee shareholders. Though I raise it on this Clause, I do not want to put the emphasis in the wrong place. I would have brought it up before if there had been a discussion on Clause III stand part. This is a matter which may concern the Agency, but will certainly concern the Board, because the primary responsibility in furthering this matter on a long-term basis rests with the Board. If hon. Gentlemen opposite are right in saying that the Agency will be left with a considerable section of the industry for a considerable time then it will benefit by the experience gained and will be able to apply that benefit to the handling of further shares.
    I do not want to give the impression that I am advocating that they should
    1826
    take this course immediately, because this is a process of evolution. I also appreciate the difficulty in writing it into the Bill, because one wants to be encouraging rather than mandatory. In questions like that of joint consultation, the pattern is already there, and everybody knows what it is. In this case, a satisfactory pattern is still to be worked out, and what we want to do is to ensure that encouragement is given to doing this. There are two issues; desirability and practicability.
    On the first point, I think that, in practice, there is very little difference between us. I am sure that hon. Gentlemen opposite agree that the pattern of human relations in industry changed just as much though less obviously than mechanical processes in industry. That is inevitable. We are all looking for outlets for the ever-increasing aspirations and interests of people in industry. Joint consultation is one means. I believe that employee shareholding may be another method of achieving it. On the practical side, though I do not under-estimate such difficulties of cyclical fluctuations in the industry mentioned by the hon. Member for North Islington, I believe a pattern can be found which will give adequate benefit and make it worth while, and, at the same time, safeguard the small investor against undue risk. I do not believe that it is impossible to achieve, and I believe that hon. Members, like my hon. Friend the Member for Esher (Mr. Robson Brown), who knows a great deal about these things, are of a like opinion.
    8.15 p.m.
    The reason I wish to emphasise the point is that I realise that, in moving in this direction, there is no great impetus behind management or behind the trade unions, who are satisfied with the existing arrangements. If we agree that this objective is generally desirable and that it is possible to work out a satisfactory method of achieving it, as has been done already in certain other industries and fairly successfully at various times in the steel industry, the speed with which we move towards that aim will depend on the energy and ingenuity directed towards solving these particular difficulties. I very much hope that, even if it is not practicable to write anything into the Bill, the Minister will have another look at the point and will give us an assurance

    1827
    that he will use his influence to encourage the Board, and when occasion offers, the Agency, to see what can be done in this direction.
    Mr. Jack Jones: The hon. Member for Rutherglen (Mr. Brooman-White) has made a rather strange speech. It seems to me to be a remarkable thing that an hon. Member on the Conservative benches is prepared to go into the Lobby to chase this Bill to its final stage and take away from the existing shareholders—all of us, including himself—and from the steel workers, the right to be shareholders and hand over their shares to private enterprise, and who then goes on to ask that, under the new ownership, the steel workers should become shareholders again. It seems to me to be a remarkable state of affairs.
    Here is an industry being worked and managed primarily by the workers, and in which the result of their labours puts 3½ per cent. on national steel stock. Nobody will buy any of this stock until that percentage can be increased to x percentage more than that, and the first thing the steel workers will have to do when this Bill is through is to earn that additional percentage. Yet here is the hon. Member for Rutherglen suggesting that, having earned an additional percentage for people whom they do not like, the workers will then begin to invest some of their savings which will be less rather than more, because their wages will be governed by the profits of the industry.
    It is a strange position which the hon. Member is taking up. The steel workers are quite happy to have the opportunity of investing in National Savings arising out of their own earnings and good conditions when working for John Bull, Unlimited, under nationalisation, and I cannot hold out much hope to the hon. Gentleman that he will get them to invest money from restricted purses in order to help to offset the results of this Bill by taking up shares, which we believe people will have great difficulty in doing.
    Mr. Chetwynd: Before we part with this Clause, which I regard as one of the most important in the Bill, and certainly one of the most wrecking Clauses, because it establishes ways and means by which the Agency is to dispose of the nationalised undertaking, I must say that
    1828
    we have had surprisingly few guarantees to guard against our worst fears, which were expressed on Second Reading. Our fears were that the best part of this industry was to be creamed off by private individuals, and the worst part left in the hands of the State.
    In the discussions which we have had on the Amendments, so far no specific undertaking has come from the Government indicating that they are opposed to that policy. How are we to guard against picking off the best pieces in this case? We have had no answer from the Treasury: indeed, we could hardly expect it from them, because their job is to see that the industry is sold and to act as a kind of holding company pending the final sale. In any event, considerable pressure will be brought to bear upon the Government both by their own back benchers and by people outside to sell the industry back to private enterprise regardless of the consequences.
    We really ought to know upon what kind of principles the Treasury will ask the Agency to act in the sale of this undertaking. How are they to set about it? Are they going to parcel up the companies in their pre-nationalisation packages and sell them as such, or are they going to adopt the policy which the Corporation would have adopted of getting the best grouping possible and setting a pattern for the better running of the industry in the future?
    The Annual Report of the Iron and Steel Corporation stated that they had clear, definite proposals for a re-grouping of the companies under their control with a view to getting a better organisation of the iron and steel industry. It would be a tragedy at a time when the Government are, perhaps, setting the stage for a long time ahead if those plans were pigeon-holed and not proceeded with. They should not turn away from that to a proposal which would get a quick and easy sale.
    How much do the Government anticipate they are going to sell of this industry in the first year, in the second year, or, assuming they go as far, in the third year? When one talks about the third year, one is getting a little hypothetical, but we want to know what are their intentions for the first year. How much investment capital do they think will be available after the most attractive part of

    1829
    the industry has been sold? It is my opinion that when the more profitable and more modern parts of the industry have been sold there will be precious little money forthcoming with which to purchase the rest.
    The Financial Secretary dropped a hint which rather disturbed me, because it seemed to point to the fact that where a company was to be sold and where the would-be purchasers would have to spend a considerable amount, not only on the actual purchase. but in future development, he was thinking of giving them some preferential right—a lower purchase price to offset the large amount they would have to spend on modernisation. I would have thought that a great deterrent against purchasing parts of this industry would be the very fact that the purchaser, as well as having to pay a substantial amount to buy the company, would have to commit himself or the company to long-term expenditure to put it into proper order.
    This supports our argument that we should like to see the powers of the holding company strengthened to deal with a situation like that because such companies will form the major part of the industry that is left. I think we ought to be told by the Financial Secretary what the Government propose to do to protect the State and the taxpayer against loss when disposing of these businesses.
    Mr. G. R. Strauss: I wish to raise what is perhaps a minor point, and I invite the Financial Secretary to give us his opinion, or that of the Government, upon it. According to paragraph 35 the White Paper issued by the Government a little time ago:
    "In allocating securities offered for sale, the Agency will, notwithstanding the serious technical difficulties involved, give priority where practicable to applications from former shareholders."
    I do not know by what means the Government can give instructions to the Agency, but I assume that will be done under Clause 17 (5). If I am mistaken I should like to be informed. I should also like to know where exactly under that subsection the Government have power to give instructions to the Agency. What thought, if any, have the Government given to this very interesting subject, and what are the difficulties they have in mind?
    1830
    I should particularly like to know whether, where big company A was previously in the possession of big company B, or where big company B was a major shareholder in it, company B will be given priority in purchasing company A over any other competitor, and whether, even if company B offers a substantially less sum of money than other competitors, it will still be given possession of and control over company A. Or does it mean—this is not an alternative; it may mean this as well—that the ordinary shareholder who had 100 shares in an iron and steel works will be given some form of priority when the time comes for issuing shares to the public, as no doubt shares will be issued? Is it contemplated that he will be told that if he puts in an application, such application will be given priority?
    What has been the thinking of the Government on this matter? How is it to work out? Is it a propaganda point in order to satisfy the previous owners of the iron and steel industry, either the shareholders or those who controlled an iron and steel company through virtue of a majority holding? I should be very grateful if the Government would tell us this.
    I agree that this is a minor point compared with the huge issues raised in this Clause, a Clause which we think is as bad as Clause 16 and which does all sorts of things which in our view are undesirable in the public interest. We have had no explanation about the point I am now putting to the Financial Secretary. As it arises on this Clause, I shall be glad to be given any available information on the subject.
    Mr. Boyd-Carpenter: I do not think there is very much I can add in reply to the right hon. Member for Vauxhall (Mr. G. R. Strauss) or to the hon. Member for Stockton-on-Tees (Mr. Chetwynd) on the points they have raised. The right hon. Gentleman is quite right in saying that instructions to the Agency are covered under Clause 17 (5). As to whether priority is to be given to applications from previous shareholders, to which reference is made, as the right hon. Gentleman pointed out, in paragraph 35 of the White Paper, I would draw attention to the fact that in the same paragraph it is pointed out that serious

    1831
    technical difficulties are involved. I think the right hon. Gentleman will appreciate some of them. But it must be borne in mind that those who have previously operated the companies, and perhaps particularly in the case where they have previously operated them as subsidiaries of some other un-nationalised concern, may well have some special practical experience in their operation which would make them useful and valuable people to operate them again.
    8.30 p.m.
    That is the sort of consideration which arises and which perhaps may arise in the case to which I have just referred—that is of the subsidiary which the parent company desires to have rejoin it. I must make it clear that, for obvious reasons, that will not be the only factor in deciding whether the sale to that particular prospective purchaser is to take place. Then, of course, there is the question of the tendering of compensation stock in payment, to which reference is also made in one of the paragraphs of the White Paper which we have discussed before. It is true that compensation stock may have changed hands in the interval, but the tendering of compensation stock by previous owners will no doubt occur in a number of cases.
    As the White Paper says, it is a matter of serious technical difficulties, and there is nothing in the suggestion of the right hon. Member for Vauxhall that the previous owners would be given a bargain when other and substantially better offers were tendered. Previous ownership will be one of the factors which will be considered, though express warning is given that there are serious difficulties.
    Mr. Mitchison: May I ask the Financial Secretary about one thing which has puzzled me? By "technical difficulties" do the Government mean financial difficulties—difficulties in the form of handling the matter as an issue, or whatever it may be, or technical difficulties with regard to the industry?
    Mr. Boyd-Carpenter: It means, I think, mainly technical difficulties with respect to the handling of the operation. I do not think that there is very much in the point raised by the hon. Member for Stockton-on-Tees, though the point has
    1832
    been made several times in the course of this debate. I might sum up by saying that there are two important considerations which the Agency will have to bear in mind. The first is that there must be a price which is fair and reasonable to the taxpayer. It has been urged from the benches opposite that all sorts of provisions should be put into the Bill to compel it. That is certainly our intention, and from the fact that suggestions have been made from the benches opposite I take it that hon. Members opposite agree with us.
    The other consideration is that the industry shall assume an efficient new form, that the grouping and arrangement of it shall be such as to enable it to render the greatest service to the community in the highly competitive condition of the world in which we now live. Those will be the major considerations which the Agency and my right hon. Friend will bear in mind, and I do not think that I can reply to the hon. Member for Stockton-on-Tees better than by reminding him of those considerations.
    Mr. Mitchison: I am afraid that I do not regard this point as quite as unimportant as has been suggested. It seems to me to involve a matter of principle of considerable importance. The Government White Paper declared that the Agency
    "will, notwithstanding the serious technical difficulties involved, give priority where practicable to applications from former shareholders."
    There is one perfectly obvious point. Suppose two offers are received, one bigger than another, one from a former shareholder and the other not from a former shareholder. Which will be accepted? What does priority mean? Does it simply mean that if a number of precisely similar offers are received, then, to some extent at any rate, priority will be given to former shareholders?
    Mr. Boyd-Carpenter: I am sorry if the hon. and learned Member did not fully appreciate my answer. I am sure that it was my fault. There is no intention to give to the former shareholders in this way the advantage of having better terms; but, as the hon. and learned Member knows perfectly well, in the allocation of stocks it is possible, as is often done by companies, to provide for the use of different coloured forms. The share is

    1833
    bought at the same price, but of the "competing" bids that on a certain coloured form gets priority. It is no more complicated than that. I hoped that I had put it clearly, but as I see that the hon. and learned Member for Kettering (Mr. Mitchison) is about to rise again, apparently I have not done so even now.
    Mr. Mitchison: I am very glad to hear what the Financial Secretary has said, so far as it goes. What it comes to is this, as I understand it: we have an undertaking from the Government that the priority is not to involve any form of preference either in price or conditions. It is simply that wherever all other circumstances are equal, it is proposed to give a measure of priority to the former shareholders. If I misunderstood that, it is undoubtedly my fault and I shall be glad to be corrected now because I am going to make a comment.
    The practice to which the hon. Gentleman refers prevails in very different circumstances. That practice prevails where an offer is being made either to existing shareholders in respect of their shareholdings or to existing shareholders in respect of a public issue, and it is known or anticipated beforehand that that public offer will be highly acceptable to the market. Priority is, therefore, given as a privilege to existing shareholders or whoever the group may be; it may and often should, include employees and customers. They are given a privilege of having a better chance of getting the advantage which is offered.
    I regard it as a somewhat ominous parallel because when we are dealing with these stocks and shares and they are being sold by and on behalf of the public we do not want to contemplate circumstances in which they will be offered at prices so advantageous to the purchasers that there will be a positive scramble to get them and the former shareholder will be glad indeed to avail himself of his priority. I am at a loss to understand what an ordinary person, described by Macaulay as "the traveller in the Clapham omnibus." would consider this sentence in the White Paper to mean. Let us look at it.
    1834
    Cutting out the verbiage it says:
    "The Agency will give priority to applications from former shareholders."
    The man would think "I am going to get some advantage out of this. This is a kind Government. I have been robbed by the Socialist bandits. Lo and behold, the Tory Party are coming along and distributing justice. generosity and a finely assorted collection of the Christian virtues and Christmas presents all at once. That is very nice." That is the sort of conclusion that I myself would draw.
    But when we come down to the plain English of the matter, it is this: priority does not mean any advantage whatever in the terms upon which one purchases as distinct from anybody else, unless the price which is asked or which is to be accepted is too low. If the price asked is fair and reasonable, then the priority as interpreted now has no meaning whatever. Perhaps that is a serious technical difficulty. I should have thought it was a very serious difficulty, but not quite a technical one. I see no technical difficulty whatever in working almost any of these arrangements. They are not as uncommon as all that.
    But the fundamental ethical difficulty remains: If one sells at the right price—that is the best price which the public can get for their property—these words mean nothing whatever and they ought never to have been put into the White Paper. They certainly deluded a number of innocent people into believing that they were going to get something which they are not going to get. Indeed, I do not think they ought to get it. I believe that one ought to sell at the highest possible price.
    Going over the history of this matter a good many years means wandering into an area of confusion between past shareholders, intermediate shareholders and stockholders, and all the rest of it. It is quite meaningless and impracticable. I am sorry that these words were put in. I suppose this is another of those quasi-Election promises which have just been dropped rather quietly overboard.
    Question put.
    The Committee divided: Ayes, 241; Noes, 223.

    Division No. 104.]

    AYES

    [8.40 p.m.

    Aitken, W. T.

    Gridley, Sir Arnold

    Noble, Cmdr. A. H. P.

    Allan, R. A. (Paddington, S.)

    Grimond, J.

    Nutting, Anthony

    Alport, C. J. M.

    Grimston, Hon. John (St. Albans)

    Oakshott, H. D.

    Amery, Julian (Preston, N.)

    Grimston, Sir Robert (Westbury)

    O'Neill, Phelim (Co. Antrim, N.)

    Amory, Heathcoat (Tiverton)

    Hall, John (Wycombe)

    Ormsby-Gore, Hon. W. D.

    Arbuthnot, John

    Hare, Hon. J. H.

    Orr, Capt. L. P. S.

    Ashton, H. (Chelmsford)

    Harris, Frederic (Croydon, N.)

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Harrison, Col. J. H. (Eye)

    Osborne, C.

    Astor, Hon. J. J.

    Harvey, Air Cdre A. V. (Macclesfield)

    Peaks, Rt. Hon. O.

    Baldock, Lt.-Cmdr. J. M.

    Harvey, Ian (Harrow, E.)

    Perkins, W. R. D.

    Baldwin, A. E.

    Harvie-Watt, Sir George

    Peto, Brig. C. H. M.

    Banks, Col. C.

    Hay, John

    Peyton, J. W W.

    Barlow, Sir John

    Heath, Edward

    Pickthorn, K. W. M.

    Baxter, A. B.

    Higgs, J. M. C.

    Pilkington, Capt. R. A.

    Beach, Maj. Hicks

    Hill, Dr. Charles (Luton)

    Pitman, I. J.

    Beamish, Maj. Tufton

    Hill, Mrs. E. (Wythenshawe)

    Powell, J. Enoch

    Bell, Philip (Bolton, E.)

    Hinchingbrooke, Viscount

    Price, Henry (Lewisham, W.)

    Bell, Ronald (Bucks, S.)

    Hirst, Geoffrey

    Prior-Palmer, Brig. O. L.

    Bennett, F. M. (Reading, N.)

    Holland-Martin, C. J.

    Profumo, J. D.

    Bevins, J. R. (Toxteth)

    Hollis, M. C.

    Raikes, Sir Victor

    Bishop, F. P.

    Holt, A. F.

    Rayner, Brig. R.

    Bowen, E. R.

    Hopkinson, Rt. Hon. Henry

    Redmayne, M.

    Boyd-Carpenter, J. A.

    Hornsby-Smith, Miss M. P.

    Remnant, Hon. P.

    Boyle, Sir Edward

    Horobin, I. M.

    Renton, D. L. M.

    Braine, B. R.

    Howard, Gerald (Cambridgeshire)

    Roberts, Peter (Heeley)

    Braithwaite, Sir Albert (Harrow, W.)

    Howard, Hon. Greville (St Ives)

    Robertson, Sir David

    Hudson, Sir Austin (Lewisham, N.)

    Robinson, Roland (Blackpool, S.)

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Hudson, W. R. A. (Hull, N.)

    Robson Brown, W.

    Brooke, Henry (Hampstead)

    Hulbert, Wing Cdr. N. J.

    Rodgers, John (Sevenoaks)

    Brooman-White, R. C.

    Hurd, A. R.

    Roper, Sir Harold

    Browne, Jack (Govan)

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Ropner, Col. Sir Leonard

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Russell, R. S.

    Bullard, D. G.

    Hutchison, James (Scotstoun)

    Ryder, Capt. R. E. D.

    Bullock, Capt. M.

    Hylton-Foster, H. B. H.

    Salter, Rt. Hon. Sir Arthur

    Burden, F. F. A.

    Jenkins, Robert (Dulwich)

    Sandys, Rt. Hon. D.

    Butcher, Sir Herbert

    Jennings, R.

    Savory, Prof. Sir Douglas

    Campbell, Sir David

    Johnson, Eric (Blackley)

    Carr, Robert

    Jones, A. (Hall Green)

    Schofield, Lt.-Col. W. (Rochdale)

    Cary, Sir Robert

    Joynson-Hicks, Hon. L. W.

    Scott, R. Donald

    Channon, H.

    Keeling, Sir Edward

    Shepherd, William

    Churchill, Rt. Hon. W. S.

    Kerr, H. W.

    Simon, J. E. S. (Middlesbrough, W.)

    Clarke, Col. Ralph (East Grinstead)

    Lambert, Hon. G.

    Smithers, Peter (Winchester)

    Clarke, Brig. Terence (Portsmouth, W.)

    Lambton, Viscount

    Smithers, Sir Waldron (Orpington)

    Cole, Norman

    Langlord-Holt, J. A.

    Soames, Capt. C.

    Colegate, W. A.

    Law, Rt. Hon. R. K.

    Speir, R. M.

    Conant, Maj. R. J. E.

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

    Spence, H. R. (Aberdeenshire, W.)

    Cooper, Sqn. Ldr. Albert

    Legh, Hon. Peter (Petersfield)

    Spens, Sir Patrick (Kensington, S.)

    Craddock, Beresford (Spelthorne)

    Linstead, H. N.

    Stevens, G. P.

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

    Llewellyn, D. T.

    Stewart, Henderson (Fife, E.)

    Crosthwaite-Eyre, Col. O. E.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Stoddart-Scott, Col. M.

    Crouch, R. F.

    Lockwood, Lt.-Col. J. C

    Storey, S.

    Crowder, Sir John (Finchley)

    Longden, Gilbert

    Strauss, Henry (Norwich, S.)

    Crowder, Petre (Ruislip—Northwood)

    Low, A. R. W.

    Studholme, H. G.

    Darling, Sir William (Edinburgh, S.)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Summers, G S.

    Davies, Rt. Hn. Clement (Montgomery)

    Lucas, P. B. (Brentford)

    Sutcliffe, Sir Harold

    Deedes, W. F.

    Lyttelton, Rt. Hon. O.

    Taylor, Charles (Eastbourne)

    Dodds-Parker, A. D.

    Macdonald, Sir Peter

    Taylor, William (Bradford, N.)

    Donaldson, Cmdr. C. E. McA.

    McKibbin, A. J.

    Tooling, W.

    Donner, P. W.

    McKie, J. H. (Galloway)

    Thomas, Leslie (Canterbury)

    Doughty, C. J. A.

    Maclean, Fitzroy

    Thomas, P. J. M. (Conway)

    Douglas-Hamilton, Lord Malcolm

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Thompson, Kenneth (Walton)

    Drayson, G. B.

    MacLeod, John (Ross and Cromarty)

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Drewe, C.

    Macmillan, Rt. Hon. Harold (Bromley)

    Thornton-Kemsley, Col. C. N.

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Macpherson, Hiatt (Dumfries)

    Tilney, John

    Maitland, Comdr. J. F. W. (Horncastle)

    Turner, H. F. L.

    Duncan, Capt. J. A. L.

    Maitland, Patrick (Lanark)

    Turton, R. H.

    Duthie, W. S.

    Manningham-Buller, Sir R. E.

    Tweedsmuir, Lady

    Elliot, Rt. Hon. W. E.

    Markham. Major S. F.

    Vosper, D. F.

    Fell, A.

    Marples, A. E.

    Wakefield, Edward (Derbyshire, W.)

    Finlay, Graeme

    Maude, Angus

    Wakefield, Sir Wavell (St. Marylebone)

    Fisher, Nigel

    Maudling, R.

    Walker-Smith, D. C.

    Fletcher-Cooke, C.

    Maydon, Lt.-Comdr. S. L. C.

    Ward, Miss I. (Tynemouth)

    Fort, R.

    Medlicott, Brig. F.

    Waterhouse, Capt. Rt. Hon. C.

    Foster, John

    Mellor, Sir John

    Watkinson, H. A.

    Fyfe, Rt. Hon. Sir David Maxwell

    Molson, A. H. E.

    Webbe, Sir H. (London & Westminster)

    Galbraith, Rt. Hon. T. O. (Pollok)

    Moore, Lt.-Col. Sir Thomas

    Williams, Rt. Hon. Charles (Torquay)

    Galbraith, T. G. D. (Hillhead)

    Morrison, John (Salisbury)

    Williams, Gerald (Tonbridge)

    Gammons, L. D

    Nabarro, G. D. N.

    Williams, R. Dudley (Exeter)

    Godber, J. B.

    Nicholls, Harmar

    Wilson, Geoffrey (Truro)

    Gough, C. F. H.

    Nicholson, Godfrey (Farnham)

    Wood, Hon. R.

    Gower, H. R.

    Nicolson, Nigel (Bournemouth, E.)

    Graham, Sir Fergus

    Nield, Basil (Chester)

    TELLERS FOR THE AYES:

    Mr. Kaberry and Mr. Wills.

    1836

    1837

    NOES

    Adams, Richard

    Hayman, F. H.

    Price, Philips (Gloucestershire, W.)

    Albu, A. H.

    Hewitson, Capt. M.

    Proctor, W. T.

    Anderson, Frank (Whitehaven)

    Holman, P.

    Pursey, Cmdr. H.

    Attlee, Rt. Hon. C. R.

    Holmes, Horace (Hemsworth)

    Rankin, John

    Awbery, S. S.

    Houghton, Douglas

    Reeves, J.

    Baird, J.

    Hudson, James (Ealing, N.)

    Reid, Thomas (Swindon)

    Barnes, Rt. Hon. A. J.

    Hughes, Cledwyn (Anglesey)

    Reid, William (Camlachie)

    Bartley, P.

    Hughes, Emrys (S. Ayrshire)

    Rhodes, H.

    Beitenger, Rt. Hon. F. J.

    Hughes, Hector (Aberdeen, N.)

    Richards, R.

    Bence, C. R.

    Hynd, J. B. (Attercliffe)

    Robens, Rt. Hon. A

    Benn, Hon. Wedgwood

    Irvine, A. J. (Edge Hill)

    Roberts, Albert (Normanton)

    Benson, G.

    Irving, W. J. (Wood Green)

    Roberts, Goronwy (Caernarvon)

    Blackburn, F.

    Isaacs, Rt. Hon. G. A.

    Rogers, George (Kensington, N.)

    Blenkinsop, A.

    Jay, Rt. Hon. D. P. T.

    Ross, William

    Blyton, W. R.

    Jeger, Dr. Santo (St. Pancras, S.)

    Boardman, H.

    Jenkins, R. H. (Stechford)

    Shackleton, E. A. A.

    Bottomley, Rt. Hon. A. G.

    Johnson, James (Rugby)

    Shawcross, Rt. Hon. Sir Hartley

    Bowden, H. W.

    Johnston, Douglas (Paisley)

    Shinwell, RI. Hon. E.

    Bowles, F. G.

    Jones, David (Hartlepool)

    Short, E. W.

    Braddock, Mrs. Elizabeth

    Jones, Frederick Elwyn (West Ham, S.)

    Silverman, Julius (Erdington)

    Brockway, A. F.

    Jones, Jack (Rotherham)

    Simmons, C. J. (Brierley Hill)

    Brook, Dryden (Halifax)

    Jones, T. W. (Merioneth)

    Smith, Ellis (Stoke, S.)

    Broughton, Dr. A. D. D.

    Keenan, W.

    Smith, Norman (Nottingham, S.)

    Brown, Rt. Hon. George (Belper)

    Kenyon, C.

    Snow, J. W.

    Brown, Thomas (Ince)

    Key, Rt. Hon. C. W.

    Sorensen, R. W.

    Burton, Miss F. E.

    King, Dr. H. M.

    Soskice, Rt. Hon. Sir Frank

    Kinley, J.

    Sparks, J. A.

    Butler, Herbert (Hackney, S.)

    Lee, Frederick (Newton)

    Steele, T.

    Callaghan, L. J.

    Lee, Miss Jennie (Cannock)

    Stewart, Michael (Fulham, E.)

    Castle, Mrs. B. A.

    Lever, Leslie (Ardwick)

    Strachey, Rt. Hon. J.

    Champion, A. J.

    Lindgren, G. S.

    Strauss, Rt. Hon. George (Vauxhall)

    Chapman, W. D.

    Lipton, Lt.-Col. M

    Stress, Dr. Barnett

    Chetwynd, G. R.

    MacColl, J. E.

    Summerskill, Rt. Hon. E.

    Collick, P. H.

    McGovern, J.

    Swingler, S. T.

    Cove, W. G.

    McInnes, J.

    Sylvester, G. O.

    Craddock, George (Bradford, S.)

    MoLeavy, F.

    Taylor, Bernard (Mansfield)

    Crosland, C. A. R.

    MacMillan, M. K. (Western Isles)

    Taylor, John (West Lothian)

    Grossman, R. H. S.

    MoNeil, Rt. Hon. H.

    Taylor, Rt. Hon. Robert (Morpeth)

    Cullen, Mrs. A.

    MacPherson, Malcolm (Stirling)

    Thomas, Ivor Owen (Wrekin)

    Daines, P.

    Mainwaring, W. H.

    Thomson, George (Dundee, E.)

    Dalton, Rt. Hon. H.

    Mallalieu, E. L. (Brigg)

    Thorneycroft, Harry (Clayton)

    Darling, George (Hillsborough)

    Mann, Mrs. Jean

    Thornton, E.

    Davies, Ernest (Enfield, E.)

    Manuel, A. C.

    Thurtle, Ernest

    Deer, G.

    Mayhew, C. P.

    Tomney, F.

    Dodds, N. N.

    Mellish, R. J.

    Turner-Samuels, M.

    Donnelly, O. L.

    Messer, F.

    Ungoed-Thomas, Sir Lynn

    Dugdale, Rt. Hon. John (W. Bromwich)

    Mikardo, Ian

    Vianl, S. P.

    Ede, Rt. Hon. J. C.

    Mitchison, G. R.

    Wallace, H. W.

    Edelman, M.

    Monslow, W.

    Watkins, T. E.

    Edwards, John (Brighouse)

    Moody, A. S.

    Webb, Rt. Hon. M. (Bradford, C.)

    Edwards, W. J. (Stepney)

    Morgan, Dr. H. B. W.

    Weitzman, D.

    Evans, Albert (Islington, S.W.)

    Morley, R.

    Wells, Percy (Faversham)

    Evans, Edward (Lowestoft)

    Morris, Percy (Swansea, W.)

    Wells, William (Walsall)

    Evans, Stanley (Wednesbury)

    Morrison, Rt. Hon. H. (Lewisham, S.)

    West, D. G.

    Fernyhough, E.

    Mort, D. L.

    Wheeldon, W. E.

    Fienburgh, W.

    Moyle, A.

    White, Henry (Derbyshire, N.E.)

    Finch, H. J.

    Murray, J. D.

    Whiteley, Rt. Han. W.

    Fletcher, Eric (Islington, E.)

    Nally, W.

    Wigg, George

    Follick, M.

    Neal, Harold (Bolsover)

    Wilcock, Group Capt. C. A. B.

    Foot, M. M.

    Noel-Baker, Rt. Hon. P. J.

    Wilkins, W. A.

    Fraser, Thomas (Hamilton)

    Oldfield, W. H.

    Willey, F. T.

    Freeman, John (Watford)

    Oliver, G. H.

    Williams, David (Neath)

    Gibson, C. W.

    Orbach, M.

    Williams, Rev. Llywelyn (Abertillery)

    Glanville, James

    Oswald, T.

    Williams, Ronald (Wigan)

    Gordon Walker, Rt. Hon. P. C.

    Padley, W. E.

    Williams, W. R. (Droylsden)

    Griffiths, David (Rother Valley)

    Paget, R. T.

    Williams, W. T. (Hammersmith, S.)

    Paling, Will T. (Dewsbury)

    Winterbottom, Ian (Nottingham, C.)

    Griffiths, Rt. Hon. James (Llanelly)

    Palmer, A. M. F.

    Winterbottom, Richard (Brightside)

    Hale, Leslie.

    Pannell, Charles

    Woodburn, Rt. Hon. A.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Pargiter, G. A.

    Wyatt, W. L

    Hall, John T. (Gateshead, W.)

    Parker, J.

    Yates, V. F.

    Hamilton, W. W.

    Paton, J.

    Younger, Rt. Hon. K.

    Hannan, W.

    Pearson, A.

    Hardy, E. A.

    Peart, T. F.

    TELLERS FOR THE NOES:

    Hargreaves, A.

    Popplewell, E.

    Mr. Kenneth Robinson and

    Harrison, J. (Nottingham, E.)

    Porter, G.

    Mr. Arthur Allen.

    Hastings, S.

    Price, Joseph T. (Westhoughton)

    Clause ordered to stand part of the Bill.

    Clause 18.—(OTHER FINANCIAL POWERS OF AGENCY.)
    Mr. Mikardo: I beg to move, in page 14, line 44, to leave out second "any," and to insert "the majority."
    The Temporary Chairman: I suggest that this Amendment, and the other Amendment the hon. Gentleman proposes to this Clause, in page 14, line 44, after "securities," to insert "carrying full voting rights," be discussed together if that is convenient to the Committee.
    Mr. Mikardo: I am very grateful to you. Colonel Gomme-Duncan. I am sure that that will meet the wishes of the Committee and will facilitate our discussion. The effect of these two Amendments, taken together, would be to make the beginning of paragraph (a) read as follows:
    "make loans to any company the majority of whose securities carrying full voting rights are held by the Agency …"
    It will be seen that the object of the Amendments is to limit the power of the Agency to make loans to the companies and subsidiaries so that those loans can be made only to those companies in which the Agency themselves hold control.
    I do not wish—indeed, I should be out of order if I did so—to anticipate some of the provisions of the next one or two following Clauses, but perhaps I may be allowed to say that by some of their provisions, about which we shall doubtless have some discussion in the near future, it would be possible for the Agency, having sold some assets and obtained some money on that account, then to proceed under this subsection to lend some or all of that money to some companies in which they have an interest. Clearly, there are very grave dangers in that procedure.
    The function of the Agency, as we said earlier today, will be ideally fulfilled if they work themselves out of their job at the earliest possible moment. The very word "Realisation" in their title, the Iron and Steel Holding and Realisation Agency, suggests an early finalisation, and it is not desirable—and I should think, quite possibly, from the drafting of the Bill, it is not desired by the Government—that the Agency shall go on dragging out timelessly their somewhat miserable existence.
    1840
    What is desired is that they should carry out the operation of realisation as far as they can in the shortest possible time. We on this side of the Committee have some views, and I suspect that right hon. and hon. Gentlemen opposite have some grave fears, that it will not be able to do much of its realising away before the next General Election blights the hopes of the party opposite and raises the hopes of those who have the interests of this industry at heart, but, at any rate, the intention is that they should get on with the job and get out.
    One of the dangers that lie within this provision is that they will maintain a continuing interest by the action that, so soon as they have got shot of one company, they will take the money and use it to get themselves involved in another company. That, clearly, is not the intention at all. For one thing, it carries with it the possibility that assets realised on a capital basis, the proceeds of the realisation, could be used for revenue purposes, and that clearly would be very bad financially.
    It certainly could be argued that where the Agency have control over a company they would be justified in lending that company money for an approved purpose which could be executed with the safeguard that it was under the control of the Agency in their execution. The Agency might, for example, argue that their task of selling the shares of that company would be facilitated if that company were able to undertake some development, and it might well be that that development could be undertaken only if the Agency came along and lent it the money to do so. That, I think, would be a weak case, but at least it would be a comprehensible case and I do not propose to argue that case again because it is not the purpose of the Amendment.
    That case could not be applied where the Agency have a minority holding. The Agency here is disposing of public money—and, moreover, public money obtained by the sale of public capital assets—and it would be the height of improvidence if it were able to, even subject to the authority of the Treasury—no doubt we shall revert to that later—and we should be happier if that authority were less general than is envisaged in line 42. Even subject to the same general authority of

    1841
    the Treasury it seems to me somewhat doubtful whether the Agency ought to be able to take public money obtained from a capital sale and pass it over to a company which may use it in ways and for purposes which lie outside the control of the Agency themselves.
    It is not the function of this Agency to become a general money-lending institution. It is not even their function to become a general money-lending institution for the steel industry. There are other organisations which have the means and are capable of providing finance for any of these companies, and there is no reason why the Agency should trench on the functions of these other organisations, at least one of which has, in the past, lent large sums of money to companies in the steel industry. What we propose is, in a sense, half a loaf; or perhaps it would be more accurate to say something like two-thirds of a loaf.
    We say that, while it is open to us to object to any of this lending of public money obtained on capital account for purposes which may be revenue purposes, we have confined our objections to those cases where the ultimate disposition of that money is outside the control of the lending body. I should have thought the Government would consider these two Amendments as reasonable, and that they would not wish the Agency to become a general money-lending authority and a general finance institution for the whole of the steel industry, including companies in which they have only a minority, and perhaps in some cases a very small minority, holding.
    I limit my remarks, not because I think this subject is unimportant, but because I think that little, if anything, further need be said to convince the Government that these are Amendments which they ought reasonably to accept.
    Mr. Boyd-Carpenter: The provision in this Clause in respect of loans to companies in which the Agency holds some of the shares is necessary to secure that the development of those companies is not held up while they are at that stage. It might well be that physical development of some importance fitted into the development plan at that time. It is equally not the intention, as the hon. Gentleman has indicated, that the Agency should be a general money-lending
    1842
    Agency. Indeed, the limit of £10 million in the Clause is sufficient confirmation of that.
    The question, therefore, which is raised on these Amendments is; Should it be possible, as under the Clause at present, for this money to be lent while the Agency have any holding in the companies, or should it be only possible, as suggested in these two Amendments, for these loans to be made while the Agency retain the majority shareholding? I appreciate that there is some force in the suggestion that where the shareholding by the Agency has fallen to a very small proportion of the total, it would not be the proper function of the Agency to go on lending money. That would be getting the Agency rather into the general money-lending organisation to which the hon. Member referred, and which I indicated it was not our intention it should be.
    9.0 p.m.
    I think that there is something to be said for imposing a quantity limit. I do not think that we can go as far as suggested and confine the lending policy to the case in which the Agency has a majority of the shares. There may be cases where the Agency has a big minority shareholding in which it would be desirable to lend the money. The fact, for example, that 40 per cent. of the shares of a company were held by the Agency might involve the company in difficulties in obtaining finances from other sources. We must be careful to make sure that the development of companies which are at this stage of disposal should not be interfered with. I am sure that everyone who wants to see the industry properly developed will agree with that.
    Mr. G. R. Strauss: I know that the hon. Gentleman is always very clear and we nearly always understand his arguments, but I could not understand the last one at all. Why should it be difficult for a company to borrow money because the Agency own 40 per cent. of the shareholdings? I should have thought that if there was Government interest in the company, they would not handicap that company in seeking loans and might help it. His argument was that the company might be handicapped, and I cannot understand that argument.
    Mr. Boyd-Carpenter: The right hon. Gentleman used the word "might." We are to some extent in the realm of uncertainty. I hope that it is no more than a possibility. I think that it is a real possibility. Even if it is only a possibility it is necessary to provide for it.
    As I was about to say, I think that we can, up to a point, meet the hon. Member for Reading, South (Mr. Mikardo). I think it would be possible at the next stage of this Bill to introduce a provision limiting the lending power to cases in which the Agency hold a substantial proportion of the shares. That does not go the full way. The hon. Member wanted us to go as far as the holding of a majority of the shares, but it goes some way to meeting his point that it would not be a proper function of the Agency for loans to be made where the Agency holding in the company was trivial.
    I would, therefore, suggest to the Committee that the substance of the hon. Member's Amendment could be met in that way, and if it met with the pleasure of the Committee I would be prepared to give an undertaking to introduce such an Amendment on Report.
    Mr. Mitchison: Can the hon. Gentleman satisfy me, and possibly other hon. Members, on one very simple point? Is there any real reason why the Government should not say what "substantial" means? Is there any real reason for putting in the word "substantial" instead of a figure? The Government have to make up their mind some day and they might perhaps make it up now, or when drafting the Clause, as to what they mean by the word "substantial."
    Mr. Boyd-Carpenter: I am willing to consider the hon. and learned Member's suggestion. My first reaction would be that there would be disadvantages in the insertion of a precise figure which, unless it was put rather lower than the hon. and learned Gentleman would like, might occasionally disable us from doing what quite clearly we ought to do to help the development of a company. My own feeling is that "substantial" would meet the point, but I am prepared to consider the suggestion of the hon. and learned Gentleman, although I believe it is improbable that on consideration a precise figure would appear to be more suitable than "substantial."
    Mr. G. R. Strauss: I must press the Financial Secretary again. He did not answer my question. He said the fact that the Agency own 40 per cent. of certain shares and have Government money to that extent might handicap the company in raising money outside. The question I asked there may be a good answer, but I cannot think of it—was in what circumstances that could be detrimental to the company if it was seeking money from the F.C.I. or the money market. How would it be more difficult for the company to raise money through ordinary commercial channels just because the Government or the Agency still own 40 per cent. of the shares and will, no doubt, later on, be trying to sell the 40 per cent.? Unless we can get an answer to the question there seems to be no reason why the hon. Gentleman should reject the Amendment. He put that forward as his only argument for saying that our proposal was unreasonable. I cannot see his argument, and I ask him to give us any circumstances in which his argument could apply.
    Mr. Boyd-Carpenter: I am delighted to help the right hon. Gentleman. It is the known policy of the Measure to dispose of Government holdings—the Agency's holdings, as they will be—of the stocks of the companies. The knowledge that a large proportion of the stocks of a certain company is likely to be disposed of in the near future could obviously tend to have a depressing effect upon the market for the stocks of that company and might make it extraordinarily difficult at that moment to raise further funds, for example by a new issue. Surely the right hon. Gentleman is not so naive as he suggests. He must realise that the likelihood of a considerable block of the shares of a company coming on the market in the near future can very often make it extremely difficult to raise further funds by means of a new issue. If the right hon. Gentleman does not appreciate that, he might consult one or two of his hon. Friends, for I am sure they could help him.
    Mr. Jack Jones: There is one question I should like to put to the Financial Secretary, although it may be said to be irrelevant. As a layman and a non-financial person, I want to know whether it is the intention of the Government to

    1845
    use money which accrues from the sale of what we call "the cream" to help the less fortunate companies which remain with the Agency. Will the Financial Secretary tell me what happens if the money is lost? How does the Government get it back?
    Mr. Boyd-Carpenter: The whole object of the investment is to assist the companies. There is no intention to invest money recklessly or in a manner in which it would be liable to be lost. We shall exercise the common prudence that we do in a considerable number of cases in which Government money is invested, and, of course, proper prudence is exercised by this Government.
    Mr. Jones: What happens if the money goes down the drain?
    Mr. Boyd-Carpenter: I hope the hon. Gentleman would regard it as a disaster if Government money went down the drain under any Government.
    Mr. Mikardo: My elation at finding the Financial Secretary at least partially forthcoming and the expectation that I have that with a little encouragement he will be even more forthcoming during the evening induce me to accept his offer. However, I ask him to pay more than formal attention to the suggestion of my hon. and learned Friend the Member for Kettering (Mr. Mitchison). It would be much more sensible to have a figure in the Bill instead of "substantial." While I am grateful to him for his suggestion that he should put down an Amendment at the next stage, if he decides upon substantial" he must not be surprised to find us moving Amendments to delete "substantial" and to insert a figure. I thank the Financial Secretary for his offer, and beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Mitchison: I only want to say a word on this Clause. In view of what has been said about the Amendment moved by my hon. Friend the Member for Reading, South (Mr. Mikardo), I feel considerable anxiety about the possibility of a general authority covering this sort of matter. I say no more, because a
    1846
    substantial point arises and when we come to Clause 20, which really sets out the financial machinery for this Agency and their accounts, I may have something more to say. I should not like this Clause to pass, however, without saying that one Member of the Committee does not feel happy about that particular phrase, and reserves any right he may have to raise the matter again on the Report stage.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 19.—(TREASURY TO TAKE OVER LIABILITY FOR IRON AND STEEL STOCK.)
    Mr. Boyd-Carpenter: I beg to move, in page 15, line 27, at the end, to insert:
    Provided that the Treasury shall not be required to establish or maintain any Redemption Fund Account or Interest Account in relation to any such stock, as provided in the Seventh Schedule to the Iron and Steel Act, 1949.
    This is a small technical Amendment in order to make it quite clear that the Redemption Fund set up under the Seventh Schedule of the 1949 Act is not imported into the provisions of the Bill. In view of the fact that payments are made into various Exchequer Accounts the provision for a Fund is not necessary. As it may be a matter of some doubt whether, in the absence of this provision, it would not be imported into the present Bill, I move the Amendment to make assurance doubly sure.
    Mr. Albu: This is not quite such a small Amendment as might appear from the Financial Secretary's remarks. We do not intend at this stage to oppose the Amendment or to deal at great length with this Clause, because to some extent the same considerations are involved in the Amendment of my hon. and learned Friend the Member for Kettering (Mr. Mitchison). The Iron and Steel Corporation have the duty of redeeming their stock. This stock is apparently to be turned into Treasury stock of the same identity and
    "subject to the same powers, privileges, charges, restraints and liabilities as before."
    It is not to be subject to redemption except in so far as there is a general redemption of the National Debt. In

    1847
    other words, by this Clause and particularly by this Amendment the Government propose to lose iron and steel stock in general Government funds.
    We are aware that in other parts of the Bill—and we shall move Amendments to strengthen them—there are provisions for accounting for what takes place when the companies are sold, but it would have been very much more easy to see what takes place if the proceeds of the sales of the companies were applied directly to the redemption of the iron and steel stock. This Amendment, of course, prevents that taking place.
    9.15 p.m.
    Some of our anxieties about the general intentions of the Government on all these Clauses are considerably strengthened by the Amendment. They arise out of the things that are said here and in the financial Press. The Financial Secretary must have seen a very extraordinary article in the "Financial Times" of last Wednesday, 18th February, which suggested that the revenue from the sale of these assets might be applied to reduction of taxation. I would be out of order if I attempted to develop that theme, but the argument was extraordinarily muddled. Examining the Clauses, I think that on the whole the Bill safeguards us against direct reduction of taxation in that way; nevertheless there are such extraordinary ideas about.
    I think it is right that we should say at once to the Government that on the next Clause we intend to examine very closely indeed how these funds, which will arise from the sale of the companies, are to be used and what Parliamentary control there will be over them, and to make quite certain that the actual facts of the sale of the companies, and the loss or gain to the Government, shall be made quite clear. I do not intend to go any further on that point now, but we must not allow the Financial Secretary, who can be very charming sometimes, and sometimes slightly disingenuous in the way he puts these matters to the Committee, to pass on without a warning that we have not overlooked what is being done in this Amendment and in the Clause; and that we hope to have a much more detailed discussion on the way in which the Government intend to use the
    1848
    funds they will get from the sale of these companies.
    Amendment agreed to.
    Mr. Mitchison: I beg to move, in page 15, line 28, to leave out subsection (2).
    I am not going to take up much time on this matter because I think the Financial Secretary will agree that the subsection which I move to leave out has no meaning whatever. It merely changes the name of the stock. The reasons for the change are completely obscure. The security remains completely identical. Ten lines are taken up by this subsection in order to say: "We will call this stock by a new name."
    I do not know why the Government want to do it. Is the name of the Chancellor to be glorified by being attached to an issue of Government stock in the way in which the names of previous Chancellors of the Exchequer have from time to time been attached, beginning with Hicks Beach and going down to Daltons, which is the most recent one? Perhaps that is the reason the Government are doing this. Perhaps they do not want anybody to remember that iron and steel have been nationalised, but we will see to that. We will see that people remember, and that iron and steel are nationalised again.
    Apart from all that, I hope that the Financial Secretary will agree that this subsection is one of the silly efforts of the Treasury and that it has no meaning whatever, no purpose, and no object, and might as well be dropped as left in.
    Mr. Boyd-Carpenter: I am sure that the hon. and learned Gentleman enjoyed himself. The purpose of the subsection is to substitute for "British Iron and Steel Three and a half per cent. Guaranteed Stock, 1979–1981," the words "Three and a half per cent. Treasury Stock, 1979–1981," to bring the stock into line with reality. The stock ceases to be an iron and steel stock and becomes an ordinary Treasury stock. Therefore, surely, it is a good thing that it should be named accurately. We believe that British Government stocks guaranteed by the Treasury should be described accurately, and as this subsection provides for that accuracy, it seems to me to be fully justified.
    Mr. G. R. Strauss: I have another explanation in mind which, although it differs from that of my hon. and learned Friend, may be accurate. It is the habit of a certain foreign country at the moment to wipe out history by expunging from the history books all those things which are disliked by the powers that be. I thought that may be the Government were doing the same thing here and, not liking the iron and steel nationalisation or the iron and steel stock, they thought it would be a nice thing to expunge it from history by eliminating the name altogether and giving it some other. Is that the explanation?
    Mr. Boyd-Carpenter: I am sure that the right hon. Gentleman would like to forget his Act of 1949, but I am afraid we cannot help him in that respect.
    Amendment negatived.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 20.—(IRON AND STEEL REALISATION ACCOUNT AND OTHER FINANCIAL PROVISIONS.)
    Mr, George Darling: I beg to move, in page 16, line 20, to leave out "fifty," and to insert "forty."
    The purpose of this Amendment is not to substitute "forty" for "fifty," but to seek information. It is quite clear from our debates on Clauses 18 and 19 that on Clause 20 we hope to have a proper discussion of the meaning of these financial Clauses. To begin with, we understand that a large part of the nationalised steel companies will remain in the hands of the Holding and Realisation Agency for a considerable time and, as the Financial Secretary has said, while those sections of the industry remain in the hands of the Agency, the Agency will have to do something to see that proper development goes on. That proper development will call for financial expenditure and, if that happens, it is proper that the Agency should have adequate finance at its disposal to look after the development charge.
    We are not quite sure how this will be done, particularly as regards the accounting. Clause 21, which purports to deal with the accounting side of the business, is not clear as to the kind of information that will be given publicly and the
    1850
    manner in which it will be given publicly. We are also perplexed about the amount of £150 million mentioned in the Clause. It will be remembered that the first development plan of the iron and steel industry was to cost about £170 million which, I suppose, is about £300 million at present prices. We do not know how the Government hit upon the figure of £150 million, unless they took the cost of development plans and divided it into halves, because half of the industry will go into private hands and half remain in public hands, and, therefore, £150 million seemed a nice figure to put in the Bill. We should like to know what the Government have in mind in putting this figure forward, and we want the fullest information that we can get about the way in which the Agency will finance the developments of companies that remain in the hands of the Agency.
    In Clause 18, which we have already passed, although we shall come back to it on Report stage in a big way, the Agency could make loans to companies, give financial guarantees and buy securities and assets of the steel companies, which does not look as if the Agency will be pursuing their one-way line—the line of disposing of the assets of publicly-owned iron and steel companies. Quite a lot of the industry will be left in the hands of the Agency, and, from our own point of view, we would prefer the raising of money by the Agency from the companies that remain in its hands from ordinary commercial earnings, but, if the Agency are to be the medium of the Treasury in raising a fund to a limit of £150 million, and the cash is to go through the Agency, we should like to know precisely how the accounting is to be done.
    Will the accounts of all these transactions be presented to Parliament or will they be buried in general accounts? Will the accounting also include details of income obtained by the Agency from the sale of companies, from shares, and so on? Clause 21 is rather vague, and the new Amendments to Clause 19, in regard to not having the redemption business, make it all the more important that we should get a clear statement from the Financial Secretary as to the purpose, and particularly the accounting, that will be followed in carrying out the provisions of Clause 20.
    Mr. Boyd-Carpenter: The Amendment would have the effect of reducing the amount available for development from £150 million to £140 million. I do not propose to go into the accounting side in any detail, because the question of the accounts is raised on the next Clause, and I do not think it would be appropriate, or indeed in order, to anticipate any discussion that may then take place.
    The question which is raised is why we have thought it necessary to make provision for as high a figure as £150 million. I may be able to help the hon. Member for Hillsborough (Mr. G. Darling) by drawing his attention to one or two facts. In the first place, when the companies are transferred under Clause 1, there will be substantial liabilities for the Agency to pay off, including the F.C.I. loans and loans from the publicly-owned companies to the Corporation, and the liabilities to be paid off will be of the order of £85 million. Therefore, that makes a substantial subtraction from the amount of £150 million which will be available for development.
    Mr. G. R. Strauss: Loans falling due on ordinary commercial agreements?
    Mr. Boyd-Carpenter: No, loans which it would be advisable to clear. I can say that the figure of £150 million is calculated with that liability in mind. That being so, a certain amount has to be allowed for perhaps the next couple of years for the development of such of the companies as remain in public ownership. Naturally, the amount required will depend on the speed with which disposal takes place.
    9.30 p.m.
    We have deliberately fixed the figure rather high so as to allow a margin in case disposal goes slower than it would be reasonable to anticipate. As I said on the previous Amendment, it is not desirable that the process of development in this industry should be handicapped because other matters move faster or slower than could reasonably be expected. It seems to us that when allowance is made for repayments it gives a reasonable cover, so far as it is possible to foresee the future. It is for that reason that after some thought we felt that the figure of £150 million with which to cover the necessary developments would be adequate. and for that reason also I must
    1852
    resist the hon. Member's proposal to reduce the amount by £10 million.
    Mr. Albu: Do I understand the Financial Secretary to say that before the Agency attempt to sell some of these companies it is the intention of the Treasury to take over such commercial loans as may still be outstanding, that it is intended out of the figure which the Treasury may pay into the realisation account—the figure of £150 million—to pay off something like £85 million?
    Mr. Boyd-Carpenter: I said that was the liability.
    Mr. Albu: This is a very complicated matter and I am trying to follow what the hon. Gentleman really meant by that. It means there is a liability because some of the companies had very substantial loans from the Finance Corporation for Industry and so on. Is it the intention of the Treasury to take over the liability for such loans and to pay them off? If so, I really cannot see the purpose of that, and I should not have thought it was desirable.
    Mr. Summers: Has not the hon. Gentleman overlooked the fact that the Corporation, whose life is clearly one of short duration, may be one of the institutions to which the money will have to be paid off by the Agency?
    Mr. Albu: That is perfectly true, but I am not sure what the figure is. It is not a very large figure so far, but we have not, of course, seen the second year's accounts, so we do not know what it is. Perhaps the Financial Secretary knows the figure of loans made by the Corporation to the separate companies. One of the great advantages of the Iron and Steel Corporation was that it could make these loans at a very low rate of interest. We know that there are other sums amounting to £60 million or so outstanding to other bodies, but I do not quite see the point of the Treasury taking over this liability.
    That leaves a figure of about £65 million. Is it intended to go on developing the industry in public hands on the basis of Treasury loans out of the Consolidated Fund? I should have thought it would have been better to do that on the basis of Government stock, and therefore I cannot see that such a large figure is needed. It seems a thoroughly unsatisfactory way of financing the industry and

    1853
    one over which there will be very little control, and I think we require a good deal more information than we have at the moment.
    The whole thing is very confused, and I cannot, of course, deal with the rest of the Clause, which describes how the realisation account is to be operated. We are very uneasy about the whole thing, but I should particularly like further information about taking over the Corporation's loans. Would it not be better to develop the industry on a much more substantial and permanent basis?
    Mr. G. R. Strauss: I should like to emphasise the importance of the questions asked by my right hon. Friend the Member for Edmonton (Mr. Albu). We really ought to have more information about this matter. After all, £150 million is a substantial figure and this will be public money, loaned in one form or another, to go to industry for either development purposes or to pay off existing loans.
    Conservative Members in the days when Labour were in office maintained that they were the watchdogs of public money and that they must not allow a penny to leave the Treasury without ample opportunity being provided to examine where it went and how it was going to be paid out. All of us ought to be insistent that in this case we should have more detailed information than we have had so far about the use which is expected to be made of this £150 million.
    The Financial Secretary spoke about £85 million liabilities. These presumably are partly liabilities of the Corporation, which of course would have to be taken over by the Treasury because the Corporation are going out of existence. We should like to know how much of this £85 million is Corporation liability. There is a great deal of other money—for example money lent by F.C.I. to the industry. There was a substantial sum outstanding—I think about £30 million—in connection with Margam when I was in control of the Ministry. Is it proposed to pay that off? If that is so, what is the difference between the situation now, when the industry is presumably going back to private enterprise, and the situation in the days when the loan was negotiated, because the industry was under private enterprise then. The F.C.I.
    1854
    loan was negotiated before the days of nationalisation. If there is a further explanation for the balance of £85 million I think we are entitled to have it. We do not necessarily take objection to it, but we ought to know what is happening.
    Is it in the mind of the Government, with regard to the balance of the £150 million, that all development schemes of companies remaining in the hands of the Agency should be paid for out of the sum of £65 million? If so, I do not think that sum is anything like enough. Ordinary development schemes will cost about £60 million a year for the next five years, a total of £65 million for that purpose is no use at all unless the Government contemplate—and I do not think anybody in their senses would contemplate—that they will sell all these companies in a month or two into private ownership.
    There may be differences of opinion as to how long it will take to sell out, but is generally agreed that it will take many years, and in our view a substantial part of the industry will remain in the hands of the Agency for a long time, if not for ever—or at least until there is a change of Government. If that is so, £65 million is a wholly insufficient sum. Is it suggested, on the other hand, that private resources will be used? Will F.C.I. be asked for further loans? If that is so, why do the Government want £65 million at all'?
    In that case, they would not want anything like that sum. Or is it suggested that these things will be financed partly from private sources and partly from this fund? All these things must have been in the minds of the Minister of Supply and the Treasury when this sum was put into the Bill. We know that there is a division between £85 million and £65 million. We cannot understand how either sum was arrived at, and we should like some pretty detailed idea—not necessarily down to the last half million—of how the figure was made up. We should also like a broad answer to the questions which I have put, and which we consider are important.
    Mr. Boyd-Carpenter: I will do my best to answer the questions. The right hon. Gentleman referred. first of all, to the liabilities of £85 million. Of those, £45 million consists of the F.C.I. loans

    1855
    which, I understand, in accordance with the Act of 1949, the F.C.I. could withdraw. Provision, therefore, has to be made to cover that. The sum of £20 million is in respect of loans from publicly owned companies to the Corporation which is now being extinguished, and a further £20 million may be required as a result of anticipated overdrawing by the Corporation. It is, therefore, necessary to make provision for the liability of £85 million, and that leaves the balance of £65 million available for development purposes.
    It is intended to use two sources for development of such companies as remain in public ownership. One source will be part of the ploughed back profits made from the operations of the company. The other will be the £65 million. I agree it is a matter of calculation depending both on the speed of disposal and on the amount of development which it is possible to undertake. We have fixed the amount at a figure which seems, taking into account all the considerations I have mentioned, reasonable to cover the amount of development which will probably be undertaken in the next two years by companies remaining in public ownership. That is the best calculation we can make, bearing in mind two conflicting considerations.
    Mr. Summers: I believe my hon. Friend used the phrase "profits of the sale." Did he not mean "proceeds"?
    Mr. Boyd-Carpenter: No, the profits of the operations of the campanies which have not been sold. Ex hypothesi there are no profits of sale yet; they are simply the profits of the operations. We have calculated this figure on two conflicting considerations. On the one hand, we want to provide all that looks like being reasonably necessary for development because we want development to go on. On the other hand, we think it is wrong to ask Parliament for more than looks reasonably like being needed. As a matter of constitutional propriety and Parliamentary decency, it is wrong to ask for wildly exaggerated sums because of an outside chance of their being wanted. It is because of those two conflicting considerations that we have arrived at this sum, and we commend it to the Committee as being reasonable.
    Mr. Jack Jones: With regard to this amount of money which is earmarked for advancing for development purposes to the companies owned and retained by the Agency, could the hon. Gentleman tell the Committee on what basis that sum has been computed and from what sources that technical knowledge has been drawn? The Government are bound to have some advice and assistance in the computation of this amount, and I should like to know how it has been arrived at.
    Mr. Boyd-Carpenter: We have available all the resources of the Government, including the resources of the Ministry of Supply, to which Department great knowledge of the industry is available. As I have said three times already—and I do not mind the hon. Member saying it a fourth—it is dependent on the precise amount that is sold, and the calculation has to take into account the fact that some companies will have been sold and some not. As with all these forecasts, it is necessarily based upon uncertain factors, but I think the calculation is a reasonable one in the circumstances and it is for that reason that I put it forward.
    9.45 p.m.
    Mr. Jack Jones: The Committee are now being told that instead of the amount of money to be provided having some relation to the number of companies and the technical development that will be decided upon, an amount of money—£x—has now been decided upon and that is the amount to be made available to an unknown number of people desiring to use it. We want to get this clear; this is a matter of vital importance. We are told that an amount of money—and the figure has been stated—will be available for the technical development of companies remaining in the possession of the Government, through the Agency; but we cannot be told what the number of companies will be.
    It may be that 30 per cent. will require this money and will have to divide it among themselves, or that 60 per cent. of the present industry will require it. It will mean that those companies requiring 100 per cent. technical development will not get it and, because of their inefficiency, they will not be sold. The effect will be that because the amount of money is insufficient the companies left

    1857
    in the hands of the Agency will not be as efficient as they should be.
    Amendment negatived.
    Mr. E. L. Mallalieu: I beg to move in page 17, line 6, at the end, to insert:
    Such account shall be prepared so as to show, so far as practicable, in relation to the transactions of the Iron and Steel Realisation Account, whether and to what extent assets or securities sold or disposed of by the Agency under the provisions of sections sixteen and seventeen of this Act are so sold or disposed of for a consideration which is greater or less in value than such an amount of the compensation, satisfied by the issue of British Iron and Steel Stock in respect of securities which, under the provisions of Part II of the Iron and Steel Act, 1949, are vested in the Iron and Steel Corporation of Great Britain, as is fairly attributable, all necessary adjustments and allowances being made, to such assets or securities sold or disposed of as aforesaid by the Agency.
    This is an Amendment to Clause 20 (8). The object of that subsection is to lay a duty upon the Treasury to state annually precisely what is happening about the assets in the nationalised steel industry of which it is having to dispose. This Amendment is really a test of the Government's straightforwardness. I do not think anybody on this side of the Committee would question for one minute the courtesy with which the right hon. Gentleman and his two hon. Friends have treated us throughout the debates on this Bill. They have done a great deal to minimise the discomfort of the rather more turbulent stretches of the river down which this Bill must pass on its somewhat hurried course to the sea of the Statute Book. But there cannot be much doubt in the minds of hon. and right hon. Gentlemen opposite about the suspicion which hon. Members on this side of the Committee have with regard to the whole question of denationalisation.
    We think it is a surrender to sectional interests, and it would be proper to describe that surrender as abject if it were not for the extraordinarily gleeful expression with which the Financial Secretary embarked upon it. We think it is the antithesis of a national policy, giving to the Government's friends pecuniary advantages and opportunities to exploit the community, no doubt for a political quid pro quo in i the form of support for their party. It s a policy of directorships for the boys and plums for
    1858
    the spivs, with whatever rake-offs there may be for the party opposite.
    I have not said this just for the pleasure of saying it in public. I may no longer be young but at any rate I am innocent enough to be hurt by having to think such things about the party opposite. But these things are only too likely to be proved true. If I have gone one bit too far; if I have been in the slightest degree unfair in what I have said about the party opposite in its approach to these problems, here is their opportunity to show how wrong I am. We shall all be extremely pleased if they do anything like that.
    The object of the Amendment is to see that full particulars are published in this account of the disposal of these assets. In particular, we are anxious to see a clear statement in this account, published annually by the Treasury, showing whether there has been a profit or a loss on the transactions—that is to say, on each disposal of assets which may occur. By that, I mean whether there has been a sale for more or for less than the amount paid when the industry was taken over by the nation. I want that statement to be published for each asset or group of assets.
    Already, under the subsection, the Treasury has to make an account annually of the disposal. All we are asking is that it shall show in the account, beyond any doubt, whether or not the sum obtained for an asset or group of assets, now that the assets are being sold back to the privateers, is more or less than the sum which the nation paid when it bought these assets. That is a very good way of being able to tell whether or not the price is reasonable, and that is why we want this information supplied.
    If the Government are as straightforward as they would have us believe, and as we should like to believe them to be, surely this is the chance for which they have been waiting, because any honest-minded Government would at once leap at this opportunity to show quite openly and in public whether or not these transactions result in profits only for a section of the community or whether they result in a profit for the State. The Government may say that what we ask will be too difficult to achieve. We have

    1859
    already heard about some of the changes which have taken place—such changes, for instance, as those in the capital structure of some companies which were taken over when the industry was nationalised. The Government may say that, as a result of these changes, it is impossible to compare the price received for what is left of the changed article with that which was paid originally by the nation. They may say that some of the assets may not exist, that there may have been regrouping.
    I submit that that is the sort of little sum which the backroom boys of the Treasury are paid to work out. There should be no difficulty whatever, if they set their minds to the task, in working out a comparable figure—a comparison between the figure received now and the figure paid in the past. For instance, if a group of assets was bought for £x under the 1949 reckoning, and a certain asset has been hived off or grouped with other assets and is no longer in the original group; and if the value of the asset hived off is one-seventh of £x; then the comparison would obviously be with the six-sevenths which remain. That would be a perfectly simple sum.
    I put it to the Parliamentary Secretary in all earnestness that, having in mind the suspicion which he knows to exist on this side of the Committee, he should be very willing to try to meet us on this point. After all, we represent a half of the electorate; we are deeply suspicious; and we want those suspicions to be allayed. This is the Government's chance to do that. Will they accept the Amendment and make an arrangement whereby the Treasury will state in public whether or not the sum being paid for the assets distributed by the Agency is as great in each individual case as was the sum paid for those assets originally? I ask the Financial Secretary to give a favourable reply. I ask him to say that this will not be a hole-and-corner business but an honest-to-God affair with regard to which everybody shall be able to form his own judgment in good conscience.
    Mr. Boyd-Carpenter: This will be neither a hole nor a corner affair, and, indeed, study of the Bill, I think, impresses one more with the plenitude and
    1860
    amplitude of the accounts that will be available to hon. Members than any indication of shortage in that respect. But the objections to the peculiar type of accounts which the hon. and learned Member for Brigg (Mr. E. E. Mallalieu) has with some ingenuity evolved for himself are several. In the first place they are tied for purposes of comparison with the compensation stock.
    I do not want to go over the ground which we have traversed—I think, at least, twice—today, but I am bound to remind the hon. and learned Member that there are very good reasons for saying that changes that have taken place since nationalisation have thrown comparison with the compensation stock as a yardstick completely out of date, sometimes one way, sometimes the other. Therefore, his particular form of accounts being based on that inaccurate yardstick must inevitably in what they show be inaccurate.
    It is not particularly clear from reading the Amendment whether the loss or the profit which is to be shown is to be shown separately for each security sold or for the whole body of securities disposed of during the accounting period of a year. It is not at all clear what obligation is so imposed. But in any event, even if it be in its simpler form, as taking a lump together for a year. to be set for the purposes of comparison against the amount of compensation paid in respect of those particular securities, that must, in the nature of things, be not particularly helpful, because it may well be that those that are sold in one year raise a better price than those sold in another. Indeed, as markets tend to fluctuate, it is extremely likely that they would.
    Then again, it is the object that all the information which can be got together on this subject shall be available in the report and accounts of the Agency, which, when we come to the next Clause, we shall provide shall be laid before Parliament. In particular, information as to the proceeds received for the sale of securities and other assets will be included in those accounts.
    I really cannot see what more the hon. and learned Member can want, and, indeed, if I may go back to it, the peculiar form of presentation of accounts which he has evolved, though, undoubtedly, it would involve a great deal of difficulty

    1861
    in getting them together, would really, for the reasons I have stated, give a most misleading impression, and would be far less helpful than the statement of the actual facts in the normal form of accounts which the Agency will lay, and for that reason alone it would seem to me quite wrong to present this rather peculiar form of balance sheet.
    Mr. Julian Snow: I do hope that the hon. Gentleman will reconsider the matter. I hope he will consider this Amendment in the way he was kind enough to consider another, which was not accepted, that was proposed to Clause 16 on the membership of the Agency. He will remember that he said that, although he could not accept our Amendment on that occasion, he did take the point of view that it would be desirable to try to avoid and to prevent any collusion about disposal. It seems to me that this Amendment would be an aid in judging whether there had been any collusion in the disposal of the assets.
    This is a matter which does not crop up only in this country. I have only to remind the hon. Gentleman of the remark made by the aspiring candidate to high office in another friendly country who delivered himself of the dictum that what was good for General Motors was good enough for the country. This is a matter to which we must give very serious consideration when these assets are disposed of, and I suggest that, even if the form of accounts—almost an aidememoire—suggested by my hon. and learned Friend is unacceptable, a more explanatory form of accounts giving the value of these assets would be highly desirable.
    10.0 p.m.
    Mr. C. R. Strauss: We are most dissatisfied with the reply of the Financial Secretary. He tells us that the information to be given to us by the Agency of the outcome of their activities will be sufficient to satisfy our reasonable curiosity. We do not know that: there is no reason why it should be. We do not know in what form the Agency will inform the House about the sales they have been managing to get of their assets or securities. It will all be subject to Treasury ruling, and we do not know what the Treasury ruling will be. We therefore say that we think it reasonable and proper that there should be such
    1862
    publication by the Agency of their sales activity as will enable us to make some comparison of their success and achievement. We want to know how they have been doing, if they have been doing well, and the sort of price they have been getting compared with the compensation prices originally paid for the various securities which were bought by the Corporation. Is that an unreasonable request?
    I do not want to go over all the arguments put forward earlier in the day, but I am afraid I must touch on them. I repeat that we are exceedingly suspicious about not the desire but the ability of the Agency to sell the securities which it will hold at a price which can he considered by anybody as satisfactory from the public point of view. When the industry was bought by the Corporation it was paid what we thought was a fair price. We thought that the Stock Exchange valuation was a reasonable one. There was a loud cry of indignation by the Conservative Party, voiced particularly by the Front Bench spokesmen, that the price was wholly unreasonable and that the industry was being bought at well below the proper and true value.
    We do not think that that was so. Surely, when the industry is being bought back by private owners, the profits of the industry having meanwhile risen substantially, it is reasonable for us to want to know whether the private owners, when buying back those companies which they had to sell to the Corporation, will pay, as we think they will, less for the companies than they received when they sold them to the Corporation. That, I should think, is a reasonable and proper matter for us to raise, and it is right for us to demand that the accounts of the Agency show whether this is so or not. We have a deep suspicion that in the very nature of the set-up here the public will not be able to get the money which it ought to get when it sells this public property.
    As I said on an earlier Amendment, there will not be competitive buying. There will be one buyer for all the major assets, the big securities which are being sold. Some combination of interests—iron and steel industry interests, banking interests and insurance interests—will come along and put to the Agency

    1863
    a proposition, "We are willing to take over this particular show for this figure and to have this financial structure. We propose to issue certain shares to the public and to pay you so much."
    I am sure—and I do not think anybody denied it when I put it to the Committee in the form of a question before—that when it comes to selling these important companies, the take over price of which may be £10 million, £20 million or £30 million, there will not be any competitive buying or tendering for that industry. There will be one buyer only. On the other side of the picture, there will be the Agency under the control of the Government, and there will be the strongest possible pressure on the Agency and on the Treasury to sell in order to get rid of the stuff. That is the intention of the Government. They were elected for that purpose, and they are going to try to carry it out—get rid of the stuff, and hand it over from public ownership to private ownership.
    I am sorry to repeat myself but I must. The Government will be in an impossible and, indeed, in a ridiculous situation politically if, having passed this Iron and Steel Bill, they are forced to say, six months or a year later, "We are very sorry but we have not been able to sell more than one or two of the iron and steel companies. They are still in public ownership, and the Bill is just a bit of paper, because we cannot sell the companies except at prices which we are advised by the Treasury and the Agency are too low and unjustifiable in view of past history."
    Then the pressure will come on the Treasury and on the Agency to sell these companies if they possibly can, and not let it be said that, in spite of the Bill, the property still remains in public hands. The companies who want to buy these assets know that perfectly well. They know that they have only to wait a bit. Most of them will not be eager to buy back these companies for a number of reasons.
    One reason, no doubt, is that they do not want to hold these companies temporarily and then go through all the difficulties and trouble of having them bought up again by the State, when the next Labour Government is returned, in such a way that they will not be able to
    1864
    make any profit out of holding these companies meanwhile. That will be the natural reaction of a number of people. They know that the permanent solution of this problem will be one of national ownership, and many people will, for that reason, be unwilling and reluctant to buy these companies back.
    There may be many other reasons. There is the fear in the industry today and in financial circles—I do not think it is justified; I think it is exaggerated—that the prospects for the world iron and steel industry are not so rosy as they were two or three years ago; and that the growing capacity of the industry, not in this country but in the world, is outgrowing world demands. They believe that as a result of lack of sufficient action in developing the under-developed parts of the world, there will not be sufficient world demand for the production of the iron and steel companies as there would have been if there had been effective action by international authorities to develop parts of Asia and other parts of the world which require developing, and that there is going to be over-production.
    I do not hold that view myself, but it is a view widely held. My point is that for this and other reasons many people will be reluctant to bring these companies again under private ownership. On the other hand, the Government and the State will be most anxious to make substantial sales. For that reason, I think the probability is that the law of supply and demand will apply, and the pressure to sell will be greater in many cases than the demand to buy. The result will be, in our belief, that the companies will be sold back to private owners, if they are sold back at all, at disgracefully low prices, much lower than the prices which were paid to the old shareholders by the Corporation.
    Mr. Summers: Has the right hon. Gentleman forgotten that 20 minutes ago, on an earlier Amendment, he was arguing that the Treasury would be so interested in the financial side that the Agency would then be put under the Board. That is exactly the reverse of what he is now saying.
    Mr. Strauss: I do not think that it is the reverse. Let us be accurate when we are referring to previous statements. I was

    1865
    putting forward the same argument then. I was arguing that the Treasury, in their anxiety to sell almost at all costs because of the pressure put upon it by the Government, might sacrifice the efficiency of the industry and sell assets because they happened to get a good offer for them when it was obviously desirable that the assets should not be taken out of some integrated group but should remain under their control.
    It was because of the possibility of pressure on the Agency to sell wherever they were able to do so at almost any price that I said that the Agency should be put under the control of the Board so that the Board could ensure that the assets owned and controlled by the Agency would not be broken up indiscriminately for financial purposes at the cost of sacrificing the efficiency of the industry. My argument on that occasion was completely consistent. That argument was consistent with the one I am putting forward today. [Laughter.] I do not know whether hon. Gentlemen opposite do not see the point or do not want to see it. The point is, simply, that the Agency will be trying hard all the time to sell perhaps irrespective of whether they are sacrificing the interests of the efficiency and co-ordination of the industry, and their efforts to sell are likely to be greater than the desires of potential buyers to purchase.
    The result will be that, if it is sold back at all, a great portion of the industry will be sold at a rotten price. The steel owners will get their industry back at a price which will be very beneficial to them but will be exceedingly disadvantageous to the public. That is our belief and fear, and the only way in which we can find out whether our belief and fear is correct or not—I cannot prophesy for certain—is by the Agency publishing figures which will either prove or disprove our fears, and that is what we are asking at the moment.
    We ask that the Agency shall produce figures which will enable us to compare the selling price they are able to obtain for the securities which they hold with the price originally paid by the Corporation to the companies for similar securities. We know that exact comparison is not possible in all cases, that there have been changes and that a number of companies may have to be grouped together,
    1866
    but we also know that the ingenuity of the Treasury or a group of chartered accountants will make possible the preparation of comparable accounts.
    The fact that the Government are unwilling to accede to our request that such figures should be published to enable a comparison to be made convinces us that they know that what we say is probably correct. If the Government had nothing to fear and were convinced that our fear was incorrect, they would allow the figures to be published in the form that we require. We do not ask for detail, but there is information which Parliament and the country ought to hear. There has never before been anything like this sale of £240 million worth of public assets to private persons; the conditions and amounts are without precedent.
    The House ought to have the fullest report and it should be in a form to enable us to make comparisons to prove or disprove our fear. If the Government are unwilling to produce figures in such a form, we can only come to the conclusion that they know our fear is correct.
    10.15 p.m.
    Mr. Boyd-Carpenter: The right hon. Gentleman has deployed a considerable part of his argument very fully and I am sure he has enjoyed himself very much in the process. The only point concerned here is the point of accounting. The particular proposal contained in the Amendment is, for the reasons I gave, quite unacceptable. I notice that the right hon. Gentleman, during his speech of some length, did not attempt to say it was. We are as anxious as he is that if this can be brought out it will be brought out.
    I said a few moments ago that the amount received for the sale will, in any event, appear in the accounts of the Agency which are dealt with under the following Clause. There is no intention whatever to conceal any relevant fact, and the right hon. Gentleman knows perfectly well that accounts of this sort are generally extremely full and detailed. We have no intention whatever of concealing any relevant facts particularly because I think that those facts, when deployed, as well as informing the public, will also show how wrong the right hon. Gentleman has been in a number of prophecies in which he has indulged tonight.
    Mr. Mitchison: I shall not keep the Committee for more than a minute, but I was fascinated by the mental processes of the Financial Secretary. He swallows camel after camel and then he strains at a little gnat like this. He arrived at £150 million by a process of calculation which I can only describe as rather inspired and detailed, and now apparently he end his Department are so old-fashioned that they find it impossible to prepare accounts which will compare the previous prices of these companies or other assets with the necessary adjustments and alterations in the intervening years. I simply cannot see any difficulty—[Interruption.] I think the hon. Member for Heeley (Mr. P. Roberts) has something valuable to say.
    Mr. Peter Roberts: The hon. and learned Member said he would take one minute, and I was informing him that the minute is now up.
    Mr. Mitchison: The hon. Member is a trifle literally-minded. He seems to consider that minutes have a certain relativity.
    All I want to say is that the Financial Secretary has given his reasons and most hon. Members of the Committee themselves see good and sufficient reasons for something of this sort being done. Surely the hon. Gentleman or his Department are underrating themselves if they say that they cannot do anything of the sort
    because it is too difficult. I suggest to him that some of the fantastic performances his Department will have to put up in connection with the Excess Profits Levy and matters of that sort are tar more difficult than anything asked of him or them in connection with this matter.
    All that the hon. Gentleman has to do is compare, over a comparatively short period of years, the capital account of one year and the capital account of the next year, which is a matter of course year by year for any company. He has got to make a proper allowance in each year for increased liabilities, assets and the like. He has, in fact, to make the necessary adjustments and alterations, and at the end of it he will be able to present his accounts in a form which will give the ordinary member of the public the answer to the question that he is asking, namely. are the Government selling public property at a loss or are they not?
    The Financial Secretary ought not to take refuge behind the usual excuse of administrative or, in this case accounting impossibility in order to defend himself from answering that question. It is a question that ought to be answered in such a way that it will provide the best answer to the ordinary man about the sale of public property.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 229: Noes. 250.

    Division No. 105.]

    AYES

    [10.20 p.m.

    Adams, Richard

    Castle, Mrs. B. A

    Finch, H. J.

    Albu, A. H.

    Champion, A. J.

    Fletcher, Eric (Islington, E.)

    Anderson, Frank (Whitehaven)

    Chapman, W. D.

    Follick, M.

    Attlee, Rt. Hon. C. R.

    Chetwynd, G. R.

    Foot, M. M.

    Awbery, S. S.

    Collick, P. H.

    Fraser, Thomas (Hamilton)

    Baird, J.

    Cove, W. G.

    Freeman, John (Watford)

    Barnes, Rt. Hon. A. J.

    Craddock, George (Bradford, S.)

    Gibson, C. W.

    Bartley, P.

    Crosland, C. A. R.

    Glanville, James

    Bellenger, Rt. Hon. F. J.

    Crossman, R. H. S

    Gordon-Walker, Rt. Hon. P. C.

    Bence, C. R.

    Cullen, Mrs. A.

    Greenwood, Anthony (Rossendale)

    Benn. Hon. Wedgwood

    Dalton, Rt. Hon. H.

    Grenfell, Rt. Hon. D. R.

    Benson, G.

    Darling, George (Hillsborough)

    Griffiths, David (Bother Valley)

    Blackburn, F.

    Davies, Ernest (Enfield, E.)

    Griffiths, Rt. Hon. James (Llanelly)

    Blenkinsop, A.

    Davies, Stephen (Merthyr)

    Hale, Leslie

    Blyton, W. R.

    de Freitas, Geoffrey

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Boardman, H.

    Deer, G.

    Hall, John T. (Gateshead, W.)

    Bottomley, Rt. Hon. A. G.

    Dodds, N. N.

    Hamilton, W. W.

    Bowden, H. W.

    Donnelly, D. L.

    Hannan, W.

    Bowles, F. G.

    Dugdale, Rt. Hon. John (W. Bromwich)

    Hargreaves, A.

    Braddock, Mrs. Elizabeth

    Ede, Rt. Hon. J. C.

    Harrison, J. (Nottingham, E.)

    Brockway, A. F.

    Edelman, M.

    Hayman, F. H.

    Brook, Dryden (Halifax)

    Edwards, John (Brighouse)

    Hewitson, Capt. M.

    Broughton, Dr. A. D. D.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Holman, P.

    Brown, Rt. Hon. George (Belper)

    Edwards, W. J. (Stepney)

    Holmes, Horace (Hemsworth)

    Brown, Thomas (Ince)

    Evans, Albert (Islington, S.W.)

    Houghton, Douglas

    Burton, Miss F. E.

    Evans, Edward (Lowestoft)

    Hudson, James (Ealing, N.)

    Butler, Herbert (Hackney, S.)

    Evans, Stanley (Wednesbury)

    Hughes, Cledwyn (Anglesey)

    Callaghan, L. J.

    Fernyhough, E.

    Hughes, Emrys (S. Ayrshire)

    Fienburgh, W.

    Hughes, Hector (Aberdeen, N.)

    Hynd, J. B. (Attercliffe)

    Nally, W

    Stewart, Michael (Fulham, E.)

    Irvine, A. J. (Edge Hill)

    Neal, Harold (Bolsover)

    Stokes, Rt. Han. R. R.

    Irving, W. J. (Wood Green)

    Noel-Baker, Rt. Hon. P. J

    Strachey, Rt. Hon. J.

    Isaacs, Rt. Hon. G. A.

    Oldfield, W. H.

    Strauss, Rt. Hon. George (Vauxhall)

    Janner, B.

    Oliver, G. H.

    Stross, Dr. Barnett

    Jay, Rt. Hon. D. P. T.

    Orbach, M.

    Summerskill, Rt. Hon. E

    Jager, Dr. Santo (St. Pancras, S.)

    Oswald, T.

    Swingler, S. T.

    Jenkins, R. H. (Stechford)

    Padley, W. E.

    Sylvester, G. O.

    Johnson, James (Rugby)

    Paget, R. T.

    Taylor, Bernard (Mansfield)

    Johnston, Douglas (Paisley)

    Paling, Will T. (Dewsbury)

    Taylor, John (West Lothian)

    Jones, David (Hartlepool)

    Palmer, A. M. F

    Taylor, Rt. Hon. Robert (Morpeth)

    Jones, Frederick Elwyn (West Ham, S.)

    Pannell, Charles

    Thomas, Ivor Owen (Wrekin)

    Jones, Jack (Rotherham)

    Pargiter, G. A.

    Thomson, George (Dundee, E.)

    Jones, T. W. (Merioneth)

    Parker, J

    Thorneycroft Harry (Clayton)

    Keenan, W.

    Paton, J.

    Thornton, E.

    Kenyon, C.

    Pearson, A.

    Thurtle, Ernest

    Key, Rt. Hon. C. W.

    Peart, T. F.

    Tomney, F.

    King, Dr. H. M.

    Plummer, Sir Leslie

    Turner-Samuels, M.

    Lee, Frederick (Newton)

    Porter, G.

    Ungoed-Thomas, Sir Lynn

    Lee, Miss Jennie (Cannock)

    Price, Joseph T. (Westhougton)

    Viant, S. P.

    Lever, Leslie (Ardwiok)

    Price, Philips (Gloucestershire, W.)

    Wallace, H. W.

    Lindgren, G. S.

    Proctor, W. T.

    Watkins, T. E.

    Lipton, Lt.-Col. M.

    Pursey, Cmdr. H.

    Webb, Rt. Hon. M. (Bradford, C.)

    MacGoll, J. E.

    Rankin, John

    Weitzman, D

    McGhee, H. G.

    Reeves, J.

    Wells, Percy (Faversham)

    McGovern, J.

    Reid, Thomas (Swindon)

    Wells, William (Walsall)

    McInnes, J.

    Reid, William (Camlachie)

    West, D. G.

    McLeavy, F.

    Rhodes, H.

    Wheeldon, W. E.

    MacMillan, M. K. (Western Isles)

    Richards, R.

    White, Henry (Derbyshire, N.E.)

    McNeil, Rt. Hon. H.

    Robens, Rt. Hon. A.

    Whiteley, Rt. Hon. W.

    MacPherson, Malcolm (Stirling)

    Roberts, Albert (Normanton)

    Wigg, George

    Mainwaring, W. H.

    Roberts, Goronwy (Caernarvon)

    Wilkins, W. A.

    Mallalieu, E. L. (Brigg)

    Robinson, Kenneth (St. Pancras, N.)

    Willey, F. T.

    Mann, Mrs. Jean

    Rogers, George (Kensington, N.)

    Williams, David (Neath)

    Manuel, A. C.

    Ross, William

    Williams, Rev. Llywelyn (Abertillery)

    Mayhew, C. P.

    Shackleton, E. A. A.

    Williams, Ronald (Wigan)

    Messer, F.

    Shawcross, Rt. Hon. Sir Hartley

    Williams, W. R. (Droylsden)

    Mikardo, Ian

    Shinwell, Rt. Hon. E.

    Williams, W. T. (Hammersmith, S.)

    Mitchison, G. R.

    Short, E. W.

    Wilson, Rt. Hon. Harold (Huron)

    Monslow, W.

    Silverman, Julius (Erdington)

    Winterbottom, Ian (Nottingham, C.)

    Moody, A. S.

    Silverman, Sydney (Nelson)

    Winterbottom, Richard (Brightside)

    Morgan, Dr. H. B. W

    Simmons, C. J. (Brierley Hill)

    Woodburn, Rt. Hon. A.

    Morley, R.

    Smith, Ellis (Stoke, S.)

    Wyatt, W. L

    Morris, Percy (Swansea, W.)

    Smith, Norman (Nottingham, S.)

    Yates, V. F.

    Morrison, Rt. Hon. H (Lewisham, S.)

    Snow, J. W.

    Younger, Rt. Hon. K

    Mort, D. L.

    Sorensen, R. W.

    Moyle, A.

    Soskice, Rt. Hon. Sir Frank

    TELLERS FOR THE AYES:

    Mulley, F. W

    Sparks, J. A.

    Mr. Popplewell and

    Murray, J. D.

    Steele, T.

    Mr. Arthur Allen.

    NOES

    Aitken, W. T.

    Brooke, Henry (Hampstead)

    Doughty, C. J. A.

    Allan, R. A. (Paddington, S.)

    Brooman-White, R. C.

    Douglas-Hamilton, Lord Malcolm

    Alport, C. J. M.

    Browne, Jack (Govan)

    Drayson, G. B.

    Amery, Julian (Preston, N.)

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Drewe, C.

    Amory, Heathcoat (Tiverton)

    Bullard, D. G.

    Dugdale, Rt. Hn. Sir T. (Richmond)

    Anstruther-Gray, Major W. J.

    Bullock, Capt. M.

    Duncan, Capt. J. A. L.

    Arbuthnot, John

    Burden, F. F. A.

    Duthie, W. S.

    Ashton, H. (Chelmsford)

    Butcher, Sir Herbert

    Elliot, Rt. Hon. W. E

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Campbell, Sir David

    Fell, A.

    Astor, Hon. J. J.

    Carr, Robert

    Finlay, Graeme

    Baldock, Lt.-Comdr. J. M.

    Cary, Sir Robert

    Fisher, Nigel

    Baldwin, A. E.

    Channon, H.

    Fletcher-Cooke, C.

    Banks, Col. C.

    Churchill, Rt. Hon. W. S.

    Fort, R.

    Barlow, Sir John

    Clarke, Col. Ralph (East Grinstead)

    Foster, John

    Baxter, A. B.

    Clarke, Brig. Terence (Portsmouth, W.)

    Fyfe, Rt. Hon. Sir David Maxwell

    Beach, Maj. Hicks

    Cole, Norman

    Galbraith, Rt. Hon. T. D. (Pollok)

    Beamish, Maj. Tufton

    Colegate, W. A.

    Galbraith T. G. D. (Hillhead)

    Bell, Philip (Bolton, E.)

    Conant, Maj. R. J. E.

    Gammans, L. D.

    Bell, Ronald (Bucks, S.)

    Cooper, Sqn. Ldr. Albert

    Godber, J. B.

    Bennett, F. M. (Reading, N.)

    Craddock, Beresford (Spelthorne)

    Gough, C. F. H.

    Bennett, Dr. Reginald (Gosport)

    Cranborne, Viscount

    Gower, H. R.

    Bevins, J. R. (Toxteth)

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

    Graham, Sir Fergus

    Bishop, F. P.

    Crosthwaite-Eyre, Col. O. E.

    Gridley, Sir Arnold

    Boothby, R. J. G.

    Crouch, R. F.

    Grimond, J.

    Bowen, E. R.

    Crowder, Petre (Ruislip—Northwood)

    Grimston, Hon. John (St. Albans)

    Boyd-Carpenter, J. A.

    Darling, Sir William (Edinburgh, S.)

    Grimston, Sir Robert (Westbury)

    Boyle, Sir Edward

    Deedes, W. F.

    Hall, John (Wycombe)

    Braine, B. R.

    Dodds-Parker, A. D.

    Harden, J. R. E.

    Braithwaite, Sir Albert (Harrow, W.)

    Donaldson, Cmdr. C. E. McA

    Hare, Hon. J. H.

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Donner, P. W.

    Harris, Frederic (Croydon, N.)

    Harrison, Col. J H. (Eye)

    1870

    1871

    Harvey, Ian (Harrow, E.)

    McKie, J. H. (Galloway)

    Rodgers, John (Sevenoaks)

    Harvie-Watt, Sir George

    Maclean, Fitzroy

    Roper, Sir Harold

    Hay, John

    Macleod, Rt. Hon. lain (Enfield, W.)

    Ropner, Col. Sir Leonard

    Heald, Sir Lionel

    McLeod, John (Ross and Cromarty)

    Russell, R. S.

    Heath, Edward

    Macmillan, Rt. Hon. Harold (Bromley)

    Salter, Rt. Hon. Sir Arthur

    Higgs, J. M. C.

    Macpherson, Niall (Dumfries)

    Sandys, Rt. Hon. D.

    Hill, Dr. Charles (Luton)

    Maitland, Comdr. J. F. W. (Horncastle)

    Savory, Prof. Sir Douglas

    Hill, Mrs. E. (Wythenshawe)

    Maitland, Patrick (Lanark)

    Schofield, Lt.-Col. W. (Rochdale)

    Hinchingbrooke, Viscount

    Manningham-Buller, Sir R. E.

    Scott, R. Donald

    Hint, Geoffrey

    Markham, Major S. F.

    Simon, J. E. S. (Middlesbrough, W.)

    Holland-Martin, C. J.

    Marples, A. E.

    Smithers, Peter (Winchester)

    Hollis, M. C.

    Maude, Angus

    Smithers, Sir Waldron (Orpington)

    Holt, A. F.

    Maudling, R.

    Smyth, Brig. J. G. (Norwood)

    Hopkinson, Rt. Hon. Henry

    Maydon, Lt.-Comdr. S. L. C

    Soames, Capt. C.

    Hornsby-Smith, Miss M. P.

    Medlicott, Brig. F.

    Spearman, A. C. M.

    Horobin, I. M.

    Mellor, Sir John

    Spence, H. R. (Aberdeenshire, W.)

    Howard, Gerald (Cambridgeshire)

    Molson, A. H. E.

    Spens, Sir Patrick (Kensington, S.)

    Howard, Hon. Greville (St. Ives)

    Moore, Lt.-Col. Sir Thomas

    Stanley, Capt. Hon. Richard

    Hudson, Sir Austin (Lewisham, N.)

    Morrison, John (Salisbury)

    Stevens, G. P.

    Hudson, W. R. A. (Hull, N.)

    Nabarro, G. D. N.

    Stewart, Henderson (Fife, E.)

    Hulbert, Wing Cdr. N. J.

    Nicholls, Harmar

    Stoddart-Scott, Col M.

    Hurd, A. R.

    Nicholson, Godfrey (Farnham)

    Storey, S.

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Nicolson, Nigel (Bournemouth, E.)

    Strauss, Henry (Norwich, S.)

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Nield, Basil (Chester)

    Summers, G. S.

    Hutchison, James (Scotstoun)

    Noble, Cmdr. A. H. P.

    Sutcliffe, Sir Harold

    Hyde, Lt.-Col. H. M.

    Nugent, G. R. H.

    Taylor, Charles (Eastbourne)

    Hylton-Foster, H. B. H.

    Nutting, Anthony

    Taylor, William (Bradford, N.)

    Jenkins, Robert (Dulwich)

    Oakshott, H. D.

    Teeling, W.

    Jennings, R.

    Odey, G. W.

    Thomas, Leslie (Canterbury)

    Johnson, Erio (Blackley)

    O'Neill, Phelim (Co. Antrim, N.)

    Thomas, P. J. M. (Conway)

    Jones, A. (Hall Green)

    Ormsby-Gore, Hon. W. D.

    Thompson, Kenneth (Walton)

    Joynson-Hicks, Hon. L. W.

    Orr, Capt. L. P. S.

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Kaberry, D.

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Thornton-Kemsley, Col. C. N.

    Keeling, Sir Edward

    Osborne, C.

    Tilney, John

    Kerr, H. W.

    Peake, Rt. Hon. O.

    Turner, H. F. L.

    Lambert, Hon. G.

    Perkins, W. R. D.

    Turton, R. H.

    Lambton, Viscount

    Peto, Brig. C. H. M.

    Tweedsmuir, Lady

    Langford-Holt, J. A.

    Peyton, J. W. W.

    Wade, D. W.

    Law, Rt. Hon. R. K.

    Pickthorn, K. W. M.

    Wakefield, Edward (Derbyshire, W.)

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

    Pilkington, Capt. R. A.

    Wakefield, Sir Wavell (St, Marylebone)

    Legh, Hon. Peter (Petersfield)

    Pitman, I. J.

    Walker-Smith, D. C.

    Linstead, H. N.

    Powell, J. Enoch

    Ward, Miss I. (Tynemouth)

    Llewellyn, D. T.

    Price, Henry (Lewisham, W.)

    Waterhouse, Capt. Rt. Hon. C.

    Lloyd, Rt. Hon. G. (King's Norton)

    Prior-Palmer, Brig. O. L.

    Watkinson, H. A.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Profumo, J. D.

    Webbe, Sir H. (London & Westminster)

    Lockwood, Lt.-Col. J. C.

    Raikes, Sir Victor

    Williams, Rt. Hon. Charles (Torquay)

    Longden, Gilbert

    Rayner, Brig. R.

    Williams, Gerald (Tonbridge)

    Low, A. R.W.

    Redmayne, M.

    Williams, R. Dudley (Exeter)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Remnant, Hon. P.

    Wills, G.

    Lucas, P. B. (Brentford)

    Renton, D. L. M.

    Wilson, Geoffrey (Truro)

    Lyttelton, Rt. Hon. O.

    Roberts, Peter (Heeley)

    Wood, Hon. R.

    McCorquodale, Rt. Hon. M. S.

    Robertson, Sir David

    Macdonald, Sir Peter

    Robinson, Roland (Blackpool, S.)

    TELLERS FOR THE NOES:

    McKibbin, A. J.

    Robson Brown, W.

    Mr. Studholme and Mr. Vosper.

    Question put, and agreed to.

    It being after Half-past Ten o'Clock, The CHAIRMAN, pursuant to Order, left the Chair to report Progress, and ask leave to sit again.
    Committee report Progress; to sit again Tomorrow.

  EMIGRATION
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Drewe.]
  10.31 p.m.
  Mr. Harmar Nicholls: There can be no doubt that the fuller development of the resources of the British Commonwealth would bring untold benefits to the whole world. Many of these resources have already been recognised and developed.
  In India and Pakistan, we have all the world's jute, in Canada four-fifths of the world's nickel, in the sterling area of the Commonwealth three-quarters of the world's tea, half its wool, half its chrome, cocoa, one-third of hard hemps, quarter of the coal and copper, and one-fifth of the wheat, bauxite, woodpulp and lead. All of these are now being produced, but, in addition to that, there are so many other resources of which we have not got full information and into which a fuller and proper investigation should be made. We already know of copper in Northern Rhodesia, the extra zinc and lead in Australia and Nigeria, extra bauxite for aluminium in the Gold Coast and Malaya, iron ore deposits in Canada, oil prospecting in Trinidad and North Borneo, and we all know of the timber resources of Canada.
  Lengthy as this list is, so far it is only scratching the surface of Commonwealth resources, but these materials and many others are very important in these days of extended civilisation, if one could use that term. At a time when these resources are so badly wanted, the question must arise in all our minds why the development of these primary products does not proceed more rapidly, and we know that there are several factors which stand in the way when answering this question.
  The first is the cost. If we are to develop them, these products must be developed at an economic price, and not at prices which are above the world price. The second point we have to consider is politics. The Dominions today are independent countries, and the Colonial Territories themselves almost every day are becoming more and more independent. We cannot tell them, as we
  1874
  did in the past, that they have got to develop. They must accept it as a natural economic domestic policy as well, because we shall need their co-operation. It is not now just a matter of arranging royalties. We must have local support for such matters as public services, schools and roads, which today run alongside such development. Of course, the other part that has to be considered is that there must be no threat of nationalisation as soon as the projects show that they are likely to pay.
  The third point is the question of markets, the fixing of long-term markets, and the fourth that of capital. We all received with great joy the announcement by the Chancellor a few weeks ago that we are considering spending a good deal of money in getting some of these developments on the way.
  Those are four factors which we must keep in mind when we consider opening up greater developments, each of which could occupy many hours of thoughtful investigation. But the fifth factor—the one to which I wish to refer tonight—is the question of manpower, the human factor and the outstanding factor as far as the Dominions are concerned.
  There have been many arguments about which came first, the chicken or the egg. But on this subject there is no argument at all; if we want these projects brought to fruition for the use of the world, we must first have the manpower in the right place.
  I emphasise emigration to the Dominions because in the self-governing Dominions the labour force is far from adequate and the normal increase in population does not keep pace with the development potentialities. In the Colonies we know that the labour exists, but that the people need education and training. In other Eastern parts of the Commonwealth they have more manpower than they want; indeed, they are thinking of asking parts of their populations to leave their countries.
  The difficulty is tied up with the immigration laws of the Dominions, which show preference for white immigrants, and these laws, as they affect part of the Empire countries, form one of the domestic irritations that we have to face inside the Dominions. But there can be no doubt that the development of the British Commonwealth will

  1875
  be of great benefit to the whole world, and it is no mere British self-interest when we say that we want these resources made quickly available during this period of conflict between Russian Communism, on the one hand, and Western democracy on the other.
  As far as the Empire countries are concerned, it will result in a higher standard of life, and I believe it will make a great contribution if we can get these resources in hand quickly and can let the dictators of the Left see that we have the strength and the power to resist their trends for world dictatorship.
  As far as the Dominions are concerned, we can only approach this problem by at once recognising that we have to face a more worth-while scale of transference of population from the older civilisations and older industrial areas of Europe and this country, where we have not the same primary potentialities, to the new areas, where they have all the potentialities but are short of manpower.
  On the one side, we have Canada, Australia, New Zealand, South Africa and the Rhodesias which have vast resources and low white populations, whereas on the other we have the Commonwealth countries without these resources and with abundant manpower. We have to face the fact that we can only consider the transference of populations within the framework of the existing immigration policies of the various countries. It is a fact that the self-governing Dominions prefer the white immigrant. They will take some of the others in a lesser proportion, but their need is for people from the white countries rather from any of the others.
  I think we should be wasting our time if we tried to persuade the Dominions—and it would be wrong to try to the detriment of quick action—to alter this policy which is ingrained in their local reactions and is an integral part of their local laws. That means that if we are to move populations within the framework of these immigration laws, the immigrants can only come either from Europe or this country. This country is still the head of this great Commonwealth, and we should have a special interest in seeing to it that there is a steady flow of people from this country who understand the Commonwealth and
  1876
  its traditions and whose roots are in the beginnings of the Commonwealth which we all want to keep intact as far as we can.
  We must remember also that today we have it from the Immigration Minister of Australia that it is much more expensive to have immigrants from this country than from some European countries. Taking Australia as an example, it is six times more expensive to have immigrants from this country than it is to have trained artisans from Germany, and more than four times more expensive to have immigrants from this country than to have trained farmers from Holland. If we recognise that, we must see that the economic pull to the Dominions to take their immigrants from Europe is very strong.
  We must face that by starting in this country a more energetic emigration policy. We must bring some inspiration into it. We must put over some really worth-while sales propaganda, and the policy must have worth-while support from whatever Government is in office here. The bare minimum of immigration within the Commonwealth should never fall below 250,000 a year. I am not saying that that is a satisfactory figure. It should be more, but it should never be less. At least 150,000 of those 250,000 should go out from this country and, whatever the eventual total attained, the immigration should be in that proportion. We should see that 150,000 of the 250,000 people going out to our great British Dominions are people from this country who are part of the Commonwealth, who understand it and have a feeling for the traditions that went to build it.
  I believe that of necessity the Government must play the biggest part in bringing this about. I appeal to the Under-Secretary of State for Commonwealth Relations to get on as speedily as possible with putting the Empire Settlement Scheme in good trim. We should have on the board of that scheme people who are virile, who feel keenly on the problem and who will not just meet regularly and receive reports and pass innocuous resolutions on them, but will get together and frame a policy and try to work out an answer to the problem.
  We should see whether the Dominions will accept the various social service

  1877
  schemes of this country and whether we can export prefabricated houses to house our people when they go overseas. We should see whether we can bring vision and inspiration into the arrangement of transport as we did in wartime. All these things can flow from the board of the Empire Settlement Scheme if we get the right people on it and they are assured of the support of the Government in being allowed to spend appropriate sums of money to bring the scheme into action.
  We have little time to do all this. Unless in the next 15 years we secure a proportion of 150,000 emigrants out of a total of 250,000 yearly, we shall find that a balance of thought and of citizenship will grow up in the Dominions which will not be British in the sense that we know it today. If that happens it will not be a case of the British Commonwealth falling apart, but, if we do not do these things, of the British Empire simply fading away.
  I ask the Under-Secretary to make every effort to ensure that we show good sense, inspiration and virility in seeing that the British emigrant is accepted in countries which have a long British tradition. If we do that now, I believe that in that peaceful way, which is a normal way, we shall be able to keep within the Commonwealth countries the sort of cooperation which we must have if we are to get these resources and, having got them, to keep them for the peaceful uses which we in this country have always had as the background of our civilisation.
  10.46 p.m.
  Mr. Ian Winterbottom: I should like to congratulate the hon. Member for Peterborough (Mr. H. Nicholls) on keeping the eyes of the Under-Secretary of State on the subject of this debate. In certain quarters it is a somewhat uncomfortable subject, and the tendency has been to put it in a pigeon-hole and forget it. The hon. Member can draw upon his experience at last year's Commonwealth Conference at Ottawa, at which he made a contribution to the debate on migration. I should like, in general, to support what he has said, and the figures he has given for over-all migration from this country and Europe to the Commonwealth.
  He has said all that is necessary about British migration. I think it must be preponderant, if possible; but we must not
  1878
  forget the contribution which Europeans can make, for it is important. They have certain gifts which we may not possess. They may stand a hot climate better than we do. The Maltese and Italians have made a considerable contribution to the development of Queensland. I am disappointed that the Government will not associate themselves with the work of the Inter-Governmental Committee for European Migration. We have withdrawn the pean Migration. We have withdrawn our support of the I.R.O., although it is doing very fine work, mainly financed by American capital. I feel that we ought to be associated with that organisation.
  I should like to support the hon. Member's request that an Overseas Settlement Board, or Empire Settlement Board, shall be set up as soon as possible. There is work for it to do now. Migration from this country to the Commonwealth, particularly to Australia, has not been negligible since the war. Large numbers have gone there, and Australia has strained her resources to the utmost to receive them. As a result there have been, in certain cases, problems for the migrants and for the Australian Government. I feel that such a body, which could study problems on the ground, and at home, would have a valuable part to play in ironing out the difficulties of a major migration scheme.
  10.48 p.m.
  Mr. Archer Baldwin: I should like to add a few words in support of what has been said. I wish we could impress on the Government the importance of this subject. It seems to me that we have been asking far too long for an Empire Settlement Board to be set up. I hope that when the Under-Secretary replies he will be able to tell us that he is on the way to setting up a board. We are not facing up to the position in this country. The world was not made for us to maintain so many empty spaces as part of the British Commonwealth. If we do not fill up some of these empty spaces, which will stand a white population, then they will be filled up by someone else. I think that others are entitled to go to those places if we do not make the best of our opportunity.
  I look upon the matter from the point of view of defence. In two world wars we have exhausted a great deal of

  1879
  strength in keeping open a life-line. We ought to do away with the need to do that by spreading our population across the world, particularly in Central Africa and Australia. There we have two great countries which have not been scratched so far as development is concerned, and which are clamouring for development. If we do not develop them we cannot maintain that we can hold them against the Asiatic over-spill which is taking place at present.
  This country is living in a fool's paradise in imagining that it is maintaining the Welfare State by itself. In fact, we are keeping up the Welfare State because we are exploiting the mineral wealth of our Empire. I want to see not only our population but our industries go out into those spaces and develop the mineral wealth that exists there. It is not fair that we should take from Central Africa so much of its wealth when we have a vast number of people who could form the labour force in Africa. We should like to see not only some of our people but some of our industries going out to help in developing our Commonwealth.
  I hope the Government will have talks with our great Commonwealth nations to find out what they want from us, so that we can fit in their requirements, and I hope that when the Empire Settlement Board is set up it will be composed, as my hon. Friend said, of really live members who will not just meet once or twice a year and issue a report but will take active steps.
  10.51 p.m.
  The Under-Secretary of State for Commonwealth Relations (Mr. John Foster): The subject of emigration is always one on which the Members of the House in the different parties show a very welcome degree of unanimity. I am very glad that my hon. Friends and the hon. Member for Nottingham, Central (Mr. Ian Winterbottom) have not brought up the case for emigration on the ground that large transfers of population will be necessary in order to reduce the total population of these islands so that there will be less overcrowding. They have put it entirely on the right ground, I think, that the spaces in the independent Commonwealth countries are, compared with other parts
  1880
  of this world, under-developed and under-populated, and that it is very desirable that, so to speak, a blood transfusion should take place from this country to those independent countries.
  Having said that, of course one has to bear in mind the limitations which must necessarily be put upon the rate at which this is done. That is one of those debatable matters—exactly where the line is; but we have seen in the last few months the difficulties which Australia has encountered when migration out-steps the capital development which must accompany this rate of migration. That sort of problem is one which can eminently well be put before the Migration Board, when it is set up, for it to discuss in all its aspects.
  I am very glad to be able to say the Government have definitely decided to set up a migration board—I am not giving it its official title; it may turn out to have a different title when officially set up—but to set up a board dealing with migration which will have wide terms of reference, and which will, I am sure, be composed of virile, imaginative members. The stage we have reached is that we are deciding on the terms of reference, and letters are going out to persons we think would be suitable to sit on this board to see if they would accept this task. I very much hope they will. As my hon. Friend the Member for Peterborough (Mr. H. Nicholls) said, it is a subject which is very inspiring and of which the problems are very difficult, and concerning which the Government, I feel would be very much assisted by a board which has the leisure and expert knowledge to study those problems.
  Mr. Gordon Walker: Could the hon. and learned Gentleman tell us whether the members of the board will be citizens of this country only or also citizens of other countries?
  Mr. Foster: No, we think they should be confined to citizens of the United Kingdom in order to advise the Government of the United Kingdom on the problems of migration.
  Mr. Glenvil Hall: What type of person is being asked to sit on this board? Will they be drawn from all sections of the community?
  Mr. Foster: Yes. If I guess rightly the right hon. Gentleman's unspoken thought in his question, I think he will be satisfied that we shall draw them from all sections and classes of the community, having regard, for example, to a particular subject with which the board is intended to deal. We also think that this board should have the fullest assistance from Her Majesty's Government in the way of access to figures and statistics and also advice or representation as to fact from officials of the Departments concerned. The Ministry of Labour will, I think, supply one of the secretaries and the Commonwealth Relations Office the other. We think that would be a good division, because the Minister of Labour has a special responsibility in acting so to speak as an agency for Commonwealth countries.
  Mr. W. Nally: It is a very important statement that the Under-Secretary is making. Are we now to understand that there is to be a board set up with full Government backing, composed of experts subject to Government approval, on all matters relating to migration, whose terms of reference will be the organisation and encouragement of migration, and that board will be entitled to enter into informal negotiations with Commonwealth Governments on this subject? This is one of the most important announcements we have had in this House for weeks.
  Mr. Foster: I do not think what the hon. Member said is correct as an implication which could be drawn from my statement. It has not been said what the exact terms of reference would be. In my own personal opinion I do not think such a board could act in more than an advisory capacity. It would not be possible to empower a board to enter into negotiations with the Commonwealth countries.
  Mr. Nally: Informal negotiations.
  Mr. Foster: No, not even informal. Again expressing my own private opinion, I think the board should have access to anything it desires. It is an advisory board and it is common sense that if it wants some information, an official should
  1882
  come forward and give it. We must assume that the board will be composed of people of common sense and also that the Government will act in common sense the other way. I do not anticipate the board asking for information the Government do not wish to give.
  I agree with the hon. Member for Bilston (Mr. Nally) that this is an important statement. I think it is an important step forward, reviving the Migration Board which existed before 1939, and which I think, from its report, did do an important piece of work in advising the Government of the day. It is due to the representations of hon. Members of the House on both sides that the subject was examined, and the Government came to the conclusion that this method should be adopted and that it was worth while re-establishing the board. I hope it will be set up fairly soon with wide terms of reference, but not terms of reference which would entitle it to enter into negotiations, either formally or informally.
  In regard to the statement about Mr. Holt, the Commonwealth countries are meeting the demand of many of the Governments of Europe for outlets for their population, and we should respect them for that. I agree with the hon. Member for Nottingham, Central that this should be so. At the same time we agree that there should be a large proportion of British migration and, in the years since the war, there have been 700,000 migrations altogether of which about half—about 350,000—were from British ports. As the hon. Member for Peterborough said, the British migration costs are six times as high as the European costs, because in the case of European workers the larger proportion is paid by the European country. This is understandable because their particular problem about migration is over-population, and it does not mean that in British migration there has been an obstacle because of cost. The extra cost has been taken up by the Australian Government.
  Adjourned accordingly at Eleven o'Clock.

MINISTRY OF MATERIALS
  Wool Skins and Raw Pelts
  Wool Skins and Raw Pelts
  Sack Kraft Paper (Import Quotas)
  Sack Kraft Paper (Import Quotas)
  Ox Carcases (Offal)
  Ox Carcases (Offal)
MINISTRY OF FOOD
  Dried Fruit
  Dried Fruit
  Feedingstuffs
  Feedingstuffs
  Sweets
  Sweets
  Meat
  Meat
  Flour
  Flour
  Flour Improvers
  Flour Improvers
TRANSPORT
  Public Service Vehicles (Statistical Returns)
  Public Service Vehicles (Statistical Returns)
  "Princess Victoria "Passengers and Crew (Compensation)
  "Princess Victoria "Passengers and Crew (Compensation)
  Night Coach Service, Edinburgh—Liverpool
  Night Coach Service, Edinburgh—Liverpool
ROADS
  Filton By-Pass, Bristol
  Filton By-Pass, Bristol
  Traffic Signs
  Traffic Signs
  White Lines and Reflecting Studs
  White Lines and Reflecting Studs
  Metropolitan Police Traffic Signals
  Metropolitan Police Traffic Signals
  SUPER-PRIORITY AIRCRAFT (PROGRESS)
  SUPER-PRIORITY AIRCRAFT (PROGRESS)
NATIONAL INSURANCE
  Family Allowances
  Family Allowances
  Maternity Benefit
  Maternity Benefit
  Self-Employed Persons (Classification)
  Self-Employed Persons (Classification)
  Anglo-Australian Reciprocal Arrangements
  Anglo-Australian Reciprocal Arrangements
  Unemployment Benefit, West Ham
  Unemployment Benefit, West Ham
COAL
  Schuman Plan
  Schuman Plan
  Mining Subsidence (Grants)
  Mining Subsidence (Grants)
  Domestic Supplies
  Domestic Supplies
  Tetanus
  Tetanus
  ELECTRICITY AND COAL (EXPENDITURE)
  ELECTRICITY AND COAL (EXPENDITURE)
HOME DEPARTMENT
  Litter, Western Avenue
  Litter, Western Avenue
  One-Way Traffic, Buckingham Gate
  One-Way Traffic, Buckingham Gate
  CAMERTON HOSPITAL, CUMBERLAND
  CAMERTON HOSPITAL, CUMBERLAND
  POLICE (WASTAGE AND RECRUITMENT)
  POLICE (WASTAGE AND RECRUITMENT)
  HEARING AIDS, CHELTENHAM
  HEARING AIDS, CHELTENHAM
  BRITISH SHIPPING, CHINA SEAS (NAVAL ASSISTANCE)
  BRITISH SHIPPING, CHINA SEAS (NAVAL ASSISTANCE)
AGRICULTURE
  Livestock Worrying
  Livestock Worrying
  Fowl Pest
  Fowl Pest
  Machinery Service (Deficit)
  Machinery Service (Deficit)
  Livestock Products (Minimum Prices)
  Livestock Products (Minimum Prices)
  NOTES
  NOTES
  Grain Cleaning Machines
  Grain Cleaning Machines
  HEDGEROW AND FARM TIMBER (COMMITTEE)
  HEDGEROW AND FARM TIMBER (COMMITTEE)
  INSHORE FISHING (GRANTS AND LOANS)
  INSHORE FISHING (GRANTS AND LOANS)
SCOTLAND
  School Building Programme
  School Building Programme
  Storm-Blown Timber (Use)
  Storm-Blown Timber (Use)
  Wood Waste (Fuel)
  Wood Waste (Fuel)
  BRITISH INDUSTRIES FAIR. LONDON SECTION
  BRITISH INDUSTRIES FAIR. LONDON SECTION
  B.A.O.R. DESERTERS (EASTERN ZONE)
  B.A.O.R. DESERTERS (EASTERN ZONE)
  UGANDA (CO-OPERATIVE SCHOOLS)
  UGANDA (CO-OPERATIVE SCHOOLS)

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

TRANSPORT BILL
2.35 p.m.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR THE CO-ORDINATION OF TRANSPORT, FUEL AND POWER (LORD LEATHERS): My Lords, I rise to move the Second Reading of the Transport Bill. Perhaps your Lordships will forgive me if I begin on a personal note. For over fifty years I have been engaged in transport matters of one sort and another, and as time has gone on it has been borne in upon me that what is most important of all is that there should be efficient transport in the whole of our industrial system. And that has continually occupied my attention. I am glad that the scope of my present appointment has given me the opportunity of playing a part over the last fifteen months in shaping the proposals which I now put before your Lordships. I outlined these plans in the debate on the White Paper which we had last May. Since then we have in certain respects altered our proposals in a proper response to public opinion.
LORD BURDEN: You will alter them again.
LORD LEATHERS: But the main principles—and I would emphasise this—are just the same: denationalisation of road haulage, decentralisation of the railways, and greater freedom for the railways in the matter of charges. These special items remain throughout.
Your Lordships will not want me to go over the background of the problem again, as I did in the White Paper debate. But I will just say one thing. Modifications in the system set up by the Transport Act, 1947, are necessary, I have no doubt at all; and I know that this view is shared by a great mass of people up and down the country. Nationalisation
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has not been a success. It has not provided, and shows no signs of providing, the country with the cheap, swift and elastic transport service which it needs. Integration, the basic principle on which the 1947 Act was founded, has made little, if any, real progress. It may be urged that five years is too short a period for effective integration to take place. There may be a little truth in that view. But it is not too short a period for comprehensive plans for integration to have been prepared and made public if, in fact, they were practicable. Apart from the failure of the 1947 Act to achieve its main aims, it has, in the view of the Government, led to excessive rigidity and centralisation which, in the case of road haulage, are particularly inapt. In private hands, speed and certainty of delivery by road haulage was the leading characteristic of the industry, and the enormous and continuing expansion of road goods transport in the last fifty years affords conclusive evidence of its advantages. Largely owing to the effect of the licensing system set up by the Road and Rail Traffic Act. 1933, this increase has been far more marked in the case of "C" licensed vehicles than in the case of haulage vehicles operated under "A" and "B" licences. But in nationalised transport the fleet of vehicles engaged in haulage has actually declined.
In setting these facts before your Lordships I should not like it to be thought that I am criticizing the Commission or the Road Haulage Executive. They have done their best and, indeed, have devoted the most strenuous efforts to carry out the policy embodied in the 1947 Act; and the fact that their efforts have not been more successful is due not to any lack of energy or ability on their part but to the defects of the Act itself. The Road Haulage Executive have achieved the remarkable feat of absorbing something like 4,000 individual firms and bringing them into a single entity and organisation, but the results have shown that this form of administration is ill-adapted to secure the best service which haulage can provide. I would not, of course, deny that in many cases the Executive give a service which satisfies their customers. But in many cases they do not, and where the service is one in which the Executive have a monopoly there is no one else to whom the customer

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can go. He must either use the Executive's service or buy and operate vehicles under "C" licences, as in fact so many people in trade have already done. I dwell on this point because it is an essential premise of Government policy that road haulage cannot give the service of which it is capable if it is organised as a nation-wide network, subordinated to meet the dictates of a central administration. Here is a business which, if ever there was one, needs quick, individual, on-the-spot decisions, the freedom to quote quick and individual rates, and the freedom to go out and canvass for, and collect at short notice, traffic of every variety. By its very nature it is a business where personal incentive is a sine qua non. Conversely, it is a business which suffers from reference to higher authority, from nation-wide agreements and from the absence of almost all long-distance competition.
Surely, my Lords, the financial results alone of the last five years illustrate the general truth of what I have been saying. On a conservative estimate, the purchase price which the British Transport Commission paid for the many units which now make up the Road Haulage Executive means that in the aggregate they were earning from£7 million to£10 million each year. By contrast, the Road Haulage Executive over the four years for which we have results have now made a working surplus, all told, of only£4,500,000—on average, a little more than£1 million a year. And this before any contribution whatsoever has been made to the Commission's central charges. A proper contribution for interest alone would be appreciably in excess of this amount. As for 1952, we have not got the figures yet, but I fear a poor result. Over the last year carryings were about 16 per cent. less than the previous year, and costs, as we know, have not been diminishing.
But quite apart from these specifically road haulage considerations I must turn for a moment to that much-laboured word in transport circles, "integration." It was the hope of those who supported the principle of nationalisation that, the Act of 1947 having been passed, there would come about a realistic division of traffics and routes between road and rail, and that not only would better services be achieved but that the financial results would relieve the country of the
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road-rail problem which has affected us all from the 1920's onwards. But look what has happened. Both forms of transport have continued in quite separate compartments. Nothing significant in the way of integration has been achieved and I do not think any reasonable person could see hope of its coming about. As for the financial aspect of the problem, road haulage, as I have already illustrated, has proved to be merely a drain upon the Commission's reserves. I hope, therefore, that it will now be admitted on all sides that to take away the bulk of the Road Haulage Executive from the Commission is not—as was first represented—an act of wanton political partisanship. On the contrary, it is a measure which any realistic appraisal of transport economics thoroughly justifies.
In disposing of the assets of the Road Haulage Executive we envisage that for the most part they will be sold by the Commission, with the approval of the Road Haulage Disposal Board (that is in Clause 2 of the Bill) in the form of what we call "transport units." We shall, no doubt, have a long discussion on this point. It has been urged upon us from many quarters—including Her Majesty's Opposition in another place—that the sales should take place by way of breaking up the Executive into the form of companies and selling the assets in that shape. Those who have made such suggestions have not always had the same final objective in mind. Certainly it could not be accepted as the only, or necessarily the principal, means of disposal. It would clearly be wrong to attempt to dispose of the Executive's undertaking in parcels of which the form or content did not suit potential purchasers. There may well be, however, a substantial number of buyers who would prefer to take over a company as a going concern, and for this reason, and also because it may ease for the Commission the process of transfer from public to private enterprise, we propose, as my right honourable friend the Minister of Transport said in another place, to include permissive powers in the Bill which will enable the Commission to assemble ready for sale some of the Road Haulage Executive assets in the form of companies. The extent to which these powers will be exercised will be dependent upon the consent of the Disposal Board, and in my judgment their actual use will vary from area to area, according to the desires and

587
interests of prospective purchasers. How far they will be employed thus remains to be seen. It would certainly be misleading to suppose that our intention in this matter revolutionises the Bill. It merely adds another method of disposal; it in no way affects the major principles of the Bill.
I should say a word about Clause 4, under which the Commission may retain, in company form, not merely the number of road vehicles which they inherited at the date of nationalisation but 20 per cent. in excess of that figure. The vehicles in the retained fleets must, however, be comparable in size, in value and in quality with the vehicles in the 1948 fleets. The 20 per cent. overall limit is perhaps too small, in that it does not make sufficient allowance for the horse-drawn vehicles of 1948 fleets which have since been replaced by lorries, and the Commission may be too restricted in their choice of vehicles. As my right honourable friend indicated in another place, we are prepared to adjust these limits somewhat. This will mean that the Commission are still by far the largest haulage undertaking in the country. But the essential point is that they will not be the only long-distance haulage undertaking and will be subject to the refreshing breeze of competition. At the same time it does allow the Commission to incorporate the benefits of road haulage as feeders and proper adjuncts to railway services.
We hope that the process of disposal will be well advanced by this time next year, for the latest reports of the number of prospective purchasers are encouraging. Then at the end of 1954 the 25-mileradius limit, which has so crippled and uneconomically confined the private road haulier, will be taken off. This provision is set out in Clause 7. The fixing of this date at the end of next year allows those who will have purchased lorries and so on to get their business properly organised and to have a reasonable start in the competitive atmosphere which we are deliberately encouraging. The 25-mile limit has always been an unloved imposition, but it would be unfair to purchasers to remove it before the end of 1954.
I now turn to the transport levy. We must be realistic about the sale of the Road Haulage Executive's undertaking.
588
As I have already said, it is unfortunately the case that it is not a profitable concern. And we cannot expect that as such it will realise the price which the Commission paid for the undertaking from which it has been built up and which, in the hands of the firms to whom they belonged, had earned substantial profits. At the same time the Government would not wish to saddle the Commission with the capital loss which will thus inevitably occur. Then there will be other consequential but lesser losses. There will be a payment of£1 million to reimburse the Commission for losses from disturbance while the Executive is being disposed of (Clause 12). There will be the expenses of the Disposal Board, and there will be the payments which we have always proposed should be made to cover compensation awards. We propose that the funds to meet these various expenses shall be found by a levy, and taking the provisions on this subject as a whole I do not think it can be said that the Commission are being unfairly or ungenerously treated. The levy will be made upon operators of "A," "B" and "C" licensed vehicles above a certain limit of weight and numbering about half a million. This will mean that the incidence of the levy will be widely spread. In the case of a 2-ton lorry it will amount to not more than£5 8s. 0d. per annum, and in terms of average running costs it represents only a very small fraction of a penny per ton mile.
We confidently believe that trade and industry will get a better service by reason of this Bill, and this is our justification for requiring the owners of "A," "B" and "C" vehicles to contribute to the levy. It may be asked why the "C"licensees—that is, those who run vehicles for carriage of their own, and only their own, goods—should contribute. But these operators have the privilege of using their own transport when it suits them, and of using public transport again when it suits them. Few of these are, in fact, completely independent of public transport in the conduct of their business. It would not be fair that they should be exempt from a charge to which the public haulier is subject. It is well known that since nationalisation the number of "C" licences has more than doubled. Indeed, this is a strong piece of evidence in the indictment of

589
transport nationalisation. A return to free enterprise road haulage should, we think, result in a diminution of the number of "C" licensed vehicles. Originally in our proposals, of course, the levy was to serve another purpose, that of making good revenue losses which the railways might unavoidably suffer from the transfer of further traffic from rail to road, and which they could not offset by compensating economies. Whatever the merits or demerits of that proposal, it did not commend itself to public opinion, and after prolonged discussion in our own midst we came to the conclusion that we might be able to achieve the same object—that is, helping the railways in their competition with road—by relieving them of some of their ancient statutory obligations in connection with charges and so put them in a stronger position in relation to their rivals. Thus we have included in the Bill Significant provisions altering railway charging legislation, and these provisions shall come to shortly.
Now I come to the part of our proposals which concerns the organisation of the railways. In Clauses 14 and 15 are set out the provisions requiring the British Transport Commission to prepare and submit its plans for railway decentralisation. I do not think there is anyone who, in broad principle, disagrees with this part of our proposals. The time has surely come when the tide of centralisation should ebb. It has been flowing in ever since nationalisation took place, and, indeed, before that, since the 1921 mergers. Now it should be reversed, sensibly and properly—but none the less reversed. We have been criticised for failing to give in detail the shape of the railway system to come. But, my Lords, I am sure that we are right in taking our stand on this point. In these clauses we have given a very general indication of the intentions and my right honourable friend has indicated in another place that he proposes, as soon as the Bill is passed, to consult with the Commission to evolve a framework which will enable a detailed scheme to be worked out. And when the scheme is formally submitted to the Government, the Minister has to consult interested parties about it. Then he has to make an order to bring the scheme into force, and this order is subject to Affirmative Resolution in both Houses of Parliament. In such circumstances it would, we feel,
590
be improper for us to air our views at large at this early stage on what the contents of the scheme should be.
This, however, I would say at the very least. The Railway Executive is, as the Bill says, to go. And thus the uneasy division of responsibility between the Commission and the Executive will no longer continue. We on our side of the House have always held that the structure of Executives set up by the Transport Act of 1947 held in store great dangers; and so, I feel, it has proved in fact. I do not think that it is going too far to say that modifications in this structure might well have taken place in agreement between the Commission and the Minister apart from the provisions of the present Bill. The Government, however, regard the decentralisation of the raildays as imperative and the Bill accordingly takes steps to see that it shall take place. In all very large concerns, and the Railway Executive controls nearly the largest organisation in the world, the combination of overall direction at the centre with such measure of freedom at the lower tiers as will encourage initiative and a sense of responsibility presents a difficult problem. The right balance is exceedingly difficult to strike and necessarily varies with the nature of the organisation concerned. Generally, in my view, it is better to err on the side of local authority than of central control. In our view some of the advantages which accrued from a highly centralised direction during the initial period of the taking over of the former main line railway companies by the Commission are now outweighed by the need for greater freedom in the areas. This, of course, does not mean the complete abandonment of central control, but merely some shift of the balance of power.
Among matters which must be retained at the centre must clearly be wages and conditions of service and, indeed, of labour questions generally relating to railway employees. By that I mean the big questions. I do not mean that all and every question of labour recruitment and discipline should be referred up and up. Such individual matters are essentially decisions for the man on the spot. But as for going back to, for instance, regional settlement of wage rates—well, there is no thought of that. Locomotive and wagon construction is another example of something to be kept for

591
central control. British Railways have benefited substantially from standardising types and gaining the benefit of multiple orders, and this must go on. At the same time, there may well be a fruitful field for developing and encouraging local initiative in design.
Equally, central wagon control should continue. I well know myself, from the other side of my co-ordinating responsibilities—the Fuel and Power side—how many coal wagons the present system saves. The National Coal Board estimate that central wagon control has saved a very great number of wagons. Such an economy must be retained. Charging policy is another matter which it is up to the centre to formulate. But in the actual quotation of rates I look forward to considerable delegation, so that the railway system can get the benefit of the much greater freedom of charging powers which we propose. Further than this I should not wish to go. The conditions with which a scheme must comply are clearly and briefly set out in subsection (2) of Clause 14 of the Bill; and provided that those objects are secured, the Commission have, and properly have, the widest latitude as to the form and content of the scheme.
Your Lordships will observe from the first words of Clause 14 that the Commission are to produce, if they possibly can—and we certainly think they should be able to—the reorganisation scheme within twelve months of the present Act. The Minister is then to consult such organisations as he feels proper about the scheme, and in the case of Scotland he is to consult the Secretary of State for Scotland. My noble friend, Lord Home, will be dealing very fully with Scottish matters tomorrow and I propose to leave that angle of our proposals to him.
Before I leave the subject of railways I would add one more comment about their future as I see it. Any estimate that our proposals, including the freeing of road haulage, mean a black future for the railway system is, in my judgment, totally wrong. In the first place I rely a lot on the decentralisation scheme to give more power to the man on the spot to take quick decisions, and so give a real uplift to railway morale. We envisage a streamlined railway system which will, as time goes on, concentrate more
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and more on the traffics, and particularly the long-distance passenger and goods traffic for which it is best suited. During the period since the war the railways have been handicapped in their capital investment. In face of the overriding demands upon the national economy of defence, the export industries and so on, the railways have inevitably had to submit to severe limitations in this field. The increased competitive power with which the Bill will provide them, and the lightening of restrictions on capital investment, will enable the railways to take advantage of such improvements in equipment and in operating techniques as their skill, judgment, and ingenuity can devise. The railways are not a static organisation and are well fitted to take advantage of developments in many fields of science and engineering.
We lay great store by our proposals in regard to railway charges—Clauses 18 to 22, which are of the highest importance. They free the Commission from a number of Statutes of, at the oldest, over 100 years ago. However necessary these may have been in those distant days, they are quite inappropriate at present and in present conditions, and they place an unfair burden on the railways. The effect of our proposals is that the Commission will be free to quote what rates they like, subject only, speaking broadly, to maximum rates and fares approved by the Transport Tribunal. This, as your Lordships will readily appreciate, is a landmark in transport legislation. No longer will the railways be subject to the law of undue preference and equality of charge, or to publication of rates and charges, other than the maxima, or to a number of restrictions in the charging of rates below the maxima and in the making of agreed charges. We shall, no doubt, have detailed discussions on these clauses in Committee; and, as on all matters in the Bill, we shall be very glad to have your Lordships' comments and suggestions, provided that they do not undermine the basis of our Bill.
While the Bill gives the railways this new freedom it is only right that a certain protection, both for traders and competitors, against unreasonable or unfair treatment should be included. That is done in Clause 19 (with the relevant Schedule) and Clause 20. For example, any trader whose traffics are tied, or

593
more or less tied, to rail—coal, for example—may appeal to the Transport Tribunal about a charge which he considers unreasonable or unfair. The Tribunal, after hearing the complainants and the Commission, may make such order in the matter as they consider just. And here in the context of these words "as they consider just" I should like to pay a tribute to the work of the Transport Tribunal. This eminent body carries out work of considerable difficulty with skill and judgment, and without fear or favour. To the matter of protection for competitors we have given a great deal of thought. We originally had in the Bill a clause giving some protection to competitors, including road hauliers, against the Commission quoting uneconomic rates with a view to eliminating competition. But we have not proceeded with that particular proposal. We are, however, embodying in Clause 19 a protection for coastal shipping which I understand is agreeable to the noble Viscount, Lord Runciman, and his colleagues in the shipping industry. We are very glad about this, because we certainly recognise the force of the arguments which he and his friends have expressed.
There is another matter on which my right honourable friend the Minister has been having detailed discussions with the shipping industry, and that is about the Coastal Shipping Advisory Committee. Since 1947 this has been a useful piece of machinery for consultation between the Commission and coastal shipping interests. It may in future have to be enlarged to take under its wing representatives of road hauliers. This is already taken care of by the present wording of Clause 28, but there are still one or two points here which we are studying. There is also a protection in Clause 19 for independent dock authorities, so that the Commission shall not charge railway rates which discriminate in favour of their own ports. The other competitors to be given protection are the canal carriers and such canals as are not now owned by the Commission.
One thing which has hampered the efforts of the Commission to get on an even keel financially ever since nationalisation is the inevitable time lag involved in getting approval from the Tribunal to increase charges to take account of increases in costs which have been so
594
lamentable a feature of the last five years. Now, under Clause 21, it is our intention that when faced with serious increases they should be allowed to apply to the Transport Tribunal far temporary increases in passenger charges sufficient to bring in not more than another 10 per cent. of revenue from those charges. The Tribunal is to hear the Commission on the application, quickly and in private, and bring the proposal into force with or without amendment. There is a special provision to prevent undue increases in London Transport fares. In regard to other charges governed by charges schemes, the Commission will have power by notice to increase any maximum charge by not more, than 10 per cent. without the Tribunal's prior approval. Such increases, whether in passenger or other charges or in both, will have to be regularised subsequently through the normal Transport Tribunal procedure with full hearings.
I will not say much more about the remaining aspects of the Bill. They are fairly straightforward. We propose, as we said in the original White Paper, to repeal the Commission's power to make area road passenger schemes and the same power relating to trade harbours. We also propose that the Minister, with the consent of the Treasury, may be able to direct the Commission to dispose of majority shareholdings in road passenger transport companies. There is nothing sinister in taking this power; it is merely a sanction against possible abuse of monopoly powers and it is certainly something of which we shall await the advice of the Thesiger Committee before moving any further. With the disappearance of the Railway Executive and with the possible disappearance of other Executives, the British Transport Commission will have closer contact with its responsibilities and it will be reconstituted and enlarged. Clause 23 (2) provides that the maximum number of members shall be increased from eight to ten. But there may well be room for latitude here, and it is a point on which we shall be glad to have the benefit of your Lordship's views and experience.
We are fully alive to the fact that our proposals may mean some redundancy amongst road haulage employees of the Commission, and possibly, though less likely, among railway employees as a

595
result of the railway reorganisation scheme. We are therefore taking power to make regulations to safeguard the pensions of Commission employees who may be displaced as a result of this Bill, and also to provide for compensation on recognised lines. We regard the two clauses concerned, Clauses 25 and 26, as two of the most important in the whole Bill, and much thought is being devoted to the framing of these regulations so that they can be brought into force quickly. At the same time, I should not wish it to be thought that we envisage large-scale unemployment. Admittedly, during the change-over there may be some temporary redundancy, and it is only right that we should make suitable provision. But as I indicated, in the White Paper debate, I would not for one moment accept any suggestion that the drivers and employees of the Road Haulage Executive generally will be the worse off. On the contrary, our proposals are designed to bring about a prosperous and developing haulage industry, and this will redound to the advantage of the men in it.
My Lords, this is the first measure of denationalisation to come before Parliament, and we are fully alive to its significance. As I said at the opening of my remarks, we should certainly not embark upon a step like this were we not absolutely convinced that it is for the benefit of trade and industry, and transport itself, and in the interests of the general public. We should certainly not embark on something which we know means a period of temporary disturbance if we were not absolutely certain that, after that period, the result will be for the general good. I have said this before this afternoon, and I do not hesitate to say it again: that we are most ready to listen to all your Lordships' constructive suggestions on this Bill, and I am sure that we shall be able to improve it, just as the House is accustomed to improve most Bills. This will be limited, if at all, only by the fact that in our readiness at all stages to listen to public criticism and comment we have amended the measure substantially over these past months. But few things in this world are perfect and, as I say, we shall be grateful for your Lordships' suggestions.
I end as I began, with a reference to the past. Possibly in my young days we
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in this country—industry especially—tended not to think enough about transport problems.. We were brought up to regard an efficient transport service, like cheap and abundant coal, as one of the facts of economic life which called for no comment. But now things are different. Just as industry has become increasingly alive to the importance of efficient handling of materials within a factory, so we are much more alive to the need to make sure that the further stage of handling goods over longer distances is carried out in the most efficient and economical way. And with this aim before us we submit this Bill. I bee to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Leathers.)
3.16 p.m.
LORD LUCAS OF CHILWORTH: My Lords, as I sat and listened to the noble Lord placing this Bill before your Lordships—in a speech upon which, if I may, I would sincerely congratulate him, because I doubt whether in the whole of his experience he has ever had a worse case to put to a meeting of the shareholders' representatives, as your Lordships are—I could not help recalling some of the words he used at the time when the White Paper—that first attempt of the Government to find a transport policy—was debated in your Lordships' House. I refreshed my memory, and this is what the noble Lord said in his opening remarks (OFFICIAL REPORT, Vol. 176, Col. 1049):
"…we are firmly convinced that we have produced in the White Paper a sound scheme. We believe that it is in the best interests of inland transport, and of trade and industry, and that it makes a positive contribution to the solution of the transport problem which has vexed the country over the past thirty or forty years."
The noble Lord's peroration was even more rhetorical (Col. 1062):
My Lords, I take my stand by these proposals. We are working hard upon a Bill to embody our intentions."
Then with a final flourish (Col. 1063):
"…I have no doubt that posterity will look back and thank us for placing these proposals before Parliament."
Brave words, but, unfortunately for the noble Lord, neither Press, public, industry nor trade, believed him. I doubt whether any White Paper setting out Government

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policy has ever been subjected to such criticism as that White Paper on Transport Policy. We did not have to wait for the verdict of posterity, because the Bill which Her Majesty's Government produced, as a result of all the hard work the noble Lord said was being put into it, was received by such a blast of criticism that Her Majesty's Government had not even the courage to put it to the test of a Second Reading in another place. So the Bill before us this afternoon is the third attempt of Her Majesty's Government to find a transport policy.
The Bill has made remarkable progress since it was produced for Second Reading in another place. In spite of the use of the guillotine, the arguments from both Opposition and Government sides in another place, as well as public opinion and the Press, have forced the Government to have fourth thoughts on their transport policy. Moreover, the Bill which we have before us to-day is not, by a long way, the Bill that will eventually leave your Lordships' House. We are informed by the right honourable gentleman the Minister that in your Lordships' House the Government will table Amendments which will alter the very principle embodied in this Bill for disposing of the road haulage assets—Amendments which The Times with characteristic pertinency, has said
"arise from the belated recognition by the Government of the dangers inherent in their proposals for selling the Transport Commission's road haulage assets."
It puts not only your Lordships' House, but Her Majesty's Opposition in a very difficult position, because we have not yet seen those proposals. They should, in ordinary practice, have been inserted in this Bill, in another place. Our Amendments to those proposals—such Amendments as we wish to make—will have to be Amendments to Government Amendments; and, to say the least, that is not an easy way of conducting business.
However, my Lords, I do not complain unduly, because I face my task rather in the spirit that "There is more joy in heaven over one sinner that repenteth." It may well be that history and posterity will transfer their thanks from Her Majesty's Government to your Lordships' House for being custodian of the interests of the taxpayer, a position from which Her Majesty's Government has abdicated right through the progress of this Bill. I
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would remind the noble Lord opposite that there are other people concerned in the sale of the taxpayers' assets than those who wish to buy; there are the owners, the taxpayers. Let me say straight away that this Bill does nothing towards finding a solution to the transport problem of this country: it does not even touch the fringe of the subject. In fact it puts the clock back thirty years, to a state of affairs to which every responsible transport authority in this country has sworn we should never return.
What are the main purposes of this Bill? They are to break up the organisation of the Road Haulage Executive, and to denationalise, but not completely—that is where the noble Lord made his first mistake, and I will come to it in a moment—the road haulage system, and to sell the bulk of the assets of British Road Services. The noble Lord proposes to do that by forming, in the words of the Bill, "transport units" of a size not to exceed without the approval of the Minister (I quote from Clause 3)
"fifty motor vehicles or motor vehicles the aggregate weight of which unladen exceeds two hundred tons."
So, according to the Bill, unless the Minister gives permission, a transport unit cannot be sold if it consists of over fifty vehicles. Yet it is not uninteresting to note that of the 450 to 500 road haulage concerns voluntarily acquired by the British Transport Commission under the 1947 Act—having, in the aggregate, 12,000 vehicles—according to my researches not one had a fleet of less than sixty-three vehicles. Why in future transport units are to be limited to fifty vehicles one can only conjecture, but I should not be at all surprised if it did not have some connection with a certain Election promise that was made.
The Bill says that the whole organisation is to be broken down and disposed of
" as quickly as is reasonably practicable"—
those words appear in subsection (1) of Clause 1—and (I now quote from subsection (2))—
"without delay and on the best terms available, and without avoidable disturbance of the transport system of the country."
How that is to be done the Bill does not indicate, and no Ministerial utterance has been made on the point. The only emphasis up to date has been upon speed

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of disposal. But wiser counsels have prevailed. It appears that somebody has found out that the total assets of the Road Haulage Executive are not confined to the 40,000 vehicles in their possession. In fact the assets, which Clause 3 of the Bill lightly passes over as
"such other property, if any, as may be specified."
form the major part of the assets.
The Minister in another place, and I think the noble Lord, Lord Leathers, this afternoon, talked about these transport units as business units. But when you have become the possessor of a few vehicles, you have not a business unit. You have not an operable transport unit or a business unit until you have surrounded it with all the ancillary trappings, the buildings, plant, spare parts, stocks, accounting machinery and, let us be frank, a few customers. That is an operable unit. I ask the noble Lord how he proposes, or how the Government propose, to surround a considerable number of units, each containing from one to fifty vehicles, with assets of the description I have just outlined. The total net assets of the Road Haulage Executive amount in round figures to£100 million. The vehicles, again in round figures, would be worth about£ million. So there are£60 million worth of other assets which the Bill lightly dismisses as
"such other property, if any, as may be specified."
It may be to the interests of some firms to buy only a parcel of vehicles; but that is vastly against the interests of the taxpayer. And may I remind the noble Lord—though he may think it impertinent to be so reminded—that this concern, valued at£100 million, belongs to the taxpayer? If the buyers of the vehicles do not want to buy these other assets, we want to sell them to them, because they are the only real buyers to whom we can possibly look forward.
I would say, frankly, that an orderly disposal, as opposed to an auction sale or something reminiscent of a Government surplus stock disposal after the war, is the only possible way in which the whole value of these assets can be recouped. I do not agree with the noble Lord when he says—falling into a rather elementary error in salesmanship—"Of
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course, this must be sold at a loss." I deny that these assets of£100 million need be sold at any loss; their value could be recouped if they are sold in an orderly way. That is a matter to which I will refer in a minute.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON): Before the noble Lord leaves this subject he will, no doubt, explain to us how we are still to realise a large profit when the nationalised undertaking has made a solid loss for two years.
LORD LUCAS OF CHILWORTH: I shall not leave the noble Viscount with any illusion upon any of these points by the time this Bill leaves this House.
VISCOUNT SWINTON: For honest salesmanship, that is a factor that should be taken into account.
LORD LUCAS OF CHILWORTH: It is not a case of being honest or dishonest; it is a case of having different conceptions, according to whether you are acting on behalf of the owners or whether you are, like the noble Viscount, acting on behalf of the buyers. It is possible to have a different point of view from his, and that is what I intend to have right the way through the passage of this Bill. I do not intend to bore your Lordships with Committee points—I shall make a long enough speech as it is this afternoon—but I will accommodate the noble Viscount on any Amendment if he likes to discuss this matter with me at greater length.
While the noble Viscount is on "losses," let me tell him this: that if the Government persist in the proposal, outlined in this Bill, to sell these assets by public auction, without a reserve, the loss to the taxpayers of this country upon realisation must be at least£50 million, while the loss to the industrial and commercial community of the country will be absolutely immeasurable. Perhaps I may have the attention of the noble Lord the Secretary of State. I am trying to address to him a serious argument, and as I listened with rapt attention to every word that he uttered, I feel sure that he will wish to accord me the same compliment. I have said that the total assets of the Road Haulage Executive are£100 million.
LORD HAWKE: Does that include the goodwill?
LORD LUCAS OF CHILWORTH: Yes.
LORD HAWKE: Thirty-five million pounds?
LORD LUCAS OF CHILWORTH: Thirty-three million pounds is the precise figure. Of the total of£100 million,£40 million represents vehicles and about£60 million other assets. It is only by turning these transport units into real business entities, such as operable limited companies, with their own identifies and with all the trappings of companies, that eventually these assets can be sold and disposed of, as they were acquired, by the passing of pieces of paper. Therefore, the only alternative method of disposal to that which the Government have provided by this Bill is via the limited company structure, upon which the noble Lord has now embarked but which he sought to qualify by saying "to a limited extent."
I want to ask the noble Lord one or two questions. I do not expect a reply now but I want him to consider them. I want to list some of the items in this
"other property, if any, as may be specified."
First, debtors: the total amount of debtors included in this£100 million is£15 million. How can you wrap that around a parcel of vehicles, which may be one vehicle or any number up to fifty? How can you allocate, and pass on,£15 million worth of debtors? And yet the records, the ledger accounts, are valuable to the buyer of those units. They are the records of what he is going to purchase, his potential customers, the turnovers, the nature of the service rendered, and the credit record. In them is wrapped up a large amount of goodwill which we wish to dispose of. Then there are consumable stores, valued at£7 million. How is it proposed to spread£7 million worth of spare parts, stores and equipment, over parcels of from one to fifty vehicles? Then there are£14 million worth of properties. How is it proposed to convey these to unknown identities? There are garages, workshops, sorting depôts, offices and buildings of all kinds all over the country. It is only by the proper allocation of all these separate items that we can recoup the£33 million worth of goodwill that stands
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on the books of the British Transport Commission.
I am not going to weary your Lordships by talking too much about goodwill this afternoon, but I shall return to that matter at greater length at a later stage. That goodwill has not been lost; it is still there. If a set of business men were handling the disposal of these assets in an ordinary business way, they would recoup the vast majority of that goodwill. We shall not be satisfied, at least on this side of your Lordships' House, until, on Committee, we have seen inserted in the Bill a provision for the creation of a sufficient number of limited liability companies to absorb the vast bulk of these various assets. We do not expect that we can absorb them all; there must be some chattel disposal.
The next thing we shall do is to oppose the formation of a Disposal Board. We say that it is an unnecessary and extravagant structure, and that if we have the company structure, and if the bulk of the assets are disposed of by way of share transfer, there is no earthly reason why we should have a Disposal Board. We shall also oppose the levy. Here the noble Lord made his second mistake. He said, "Of course, our proposals in this Bill are really no different from those in the White Paper." But in fact half the levy has gone. In our debate on the White Paper the noble Lord said "that is the keystone of our policy." So half the "keystone" has gone. Admittedly, the noble Lord has substituted something better for it, but the present proposals are not quite the same as those in the White Paper.
VISCOUNT SWINTON: The Bevanite section has gone.
LORD LUCAS OF CHILWORTH: If I may, with apologies to the noble and learned Lord on the Woolsack, say this, I suppose that the noble Viscount thinks that is an apposite interpection.
VISCOUNT SWINTON: Yes.
LORD LUCAS OF CHILWORTH: I do not. We shall oppose the levy. We say that, if this company structure method of disposal is skilfully planned, there is no need at all for the levy. The loss upon realisation, the loss by disturbance, and any necessary compensation paid to

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employees for the worsening of their conditions should be minimised to such a sum that it can be included in the ordinary accounts of the British Transport Commission and amortised in the ordinary business way.
I am going to say this quite bluntly. If there is any loss on the sale of these assets, it will be the Government's own fault. They are forcing the Commission to sell. They are forcing the sale, and it is no good the Minister, in another place, in terms or by insinuation, saying that Her Majesty's Government are doing in 1953 only what the late Government did in 1947. Admittedly, under the Transport Act of 1947 the road haulier was forced to sell, but the British Transport Commission were also forced to buy, at a pre-determined price written in a Statute, with all the safeguards for appeal again written in that Statute. This Bill will force the British Transport Commission to sell, but of course the Government cannot put any statutory compulsion upon private enterprise to buy at any price. That is the difference.
Our other objection to the levy is this. Since when has it been suggested that we should agree to introduce into the fiscal system such an unsavoury principle as that one section of the community shall be taxed to pay for the commercial blunders of the Government—because that is what it is. If the Government were not in such an indecent haste to sell these assets there need not be any loss to be covered by a levy; it is only because of their indecent haste to fulfil a foolish Election pledge. The Minister at one time in another place said, "We shall sell these assets within nine months." He has rather recanted from that statement. The issue joined here is whether Her Majesty's Government are the representatives of the taxpayer, and whether the taxpayer's interests come first, or whether the Government are proceeding in the interests of those who want to buy, of course at a loss to the country.
I want to put to the noble Lord a question on what the levy would cover. If, before or during the sale of these assets, the Chancellor of the Exchequer, in his wisdom, reduces or abolishes the purchase tax on goods-carrying vehicles, thereby depreciating the value of all these 40,000 vehicles, will the levy be used to
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cover that loss? Of course it will. I should think the Chancellor is bound to reduce the purchase tax on goods-carrying vehicles before these vehicles are sold. That will mean a loss. Since when has it been suggested that we should accept in the fiscal system of this country the principle that the Chancellor of the Exchequer can reduce a tax on one thing, and then tax the same people by a different method to get that amount back again? Yet that is what he will be doing. My Lords, it is upon those grounds that we shall oppose the levy.
I will now deal with the next mistake the noble Lord, Lord Leathers, made, when he said that there are no differences between the proposals in this Bill and those in the White Paper. In the original proposals in the White Paper the Road Haulage Executive were to be bereft of vehicles of any sort, size or description. It was only when, in the debate on the White Paper, I pointed out across the floor of this House that what the Government were doing was to leave the Railway Executive in a worse position than they were even before nationalisation, when they had 4,000 vehicles, that the Government started this amusing game of thinking of numbers. First of all they thought of 6/5ths; then they changed that to 5/4ths. That related to the number of road haulage vehicles operated by concerns wholly owned by the railway companies on January 1, 1948. Now I see that another number, 13/10ths, has crept into the calculation. I think The Times is illuminating on this point. It says:
"The truth is that a rational division of the Commission's property is gravely prejudiced by the procedure of returning vehicles of particular kinds to the railways in broadly the same proportions as they held them six years ago. Why revive a pattern of organisation which has ceased to operate? To do this is to live in the past."
But, my Lords, when the Daily Telegraph criticises Her Majesty's Government it is time they looked up and took some notice. The Daily Telegraph says this:
"Again, the proviso limiting the road haulage interests of the railways to 5/4ths of those they held at the time of nationalisation has no logical or practical basis."
On the Committee stage we shall join in this game of numbers, and the number we shall think of will be one that has some meaning and connection with the national,

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industrial, and economic interests of the country. That will be the vast difference between us. Our number will also pay some regard to the number of vehicles which are operating the basic services to-day.
From all sides—the Associated British Chambers of Commerce, finance and accountancy—we have heard criticism that the breaking up of the basic services will mean heavy loss to the industry and commerce of the country. The Road Haulage Executive to-day, in its "parcels and smalls" services and the specialised traffics carried on by Pickford's, Carter Paterson's and the other "grown-up children" of like companies are giving a satisfactory nation-wide service. It does not matter what Her Majesty's Government put into this Bill, or what they may say; the British people will always look to the British Transport Commission to give a national service. What is going to fill the gaps after the speculators have taken what they will—the choice pieces? Who is going to be responsible for dealing with the unremunerative services? There will always be unremunerative services. Who but the national organisation is going to do that? So far as possible we on these Benches will take care that Amendments are moved to see that the number of vehicles retained is commensurate with those requirements.
I will give one example within recent memory. On the occasion of the unfortunate disaster of the floods, the Midland Region of the Road Haulage Executive was called upon late on the Sunday night, and within an hour about 500 tipping vehicles were sent to Lincolnshire—not only the vehicles themselves but the whole organisation to run them. Who but a national organisation could have done that?
VISCOUNT LONG: Will the noble Lord allow me to interrupt for a moment to remind him of the private road hauliers who, in their hundreds, helped to save the situation during the war, in Coventry, Bristol and London?
LORD LUCAS OF CHILWORTH: I am not contesting what the noble Viscount says. I am not going back to the last war; I am going back only a fortnight in order to give one example.
What plans have the Government, assuming they do not sell all these
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vehicles? There is nothing in the Bill. What is going to be the organisation? Nothing is said here. There is one significant omission in this Bill, and perhaps the noble Viscount, Lord Swinton, when he comes to wind up will deal with this matter. Why is the Road Haulage Executive not to suffer the same fate as the Railway Executive? The Railway Executive is to be abolished, but there is not one word about the fate of the Road Haulage Executive. Yet the Bill purports to sell all its property. Is it to be kept in cold storage in case all the property is not sold? Is it to be kept in cold storage to save the face of the Government if their scheme of disposal proves a failure?
The absence of constructive thinking upon and of any knowledge of the subject of transport is well illustrated in this Bill when we come to the question of the railways. I know the noble Lord, Lord Leathers, will not take this unkindly, but I was really amused when he asked, "Why should we say anything about the railways at the present time?" I thought of the old adage: "If you do not know anything about a subject, keep your mouth shut; do not open it and prove your ignorance."
VISCOUNT SWINTON: A very good maxim.
LORD LUCAS OF CHILWORTH: It is one which I hope the noble Viscount will remember on Wednesday evening. The Government are full of ideas about how to dispose of the assets of the Road Haulage Executive, but they have not one idea as to how to reorganise the railways—not one. What do they say in the Bill? First of all they say, "We are going to do away with the Railway Executive." But you do not need a Bill to do that. You can do that under the provisions of the1947 Act. Decentralisation of the railways is the next thing. You do not need a Bill to do that. You can decentralise the railways under the 1947 Act And why not? Now the only statement we have is that the Commission must produce a scheme—one of those things "hereinafter to be revealed." I think the noble Viscount, Lord Swinton, will be able to tell us something about this. He was a great authority, in connection with the 1947 Act, on schemes "hereinafter to be revealed." Perhaps he will tell us why the Government have

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not revealed this one. The truth is that they do not know anything about it. In this connection again I quote a very pertinent remark from The Times:
"It is to be hoped the Government are not as much in the dark over their intentions as they leave the public."
What is this claim for freedom which the noble Lord has made, this claim that the railways will now be free? The Minister, in another place, said that they will now be able to compete on equal terms. I do not want to look a gift horse in the mouth, for concessions have been made in another place as regards railway charges; very valuable they are, too, and they should go a long way to remove some shackles. But are we indeed expected to believe that this freedom is real? The railways are still the only transporters who have to submit their charges schemes to a national Tribunal. There is not another transporter in the country who has to do it. Bus and coach companies can get their fares settled very quickly by going to any of the twelve local licensing authorities in the country. But as these authorities take into account only local conditions and considerations, their policies are quite unco-ordinated, either among themselves or with the national Tribunal. The time has come when we require reconsideration of this question of tribunals, in order that they shall fit every form of transport and have a common policy. If we take the air services what do we find? Internal air service fares need not be submitted to any tribunal, and a careful study of the 1951 accounts of the principal provider of the internal air services shows that it costs the internal air service authorities just over£4 million to operate their internal routes and short cross-channel routes, whereas they receive in revenue only£3 million. The balance was made up from their Scandinavian routes and by a Government subsidy. Yet that was traffic which British Railways could have handled at great profit.
Then we have concessional fares. British Railways provide about£6 million worth of workmen's tickets and£12 million worth of season tickets a year, while the figures for London Transport amount to about£6 million worth of these tickets a year. I believe there is a case to be made, while we have the
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peculiar fit-up that we have in this country, for giving the lower paid worker some subvention for his travel to and from work. But why should it be financed out of the coffers of the railway companies in a supposedly competitive system? By Section 3 (4) of the 1947 Act they still have the statutory requirement to operate at a profit. I do not grumble at that—they should do so. But do not place handicaps upon them when the road haulier is as free as the wind. There is no tribunal to exercise control over him. The consultative committee structure is kept in this Bill, but it obtains only so far as the nationally owned transport is concerned. A private bus operator, a private transporter, does not come within the ambit of the consultative committee.
As the noble Lord has said, those concerned with coastwise shipping can complain about the rates on the railways, but the railways cannot complain about the rates charged by the shipowners. Why do the Government retain this setup in what is supposed to be a competitive system? If, as they say, they are going to free the railways; if they believe in freedom, why do they not sweep all this away? Of course, the truth is that the Government know very well that the national provider of transport can never be free. He will always have a moral obligation, and the public will always see that he accepts it. As I have said, this Bill does nothing to face these problems. Politically these problems are very difficult. That I freely grant. But at some time or other they will have to be faced. At some time or other in this country, we shall have to make a study of transport economics—not of road transport economics or rail transport economics or air transport economics, but of transport economics as a whole. Until we do that we are not going to make progress. We do not make progress with this Bill. We go back.
May I conclude by paying tribute to the right honourable gentleman the Minister of Transport? I think he has done exceptionally well. He came to this problem knowing nothing about it; but he has learned. He has provided in this Bill many concessions which are wholly good. May I say this, more in sorrow than in anger?—and I hope the noble Lord, Lord Leathers, will not think I am

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being impudent. The noble Lord said at the opening of his speech that he had been fifty years in transport. I should have thought that anybody with fifty years of experience in transport would shun this Bill like the plague, because never have I seen anything quite so had. We shall not divide against this Bill, but we wish to probe it on Committee stage. I appeal to the noble Viscount the Deputy Leader of the House, who will appreciate the difficulties which face the Opposition, and to the noble Lord the Secretary of State, to give us time to probe this Bill. I hope the noble Lord will be as accommodating in this House as his right honourable friend the Minister was in another place. We hope that when this Bill leaves this House it will be a charter for the protection of the interests of the taxpayer. That, at any rate, will be our main object through all stages of the Bill's passage here.

INCIDENTS AT DECEPTION ISLAND
4.0 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, may I, with leave of the House, intervene to make a brief statement on recent happenings in Antarctica? At the beginning of this month Her Majesty's Government were informed that Argentina and Chile had established naval parties on the airstrip adjoining the British base at Port Foster, Deception Island, which is British territory, and that permanent buildings had been erected. These encroachments represented not merely an infringement of our sovereignty on the Island, but a nuisance and an obstruction to those who were maintaining our base.
Instructions were accordingly given to the Acting Governor of the Falkland Islands to dismantle the buildings which had been erected and to arrest and deport under the Falkland Islands Aliens Ordinance any occupants found in them. These instructions were carried out on February 15, by the British magistrate, assisted by constables of the Falkland Islands police. The party travelled to Deception Island in Her Majesty's Frigate "Snipe," and Royal Marines were available, if needed,
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in support of the civil power. Two occupants of the Argentine hut were arrested, without resistance, and the Argentine and Chilean huts were dismantled. The Chilean hut was unoccupied. The two arrested men were handed over at South Georgia on February 18 to the master of an Argentine vessel bound for Buenos Aires.
Her Majesty's Ambassadors at Buenos Aires and Santiago presented Notes on February 16, informing the two Governments of the action we have taken and protesting against the infringement of our sovereignty by the Argentine and Chilean parties. Replies were received on February 20, asserting the Argentine and Chilean claims to the territory, protesting against our action and calling upon us to restore the dismantled buildings and return the arrested men.
In taking the steps I have described, the Government have been concerned to dispel any doubt about their attitude to encroachments of this type on British territory At the same time they have repeated the offer made to both countries by the late Government to refer the conflicting claims to territory in the Antarctic to the International Court of Justice. I am sorry to say that both countries, in their Notes, have seen fit once more to reject this offer.
EARL JOWITT: My Lords, I am grateful to the noble Marquess for making this statement. We all desire to maintain close and cordial friendship with Argentina and Chile. Indeed, the noble Marquess went out to these countries only recently to achieve that object. But I cannot think it right that anybody should, as it were, "jump the claim." The late Government made an offer to Argentina and Chile to refer the whole matter to international settlement. That obviously seems the right course and one which anybody can accept without any indignity or loss of prestige, and I am sorry to hear they have not accepted. I should like to ask whether they have given any reason for not accepting the offer to submit this matter to international settlement. It certainly seems very strange.
THE MARQUESS OF READING: No, my Lords, no reason has been given. So far as I recollect the terms of the replies, they are a bare refusal to contemplate that particular form of procedure.
VISCOUNT SAMUEL: My Lords, I feel little doubt that public opinion will support Her Majesty' Government in the action they have taken. Like the previous Government, they have offered to Argentina and Chile that the subject should be referred to the International Court of Justice and decided by them. That offer having been made and refused, the Government are on very firm ground in taking the action they have done. Indeed, I see no alternative, because otherwise we should experience greater infiltration into these remote and desolate islands until, after a time, it would be found that our rights, or what we claim to be our rights, would be lost by default. At any time this dispute, which we much regret, can be ended by its being dealt with in the manner in which all such international disputes should be settled—namely, by reference to courts of law. We greatly hope—for, as the noble and learned Earl has said, all of us have feelings of warm good will both for Argentina and for Chile—that they will agree to take the course which is incumbent upon all peace-loving nations in matters of dispute of this character.

TRANSPORT BILL
4.5 p.m.
Debate resumed.
LORD TEYNHAM: My Lords, I support this Bill because, in spite of what has been said by the noble Lord, Lord Lucas of Chilworth, I feel that it is the first really constructive effort to produce a workable transport system without the evils of centralised control. The noble Lord, Lord Lucas, has said the Bill does not touch the fringe of the subject. On the contrary, I would say that it is a most comprehensive Bill. When the noble Lord says it does not touch the fringe of the subject, surely he is admitting that all is not well with the nationalised transport industry. I would ask the noble Lord whether he really thinks that the nationalisation of road haulage could possibly have been a success with only one-twentieth of the lorries included in it. Of course, it could not be so. On the other hand, trade and industry have suffered enough already through the inefficiency of the nationalised road transport services, and if the "C" licence holders had been included in the 1947
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Act the injury to trade would have been far worse than it has been already.
The noble Lord, Lord Lucas, has complained of the many changes that have been made in the Bill since the introduction of the White Paper. Perhaps the noble Lord has forgotten that the original Bill of the 1947 Act included the "C" licence holders and the Government did not have the courage to retain them in the Bill. The fact is that road haulage is quite unsuited to nationalisation, because it is a very personal business. We have had proof of this in the great increase in the number of "C" licence holders. Nobody in industry wishes to buy an expensive lorry and run it for his own account merely because he has Tory instincts. That suggestion just does not make sense at all. The increase in "C" licence holders has been due directly to the failure of the nationalised road haulage organisation to give the service required. From the trumpetings, up and down the country, of a number of Socialist Members of another place, it seems to he the policy of the Opposition to re-nationalise not only long-distance haulage, if they get the chance, but also all the "C" licence holders—in fact, the whole road haulage system. It is just as well that the country should know the real intentions of the Socialist Party.
Again, I would ask the noble Lord opposite whether he thinks the 1947 Act has been effective in the integration of road passenger schemes. Of course, it has not; and it has not been able to accomplish anything of importance. In fact, as noble Lords will be aware, the Commission have had to abandon the integrated passenger service schemes in the North-East and in the South-West of England, largely owing to the opposition from Socialist-controlled councils. On top of all this, the late Minister of Transport decided, very wisely I should say, to abolish the Road Passenger Executive because there was nothing for them to do. I would say that the 1947 Act was a half-baked and muddle-headed production, and the sooner it is amended by the Bill before the House to-day the better.
The 1947 Act has solved nothing, and never could solve anything. No doubt the theory was that a single authority should run the transport services and decide the most suitable way that the

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public and their goods should travel—in other words, that "the man in Whitehall" should know best. It sounded so nice and tidy in the bureaucratic mind. But, of course, it has not turned out that way at all. Practically no integration has taken place. In fact, the road and rail services of the Transport Commission have been run as separate bodies in competition with one another. Then, again, the set-up of the Road Haulage Executive was quite impractical. As many of your Lordships are aware, it was organised into geographical areas, with little regard to the main trunk routes which run up and down the country, which had existed before nationalisation and which had served
the country so well. What has been the result? It has been almost impossible to trace any particular consignment which may have had to pass through several of these areas, and demands for proof of delivery of consignments in transit have increased enormously. Do noble Lords opposite really think the Road Haulage Executive were likely to succeed with such a plan? I suggest that if the Transport Commission had wanted to make a contribution towards the success of integration they should have had one Executive covering railways and road; but even then I think the set-up would have been unwieldy and too cumbersome to provide any practical results.
I am a little disturbed at the provisions in the Bill relating to passenger vehicle road transport. If healthy competition is to be achieved, it is essential that road and rail transport should be divorced. By that I do not mean that all the shares held by the Commission in bus companies should be sold. Provided that the Commission relinquish operational control in the provincial omnibus companies, they should, I suggest, retain substantial shareholdings in them, corresponding to those of the former railway companies in 1947. Your Lordships will remember that the 1947 Act empowered the Commission to acquire bus and coach companies, with a view to the preparation of area schemes for the control of all passenger transport services. But, as I have already mentioned, the initiation and completion of such schemes was a complete failure. I suggest that it is time a definite obligation was placed on the Commission to dispose of their control of provincial bus and coach undertakings, with many of
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which they have a complete monopoly in some areas of the country. I certainly do not wish to disturb the efficient partnership between the Commission and private enterprise which already exists on a substantial scale. On the contrary, I should like to see it increased. But again I should like to emphasise that when a bus company is under the same ownership as the railways, healthy road and rail competition is unlikely to materialise—in fact, I suggest that there is a real monopoly in its worst form.
I do not know how many of your Lordships are aware that large areas of the country, notably in Scotland, East Anglia and the Midlands, are already under a monopoly of road and rail which is almost complete. I maintain that healthy competition between bus services and the railways should be re-established. My noble friends on this side of the House have no intention of substituting for a State monopoly in bus services a private monopoly. What we should like to see is an extension of the already existing State and private enterprise partnership, which may well be the solution to our transport difficulties. In that direction I was glad to see that, during the passage of the Bill in another place, the Minister of Transport indicated that he would set down an Amendment in this House which would permit the Transport Commission to form companies, in certain circumstances, for the disposal of road haulage units. Surely, that goes on a long way to meet the views propounded by the noble Lord, Lord Lucas, to-day. It is quite likely that one or two private interests would welcome partnership with the Transport Commission in road haulage undertakings, and the proposed company formation by the Commission would facilitate this. In fact, we may well see a somewhat similar set-up in road haulage of private enterprise and State partnership as already exists in road passenger services, and I would certainly support such a scheme.
I very much welcome the measure of freedom which is to be given to the railways in relation to charging, which will enable them to become really competitive and to offer the public a better service. I sincerely hope that the name "Region" will disappear and be replaced by the good, old, well-tried names of Great Western Railway, Southern Railway, and

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so on, which provided so much pride and esteem, amongst employees and passengers. I also hope that Her Majesty's Government will reconsider the proposal in the Bill by which the Commission are charged with the task of preparing a scheme for the reorganisation of the railways. I suggest that the preparation of such a scheme should be entrusted to a composite body, on which, of course, the Commission should be represented, and the present chief regional officers of the railways, with an independent chairman. I believe that this type of organisation would be far more likely to produce a good scheme.
I am sure that all those of your Lordships who are interested in shipping will be glad to know that the Commission will continue to consult coasting owners in the formation of any future charges scheme. I also understand that, by an Amendment in another place, coastal shipping will again have the right of appeal to the Transport Tribunal against railway rates which they consider might place them at an undue or unfair disadvantage. I should, however, like to draw your Lordships' attention to one particular aspect of competition between road haulage and coastal shipping. It cannot be denied that there is considerable uncertainty as to how the road haulage industry will develop under the new Transport Bill, and I would suggest that it might be felt prudent not to alter the grounds for granting or refusing licences until it can be seen how the road haulage industry develops. I suggest that it might be desirable to suspend until January 1, 1956,the application of the provisions of Clause 8. In any case, I think it will be necessary to amend this clause during the Committee stage, although obviously it would be improper for me to go into that matter now. In this great reorganisation of transport which is before us to-day we must be careful not to forget that it is the public, including trade and industry, whom we are trying to benefit, and not the reorganisation of the transport industry for transport's sake. It is true that competition may raise certain difficulties, but I maintain that it is vital and necessary to have competition, not only between road haulage and rail but also between road passenger vehicles and the railways, in order to have an efficient and live transport service.
4.17p.m.
LORD REA: My Lords, it is sometimes said that the quality of debate in your Lordships' House is highest when the matter under discussion is non-controversial or general. This, of course, is based on the well-known fact that when a speech is made which supports one's own views it is, generally speaking, an admirable speech, whereas, when a speech is made in the other sense it is a regrettable speech, and very often should never have been made. To-day we are obviously discussing a controversial matter and one of grave responsibility to each of your Lordships individually. In those circumstances, I do not propose, if I may be excused, to follow in detail the points made in the three previous speeches—which I consider were, perhaps, rather more Committee stage speeches than is usual on a Second Reading—but rather to touch on the responsibility of each of your Lordships in this House.
It is Her Majesty's Government who are in the dock now, and until they are proved guilty we must assume that they are innocent. I have no doubt that the Government and the Opposition are equally convinced of the merits of their respective cases: in fact, the noble Lord who spoke for the Opposition seemed to have so much confidence in his case that one wondered whether he was really angling for acceptance of Amendments, or for throwing the whole thing overboard as a bad job. I should, however, point out to noble Lords sitting on my left that in the rôle of Opposition they are mere tyros and amateurs compared to noble Lords who sit on these Benches and who have been in Opposition for some forty years. We have had the advantage of seeing in a rather special perspective the subtle change of tempo (and sometimes even of policy) of the two larger Parties which takes place as they cross and re-cross the floor of this House from Government to Opposition and from Opposition to Government. Therefore, as the Elder Brethren of Opposition—if I may use that term—we have, I hope, profited in wisdom by our experience.
Your Lordships will agree that the basic quality of opposition is neither admirable nor constructive. It has been said—and I think said rather too often lately—that the duty of an opposition is to oppose. I feel that—if I may again

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criticise both the larger Parties, but not their members in your Lordships' House—this maxim has been taken rather far in many cases. For my part (and I may be unorthodox and may even be forsworn by some members of my own Party) I would say that the duty of an Opposition in a civilised State is to support—not support continually, but support in general, because when criticism of a Government is likely to put that Government in jeopardy, it is seldom worth while unless the matter is of the greatest Importance. Although Liberals in both Houses are a small Party, we feel that we have a real responsibility to a great proportion of the electorateߞpossibly even a majority—who cannot subscribe to all the "Thirty-nine Articles" of the creed of either the Socialist or Tory Party.
We have been accused of being inconsistent, as indeed we may be in this matter of the Transport Bill, because sometimes we vote with the Government, whatever Government it may be, and on other occasions we vote against it. But we maintain, in all sincerity—and I think it may be granted that we have at present no visible axe to grind—that we represent the average common-sense man and the generality of opinion in this country, because we do believe that to be liberal minded. In this way we have supported on occasions the Government of the day when opposition would appear to be vexatious or doctrinaire, and we have opposed the Government of the day—as in the case of the nationalisation of the steel industry—when we have felt that the Government has not received the mandate of the people. This seems to be the honest job of the honest politician in either House. If a Party measure, such as this measure, is to be put upon the Statute Book, it must clearly and for all time bear the fiat of the electorate of the day. For that reason I speak to-day on behalf of my noble friends in support of the Bill which is now before your Lordship' House. We are convinced that, on the whole, it is a progressive measure, calculated to promote greater efficiency and greater prosperity. We do not hold out that it is a perfect Bill: indeed we are not satisfied with it as it stands, and we reserve the right, if necessary, to go into the Lobby against the Government if certain aspects are not
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modified in a way in which we should wish to see them modified.
In another place, the small Liberal Party took exactly this line and, in fact, on the Committee and Report stages they voted thirty-three times with the Government and nine times against it. Of course, it is a matter of opinion, but I consider that if there had been no Whips on in another place, most members of both the other Parties would have voted in the same way. I urge, therefore, that in considering this Bill we should try to avoid purely doctrinaire reactions. This country is certainly not wholly opposed to nationalisation, and if our present electoral system means anything at all it is certainly not wholly in favour of it either. I therefore suggest that noble Lords on both sides of the House, including those of us who complete the eternal triangle, should be ready to compromise, not only on detail but sometimes on fairly major issues. If one is convinced that one is right and that therefore everybody who disagrees with one is wrong, that is called, in politics, prejudice; in religion it is called faith, and in the lunatic asylum it is called normality.
This is not an occasion for a detailed examination of the Bill, and I should like to touch on only two points in respect of which I hope to see a change of policy on the part of Her Majesty's Government. In the first place, I would urge Her Majesty's Government to try and recapture the large measure of public confidence which I feel they have lost by failing to set the people free in the way the people expected to be set free. Bureaucracy is very little, if any less, irritating now than it was under the previous Government. A sort of treacle of estoppel has entered the machinery of administration, so that incentive is stifled not only by punitive taxation, but by creating a form of desperation of ever being able to comply with all formalities, and at the end being left with any stimulus whatever with which to pursue the original project.
This country has in the past thrived on the absence of unnecessary restrictions, and my first point which I put to Her Majesty's Government is that they should take the sweeping line of abolishing totally and forthwith all "A" licences, all "B" licences and all "C" licences.

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To do so, of course, would have the terrible effect of allowing anybody who thought fit to try to earn a living in the road transport industry. But is that such a shocking thought? In another place, this proposal was described as "lunatic laissez-faire"; but was our great shipping industry and all our other great industries built up on "lunatic laissez-faire"? Is our Colonial Empire, voluntarily peopled by fine pioneers and settlers, the result of "lunatic laissez-faire"? In advocating the abolition of these licences, I would naturally safeguard both the industry and the public by regulations as to roadworthiness of vehicles, proper driving hours, terms of employment and so forth. But I would free the people from this generation's apparent reversion to the feudal age, when a man was not allowed to choose his own life or livelihood. I would ask the noble Lord, the Secretary of State, under whose wise, kindly and sometimes strict guidance I have for over thirty years handled many problems of surface transport, to put his hand on his heart and tell your Lordships if this great industry, if completely free of controls and restrictions, would not in fact become prosperous and happy as it was before, and, I suggest, could be again.
Secondly, I ask Her Majesty's Government to yield in what I would call the rather ugly matter of the levy. Having worked under and with the Secretary of State for thirty years, which, added to his fifty, makes eighty, I am rather surprised to see the change of his literary style which was always a model of conciseness and clarity. There are some sections of this Bill which I hope may be changed in time so that they are understandable to the ordinary person. I should like to read the definition of the levy in Clause 10 (2):
"…the amount charged by way of the levy for any such period shall be the amount by which the excise duty payable upon that licence would be increased if the annual amount of that duty were increased by the amount arrived at by multiplying the unit charge, as defined in subsection (3) of this section, by the appropriate multiplier, as defined in subsection (4) thereof."
That does not seem to me at all like the style of the noble Lord, Lord
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Leathers. He goes on to explain what the multiplier is:
"…'the appropriate multiplier' is the number arrived at under the second column of the Table in Part I, or, as the case may be, the fourth and fifth columns of the Table in Part III, of the Second Schedule to this Act by reference to the weight unladen of the vehicle plus, in the case of a vehicle of the description specified in the first column of the Table in Part I of that Schedule…"
and so on.
It is evident that a large and regrettable financial loss is bound to be incurred when this Bill becomes law. Noble Lords on my left may say—indeed, the noble Lord, Lord Lucas, has said—that this loss can be perfectly well avoided by rejecting the Bill.
LORD LUCAS OF CHILWORTH: Will the noble Lord forgive my interrupting? I have said nothing or the kind. I said that this loss could be avoided to an amount that could be easily absorbed by the ordinary accounts of the British Transport Commission, by the adoption of the limited company structure, and therefore by an orderly disposal of the assets.
VISCOUNT SWINTON: Take less and convert it into a profit.
LORD REA: I beg the noble Lord's pardon. I had assumed that he considered that if nationalisation continued the loss either would not grow or might be liquidated in the course of time. But I will not press that point. I believe that in this case the Government have their mandate and should proceed with the Bill. In any event, it is surely undisputed that the blame for the loss, if blame is to be attributed, lies with the Government as the Government, irrespective of which political Party it was or is. Surely it is unfair that one selected industry, the road haulage industry, to whom we think that no more than justice is now being done, should be saddled with the whole expense of a costly mistake, simply because it was for a few years put into double harness with a sick relative? That sick relative, the railway system, has not recovered as a result of this association, and means must be found—I hope by considerably more decentralisation than is envisaged in the Bill as it now stands—to put it on its own feet in some other way.
But why should the road haulier be summoned to this Borgian feast in honour

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of his re-emancipation and be given, as a first course, a cup of cold poison? The Government, be it Conservative or Labour, is responsible as a Government for this state of affairs, and it is the unfortunate taxpayer who must take that poison, diluted as best the Chancellor of the Exchequer can contrive. That is what Chancellors are for. The acceptance by the Government with good grace of the loss of a few taxpayers' votes because a previous Government has involved it in difficulties is surely a more honest course than victimising one innocent industry because it appears to have the chance of regaining prosperity, yet itself has done nothing to merit such penalty. There are many points which I will leave to other noble Lords in the long list of speakers who wish to address your Lordships' House. In the meanwhile may I commend to your Lordships' approval, in general, this Bill, which I hope during the discussion we may find involves some flexibility and is not entirely an iron hand in a Leathers glove?
4.31 p.m.
LORD PETHICK-LAWRENCE: I have listened with great interest, as I am sure have all your Lordships, to the speech from the Liberal Benches. We are always glad to hear our Liberal friends speak in this Chamber, because they do not often speak and we are always anxious to know what the Liberal point of view may be. The noble Lord who has just addressed us said that from his position of forty years with his Party in Opposition, he is able to criticise and point out the faults in the two Parties that sit on the Government and Opposition Benches. And he may be right, because it is always said that the onlooker sees most of the game. Perhaps, however, we who sit on these Benches may sometimes see that a Party that has been in Opposition for forty years has lost a certain amount of reality and, further, that they suffer from the defect of very small things, the activities of which, according to modern science, are indeterminate and cannot be traced to any very definite cause.
This Bill makes me very unhappy. I say that not from a Party point of view, but from a national standpoint. Indeed, if I were thinking solely in terms of Party, I should be glad, for nothing that this Conservative Government have done up
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to date is more calculated, in my opinion, to bring discredit upon them in the eyes of sensible people than this silly Bill. From the national point of view it is a disaster, for in that sphere of national life where, most of all, there needs to be order and co-ordination, it recreates disorder and chaos. I myself have no doubt that the time will come—it may be sooner or it may be later—when the principle underlying this Bill will be reversed, not because the Labour Party have declared their intention of reversing it when they get into power, but because it is contrary to the natural progress of civilization; the logic of events is bound to force a different attitude upon some future Government than that which is taken by the Government at the present time. When that time comes, as I am sure it will, the years that have been spent in this futile and fatal experiment will be reckoned the years that the locust have eaten, and in which the economic recovery of this country has been wantonly hindered and obstructed. I know that these are strong words, perhaps harsh words, but I should not have used them unless I had been convinced that they were amply justified by the facts.
I have never been one of those who are obsessed with an ideological faith in nationalisation as a panacea for all human ills. To-day, there can be but few people in this country, other than avowed Communists, who hold that view with, in front of them, the object lesson of the gigantic octopus whose tentacles spread out through Eastern Europe and Northern Asia. I have, however, always realised that there are certain public services which can be run efficiently only on a national or at least a regional basis. I should have supposed that there was common agreement in. this country among the vast majority of knowledgeable people, irrespective of Party alignment, in favour of that position, and I should have thought that the noble Lord who has just spoken would have been counted with me in that view. In fact, he said something of the kind.
But when I read the terms of this Bill, I confess that I am puzzled. I am quite at a loss to understand the mentality of those who have sponsored it and who propose to drive it through Parliament. "Can it be," I ask myself, "is it really the fact, that transport, in their view, is not

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one of those essential national services?" Are they of opinion that road transport is not inevitably interlocked with rail service? Of course, it was not always so. When I was a boy, the only traffic upon the roads was horse-drawn. In those days the railways carried all the long-distance traffic, passenger and freight, while the carriages and carts looked after the little journeys. Even for many years after self-propelled vehicles were allowed to travel along the road unheralded by a man walking in front with a red flag, no one ever contemplated a road service which would go hundreds of miles in a day and would carry thirty or forty passengers, or several tons of freight, in a single vehicle.
Today, that situation is altered. The road has become an interchangeable means of locomotion with rail. Not only so: the public interest requires that road and rail should be interlocked, and that between them they should cater for every part of the country, the tiniest rural hamlet no less than the populous city. Surely the analogy is nearly complete between the transport system and the Post Office, which has to serve the remote crofter in the Highlands of Scotland at the same price per packet as it does the denizens of the vast conurbations. Admittedly, the road is also used for personal, local and regional purposes, and different considerations apply to these. If, therefore, the Government had said, "The Transport Act, 1947, has blemishes of many kinds"—and it would be unique among human institutions if it had not—"The boundary lines between the different forms of road usage are wrongly drawn. Not enough freedom is loft for individual initiative or personal choice. We propose to amend these while preserving the main features of co-ordination of national transport"—if they had said that, and had embodied those principles in a Transport Bill, I might or might not have agreed with them, but I should have admitted that they had a case. Even if they had said, "We think that road transport is so essentially different from rail transport that the two should be organised separately under public, or it might even be under private, ownership, with some machinery to co-ordinate them," I should have differed profoundly from them; but I should have seen some logic in their standpoint.
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But this Bill is a destroying and a wrecking Bill. At a time when the machinery set up by the Act is just beginning to pull the separate parts of the transport system together, so as to weld them into a national service for the country as a whole, this Bill throws a spanner into the wheels. The noble Lord, Lord Leathers, stated in his speech moving the Second Reading of this Bill this afternoon that the machinery at present in existence under the Transport Act of 1947 had not co-ordinated, and had shown no signs of co-ordinating, road and rail transport. Surely that is not the case. In the other place a few days ago, the Home Secretary made a very illuminating comment upon a Bill that was being introduced on an entirely different subject, the amendment of the Criminal Justice Act of 1948. He pointed out that it was quite premature to adjudge that Act a failure because it was less than four and a half years old. No one, he said, had had time to assess the effects of the whole scheme.
To my mind, precisely similar considerations apply to the Transport Act, passed in the previous Session. It was admittedly an immense undertaking, and it has been necessary to sort out and bring under control a vast number of separate units. But this was proceeding not in a desperate rush but in careful, well-thought-out stages. It was pointed out in the other place that 3,700 businesses had been acquired in the three years. I think noble Lords must surely realise that, to do that effectively and carefully, it would be a great mistake to carry that through in a much shorter time: 3,700 separate businesses, with no fewer than some 41,000 vehicles. I think that was a remarkable progress of acquisition, but it was at first an essential preliminary step to the integration of the industry, the integration and knitting together of the road and rail services. We were within sight, for the first time, of a national agreement on rates and charges for the whole of the road and rail transport. But the physical acquisition was not complete until about October, 1951—the very month that this Government took office and proceeded to break the whole of this machinery, so carefully put together, into pieces.
This wonderful co-ordination that was going forward would have brought great benefits to the traders of this country,

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and now it is to be scrapped—and scrapped for what? For a step backward, for a system that prevailed, broadly, prewar. Let me quote from a comment that was made in July, 1946, on that system. This comment spoke of—and I now quote—
"…the disastrous defects of our transport system as it existed before the war. At that time the road haulier was at full liberty to accept only traffic 'plums,' to charge whatever rate he liked and to discriminate at will between one user and another. The result was a cut-throat competition which…militated against the efficiency alike of the road hauliers and of the railways and gravely threatened the solvency of the latter."
THE EARL OF SELKIRK: Would the noble Lord please tell us what he is quoting from?
LORE PETHICK-LAWRENICE: I was about to do so. I was rather hoping that I should be asked that question. That is not an extract from a pro-Labour organisation. It is an extract from the Daily Telegraph which, as my noble friend beside me has already pointed out, can hardly be charged with having a Labour bias. Now, my Lords, it is, in effect, that pre-war system, so rightly condemned, to which (with, possibly, some amendments, about which we are to be told more on the Committee stage) this country is to be committed by Her Majesty's Government if they insist on our passing this misguided Bill.
4.49 p.m.
VISCOUNT GOSCHEN: My Lords, I should like to say a few words in support of this Bill, from rather a different aspect. On studying the Bill, which I must admit I found extremely difficult—possibly because it was the first one that I have ever tried to study—I came to the conclusion that this word "competition" can mean three different things. It can mean competition between road and rail transport it can mean competition within the railways and within road transport; and, thirdly, it can competition within both road and rail with no apparent financial aspect. The terms "British Railways" and "road transport" do not really urge on ally form of competition I agree very much with the noble Lord, Lord Teynham, that the names of the old railways should come back. As I say, it do not think the present names have anything to do with competition; they do not produce competition.
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I believe that one of the few spheres of competition left on the railways is the stationmasters' gardens. But so far as competition between groups is concerned, when the railways get back to their original names, obviously they will do much to bring back the service to what it was, in such ways as running trains more punctually in competition with each other. There are many places in England where it is possible to take either one line or the other. Therefore, obviously each group will try to do their best in that direction. Much can be done in keeping carriages and all rolling stock very much cleaner. This applies equally to the tracks, although they are not quite so much affected. I fully understand that the construction of locomotives and rolling stock has to be standardised to a certain degree, but I very much hope that in the design of locomotives each railway will go on wilt what it has been doing and will possibly produce a new design, just as aircraft manufacturers have produced new designs. From these designs the best can be chosen.
Turning to road transport, of course the position is slightly different, in that the transport companies do not make their own vehicles—they buy the chassis and then, if they wish, they improve the bodies and the gadgets, which are increasing in number. Possibly we shall soon see television within the ordinary bus. I hope that there will be more competition. There is another form of competition which does not exist at the moment because the hotels do not belong to the railways. I feel that the Hotels Executive should go, and that the hotels and the catering should be handed back to the railways concerned. They have always been part of the railway business. There have been cases recently of railway hotels being converted into offices. One rather hopes that when the railways are decentralised it will not be necessary for them to have so many offices. The catering problem on the railways has always been difficult. Since the war much has been done towards solving the problem, and I feel that the railways must be allowed to do their own catering. Each railway has a different catering problem. Business men going up to the Midlands need a quick meal before they get to their job; but the long-distance traveller wants a good meal, act not only to do him

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good but also to pass away the time. The first point that I have brought up—namely, competition between road and rail—has already been touched upon, and I am certain that many other noble Lords will deal with it.
My next point deals with competition without any gain. This really comes down to a much more human aspect of this Bill. I am sure that it will not be argued in any way that we are all very proud of being British—we are equally proud of being English, Scots, Irish or Welsh. But I am absolutely convinced that we need divisions lower down than that in order to help us in any form of industry or work in which we may be taking part. With your Lordships' permission, I will take the example of the Services. For centuries, men have taken great pride in their regiments, their corps and their ships—in fact in any unit to which they have belonged. In the war it was difficult for a time to put people into their county regiments. County regiments mean a great deal to a great many people. Later on we were able to do it, and to issue such things as shoulder titles showing the unit to which a man belonged. Then there came brigade flashes and divisional signs. To my mind those are most important. They give a man a great feeling that he is going to do his utmost to work for and never to let down his particular unit. I am quite convinced that if one went round to the homes of ex-Servicemen one would find these various regimental, brigade and divisional signs well to the fore among the relics of the last war.
As I say, in the Army there are the county and national regiments, and also such regiments as the Royal Artillery, the Royal Engineers, the Royal Corps of Signals and the Royal Army Medical Corps. They have not a county to hang themselves on to, but they have great traditions, and there they have something. They know that if they do well for the regiment they will always be backed up by the regiment. In the Navy there is competition between various ships. There will always be rivalry between ships; furthermore, you have the rivalry which exists between a Chatham ship and a West-Country ship. To my mind that is most important. Indeed, when the parachute units were first formed, invariably
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a parachutist would, like the traffic, use the left side of the street, so that everybody might see the parachutist' wings which he wore on his right sleeve.
Somebody may be asking, "What on earth has this got to do with railway and road transport?" I think it has a great deal to do with it, because the men who are now or have been in the Services are the men who are now engaged in or will be entering the industries which we are discussing to-day. To my mind, the National Serviceman, who gets a thrill from belonging to a regiment, will get just as great a thrill if he goes into industry and finds that he belongs to a famous railway or transport company—of that I am confident. Obviously, if that is so (and I am convinced it is) the esprit de corps and morale which he has learnt in the Army, the Navy or the Royal Air Force and which invariably raises the efficiency of that unit, he will carry into the industry of his choosing.
And I do not believe that that feeling is confined only to people who are in the industry: I believe that it is felt very strongly by those who use the industry. Until recently one heard of people who worked in the City of London trying to find a house in a certain area because they wanted to remain on their old railway. I think that the person who travels the country always has the feeling that he is getting nearer home when he sees the buses of his own county, or a vehicle bearing the name of a haulage contractor well known to him, or something of that description. I am certain that that is so. A very good example of that sort of thing occurred in Italy in 1944. A certain Division had landed in the South of Italy, and were to be passed through by the Eighth Army. When they had been passed through they were to wait for orders. I was in charge of administration there, and I was told by the local authorities that it was going to rain. In view of that, instructions were given for cover to be found for this Division. In such cases, inevitably, use is commonly made of schools, village halls and so on. I rang up one battalion commander and asked if he had found any cover. He replied, "Yes, I have found a railway train." And that was true. It was a London and North Eastern Railway train, complete except for the engine. One soldier, when he saw the train, was

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heard to remark: "There! I always told you the London and North Eastern Railway were the best: they've fixed it again."
5.2 p.m.
LORD BURDEN: My Lords, it is now my very pleasant responsibility and pleasure to offer the congratulations of the House to the noble Viscount, Lord Goschen, for so successfully surmounting the ordeal of making a maiden speech in this House. It is, of course, courteous not in any way to criticise a maiden speech, but perhaps I may be allowed to say this. I seem to recollect that Lord Randolph Churchill, on one occasion, offered to resign from the Government of the great Lord Salisbury; and, to his amazement, his resignation was accepted. Then he said he had "forgotten Goschen." I hope the noble Viscount who has just resumed his seat will not forget the House of Lords, because we shall be very happy to hear him again on many occasions in the future. Perhaps I might continue that line of reminiscence by saying that the great Lord Salisbury was asked whether he would like to have Lord Randolph Churchill back again, and his reply was, "Does a man who has got rid of a boil on his neck want another one?" I am not making any particular application of that story to those who bear the name of Churchill to-day.
I suppose that at the outset of my speech on this Bill I ought to declare an interest, because I have spent my working life as an employee of a railway. Obviously, I am not a railwayman to-day, though to some extent I will agree with the noble Viscount that "once a railwayman always a railwayman." It is something which, so to speak, enters into the blood; the feeling for his own particular railway remains always with a man. But to come to this Bill. On the morrow of the General Election, which was won by the Conservative Party, Mr. Fowler, the chairman of the Road Haulage Association, announced that for two years the Association had been working on a plan for the denationalisation of the road haulage industry, and he said that this would be submitted to the Government as soon as a Minister of Transport was appointed. Mr. Fowler said:
"It is suggested that the operators should be allowed to buy additional vehicles, premises and equipment from the Executive."
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Then he somewhat venomously suggested that those operators who had voluntarily surrendered their vehicles to the Executive should tail off at the end of the queue. On the same day a Mr. John M. Burch, chairman of the National Council of Passenger Vehicle Operators' Association, said in London:
"What we want are the fruits of victory."
The spoils to the victors! In this context, as my noble friend Lord Lucas of Chilworth has pointed out, the "fruits" are national assets. And the great Conservative Party came to heel. The first sentence in the Explanatory Memorandum accompanying the first Bill said:
"The main purposes of the Bill are to provide for the disposal of the British Transport Commission's road haulage property."
Rare and refreshing fruit for the operators! Job lots for the boys!
I know that it will be contended by the Government—in fact, the noble Lord, Lord Leathers, has repeatedly emphasised it—that this Bill is actuated, and the Government are actuated, by the highest possible motive of concern for the public interest. Let us consider that claim for one moment. A short time ago, when the affairs of the Conservative Party were at a very low ebb, the newspapers carried an announcement that the noble Viscount, Lord Swinton, had been appointed as a super Public Relations Officer, and that he was being assisted by Mr. David Gammans, a Member of another place. May I give your Lordships just one pearl of wisdom from this assistant to the super Public Relations Officer, as showing how the approach is in the public interest?
"Nationalisation—that cretin conceived by long-haired Bloomsbury out of envy and greed with timid capitalism as its midwife—is standing in the market place with its foolish tongue hanging out and wagging its monstrous head for all to jeer at. It has not only letdown the consumer, but it has failed where it cannot afford to fail, and that is in its labour relations. Most of the strikes to-day are in the nationalised or Government-controlled industries. Now is the time for industry to pluck up its courage and knock out this alien monster."
What a wonderful pearl of wisdom! If that had been a post-prandial utterance, one might have understood and excused it. But it appeared in an article in the sober columns of the Financial Times for July 17, 1950. Is it surprising that Mr. Gammans, holding those views, should have been appointed, along with the noble Earl, Lord De La Warr, to run the

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oldest nationalised industry in this country, the Post Office?
If there is anything at all in the doctrine of a mandate, I think we on these Benches can claim that the Labour Government had a mandate for carrying out their policy with regard to road transport. Clearly, in their manifesto, they said this:
"Co-ordination of the transport services by rail, road, air and canal cannot be achieved without unification, and unification without public ownership means a steady struggle with sectional interests or the enthronement of a private monopoly which would be a menace to the rest of the community."
I am grateful that my noble friend Lord Rea is here, because I heard him support this Bill. He seems to have forgotten the manifesto, or shall I say the statement, of the Liberal Party, prior to the 1945 Election. Just before that Election the Liberal Party issued, under the chairmanship of Sir Seebohm Rowntree, a pamphlet, entitled The Future of British Transport, which concluded with this statement:
"We…recommend that the control and ownership of railways and the long-distance road haulage and passenger transport industry should be transferred to a public utility corporation."
LORD HAWKE: Is one not allowed to learn wisdom in eight years?
LORD BURDEN: I think their wisdom is "like a crab"— goes backward and not forward.
LORD REA: Or sideways?
LORD BURDEN: Or sideways. That is typical of the Liberal Partyߞalways side-stepping. Despite what the noble Lord, Lord Leathers has said, I suggest to your Lordships that the railways have not been given a fair chance to recover from the ravages of war. It is sometimes forgotten by the public that the railways were badly run down, in a physical sense, during the six years of war. May I give your Lordships a few facts to support that submission? I take this reference from a valuable study of postwar Britain by an American professor, Mr. Robert A. Brady. In his lecture, "Crisis in Britain," this is what he said:
"At the beginning of the winter 1946–47, no less than 3,700 locomotives 'out of a total book stock of 20,242 were out of service for repairs.' The locomotives on the London and
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North Eastern were 'on the average…over thirty-two years old.'
"Much the same picture held for passenger carriages and freight wagons. Of the latter 'over 20 per cent.' said Barnes,"—
the former Minister of Transport in another place—
"'are obsolete and should be scrapped and 50 per cent. are over 35 years old.' In November, 1947, more than a month before taking over under the Act, it was estimated that 'nearly 200,000 wagons were under or awaiting repair' out of a total of about 1,250,000 and that there 'were over 54,000 fewer wagons in operation than a year ago, and over 80,000 fewer than in 1945.'As for roadbed, 'maintenance work on the permanent way was in arrears to the extent of 10,000,000 sleepers and some 328,000 tons of new steel rails, and much road ballast was in bad shape.'"
The same sort of facts can be found in a lecture delivered to that very respectable body, the Institute of Bankers, by Mr. M. R. Bonavia, who was then assistant to the Chief General Manager of the L.N.E.R. At this late hour I will not go into these facts. But I am sure the noble Lord knows the facts as well as I do.
LORD HAWKE: Will the noble Lord tell us the point he is trying to make from these facts. That is what we cannot understand. We admit the facts.
LORD BURDEN: Do not be so impatient. I am trying to lead up to the point in my own way. I am very grateful to the noble Lord for helping me to make my speech, but while I appreciate his help, I really do not want it.
LORD HAWKE: The noble Lord was going to disclose something.
LORD BURDEN: My Lords, I have here a document issued in 1941 by the Minister of War Transport—the noble Lord, Lord Leathers, may recognise the document. It is the agreement on the financial arrangements between the four railway companies and the London Passenger Transport Board. This is what I am working up to, and I am going to describe the point I want to make in terms of an article in the Economic Journal, the journal of the Royal Economic Society, which is by no means a Socialist or Labour organisation. While the noble Lord may not take it from me, he may take it from somebody else. This is what the article said:
"Since 1939 the Railways have been working under Government orders and control.

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Moreover the second 'Agreement' of 1940 was not an agreement, in the usual sense of the word; it was dictated to the four Companies and the London Passenger Transport Board by the Chancellor of the Exchequer and the Minister of Transport,—
that was the noble Lord, Lord Leathers—
"with a threat of immediate 'nationalisation' if the five Boards refused the proposed terms. So they were compelled to accept the new 'Rental' of£43½ million. This rental was substituted for the sliding scale arranged with Sir john Simon"—
now, of course, Viscount Simon—
"as Chancellor at the outbreak of war in 1939, which divided the net receipts above a minimum and below a maximum between the Railways and the Exchequer.'
LORD LEATHERS: My Lords, may I say a word? Having been the one who made this arrangement with the chairmen of the railway companies, I want it on record that no such pressure was used upon them. The agreement took a little time to negotiate. I do not want to indicate that they rushed to accept it, but, at a later stage, they came to acceptance quite cheerfully and willingly.
LORD BURDEN: When the noble Lord had exercised that influence which he can always exercise and which he wishes and is endeavouring to exercise to get this Bill through the House. I cannot speak for the railway managers, and I am now going to refer only to the effect of this agreement. The article continued:
"Evidently a profit-sharing plan of this kind was a good one"—
that was the first arrangement—
"as it encouraged the companies to be efficient and economical. Apparently Sir Kingsley Wood and Lord Leathers saw that traffic was growing as the nation got into its right stride in the war effort and feared that the sliding scale would give the Companies their standard revenues as fixed by the Railways Act, 1921. Perhaps the five Boards were a little weak"—
and this proves my point —
"to submit so easily, but they may have thought it unpatriotic to resist the Government at a critical stage of the war"—
and one can see that patriotic strain being played by the noble Lord, Lord Leathers.
"During the five years 1941 to 1945 the railways and the London Passenger Transport Board actually earned£412 million, of which the stockholders took£217 million, less income tax, and the Treasury took the rest."
According to the Economic Journal—I accept what the noble Lord, Lord Leathers, has said—this agreement was
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forced on the railways, or they were persuaded to accept the agreement, and it clawed£195 million into the Treasury. If the railways had had, say, one-half of that sum for reconstruction, or to help them over these difficult times, perhaps the tale which is being told in the Conservative Press and other places, of the alleged inefficiency of the railways, would not be told in the way it is.
It might be said: Why then did not the Labour Government do as was done by the Coalition Government with the Railways Act, 1921, in settling their indebtedness by£60 million, which, less income tax, amounted to£51 million? The Minister of Transport, of course, was not in the Cabinet. I have no access to Cabinet secrets, but I can in my mind's eye see the then Chancellor of the Exchequer, Mr. Hugh Dalton, backed by all the majesty of Treasury officials, gently tapping the table, and in his sweet dulcet tones saying, "Nothing doing." That, of course, is the explanation of why nothing was done. But the noble Lord, Lord Leathers, having delivered that deadly telling blow on the railways while he was Minister of War Transport, now, as Overlord of Transport (if he will allow that abbreviation of his title), to continue the language of the boxing ring, comes in for the kill; because, despite what he says, speaking as a railwayman with some experience, I say that unless there are drastic alterations in this Bill, it is a knock-out blow for the railways.
To say that this Bill removes some of the time-honoured shackles, or all the time-honoured shackles, of the railways—shackles which practically strangled them in their competition with road transport before the war—is not a complete and accurate statement of fact. Some of the shackles are removed, but others are put on. The noble Lord shakes his head. I am afraid that I shall have to be somewhat technical to prove my case, but am sure the noble Lord will allow me to. I have here an authoritative description of what was happening to the railways, in relation to road transport, before the war. I know it to be true, because I took part in it. Here are the words used:
"Beginning slowly during the 'twenties but with growing rapidity during the 'thirties, bus and road haulier systems had been siphoning off increasing percentages of profitable railroad traffic. A single illustration will show how drastic this threat to the railroads

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appeared to be. British railway freight in general merchandise classes 7 to 21"—
if I may again be technical, there are twenty-one classes, as one knows, and classes 7 to 21 are the general merchandise classes, below which are the basic commodities—
"which include practically the whole range of manufactured goods…although mounting (until 1938 at least, the latest date for which pre-war statistics are available) to one-sixth of the total railway tonnage—yielded almost half of the gross revenue from freight; and during the twenty years before the war (1939) at a time when the estimated potential (railway) traffic was rising one-third, the actual tonnage of general merchandise originating fell by one-quarter."
LORD TEYNHAM: From what is the noble Lord quoting?
LORD BURDEN: This is the same document to which I referred earlier, a study by an American professor, and therefore unbiased, entitled "Crisis in Britain," which I think may be seen in the Library of your Lordships' House. The document goes on:
"Contrariwise, the railroads lost practically none of their tonnage of classes 1 to 6, consisting primarily of coal, minerals, heavy merchandise, and in general, heavy, bulky and low value traffic."
Speaking from my experience as a practical railwayman, I can say that that is an accurate picture of what was happening up to the outbreak of war. With road transport back again on pre-war competitive terms, the same position is bound to arise. They will attack—and quite rightly, from their point of view—this traffic under classes 7 to 21, which is easy to load, easy to handle and easy to transport, and will leave the other merchandise to the rail. As the noble Lord knows, 77 per cent. of the deep-mined coal in this country is carried by rail, and perforce has to be carried by rail. But examine the Bill, despite the gloss which the noble Lord puts on it. What would happen if the railways, losing their classes 7 to 21 remunerative traffic, endeavoured to raise the cost of transport of the classes 1 to 6—namely, coal? The Bill immediately provides for an appeal to be made against that sort of thing. Deadly blow No. 1 at the post-war competitive position of the railways. As my noble friend Lord Lucas said, if you are going to free the railways, then free them;
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but do not tie one hand behind their back.
I can give another instance. The noble Lord, Lord Leathers, referred to coastwise shipping. But what do we find? Under the Road and Rail Traffic Act, 1933, coastwise shipping had the right to appeal to the Transport Commission in regard to arrangements for agreed charges—and I need not explain to your Lordships what agreed charges are. Now under the clause and the Schedule mentioned by the noble Lord, the right of appeal of coastwise shipping is extended to all rates which they think may hurt them. Is that removing shackles? Is it not putting further shackles on the railways?
LORD TEYNHAM: The noble Lord referred only to unfair charges. The noble Lord, Lord Burden, is referring to all charges.
LORD BURDEN: Where is the criterion for fair or unfair? Let me give your Lordships two instances of fair or unfair from my own experience when I was goods agent for a not unimportant station just outside London. I gave a certain firm a rate for goods somewhere over 20s. per ton, for conveyance from London to Liverpool of 250 tons of traffic. I was young in the job and enthusiastic, and the firm insisted that I should give them a quotation in writing. What happened? They took that quotation from one road transport firm to another in a kind of Dutch auction until they got the goods carried from London to Liverpool at a figure which could not be remunerative to the road haulage firm unless it broke every regulation of the Road Traffic Acts. Is that fair or unfair? I was a little peeved about it, but when I mentioned it to my colleagues at the office they told me that it was not an unusual practice for the firm concerned. I called to see them again and they asked me to quote for another lot of traffic. Well, on the principle that "the customer is always right," I am very glad indeed, looking back on past experience, that the firm concerned did not report to headquarters what I told them they could do with their traffic. I could give the noble Lord the name of the firm, the quantity of traffic and the road transport firm that carried the goods. The next instance

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is this. A representative of a road transport concern went to a firm with whom I was doing about£70 worth of traffic a month, and made this offer. He said: "Give me all your traffic and I will charge you railway rates less a rebate of 12½per cent." Is that fair or unfair? That is not something fished out of a bag; it is from my practical experience as a railway man, and I could go on giving your Lordships more and more instances of that kind.
I submit to your Lordships that this Bill, instead of taking all the shackles off, is putting fresh shackles on. As a direct result of this Bill—in fact, it is one of its objects—there will be intensified competition between road hauliers and the railways. The noble Lord, Lord Leathers, and his Minister in another place have emphasised that time after time. Has the noble Lord calculated what that may mean in terms of sacrifice of human lives? As your Lordships know—it has already been referred to—there are certain conditions governing the issue of "A" and "C" licences. Everyone acquainted with the road haulage industry and the railway industry prior to the war knows about private ownership. Working conditions were very bad, and the annual report, 1936–37, of the licensing authority for the Yorkshire traffic area says:
"There was widespread disregard of the provisions laid down by Parliament with regard to hours of driving and conditions of rest."
In that year there were over 8,000 convictions for offences of this kind. Again, for 1936–37 the annual report of the licensing authority for the West Midlands Area stated:
"There is still far too large a number of operators…who ignore the limits of hours, speeds and weights and disguise their offences by the falsification of records."
In that year there were over 10,500 convictions in connection with the keeping of records. Everyone who was in the business knows that hundreds of lorry drivers were compelled to keep two log sheets—one to produce to the police and one for the firm. Those 10,500 convictions are only those of the people who were found out.
But, as Modern Transport says as late as May, 1952:
"The fact is that this far flung commercial undertaking (British Road Transport Services)
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has brought new standards of service, vehicle operation, engineering and employment into the road haulage sphere."
Prosecutions relating to British Road Services for breaches of the law have practically disappeared. If the railways were destroying life even at one-tenth of the rate on the roads, there would be howls of indignation throughout the length and breadth of the land. It is no use saying that the road users pay a tremendous amount in taxation, and so on. So, as I understand it, do beer and whisky drinkers. I believe that those who drink beer and whisky give the Revenue a good net return for their expenditure. But that does not authorise the beer and whisky drinkers to go out and kill and maim people because they have contributed to the Revenue.
I charge the noble Lord, Lord Leathers, with deliberately tearing up the work of far-sighted railway officers and administrators, from the late Sir Eric Geddes to Sir William Whitelaw, of the old London and North Eastern Railway. I can prove What I am saying by quotation after quotation. In its place, the noble Lord wishes to restore free competition between road and rail. That is the issue which divides the people on this side of the House from those who sit on the other side. We believe that inland transport should be organised as a perfect service in the public interest. The Government are deliberately handing back road haulage and trusting to the incentive of private profit, of greed, of the law of the jungle— I repeat the law of the jungle.
LORD TEYNHAM: How can the noble Lord say "the law of the jungle" when he knows perfectly well that the licensing authority can cover all the points that he has raised?
LORD BURDEN: The law of the jungle is that the fittest shall survive. That is the philosophy of the gentlemen on the other side:
"We dined off each other,
What matter; the toughest survived."
But it may be said—the noble Lord has said it repeatedly—that transport would be more efficient and provide a more satisfactory service. Even if that were true, the evidence does not in any way prove it to be true, because we have this curious, anomalous position, that a Minister who is technically responsible for a Department is here attacking the administration

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of another Department with no one from that Department to defend it. That is a curious position in British political life. But do not forget that under the 1947 Act the Minister is in the position to give general directions to the British Transport Commission. Even if the evidence for increased efficiency were right—and I submit it isnot—we of the Labour Party would still strive for the substitution of fellowship for fighting, of professional ethics for competitive trading, of scientifically audited vital statistics for the test of pecuniary profit, because we believe that the state of mind produced by fellowship and the pursuit of knowledge, the society in which fellowship is the dominant motive and scientific method the recognised way, is, whether or not it is materially better provided, infinitely preferable to that produced by the economic war of man against man and the social rancours which are the outcome of such warfare. We are definitely opposed to this Bill; and the day will come, as my noble friends have said, when the Labour Party will be able to give practical effect to its determined opposition to the wicked Bill now before us.
5.42 p.m.
VISCOUNT BRIDGEMAN: My Lords, I gladly follow the noble Lord who has just sat down in the congratulations he offered to my noble friend Lord Goschen. He made, as I think we all agree, a very clear and practical approach to some of the problems in this Bill. I hope we shall often hear him again in this House and that he will join some of us, his noble friends, in the other activities of the House behind the scenes without which the business of this Chamber would not go on as it should.
I find it a little harder to follow the noble Lord who has just sat down in some of the rest of his speech. I find it hard for two reasons: first, because I thought that his approach was primarily political, and secondly, because I thought he spent a great deal of time discussing what had happened in the jungles of the past. He said one thing which I think needs some comment, and that was that if private enterprise is allowed back in road haulage there will be infringements of the Road Transport Act. 1933. I do not admit that for one moment, but let me say this: that, if so, it is the business
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of the industry, the employers' associations and the trade unions concerned, to clear that up. It is their business and I am sure they will have the support of all concerned in keeping order and upholding the law.
Let us leave that for a moment, because I have in mind to try to get back to the economic aspect of this Bill. After all, in 1947, when our places were reversed, we spent a good deal of time saying that we opposed the 1947 Bill not so much because it involved nationalisation but much more because we considered that nationalisation to the extent proposed in that Bill was not what was required for the good of the country: that is to say, it would not produce more efficient transport of goods and passengers. After all, nationalisation, certainly with us, is not a creed; it is an expedient to be adopted according to whether or not we think it fits the economic requirements of the case, in the same way as in earlier times (but I must not go back into the past like the noble Lord opposite). Protection was not so much a creed but an expedient to be adopted when the right moment came. As I say, we took the view in 1947 that nationalisation did not fit the case. We take the view now that what we said and thought then has been borne out, and therefore that the time has come to make the alterations which are now before us in the Bill. So what we want to discover is whether the alterations proposed in the Bill, coupled with the ones which we know are to be offered as Government Amendments at a later stage of the Bill, will produce improvements in the system of transport as it is now operating under the 1947 Act.
Various principles have been laid down in the Bill. Some of the talk this afternoon has been on principles and some has been on practices. The principles, as I see them (and I think they are right) are really these. First, there is the principle of restoring proper competition and obtaining the proper incentive which competition gives. Do not let us say that improved efficiency and lower running costs are not worth having. That was suggested by the noble Lord who spoke last. They are worth having. Every improvement in efficiency, every cutting of costs, improves our export position, to give only one reason; and the amount which can be done in that direction, I

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believe, is very great. For that reason, do not let us say that we should not have competition between the railways and the roads because sometimes the roads may take a job from the railways or perhaps the railways may take a job from the roads. Do not let us say that the lorry drivers are going to kill more people. If they do, I hope they will soon find themselves in court on the proper charge. But let us think of the matter much more in this way: that competition will give incentives to efficiency and reduce costs, and that decentralisation will give efficiency to the men on the spot; because if competition is the first principle enshrined in this Bill, then I think decentralisation is the second.
The noble Lord, Lord Pethick-Lawrence talked about the Bill leading to disorder and chaos. It seems to me that that is a view which can be properly taken only if one assumes that everything that does not lead to centralisation must automatically lead to chaos. However, let us leave that and come back to the question of principles, the question whether or not what we are proposing to do will improve the transport of goods and passengers; because whether or not that is the subject we are discussing in the House this afternoon, it is most certainly the thing that people outside are discussing when they react in the paper that we are dealing with the Second Reading of this Bill. It is not so much that this Bill has generated any very great political heat outside this House—it has caused far less, I think, than the 1947 Bill—but it does seem to me that a good many people are asking themselves whether by this Bill we are going to improve the transport of goods and passengers, or whether we are going to throw that transport into confusion, as indeed was done after the passing of the 1947 Act.
Coming to passenger transport, I feel it would be quite wrong to suppose that there has been any integration at all during the period of nationalisation. The road passenger transport companies seem to have dug themselves in very successfully, and I agree heartily with my noble friend Lord Teynham when he says that it is high time that the operating control was vested in the companies themselves, and that they were independent of the railways and able to make their own
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arrangements. I am hoping that those arrangements will also include greater integration of passenger services with the services that the railways provide, because certainly in my part of the country, with the closing of the branch lines, that has been conspicuous by its absence.
Then we come to the railways. We are told that everything is being done in opposition to the far-sighted railway chiefs of the past, perhaps of the last generation but one; but I cannot myself recall that the railway chiefs of the 1947 generation were loud in their praise of the provisions of the 1947 Act. My recollection is quite to the contrary. It is clear that some change is required in the present running of the railways. It is not easy for those who are not professional railwaymen to look below the surface and see what is happening. So many of us, when we think of railways, think in terms of the food on the train, the behaviour of the porters at main line stations and the punctuality of the trains by which we happen to be travelling; but those tests are not quite good enough. My own judgment, as a layman, would be that, since nationalisation, the maintenance of the permanent way has caught up very little indeed; that the maintenance of the rolling stock and locomotives has not even kept pace with requirements and, speaking very generally, that the post-war progress of British Railways has been, on the whole, slower than that of some railways on the Continent.
LORD LUCAS OF CHILWORTH: I hesitate to interrupt the noble Viscount and I appreciate his courtesy in giving way. He is, I hope, going to give reasons for saying that. Surely the principal reason is the capital expenditure allowed to the railways.
VISCOUNT BRIDGEMAN: It is one reason; I quite agree with the noble Lord opposite. But I think there are other reasons, and those other reasons are probably connected with excessive centralisation. As I say, I am speaking very generally, and I know there are a great many reasons which made matters difficult for the Railway Executive, but not so difficult as they would have been had the railways not had to contend with the double heading of the Transport Commission and the Railway Executive. On

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the other hand, it probably would be right to say that, since the Railway Executive took over, there has been a certain amount of economy—perhaps a good deal—in the manufacture of locomotives, rolling stock and things of that sort. I am certain that no one would wish to destroy those improvements. There has been nothing in the Bill or in any speech in another place to suggest that; and I do not think for a moment that any sensible body, when they come to prepare the scheme, will suggest making any arrangements which will do away with the economies which are clearly there.
What I do wonder is whether the Commission are the right people to form the scheme for the railways. After all, the Commission, if the personnel remain the same, may, by this time, not have too open a mind—it would be difficult for any human being to have that. Many of the alterations that have to be made are, I should think, largely technical matters, and can be satisfactorily made not by discussions in this House or by committees of laymen, but only on the advice of those who really understand railway operating and railway maintenance. I hope, therefore, that, when the time comes, the Commission, or whomever they delegate their work to, will arrange matters in such a way that they get really good technical advice, and that that technical advice is submitted to people who are qualified to judge of it.
I feel that the noble Viscount, Lord Goschen, was absolutely right when he talked about going back to the old railway names. The regimental spirit always has mattered a great deal in the railways, and it is surprising how long it has persisted, in spite of nationalisation. There is a great deal to be gained there just as I believe there is a great deal to be gained also by restoring the individual companies of good reputation to road transport. It is in road transport that I think, not that the principles are more difficult, because I think they are exactly the same, but that the lower level problems, if I may put it in that way, are more difficult than they are in passenger transport or in the railways. But although the British Road Services have worked extremely hard, both as a body and as individuals, to try to build up a really good service, and although they have succeeded in the last year or so in
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improving its operating, I am sure that my noble friend Lord Leathers is absolutely right when he tells us that, with the overhead organisation, they can never really cut their costs and can never have the freedom which is required to give the right charges quickly to the right sort of customer.
It is not going to be easy. When the late Government acquired the road transport vehicles, they did so at the top of the market. Whether or not it was wise to do it they were the judges at the time; but there is no doubt that the time when those vehicles were bought out was the time when prices were highest, and that prices are not so high now. All this makes it clear that whoever undertakes the actual disposal of vehicles must do it cautiously and carefully, and that it will be much better to take longer rather than shorter over this process. In saying that, it is nice to hear the cheers from the opposite side of the House; but I should not like anyone to think that, because I am saying that, I mean it is wrong to dispose of those vehicles. I mean nothing of the sort. But two wrongs do not make a right. At any rate there is going to be a great deal of untying, and all the time that process is going on we have to keep in mind the business of serving the consumer, seeing that the consumer is satisfied all the time and that he does not go through a period of disorganisation and chaos such as occurred after the passing of the 1947 Act.
I think one step has been taken this afternoon to avoid that disorganisation and chaos, and that was the announcement that my noble friend Lord Leathers made when he pointed to those two clauses in the Bill—I think they were Clauses 25 and 26—to safeguard the position of the people who are now in the road haulage industry. From what I have heard outside, I feel that that will go a long way to allay many doubts and fears which have been felt in the industry at large. It was inevitable that those doubts should be felt, because it was quite impossible, and it would have been utterly wrong, to try, in this Bill, to produce a detailed scheme showing exactly what things were offered for sale, how it was to be done, and all the rest of it. Of course, until that is known, the future of the vehicles in the industry, and therefore of the people in the industry, cannot be accurately foretold. And yet the

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country relies on those people to carry on the industry, because the goods will still have to be carried.
Furthermore, as some noble Lords have said this afternoon, we should remember, that although most of the lorry drivers themselves will get the same job or another job exactly like it, it is the people at the top—the people who have been put in to organise, and control British Road Services—whose positions are most vulnerable at the present time. It is true that nearly all of them came from commercial organisations, and it is probably true that many of them will go back. None the less, the good will and the continued service of those higher and middle piece executives is very necessary indeed if the business of carrying through these changes is to go smoothly and lead to the state of affairs which we on this side of the House intend shall happen. I think that that is the main point regarding British Road Services.
Another point, which is almost as important, concerns the units which are split up. You can split up into units of fifty lorries or so at a time, but you cannot split up overhead services—the depôts, the exempted traffics, the parcels organisation—which have to exist in some form, which indeed did exist in some form before the Transport Act, and which will have to carry on. I feel that this proposal to form companies will go a long way towards meeting what were previously very serious difficulties. There was a good deal of doubt and despondency in business and industry as to what was going to happen in regard to these things. I will take one small example. There are in this country only two or three transporters capable of transporting a locomotive made on a non-British gauge and which is being sent from the factory to the port. Before the Transport Act these services were operated by a small company: they have now become part of the Pick ford organisation. Unless these lorries are kept at work, it will not be possible to transport any locomotive other than one of standard gauge from the place of manufacture to the port of shipment. I give that only as an example of a number of small things which have to be cared for, and which I am certain will be cared for once this Bill is passed and the Minister has time to apply himself to the difficult and delicate job of
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seeing that the plans work, and of getting out of the works what one might call the "low level spanners."
To say that those difficulties exist is not to say that the principles are wrong. I am sure the principles are right. Equally, the difficulties are there. I feel that, since the principles are right, it will be possible, by taking time and trouble and by doing the thing in the right way, to get over all those difficulties. When they are overcome and the smokescreen which we are bound to have for a year or so has rolled away, we shall find that the Government was right in principle and will turn out to be right in practice.
6.5 p.m.
VISCOUNT ST. DAVIDS: My Lords, delighted as I have been by the thought of a "low level spanner," I am afraid that I cannot follow the noble Viscount who has just spoken. I wish rather to remark on the subject of integration. Several noble Lords, particularly Lord Leathers and Lord Teynham, have said that there had been no, or very little, integration in the new nationalised services. I do not see why that worried them, because of course they are busy taking the whole machinery apart and stopping any integration—possibly, they do not require such a thing. In point of fact, there was very considerable integration. Lord Leathers himself gave an example of it. As he pointed out, after nationalisation there was a considerable drop in the number of lorries on the road. I remember the time well. All the scrap depots were full of old lorries. There was an opportunity for a number of them to be got rid of because there was great integration of service. Whether or not the present Government require it, that is a most important item, because we in this country are really fighting for our lives, and it is important that we should get our transport as cheaply as possible. If we have on the road large numbers of surplus lorries and lorry drivers, it is not a good thing for the economics of this country. This country is already in the position of having too few people making things and too many people pushing them about and selling them to each other. The fewer of the latter we have, of course, the better, provided that the stuff is properly distributed and sold.

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In point of fact, it is true, as I think Lord Leathers will agree, that a reduction in lorries occurred either directly after, or within a few years of, nationalisation. However, there has also been a reduced turnover on the part of British Road Services. That is not their fault. As Lord Leathers said, it is in the region of 15 per cent. Strangely enough, that is much the same as the reduction in British manufacturing speed and output at the present time. So the reduction in turnover can hardly be blamed on British Road Services. The fact of the matter is that, under the system arranged by the present Government, the whole of the speed of production of British industry is down by just about that amount, so there is less stuff to carry round. One cannot say that that was a cause of there being fewer lorries, although, in fact, there were fewer lorries directly after nationalisation. I know that the noble Lord is making plans to compensate lorry drivers and others who lose their livelihood. I do not think there will be many who will lose their jobs. I believe that under this proposed new system many more lorry drivers will be needed. What is more, I think it will need many more accountants and people of that kind. I think it will be found to require more executives. After all, the Government are creating a separate Executive for each of these units which are being made. So, kind as it is of the Treasury to "dish it out" to some of these people, I do not think it will be found that very much compensation will have to be paid out.
What is all this for? What is the purpose of it all? Why this splitting up of organisations? I have scratched my head for a long time, and the only thing that I can see it doing is to give a magnificent opportunity to a number of gentlemen to "cream" the traffic. "Creaming" is a well-known economic phrase. You can have regional "creaming": you can have "creaming on a particular route; you can have "creaming" of a particular kind of traffic, as Lord Burden told us a little earlier. There are a dozen sorts of "creaming". The Post Office was originally set up because it would be perfectly possible for a private post office to "cream off" profitable postal deliveries here, in great, densely built-up cities, and send letters for a fraction of a farthing
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each, whereas, to send letters at an economic rate in the Highlands of Scotland would cost something in the region of half-a-crown—or so I believe. But this is really what the Government are doing. The total effect of the Bill is to allow all the "creamers" in to take fares on the main routes, where they can do it easily, and to leave the uneconomic routes to the national organisations which have to run on those routes.
Let me give some examples. There are a great many highly uneconomic processes which have to be carried out by the British Transport Commission in their various lines and branches. There is the uneconomic railway branch line which has to be run either because it is a public service, directly for individual customers, or else, possibly, because it is a strategic service. These services have to be run, and the Transport Commission do not get any pay for them; the Commission do not get any subsidy for these uneconomic or strategic services, though by law the Commission have got to make the whole service pay. The Commission, therefore, are in a highly uncompetitive position. They must be, for they have to carry these extra burdens, of which I have given examples, whereas private enterprise is to run normally economic services. Take the case of David MacBrayne's buses and steamers in the Highlands and Islands of Scotland. MacBrayne's could not hope to make that service pay. It is utterly un paying. But MacBrayne's are paid, for they get a substantial subsidy from the Secretary of State for Scotland. On the other hand, British Railways and other national organisations which have to deal with such areas do not receive a large subsidy for that sort of thing. The Transport Commission have to make both ends meet, so to pay for that sort of service they have to charge higher fares elsewhere. Then the Government propose to let everyone in and call it a "basis of free competition!"
Let me give a few more examples. I know the canal systems of this country very well. I should like to say that I believe the Docks and Inland Waterways Executive have done a wonderful piece of work. They had put on their plate an ancient, cob-webbed, mildewed tangle of canals, a large number of which needed immediate closing down and another large number of which will eventually have to

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be closed. But all these antiquated waterways were hung around the necks of a few economic waterways and were well on the way to strangling them. So the Docks and Inland Waterways Executive are in the same position. They have a number of economic waterways which they must run, and they have a number of antiquated waterways which, admittedly, they will get rid of at some time, but which at the moment are losing£250,000 a year. That sum, again, comes on to the British Transport Commission's plate, because they have to make ends meet. So that has to be added to the fares of the railway and road services.
Apart from those which, after all, we can probably get rid of in the course of a few years, there are such canals as, for example, the Kennet and Avon Canal. There is no traffic on that—none at all. And there cannot be. It was slowly and systematically reduced to wreckage by the old Great Western Rahway Company, who were its previous owners. They carried it on, making things as difficult as they could, until traffic stopped. Given time they would finally have pleaded with Parliament to be allowed to abandon it, on the ground that there was no traffic. That was the usual thing that was done in the case of such canals under the old system. But the Kennet and Avon Canal has a strategic purpose—for this reason. Supposing, unfortunately, at any time there was another war. It would be very difficult under modern conditions to push convoys up the Channel. Even if the other side of the Channel were in friendly hands, with such a very small area of water to watch it would be possible, under modern conditions, for an enemy to wipe out convoys much more easily than in the last war. It would be a question of how London was to be provided with all the milliard things that London must have.
One of the best ways of getting them here would be to take the stuff in at Avonmouth and across country by the Kennet and Avon Canal. It is a big broad canal, which can take barges of considerable size, provided that the canal is in a decent state of repair. Certainly, it would not solve the whole problem, but it would be of very material assistance in solving it. As things stand, and as things will stand in any conceivable period in peace time, the Transport
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Commission and the Docks and Inland Waterways Executive will have to carry the Kennet and Avon Canal, with all its locks and organisations, but with no traffic at all, having to do major repairs to it, and still having to make ends meet. If noble Lords think to leave the Commission in that state, bound by law to make ends meet and carrying all its burden without any support from public supplies, and then say, "It is freely and fairly in competition with private enterprise road transport," well, to me it seems mad and wicked. If the noble Lord has an explanation of such a system I should very much like to hear him give it.
6.17 p.m.
THE EARL OF RADNOR: My Lords, I have had the impression that in the public mind the most important part of this is that which deals with road transport. It is therefore very welcome to me to find, in your Lordships' House, a great deal of attention, starting with Lord Leathers, being paid to that shorter part of the Bill which deals with railway transport. Our railways are a most important part of the transport of this country; indeed they are an essential part of it. I do not know whether people realise to the full the extent to which we use the railways. I read the other day that 1,000 million passenger journeys are made annually on the railways, and that a million tons of freight are lifted every day of the year. That is a very considerable business. I was a railway director for nearly twenty years—I resigned when the 1947 Act came into operation—and as such, I did everything I could to oppose nationalisation of the railways. There were a variety of reasons, but the two fundamental ones were that I believed that the service to the public would suffer under nationalisation, and that a vast organisation such as the nationalised railways could not be economical in its working.
So far as service to the public is concerned, it is my belief that the service has continued at as good a level as, if not better than, could have been maintained by the railway companies had they been in private hands. The noble Viscount, Lord Bridgman, talked a great deal about maintenance, and the noble Lord, Lord Lucas of Chilworth, pointed out that the railways were limited as to capital expenditure. But there was

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another factor. They had been very limited as to the amount of steel available. Last year, 1952, they had a programme for the building of 2,000 passenger coaches, but they had not enough steel to build one of them. So the faults which may lie with British Railways in the way of service are faults which would have affected the privately owned railway companies just as much. So far as economy in working is concerned, I have been proved entirely wrong. Entirely as a direct result of unification of the railway companies, economies to the extent of£16 million per annum have been effected. Very few of these economies would have been effected by the separate railway companies at a time of rising prices, rising wages and rising costs generally. I think that that is a remarkable achievement of organisation.
We come to deal with the Bill as it affects railways. Clauses 14 and 15 deal with material alterations in the structure of the organisation of the railway companies. The wording of these clauses is somewhat vague and not easy to understand. The first part of Clause 14 is quite simple. It says that we have to provide a scheme and that under subsection (2) (a) the Railway Executive shall be abolished, if it is not already abolished. That is easy to understand. I do not know that anyone is going to object to the abolition of the Railway Executive—not even, I am told, the Executive themselves—provided that the Transport Commission themselves become entirely a policy-making body, instead of interfering to some extent in the management as well, as I understand has been the case. There is a provision for a slight increase in the membership of the Transport Commission and not so many of the members are to be whole-time. I think it is the whole-time members of the Commission who have made the difficulty. They have had to fish around and try to keep themselves out of mischief, because they have got to be there whole-time. They are experts in transport, of course, and it is difficult for experts to keep their fingers out of the pie. However, if that can be done, there is no great objection to getting rid of the Railway Executive.
The clause goes on to suggest that regional authorities should be set up and that to those authorities should be dele-
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gated unnamed powers. I think it would be interesting to know the extent to which Her Majesty's Government think delegation can go, because subsection (3) (a) provides for setting up other authorities (I hope noble Lords will note the plural) to deal with those things which cannot be delegated to the regional authorities and for setting up co-ordinating authorities for the purpose of co-ordinating the work of these authorities. Once again, note the plural. If we have abolished one Railway Executive, we are setting up an unspecified number of authorities which will do a great many of the things, I imagine, which the Railway Executive now do. It would be interesting to know from the noble Lord what the Government really have in mind in setting up these additional authorities. Apart from that, I wonder how far delegation can go without destroying the proper organisation of the railways as it exists. Capital expenditure cannot be delegated to the regional authorities; that has to be centrally controlled, and since finance generally dictates policy, they will not be able to delegate any policy which involves capital expenditure. Salaries and wages must be centrally controlled, and also fares and rates. We cannot have the different parts of the same organisation cutting each other's throats. I agree that it is competition. I did not mind the Great Western and the Southern Railway competing with each other, but I object to Mr. A of British Railways competing with Mr. B of British Railways and trying to cut his throat.
There are two other things I would mention in that connection which are a large part of the economies made by the British Railways service in the five years they have been in existence. One is locomotive and rolling stock distribution. By eliminating boundaries British Railways have been enabled to put rolling stock where it was most required, regardless of regions or companies. When I mention locomotives and rolling stock, I also include railway steamers. If there is a breakdown in one place, instead of having expensively to charter another steamer from somewhere else, they can move a spare one from some other region where it is not wanted. The same applies to locomotives and rolling stock. The number of locomotives has gone down by about 1,500, and the total amount of

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rolling stock has decreased very materially. Yet the railways are able to do their job, because of that flexibility which is centrally controlled from day to day and which would not have been achieved if such authority were delegated to local bodies. I should not like to think of the kind of remark the General Manager of the Southern Railway would have made if the General Manager of the L.N.E.R. had come to him and said, "Look here, old chap. I have run short of engines: would you lend me half a dozen?" or the kind of remark that the L.N.E.R. Board of Directors would have made to their General Manager if he had got into that sort of position. That can be done now, and it is being done now, and it is something which it would be a great pity to lose.
Another major economy lies in the standardisation of construction. I do not mean only the fact that the number of types have been reduced from 400 to twelve. I mean also that the actual method of construction has been standardised and—I do not like the word "streamlined," but modernised on modern construction lines. We might find, say, with passenger stock, that the bogies are being made in Derby the frames in Swindon and the bodies in Lancing. All that would be lost with delegation. Although I could name a number of things which I think ought not to be delegated, I do not honestly know what is going to be delegated to the regional authorities. I do not know, and it does not appear in the Bill, what the intentions of the Government are, but if they are going to have boards of directors, as in the old days—and that has been hinted at by more than one speaker today with, perhaps, a nostalgic desire to get back to the "good old Great Western" or "good old Southern Railway" or whatever other railway it may be—I do not see people taking on directorships with no power of control and able to do nothing beyond operating in their own area.
There is one other thing which I think is of considerable importance in this matter. I became a railway director in 1929, and right on until practically the beginning of the war I found that there was still considerable feeling, going a long way down in the ranks of the railway workers, with regard to their old
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railway before the 1921 amalgamations. I can tell your Lordships that a railway ticket collector whom I knew well came to me one clay and said, "Do you think you could see if I could become a travelling inspector?" I made no comment at the time, but I put in his name. A little later, somebody quite unknown to me was appointed, and I had another word with my friend the ticket collector, who said, "They are putting too many of these South Eastern men on the South Western line." That was in 1938. We have had five years of British Railways, during which time a great many senior officers have been moved from railway to railway, and many of the lower classes have also been moved about. There are the beginnings of the tradition of British Railways. I do not say necessarily that it is a good thing to have that tradition, but there are the beginnings. It will take a considerable time to get any kind of tradition in that way. If they are unsettled now, by starting the regions, this is something which once more will be unsettling to the staffs of the railway companies. That is really all I have to say on those two clauses, except that I have a strong feeling that, unless I have misread the 1947 Act, everything which is proposed in them could be done without the aid of this Bill.
I should like to say a few words with regard to the question of additional freedom, so far as rates are concerned. I must confess that this is something which is most welcome, and which the railways have wanted for a long time. I am rather doubtful whether the proposals go far enough. I do not know whether anybody has fully realised that denationalisation of road transport will expose the railway companies to the full rigour of competition; and the competition which road transport can afford to the railway companies generally lies in taking from them the most profitable forms of traffic. It is an intense competition. Therefore, alleviation to the extent that is proposed in Bill is welcome, although I doubt whether it goes far enough.
I feel that I must tell the noble Lord, Lord Burden that he did not get things quite right in the instance which he gave of his early life, when he quoted a price, because I do not think he fully understands the Bill. All that the railway companies need do after this Bill becomes

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law will be to give a maximum price. The mistake that the noble Lord made was, I think, in putting his quotation in writing. I am afraid that I have been rather critical of this Bill. When one has been a railway director as long as I have, one has a great feeling for the railways as a service. I have a feeling that the provisions of this Bill may well strike a blow at the railway service and, in an attempt to put the clock back, will disrupt that service to a degree which will react seriously on the transport of this country.
6.35 p.m.
LORD GIFFORD: My Lords, I should like, first of all, to add my tribute to tributes of other noble Lords to the noble Viscount, Lord Goschen, on his excellent maiden speech. I feel that he "had something," if I may use that term, when he gave us the instance of the regimental badge and the divisional sign. The rank and file cannot give loyalty and esprit de corps to too large a unit. I think the noble Earl, Lord Radnor is wrong. I do not believe you will ever get the same esprit de corps in British Railways as a whole which the men felt for the old companies, for the simple reason that there is nothing with which to compare. The average railwayman does not go to France and compare the British Railways with the French Railways. In this esprit de corps there is laughter, and sometimes derision, at the other fellow. "Look at that sloppy ticket collector on the London and North Eastern Railway; and look how late their trains run," says the Great Western railwayman. There is a great deal in that competition between units, and that is why these regions (a term which I hope will go) should have their different colours and their outwardly-seeming competition.
The noble Lord, Lord Lucas, as I understood him, said that the question we should ask ourselves with regard to this Bill, and particularly with regard to the road haulage part of it, is: Is it going to benefit the taxpayer or the buyer? To my mind, that is not the right question to ask. I feel that the questions we should ask ourselves are: Will this Bill give us a better transport system? Will this Bill benefit the transport user? In my view, the answer to those questions is "Yes."
LORD LUCAS OF CHILWORTH: I am sure the noble Lord does not want to misquote me. What I said, in answer to the noble Lord, Lord Leathers, who said that the shape of disposal had got to suit the buyer, was that it had also got to suit the owner—and that happened to be the taxpayer.
LORDGIFFORD: I should not wish to misquote the noble Lord, but I thought he gave us those two alternatives. However, I believe the answer is that this Bill will benefit the transport user. And if it benefits the transport user, then, in the long run, it automatically benefits the taxpayer, because a great percentage of the cost of every article of commerce to-day comes under the heading of transport. The noble Lord, Lord Burden, gave us a tirade, and accused us of dining off each other.
LORD BURDEN: May I interrupt the noble Lord to say that that was only a quotation from Browning. I hope the noble Lord will not accuse Browning of a tirade.
LORD GIFFORD: Anyhow, apparently the noble Lord let us off if we took plenty of beer and whisky with our dinner, because in that case we benefited the Exchequer. I suppose that the most important thing in this Bill—though by no means the whole purpose of the Bill—is the denationalisation of road haulage and once more giving free enterprise a fair opportunity of competing in the carriage of goods on the roads. I did not agree with a great deal that was said by the noble Lord, Lord Lucas, but I did agree with him as to one matter. I feel that this Bill rather makes it appear that the only things to be dealt with are vehicles, whereas, in fact, vehicles are only a small part of the capital structure. In addition, there are depôts, offices and many other assets to be considered. In that respect, I feel that the Bill rather ignores these other assets of the industry.
As I said before, denationalisation of road haulage is only justified if it gives the trader a better service. If it is going to give the trader better service, it is essential that the people who buy these units or form companies to run road haulage should be efficient people with full knowledge of transport. At the moment I do not think there are sufficient

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safeguards in this Bill to ensure that those who buy the transport are fully qualified to do so. I think there should be a direction, possibly to the Disposals Board, that they are to satisfy themselves that the buyers, if not themselves fully qualified transport men, are at least employing fully qualified transport men in executive positions.
I intend now to pass to the question of passenger road transport. There I believe we have a much easier problem than with road haulage, because the existing companies and the existing structure has been little interfered with by the 1947 Act. I was rather surprised that the noble Lord, Lord Leathers, devoted so little of his speech to passenger road transport, but rather skated over it and left it to be dealt with by the Thesiger Committee. I feel that it is wrong that the British Transport Commission should continue to manage certain undertakings which they voluntarily acquired, such as S.M.T. in Scotland, and other companies mainly operating in East Anglia. It should be the policy of this Government to direct that these units should be run on a partnership basis, which is very succesfully employed in many large companies to-day. Bus undertakings should be run and managed by busmen and those units wholly owned by the Transport Commission should go back to the control of private enterprise so that they can run in true competition with the railways. The noble Viscount, Lord St. Davids—I think he has left the House—said that the Transport Commission had to run many uneconomic undertakings. It is not only the Transport Commission who have to run uneconomic undertakings. All the bus companies run many uneconomic services. They do that because it is to their advantage to do so in order to prevent other operators from coming into the part of the country which they serve, and because they consider it is right and necessary for them to take the rough with the smooth.
I do not think there would be the slightest difficulty in arranging for the disposal of part of the Commission's holding in these transport undertakings that they now wholly own. Bus shares have always been attractive to the public, probably more so than investment in road haulage, and I think the holdings could be disposed of to the public at a
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fair and profitable price. I should like to say one word about the London Transport Executive. They are doing an excellent job in providing transport over a difficult area, but there is a growing feeling in this country that it is being somewhat extravagantly run, and public opinion is becoming more vociferous on the subject. There are many ways in which great economies could be made—for instance, if more standing passengers were allowed during the rush hours. I believe that the scale of uniform allowances for conductors and drivers is higher than in many other undertakings. I do not know how many new pairs of trousers your Lordships buy each year, but I believe each driver and conductor gets two new pairs a year.
I would mention the latest proposals for fare increases. The Transport Tribunal has, no doubt rightly, decided that the London Transport Executive can bring in this new scale of fares, even though it is less than a year since their last increases were made. Whatever the legal interpretation of the 1947 Act, it does seem to me that the intention was to protect the public from more than one fare increase annually, and I should like to see something in the Bill to regularise and carry out this intention. It may be necessary from time to time, owing to sudden increases in costs, to make an increase within that time, but this could be done on a temporary basis, such increase, I suggest, being limited to a period of three months until the proper machinery can be put into operation.
This is mainly a Committee point, but I did notice that there was one clause which allowed London Transport to run vehicles almost anywhere in the country outside their own area, for parties of employees of the Transport Commission and their friends. That is a tremendously wide permission and I think that it should be narrowed down considerably, because in the way it is worded it is very much open to abuse, particularly as there are adequate coaches running under private enterprise to take these parties to the coast, or wherever it is, at reasonable prices.
The noble Lord, Lord Rea, in a very amusing speech likened himself and his Liberal friends to the older brethren of Opposition, and he spoke about the eternal triangle. So far as I can see at

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the moment, only the base of the triangle remains, the other two sides having departed. Perhaps we on the Back Benches here can call ourselves the younger brethren of Opposition, in that we do our best, as Lord Rea suggested, to support the Government in their proposals, at the same time feeling ourselves free to criticise as regards certain details. I will end my speech by repeating that I think that this Bill will greatly benefit the transport user, and therefore I give it my wholehearted support.
6.51 p.m.
LORD WISE: My Lords, in winding up a very interesting day's discussion I promise you that I will be brief. Her Majesty's Government are no doubt of the opinion that this is "the end of a perfect day." I am not so sure that it has been such a perfect day for them, and I hope that they will take particular note of the speeches which have been made by the "younger brethren" behind them. It has been significant that many of the Members on the Benches opposite have made speeches which call for attention. There has, I think, been a determination on both sides of the House to try to improve the Bill. I was particularly struck with the speech which a few moments ago the noble Earl, Lord Radnor, made. I personally have nothing to say against the railways, and I agree entirely with the points he made. I think it is curious to note that the opposition on that score in another place came primarily from an honourable Member who had been in the past a railway director of some note.
I noticed that several noble Lords suggested that when the new system comes into operation the names of our railways should be changed back to their original names. In my part of the country there were one or two lines that we used to know by bad names. The noble Lord, Lord Gifford, referred to the London and North Eastern Railway and to that, in our fashion, we gave the name "Late and Never Early." There was another joint railway, the Midland and Great Northern which was called the "Muddle and Get Nowhere."
LORD GIFFORD: May I interrupt the noble Lord? I could tell him privately a number of the names given to British
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Railways, but they are not fit for publication in this House.
LORD WISE: We shall be silent on those, I am certain. At any rate, I have a little tale to tell of that old condemned railway, the Great Eastern. I apologise to the noble Lord, the Secretary of State for the Co-ordination of Transport, Fuel and Power, that I did not hear his speech. I did not arrive in time. The fact remains that I arrived at Liverpool Street this afternoon six minutes before time, so that there is nothing very much wrong with the railways at the present time.
Coming back to this afternoon's speeches, I wish to congratulate the noble Lord, Lord Lucas, on a very powerful speech. I think we might say to Her Majesty's Government that that speech, and the speech which has been delivered by the noble Lord, Lord Pethick-Lawrence, represent the views of the Opposition. We do not like the Bill, and in Committee we shall try to improve it. We shall wait for the time when we may be able to wipe it out once again and start afresh. I think the Bill is inopportune at the present time for many reasons, but primarily because we are in the midst of what might be termed a trade crisis. Everybody in this country is keyed up for higher production, and none of us wants the Government to take any action whatever which is likely to curb that production or put out of joint our transport systems. I think that is extremely important. I do not think nationalisation of transport should be so wholeheartedly condemned as it already has been in another place and may be from the Benches opposite during the next two days in your Lordships' House. We have had a very short period of trial; in fact we have not yet got into our stride, and I can see a great many improvements which will come along and which we should consider.
I am wondering whether anybody, at heart, really wants this Bill. I know that it was mentioned in the pamphlets which were issued by the Conservative Party at the last Election, but for the life of me I cannot discover in the country anybody who wants the Bill, except possibly one section of the community, with which I will deal in a moment. If you consult

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the great trade union organisation you will find that the people who work in the industry apparently do not want a return to the old order of things, or a partial return to the old order of things. None of the workers want it. We have had very few complaints from passengers or users, either of the railways or of the road services. In fact in many instances there has been a recognition of the great improvements which have been made. Difficulties have been experienced, as the noble Earl, Lord Radnor, said, when he referred to steel for the construction of new coaches and locomotives and so on. But, by and large, I think, looking around the country, we shall find that the majority of our people cannot possibly see any reason for the tremendous upheaval which is likely to take place in the transport industry within the next two or three months. I notice that in another place an honourable Member referred to certain firms in his own constituency. He said that sixty-seven firms had been taken over after the 1947 Act, and there had not been a word of complaint from any of them. That is significant. If there has been serious complaint I hope that Her Majesty's Government, before this debate finishes, or during the progress of the Bill, will tell us what it is and from whence it comes.
Now I want to refer to one or two remarks which have been made during the course of the afternoon. I want, first of all, to assure the noble Lord, Lord Teynham, that we on these Benches stand by the 1947 Act. It is there, so far as we are concerned, and I hope that if it goes, we shall revive it. In that Act we did not take over the "C" licences, and, so far as I know, there is no intention whatever from this side of the House to deal with the "C" licences in the manner in which the noble Lord has suggested. It is not part of our policy; and, if he will take an assurance from me, that is so. I do not want it to go out from this House that there is any such intention on the part of the Labour Party or of a new Labour Government.
I want, if I may, just to refer for a moment to the levy. In doing so, I apologise to Lord Leathers that I was not here when he was speaking. I did note on the tape machine what he said in one particular. It was that:
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"We hope that the process of disposal will be well advanced by this time next year, for the latest reports of the number of prospective purchasers are encouraging."
The noble Lord, Lord Gifford, hoped that the Government would move rather slowly in that direction, but if, indeed, there are a number of purchasers in the market, purchasers ready to try to treat, I wonder whether they have taken notice of the levy. I stand to be corrected in these figures if I am wrong, but it seems to me that the purchase of the vehicles which will be sold is not a thing to be lightly entered into by anybody, because if the present arrangements are carried out the levy is there.
My noble friend Lord Lucas was anxious that some other system might be evolved. If the levy is still there, according to my information it may reach£8 million in two years; there may be a further£12 million in the following three years; and then, if the deficit has not already been made up, there may be a further £12 million in the following three years after those. So, in eight years, the new-born industry, if you like, or the new purchasers of the vehicles, may be faced with a payment in a levy form of no less than£32 million over eight years. That is the figure I have as being correct. We will break it down a little further, because I always believe in breaking these things down. If there are 40,000 vehicles sold, that means, on those figures, that each vehicle has a charge of£80 a year. If those figures are not correct, then the proportionate figures can be given. In any case, the sum will be very high. It will mean that there will be a tax of something like£80 a year on each of the vehicles.
THE EARL OF SELKIRK: Did the noble Lord say a tax of£80 a year on each vehicle?
LORD WISE: Yes.
THE EARL OF SELKIRK: That is quite incorrect. I should not like that to go out as being accurate.
LORD WISE: The Government will be able to give these figures, in course of time, but those are the figures I have, and they come out in that way.
I want to conclude by saying to the Government that I think that, in the

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interests of the country, this Bill should be withdrawn. As I said in my opening remarks, I am certain that there will be a tremendous upheaval. The Bill is not well thought of, it is not well wished and it is very incomplete. Possibly it is the most incomplete Bill that has ever come to your Lordships' House. It requires a tremendous number of Amendments. The Government admit that it will have to be amended in many particulars. I therefore suggest to noble Lords opposite that they should take their courage in their hands and have the Bill sent back.
THE EARL OF LUCAN: My Lords, on behalf of my noble friend, Lord Mathers, I beg to move that this debate be now adjourned.
Moved, That the debate be now adjourned.—(The Earl of Lucan.)
On Question, Motion agreed to, and debate adjourned accordingly.

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