Orders of the Day — Iron and Steel Bill

– in the House of Commons at 12:00 am on 17 November 1948.

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Order read for resuming Adjourned Debate on Amendment to Question [15th November], "That the Bill be now read a Second time," which Amendment was to leave out "now," and at the end of the Question to add, "upon this day six months."—[Mr. Lyttelton.]

Question again proposed, "That 'now' stand part of the Question."

3.33 p.m.

Photo of Sir Andrew Duncan Sir Andrew Duncan , City of London

The Chancellor of the Exchequer, not last night but on other occasions, has rightly warned the nation of the fate that may befall the country if we should be defeated in the present economic struggle. The iron and steel industry and the steel-using industries have been greatly strengthening the confidence of the country by the contributions which they have been making to the national requirements in these critical times. Time alone will tell what prejudice may result from the introduction of this Bill now and the controversy which it is bound to create. But it is clear at the outset, and it is a very significant fact, that the provisions of this Bill can do nothing to add to or strengthen the industry's contribution to the national needs now or in the immediate future. Nor can it do anything either, in the ultimate, to foster and further the efficient organisation of the industry as a whole.

The Government introduced a Motion to this House in May, 1946, in which they asked the House to approve the decision of the Government to bring forward proposals for transferring to the ownership of the nation appropriate sections of the iron and steel industry with a view to its, that is to say, the industry's, efficient organisation in the public interest. It is no part of the proposals of this Bill to make provision for the efficiency of the industry. Indeed, the Bill splits certain sections of the iron and steel industry into sectors to be acquired, sectors to be licensed and sectors to be left free. It splits other very important sections of the industry into sectors to be acquired because the parent company is acquired, and other sectors that are to be entirely free.

For example, in the case of heavy forgings, 45 per cent. of capacity is to be acquired because the parent company is acquired, and 55 per cent. of production capacity will be free. With drop forgings, 16 per cent. is to be acquired and 84 per cent. left free; steel castings, 23 per cent. to be acquired, and 77 per cent. left free; steel wire, 60 per cent. to be acquired, and 40 per cent. left free; and bright steel bars, 40 per cent. to be acquired and 60 per cent. to be free. Put another way, the Government propose to acquire 107 firms out of the over 2,000 that are engaged in the iron and steel industry and are at present under the supervision of the Steel Board. These 107 firms are described as main producing units in certain sections of the iron and steel industry, but they are likewise main producing units in industrial activities that branch out right into the contracting and engineering industries, and many of them have subsidiary companies overseas.

These proposals cut right across all the machinery, both industrial and Governmental, which has been built up in recent years for the better ordering and more efficient functioning of all sections of the iron and steel industry. This industry, under the Steel Board, has afforded the most effective demonstration of the practical possibilities of effective co-operation between the Government and industry. But all that goes for nothing, and, at a time when the industry's contribution is still most vital, and when the industry is engaged in great development plans, this Bill is introduced, with all its conflict and controversy. It may well do serious damage to the progress of these development plans. In their attempt to justify their action in this regard, the Government make no effort to prove how efficiency is to be improved, but plunge the industry into controversy as to what happened two decades before the war. They seek not only to dispossess, but to discredit.

For instance, the charge is made that, between the wars, the policy in this industry was restrictive; that is to say, as the Minister of Supply put it the other day, it maintained productive capacity below demand in order to bolster up prices. Statistics available to everyone, and therefore, certainly available to the right hon. Gentleman, refute this charge completely. It was a period of great expansion, between 1913 and 1937, not only in America, Russia and Germany, but in many other parts of the world. Between 1913 and 1937, production of steel ingots and castings increased by 78 per cent. in the world, by 61 per cent. in the United States and by 70 per cent. in the United Kingdom.

But that is not all. In the shorter period between 1929 and 1937, the output of ingots and castings increased by 11 per cent. in the world, by 35 per cent. in Great Britain, and fell by 10 per cent. in the United States. The years 1913, 1929 and 1937 were all years at the top of a cyclical boom, and, therefore, are a fair comparison. There is no evidence in these figures of maintaining a total productive capacity below potential demand. Indeed, it shows that throughout the whole of these years there was a large excess of capacity in this country.

By 1937 the steel industry, working under Government supervision, had embarked confidently upon a policy of reconstruction and expansion. It was spending during the five years before the war on new plant at the rate of £10 million a year. The £50 million spent in those five pre-war years is the equivalent of something like £120 to £150 million today. That pre-war programme was not a spurt but the earlier stages of a continuous plan of reconstruction and expansion. By 1939 the annual rate of expenditure was increasing. When war broke out we had in this country many schemes which were still incomplete, some which had just begun and some which were still in contemplation. But for the war, the six years between 1939 and 1945 would have shown continuous modernisation and development in the iron and steel industry of this country.

When the Caretaker Government in May, 1945, invited this industry to submit within six months a plan of development over the next five years, they were able to do it because they were organised and had already given great thought to this subject. That plan has never been challenged. The Government rightly took time to consider it. The plan was submitted to the Government in December, 1945, and general agreement was given in this House by the responsible Ministers in May, 1946.

Now, already, before anything of a major character can be gained from this expansion, the industry has been able to make a magnificent contribution to postwar recovery. Export targets of steel and steel-using products as a whole have been set at 100 per cent. over pre-war, while for the country generally a target of only 50 per cent. has been set. Even this high figure of 100 per cent. has already been reached and in addition the country, as the Chancellor announced the other day, has been able to carry on a considerably bigger capital development at home than was looked for in the economic survey a year ago. These achievements have been based on the record levels of steel production.

It may well be that greater quantities of steel could be used if they were available. There are, of course, all the postwar accumulated demands for machinery, plant and other things that use steel products which could not be obtained during the war, and there are also the vast post-war reconstruction demands. This inflated and accumulated demand for steel of all kinds makes the steel position tight not only in Great Britain but all over the world, tight even in America where a vast war expansion was engaged in. I say, therefore, quite confidently, that the present ability of this industry to respond as it has done is indeed evidence that our steel industry before the war had already in being a substantial capacity margin which has proved of great value now.

There are one or two points on this question of expansion which I would ask the House to note. With its growing production, this industry is already hard up against the upper limit of supplies of coke and coking coal. We are having to use cokes of lower quality today than were ever used in this industry before the war. Here is a problem within the Government's own responsibility, for they own the coalmines of the country. What are they doing about forward development of coking coal? What are they doing about coke oven development, for they own half the coke oven capacity of the country? So far as the steel industry is concerned, in respect of the half it owns, development schemes are well under way, new coke ovens already coming into operation and many others being well advanced. However, there is still the greatest anxiety on the part of the industry in respect of the supplies of coking coal, and, indeed, it is admitted by the Coal Board that there is at present an insufficiency of coking coal for the steel industry.

The other point I should like to raise in this connection is that discussions have gone on between the Government and the industry not only on the forward development of capacity in this country but in the wider context of Western European development policy. I am glad to be able to say that there is no difference of view at all between the Government and the steel industry as to the provision which should be made by the early 1950's. Indeed, examination has indicated that on a full employment basis in this country the demand for steel is likely to be 18 million tons in the early 1950's. Arrangements already made in the steel industry will provide this required capacity. I find it very difficult to understand what the right hon. and learned Gentleman the Chancellor of the Exchequer meant last night by envisaging a possible quarrel between steel makers and the Government on forward planning. Here provision is made until 1953, and long before 1953 is reached the Government of the day, whatever it may be, will, I imagine, regard it as its duty to discuss with the steel industry what the requirements still further ahead are to be. There will be ample notice then for the Government to take any action they might regard as necessary if they find any reluctance on the part of the steel trade to do its duty. I have no fear whatever that the public purpose which animates the steel industry today is a complete assurance that public purpose will always animate it.

But if we have this capacity by 1953, are we going to have coking coal and coke to make use of it? As recently as August last, the chief mining engineer, for development and planning, of the National Coal Board referred in a paper at the summer school of the Board to the almost insuperable difficulty of forward planning of capital development in view of the great uncertainties about the future demand for coal. He said: There are so many imponderables, conflicting factors and complications, that the formulation of a plan might well be dismissed as an insuperable problem. He went on to say, however, that the Board had set themselves the almost impossible task of producing a first essay at a plan in a year's time. It does take time, but I ask the question: When will there be a final plan, and when will the plan ultimately be realised? Will it be in time for the increasing capacity as it becomes available in the steel industry?

A second charge has been made in respect of those pre-war years, and that is also completely unfounded. It is that the industry pursued a price policy to acquire monopoly profits. Here again I regret that the right hon. Gentleman the Minister of Supply should have associated himself with a charge of that kind. This charge certainly could not be true in respect of the years prior to protection. For a stretch of 10 to 15 years, the return on capital in this industry did not average more than 2 per cent. During that period, too, the consumption of steel never reached more than 9 million tons and at times was as low as 4 million tons. In 1932 the total world consumption of steel fell to 40 per cent. of what it had been in 1929.

No one could blame the British steel industry for such a catastrophic fall in world consumption. As we were reminded yesterday by my right hon. Friend the Member for Woodford (Mr. Churchill), we are discussing these matters today at a time when full employment misleads us in our judgments of these years with their merciless vicissitudes. We had a timely reminder recently in the "Board of Trade Journal" of what we might be suffering in this country but for Marshall Aid. The "Journal" says: But for that aid the general dislocation of industrial activities in this country might well have brought unemployment figures up to a million and a half, and would have become progressively worse as a lower standard of living resulted in a diminished productive effort. We had no Marshall Aid in the 'twenties or early' thirties, and no equivalent of it. In these years the steel industry, in common with other industries in this country, experienced periods of intense depression, accentuated by dumping from other countries which themselves were protected. It was a period of low prices, financial losses, and privation and hardship for all engaged in the industry.

The real story of these lean years reflects great credit on the leaders of both sides of the industry for the way in which they maintained industrial peace, mutual understanding and good will. I should like to take the opportunity of associating myself with the hon. Member for East Swansea (Mr. Mort) in the tribute he paid to John Hodge and Sir Arthur Pugh, great leaders in this industry in those times. I would include their successors in leadership in that category also. I do not believe that anything which the Joint Parliamentary Secretary said yesterday about rumblings in the industry meant that he would not associate himself with the tribute paid by the hon. Member for East Swansea. Indeed, I want to take the opportunity of saying that the Joint Parliamentary Secretary is highly respected throughout the steel industry, not only for his character but for his great skill in the craft, and he knows well that on both sides of this industry there has been leadership of first-class quality.

It was a period, also, when steel firms were co-operating with other industries in trying to secure to this country export orders that would bring a load to their mills. It was a period, too, when our steel-making firms were themselves searching world markets for engineering contracts that would bring a load to their mills. The classic example is Dorman Long and the great Sydney Bridge. Dorman Long had often supplied structural material for bridges but they had not previously built a bridge. They undertook that vast contract and carried it out with such complete success that besides bringing 50,000 tons load to their steel mills, they obtained a great many other contracts for bridges in other parts of the world.

From 1933 onwards the position certainly improved. The departure of the United Kingdom from the Gold Standard achieved a better relationship between sterling and the value of other currencies and, in addition, the introduction of tariffs in this country put the British iron and steel industry in a somewhat comparable position with its competitors. However, unlike other industries which had received the tariff before, as in the case of motor cars, and unlike other industries which then received the tariff, the conferment of tariffs on steel was coupled by the Government of the day with an undertaking that a reorganisation policy should be pursued. That was carried out under Government supervision.

Therefore, steel has never really been a monopoly in the normal sense of the term. Its prices before the war were approved by the Import Duties Advisory Committee before they became operative. During the war, and still, prices have been under statutory control by the Ministry of Supply. Prices have always been fixed, and certainly they are fixed now, in accordance with a uniform costing system that has been greatly perfected. I would remind the right hon. and learned Member for Montgomery (Mr. C. Davies) that they are fixed in relation to the cost of efficient plants. Under this system there is, and always has been, competition between firms not only in the reduction of costs but in quality and service, and there always has been a constant striving amongst firms to improve their relative position in the industry.

Therefore, there is no such thing as an ungoverned monopoly in this industry, apart altogether from the fact that the industry is generally under Government control. The most striking evidence of the success with which prices have been kept at a reasonable level is the fact that even before the war our prices in this country were fully competitive with the prices both on the Continent and in America, and at the present time they are well below, in almost every product, the prices of both the Continent and of America.

Here again I do not follow the purpose of the Chancellor of the Exchequer in introducing the question of subsidies last night. Who can say that the cost which the State carries in respect of imported sieel—something like probably £10 a ton over the home price of steel in many cases—is a subsidy to the steel industry? It is a subsidy, and it is intended to be a subsidy, to the steel users. I am making the point because this subject has been discussed here during the last two days.

It is perfectly true to say that the subsidy paid in respect of freights on imported ore and in respect of imported scrap is a subsidy to the steel industry, but the steel industry is willing, and always has been willing to incorporate those costs in its own costs, not in the form of subsidy but in the form of part of the price. It would not mean more than probably about 5 per cent. on the present prices, which would keep them still generally under the level of European and American prices. Our pre-war discussions were always conducted with Government authority, and I should like to pay tribute to the co-operation we have had from the Steel Board in regard to these prices during the last two years. We probably have not got anything like we should have got, but that is another story. I have no reflection to cast upon the Steel Board.

The third point of reflection on the industry is made on the ground that they entered pre-war into an international cartel and that they might, according to the Chancellor again some day wish to enter into an international cartel.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

What I said was that I did not accuse them.

Photo of Sir Andrew Duncan Sir Andrew Duncan , City of London

If the right hon. and learned Gentleman is giving us credit for it, I gladly accept that. There is nothing secret about this international agreement. It was made not only with the authority of the then Government, but really under auspices of the then Government. It was an agreement which controlled the imports of foreign steel into this country and, at the same time, assured this country of a fair share in the export market. There is less need for us to discuss that issue today because, in point of fact, there was nothing, either in principle or in substance in those pre-war times which was different from the discussions going on today in Paris, discussions which are a very necessary feature of future relations between Western European nations. Even if the pre-war Government are not particularly liked by the present administration, that is no reason for attacking the steel industry on this subject.

I suggest that the House should not accept these points as constituting any ground at all, or even a pretext, for the Bill. Controversies of the past are really of very little moment at this present time. Parliament cannot fulfil its duty to the nation by pre-occupying itself with contentious discussions as to what happened 20 years ago. Proposals or policies submitted today, as the right hon. Gentleman the Lord President of the Council has said several times, should stand or fall upon their own merits in the light of the conditions of today.

The structure of the steel industry is the result of long experience and evolution, the integration of so many of our large firms through the processes of iron and steel making to the finished steel product; and from the finished steel product into so many branches of our engineering industry—constructional engineering, bridge building, tool-making and the like—that integration has been the result of progressive building up over a great many years of outlets for the steel plants. On the other hand, integration has sometimes come from the other direction, by enginering firms themselves entering into the production of specialised steel products so that they might control from the foundation the quality and particular sizes they needed for the final product they were making.

The organisation of the industry recognises that its firms overlap into so many of these engineering activities and it provides machinery by which the main problems in the steel-making processes—not in constructional engineering, building or machine tool making, but in the main problems in steel-making processes—can be looked at and settled cooperatively for large and small firms alike. What are these problems? In the main they are problems of raw material supplies, of labour and equipment, of scientific research—something like £2 million is spent annually on scientific research in this industry—problems of reconstruction and development, problems of balancing capacity to an expanding demand and to the changing pattern of demand.

I know of nothing in these arrangements that deserves censure or affords either the exercise or even the possession of power. Even if it did, the fact is that the national effort has been greatly advantaged by this form of organisation. That was the reason why the pre-war Conservative Government insisted on the organisation. The Government have, so far as it is necessary or desirable, effective control in this way of policy in relation to the iron and steel industry.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

Sir S. Cripps indicated dissent.

Photo of Sir Andrew Duncan Sir Andrew Duncan , City of London

I see the Chancellor of the Exchequer shakes his head, but I assert, and I repeat, that it is true. We will see how it works. During the two years in which the Ministry of Supply has exercised control of this industry through the Steel Board there has not been a single complaint either against the co-operation the industry has given or against the willingness of the industry to measure up to the full requirements of public interest. The Steel Board was set up to review and produce programmes of development needed for the organisation of the steel industry. How can the Minister of Supply say that the Steel Board system did not enable the Government to exercise a positive influence? What could be more positive than an obligation or a duty to produce programmes of expansion? None have been produced. The conclusion I draw—and it is a reasonable one—is that none were needed except those already submitted by the industry.

But the Minister makes a quite new kind of complaint about non-co-operation. He said on Monday last: Only recently, as the House is aware, the employers' representatives on the Iron and Steel Board, together with some other members, refused my invitation to continue their work because of their objection to Government policy."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 57.] That is a strange statement. I ask the House to note two points. Who were those other members whom the wicked steel makers so influenced? One is the chairman, an independent and most able administrator; another is a consumers' representative, a distinguished shipbuilder; and the third is an ex-civil servant of the highest rank. My second point is that the Minister of Supply says they decided not to accept an invitation for a further term of office because of their objection to Government policy. But his own official announcement some time ago said this about it: The Minister of Supply invited them to serve a further year but with the exception of the trade union members they have told him that in the changed conditions likely in their view to arise from the Government's proposals…they are not willing to continue on the Board. That is no expression of view at all as to public policy. [HON. MEMBERS: "Oh."] With great respect I leave this matter entirely to the view of the House. I see the Lord President shaking his head about it. These two statements are totally different in essence. Without expressing any opinion at all as to the propriety or impropriety of policy, people can say, "No, it is so changing the conditions in which I am working that I cannot go on working in them." That is quite different from expressing a view on the policy. I will leave the House to make up its own mind about it.

There are no pressing difficulties known to this industry or raised by the Government which justify the adoption of a completely new organisation without regard to its possible damage. If there were any need to discuss further development of public policy, there exists all the machinery with which to do it. The industry is thoroughly organised to discuss and implement public policy.

The fact really is that the Bill is not a fulfilment either of the Government's Motion of 1946 or of "Let Us Face the Future." There are two important respects in which it differs from the Government Motion. It breaks completely with any pretence of effecting efficient organisation of the iron and steel industry. It throws the existing organisation into chaos and it proposes that the Government should themselves step down from the position of impartial overseer into competition with a variety of firms both inside and outside iron and steel. Secondly, it does not propose to take into public ownership appropriate sections of the iron and steel industry. It proposes to take into public ownership a number of selected firms, a hundred or more, engaged in certain sections of the iron and steel industry, but engaged also on all kinds of industrial enterprises, such as making printing machines, locomotives, floating docks, barges, bridge building and great public structures such as the new House of Commons. All that would come under the Board by the proposals of the Government.

These industrial activities would involve the Government in contracts in every part of the world and also in ownership of subsidiary companies in all our Dominions, in the Argentine, on the Continent, in Belgium, France, Spain and a number of other countries. Not a word was said to us by the Minister of Supply of what was to happen to these foreign subsidiaries. Under these proposals it is also true to say that the State will secure a foothold in 101 other industries and will own firms whose interest in iron and steel is a very small portion of their activities. Certainly a great number of them have far more men employed outside the scheduled industries than inside them. As many as 80 per cent. to 90 per cent. of the employees of some firms are engaged outside the scheduled industries.

The Government may claim, but I would not concede it, that because of "Let Us Face the Future" they have a mandate to nationalise steel, but where is the mandate to embark on the nationalisation of the construction of floating docks, barges, bridges and buildings? If these proposals go through, the Government would own the largest bridge building unit in the country, and 30 per cent. of the constructional engineering plant of the country. Where is their mandate to enter into any or all of the industrial activities mentioned in the memoranda of association of any of these companies—an almost unlimited field?

Public boards have already been set up by the Government in respect of nationalised services and in respect of the more difficult but limited industry of coal. No one can say that we have yet reached in coal an organisation equipped for its purposes. It may not be reasonable—personally I think it is not reasonable—to expect a satisfactory coal organisation without trial and error over a period of years. But can it be pretended that the Government have such experience from any of the existing boards to justify the belief that the proposed new corporation can successfully manage the vast complex of industrial activities now to be mopped up?

Here we are dealing with vital home and export industrial activity of tremendous variety, and we cannot afford to trifle with such grave and great issues as these. "But," the Government say, "we are not proposing to set up a bureaucracy similar to that we have set up in these other industries. We just do not like the shareholders, who are too numerous. But the directors and managers are all—until we have another look at them—men of vigour, imagination and enterprise. They will just continue in office." But will they continue in office? If they do, with all their training in taking risks and independent action and with all their accustomed acceptance of responsibility, what is to become of the poor Corporation?

The truth is that the final and overall responsibility is, and must in fact be, vested at the head, in the Corporation. Inevitably, instead of having 107 completely autonomous units each carrying their own responsibility, authority and risk taking, we shall have concentrated in the proposed Corporation at the top, all authority and risk taking. There will be much less control of this Corporation than there is of the iron and steel industry today. Directors and managers may still be called directors and managers, but they will and must in fact become executive officers. Their work is bound to change in character and shrink in significance. There will be an inevitable and rapid march towards bureaucracy, just as big a bureaucracy as if it had been intended that these firms should be taken over in the same way as those in the coal industry were taken over.

The technique of running great State organisations is a subject to which the Government must apply more research and on which they must gain more experience even for the efficient conduct of the industries they own. There can be no justification for venturing with confidence into a great new range of complex and complicated industrial activity. If there are defects in this industry, either in the industry itself or in its organisation, by all means let them he ventilated and corrected. But, in face of the evidence of the successful functioning of the industry, there is nothing which possibly can justify the Government in embarking on this proposed great gamble where irreparable damage can so easily be done to the whole fabric of this great industry and the nation.

Names of our steel makers are known throughout the world and they have attracted to this country a considerable share of the international business goodwill this country enjoys. No other industry possesses a better record of labour and industrial relationships, no other industry has a better record of rising output and increased productivity per person and no other has developed its organisation as this industry has done. Not only does its organisation ensure progressive development in the industry, but it affords to the Government a machine which can co-operate with them to maintain as far as possible a high and stable measure of employment.

The proposals in this Bill do not build upon those foundations; they destroy them. No attempt is being made to prove an industrial case. This industry is doing well, very well. There is an onus on the Government to show that under any change they can do better. They have not discharged this onus, they cannot discharge it. Therefore, the conclusion is really inescapable that great national interests are being threatened with sacrifice on the altar of such a political philosophy as was enunciated by the Chancellor of the Exchequer last night.

4.17 p.m.

Photo of Mr Ronald Mackay Mr Ronald Mackay , Kingston upon Hull North West

At the conclusion of the Debate last night, at the end of the very brilliant, remarkable and devastating speech made by the Chancellor of the Exchequer, I felt that there was nothing more to say and that the Debate today would be something in the nature of an anti-climax. After listening to the very excellent speech we have just heard from the right hon. Member for the City of London (Sir A. Duncan), with his great knowledge of this industry and the fairness he has shown in the way he has dealt with the problem, I am fairly satisfied that there is no anti-climax and that we have listened last night and this afternoon to two of the most outstanding performances in the discussion of this great subject that we are likely to hear. I am sure my hon. Friends would not like this occasion to pass without paying tribute to the right hon. Gentleman for the way in which he has dealt with the subject this afternoon.

The right hon. Gentleman, in opening his case, stated that only the future would tell whether the things which we are doing today would be a success. In view of the fact that the announcement of what we intended to do was made two years ago, and in view of the picture we have had and the evidence we have had about the state of the steel industry this afternoon, time would seem to be well on our side. If the right hon. Gentleman's argument is a correct one, that during the last two years we have seen such results attained in this industry, with the knowledge that nationalisation was to come at some time, then it is fair to suppose that we have every right to expect that the successes which we have witnessed during the last two years will continue in the years when our promises have been carried into effect.

The right hon. Gentleman dealt with four matters. The first was organisation; that the Government were not setting up any system of organisation which would be of any value to the industry as a whole. The second was a review of the interwar period in which he recounted the work of the steel industry, as he interpreted it, during that period. If I may say so in passing, if the right hon. Gentleman were to return to his former profession and I found myself in trouble, so persuasive do I find him on this part of his story that I should be glad to have him to act for me. The story which he told of the inter-war years has been told by others in a different way. I think it only right that the story, as it has been told in another way, should be put, and I propose to do it in a few moments.

Thirdly, the right hon. Gentleman dealt with the integration of the industry. He outlined and enumerated the different matters which had to be dealt with if the industry was to be properly integrated. I want to deal with that subject also. Finally, he dealt with the breach of promise, if one might put it that way—the fact that in our "Let us Face the Future," we had undertaken to nationalise the industry, but that we were going much further. He outlined a number of points dealing with that aspect which are of considerable importance. I want to review this subject from the same points of view as those of the right hon. Gentleman. I wish to make it clear before I do so, if it is not clear already, that I do not suggest that in what I have to say I can contribute one small part of the knowledge, information or experience in this great subject of which the right hon. Gentleman has given us the benefit this afternoon.

It is time that we faced this question of organisation, which has been thrown up at us so much in the course of the Debate. The right hon. Member for Aldershot (Mr. Lyttelton), in opening the Debate for the Opposition, complained that he was worried because there is no plan of any kind to say how this industry is to be run when it is taken over by this Bill. When I looked at the leader in the "Manchester Guardian" this morning, I saw that it covered exactly the same point of view, although not with the same emphasis as the right hon. Gentleman. It said: The Government still has today to tell the Commons and the country the purpose of the Steel Bill.…They have found hardly a reason for supposing that any good will be done. Everyone knows that there is a purpose for which a Steel Bill is needed. The protection of a Tory Government's tariff and the growing size of steel plants have together enabled the private firms to avoid at least the sharpest compulsions to efficiency through competition. The Government has to put something in their place; the question is what sort of control on behalf of the community will best ensure that steel is made and sold as cheaply as possible. No one pretends that this problem of monopoly control has been solved yet; we have only been trying for a few years. What the Government has failed to show is that the transfer of ownership will contribute anything at all to the solution. This passage puts the same point which the right hon. Gentleman put.

I wish to ask the House to examine this problem. When one comes to look at it, I should not have thought that there could be a better framework or piece of machinery for the organisation of this industry than is provided by this Bill. We are trying to rationalise the industry, trying to bring the different parts of the organisation in the industry together. I have very little experience of steel, but I have spent about 20 years of my life as what the Americans would call a corporation lawyer in handling the reorganisation of business and the amalgamation of businesses.

I put it to the right hon. Gentleman that from the point of view of the organisation of the industry as a whole, that to try to ensure that the shareholding of each company shall go into one holding company, if one likes to put it that way, is probably the most simple way of bringing about the proper rationalisation of this industry. That will then put the ultimate ownership in the hands of one authority. It will vest the ultimate control in the hands of one authority, and will mean that in the course of the reorganisation that is to take place we shall not be faced from time to time with continual conflict between the different companies, one against another.

The impression has been given this afternoon and throughout the Debate that because in private enterprise there are directors on the one hand and shareholders on the other, the shareholders exercise a real control over a company. Must we go on accepting this sort of nonsense? I have been a director of a very large public company in this country for 15 years. We always have to get two members of the staff to own shares so that we have a quorum at our annual general meeting. The many thousands of shareholders never bother to turn up.

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

The hon. Gentleman's company does very well.

Photo of Mr Ronald Mackay Mr Ronald Mackay , Kingston upon Hull North West

We do not do very well. We work very hard and we pay reasonable dividends.

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

If the company does not pay a dividend it will come.

Photo of Mr Ronald Mackay Mr Ronald Mackay , Kingston upon Hull North West

The right hon. Gentleman has just said that if we do not pay a dividend it will come. That is what has come to the steel industry. In the past it has come to the Government when it was in a mess. It does not want to come now when it is not in the same state. That is the position which we have to face today. I want to come back to the company aspect, because I cannot let hon. Members opposite get away with the sort of argument that in the capitalist world as we understand it, in the world of private enterprise, in the functioning of commercial enterprise today, even in new companies, there is any real proper control exercised by any body of shareholders over that number of companies which operate in the private sector and which are carrying on without loss.

I want to ask a question. I find, from reading the "Financial Times" and by following the ordinary company advertisements, how rarely does a new director join a board directly from a shareholders' meeting. In the first place, he is generally co-opted to the board by his friends. I am not saying that in many cases he is not the right person to put on; I hope that when I was put on I was the right person—I certainly joined the board in that way. He then goes up for re-election at the next annual meeting. Do hon. Gentlemen opposite who are saying today, "You are not putting up a scheme for the organisation of this great industry," and who are asking us to leave the steel control in the hands of shareholders who are controlling it, really suggest for a moment that the shareholders are exercising any control over the steel industry, except those particular shareholders who happen to work in Steel House. They are doing so, and it is probably right and proper that they should do. But I think it is time we cut out nonsense like this and realised that in that section of private enterprise there is quite a lot to be done, and that in an industry such as this, where there is no control over the industry as a whole by the people who own it, there is something to be said for a forced amalgamation. For that is what this proposal is, an amalgamation into a new corporation, which will enable the industry to carry out the necessary re-organisation.

The right hon. Gentleman made a point of the fact that we were splitting the industry. Here I shall be very careful. I do not want to get on to technical grounds or, if I may put it in another way, to get into waters which are too deep for me to compete in swimming with the right hon. Gentleman. It is obvious that in the case of castings and things of that kind, only a small portion of the industry is being taken over; that is clear from the Schedule. But let us look at what is being taken over. In iron ore the companies taken over represent 97 per cent., of production, in pig iron 97 per cent., carbon steel ingots 99.6 per cent., alloy steel ingots 93.7 per cent., re-rolling 93 per cent., sheet metal 94 per cent., plate 97 per cent., and tinplate 88 per cent. That is almost the whole of that major part which is the basis and the foundation of the steel industry as a whole.

If we say, as the right hon. Gentleman said, that one or two sections illustrate that and say, "You are splitting the industry for this reason," I suggest that is not an argument at all. But when it is said, "You are taking over subsidiaries"—such as the example of Vickers who do their re-rolling in the parent company—"and you are beginning to split the industry," I say that there is a real problem of reorganisation in this industry to be tackled and we cannot make an omelette without breaking some eggs. We cannot reorganise any industry or amalgamate sections of businesses without knowing that 1 per cent. or 10 per cent. or 5 per cent. of the businesses taken over will be unsuitable for the purpose of the amalgamation and will go back to some other organisation.

So I seriously suggest to the House that though the right hon. Gentleman made quite a substantial point with regard to splitting the industry—we had it in more melodramatic and picturesque language from the right hon. Member for Woodford (Mr. Churchill) yesterday, when he was waving his arms to indicate the vertical and horizontal splitting of the industry—in a matter of this kind, as in politics, we have to be satisfied with the least bad of the second best. When we bring those companies together, we have to put up to a certain extent with a certain amount of sections of the industry, which obviously would have existing companies that are not being taken over.

The problem of reorganisation does not rest only here, and the right hon. Gentleman might have carried this point further. It is, I think, substantially true that some sections of the industry are more efficient than others. It must be true that some businesses are more efficient than others. It must be the fact, because of the location of some plants as against others the costs of production vary and are higher in one case than they are in another. If the State or the Corporation is going to own the shares of the whole 107 companies and it decides it is necessary to close down five, seven or ten of them, or individual sections of them, that is reorganisation and it can be done by the Corporation without infringing any right at all in doing so. In other words, the field is open for people with knowledge of the industry to come in and carry out the reorganisation of those industries that is necessary. Moreover only in this way can the necessary reorganisation be carried out.

I find it difficult to read this Bill and the speeches made in this House and not to realise that everywhere, with the exception of the right hon. Gentleman, there is a general acknowledgement that something must be done to reorganise the steel industry. Even our Liberal friends, who are asking for an inquiry, say that something must be done. The whole development indicates that it is an industry in respect of which the State must take an interest. What are we doing to bring this about? We are creating by this Bill in this country a corporation to run the steel industry of the country, a corporation in which production plant and size will not be as great as the largest steel corporation in the United States and will only be as great as the second largest.

The right hon. Gentleman has suggested that the talks going on in Paris about which he, in his capacity as benevolent director of Steel House, knows more than I do, deal with the whole problem of the steel industry of Western Europe. Surely, it would be much easier for the Steel Corporation as set up by this Bill, to deal with a similar nationalised industry on the Continent with the industry as a whole speaking in this way with complete authority, than if it was divided. The right hon. Gentleman dealt with the periods between the wars, and when he had dealt with them at great length he went on to say that, of course controversies of the past are of little moment in the present. I was reminded of an expression of the right hon. Member for Woodford—"Recriminations in the past are valuable guides to the future." I leave it to those two right hon. Gentlemen to fight that battle out for themselves.

But I cannot pass this point without saying to the right hon. Gentleman that by the time he had arrived at that very philosophic attitude about controversies of the past he had enumerated all the controversies of the past to the advantage of himself and to the disadvantage of the Government. I should like to deal with this problem but I was so taken with the persuasiveness of the right hon. Gentleman that I am thinking that we should let these things be of the past, partly because they have been dealt with so much, partly because they could be dealt with again, if necessary, and, also, because I think it is more important to look at the present.

I wish to call in aid at this moment the opinions not of myself or of people on this side of the House who might perhaps have a predilection to nationalise the steel industry, but of people who would not be expected to take that view. The United States State Department, in a report published this year—the Department of State in Washington—says: Although steel is one of the foundations of British economy the basic plants had for a number of years received inadequate maintenance and little modernisation,"— that could be during the war period— At the end of the war the industry as a whole was inefficient by contemporary standards, although a small amount of new capacity was highly efficient. If the industry is as healthy as the right hon. Gentleman said, why have a steel plan for development at all? And why are its recommendations so drastic?

The fundamental thing to bear in mind before coming to other questions surely is the amount of plant that has to be re-equipped, 40 per cent. in one case, 30 per cent. in another case, 34 per cent. in another case, 30 per cent. in another. There the steel industry is saying, "We must completely re-equip between 30 and 40 per cent. of the different sections of our productive capacity." Surely that is sufficient evidence to bring home to us that this industry admits the need for reorganisation, for that is exactly what it proposes should be done under the plan and what we propose to do?

Photo of Sir Arthur Salter Sir Arthur Salter , Oxford University

Would the hon. Gentleman deliberately say that the limiting factor to the expansion of the steel industry in the near future will be finance rather than men and materials?

Photo of Mr Ronald Mackay Mr Ronald Mackay , Kingston upon Hull North West

The question has been put to me whether the limiting factor to the expansion of the steel industry will be finance rather than men and materials. My answer is that I do not think that men and materials will be a limiting factor. I do think that finance may be a limiting factor unless the industry is taken over. [HON. MEMBERS: "Oh."] Hon. Members opposite sneer, and they are entitled to do so if they think that that is a method of argument. But the sooner they realise that these are problems which have to be discussed in a body of this kind, and we are going to discuss them, the better it will be for everybody on both sides.

I think it is fair to say that the original plan was for £168 million stepping up to £200 million. That was in 1945. I suggest that it is common sense to say that the present expenditure of £50 million is going to cost about £20 million or £25 million more. The work that is to be done will cost at least £300 million, the £200 million figure will go up by anything from 40 to 50 per cent. We shall get into big figures. It is only fair to say that the hon. Member for Central Southwark (Mr. Jenkins) in an excellent speech on Monday made an exceedingly good point when he pointed out that the only substantial steel application after the war to the City for money was a failure. It was by the Welsh Steel Company, where £50 million was wanted, of which £15 million was to be subscribed on a mortgage debenture ½ per cent. above the then rate, a mortgage debenture which was in front of a security for £35 million from the Finance Corporation, which was virtually a Government concern—[HON. MEMBERS: "Oh."]—in the nature of a Government concern, or at any rate associated with the Government; put it that way. £35 million was put up by the banks and £15 million by public issue. Twenty-seven per cent. only of the public issue was subscribed and 73 per cent. was not and the Tory Press described it as the biggest flop in the post-war period. The answer to that is that at the same time and in the same period there were other quotations which were not flops at all.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

Surely, that was because the Government had poisoned the market by its nationalisation policy?

Photo of Mr Ronald Mackay Mr Ronald Mackay , Kingston upon Hull North West

The hon. Gentleman ought to realise that when you give people poison they die. The market is still alive. The Chancellor of the Exchequer dealt with this subject last night in such a way that we need not raise it again. He said that with every dose of poison put into the market up went the steel prices. With every announcement we had that steel was to be nationalised, steel shares rose and rose. So it is not really very sensible to try to argue at this stage that the market reacted in that sort of way.

I return to the point put to me by the senior Burgess for Oxford University (Sir A. Salter). The amount of money necessary to be spent on the steel industry in the next few years is going to he so great—partly because of higher costs and partly because of the additional development work necessary to be done—that there is a real risk that we cannot find the finance in private channels. That is a very good reason why the industry should be taken over in this form so that the Government can make certain that the whole of the finance necessary for development is available.

I come back to the present. As such a great point was made of the way in which between the wars we suffered, let us look at this expression of opinion which comes not from a British but from an American newspaper, not from a Labour but from a Liberal newspaper—one which is probably the second leading Liberal newspaper in the United States. This appeared in a leading article only a few days ago It says: Private enterprise has failed to do its job.… [HON. MEMBERS: "What is the name of the paper?"] The St. Louis "Post-Despatch." Obviously it is not the leading Liberal paper in America, but it is a very good paper as everyone here who knows it will agree. It said: Private enterprise has failed to do its job. It is forcing Socialism's hands. Its case for being allowed to remain in control is weak. Though it has been getting top production considering its present plant, that plant is lopsided and obsolescent, and its inefficiencies are protected by monopoly. The industry has got itself into such a mess that nothing short of Government is big enough to get it out again.No one, including the industry itself, disputes that it is in a bad way. The only dispute concerns what is to be done about it, and even there private enterprise does not maintain that it can do the needful. It maintains only that it will see that Socialist Government in a hotter place than an open hearth furnace before it will let the Government do the needful. This is a poor position for private enterprise to manoeuvre itself into. It is all the worse because the industry did it by voluntarily throwing away two of the greatest policies of free private enterprise—competition and initiative.What has the industry left to say of persuasiveness, as opposed to mere defiance? What effective answer can it give to the Labour Party's pamphlet which declares the only choice remaining is between private monopoly and Government monopoly? How can it deny Labour's contention that steel is so essential to so much of a modern industrial State that control of it 'carries with it control of the economy,' a power which belongs to the people? I pass to the third point referred to by the right hon. Gentleman, and that is integration. He described the sort of things that ought to happen to the industry—the development of raw materials, the improvement of labour and equipment, scientific research, reconstruction and development, balanced capacity, changing the pattern of demand and generally following through the whole development programme to see that it is properly carried out. What is the agenda for the Corporation which the Minister is setting up? These are exactly the things which will be the duty of that Corporation. This point must be honestly faced. Hon. Members throughout this Debate have been saying that the Government have given no indication of what the Corporation is to do. I will quote what the Minister said on Monday. I will quote the last paragraph and then come back to an earlier part. He said: Its major task, however—and this will be a continuing one—will be to review the development plans and to devise schemes of rationalisation to improve the efficiency of the industry as a whole."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 74.] What objection can there be to creating a corporation which, by the securities it will own, will have complete power to see that the development programme is properly carried out? When we think of the finance given to this industry, the tariffs and the conditions of the tariffs between the wars, and the reorganisation which did not result between the wars, we take the view that the Government will be completely playing with the electors and be guilty of the grossest negligence if they do not take some action to see that the development schemes are being properly carried out. The Minister also said: The following matters will plainly be on its agenda. The establishment of relations with the companies it owns and in particular ensuring that these companies will have ample freedom of initiative and competition with which to carry on their activities. That is one of the things necessary so that the 107 companies with enormous resources which they will be controlling shall be able to work together. That means that they will be doing a large part of the work of the Iron and Steel Federation. This work will be done in this way in the future by a public corporation and not by a private trade association. The Minister continued: …setting up the appropriate co-ordinating machinery with the various producers still in private ownership; working out with my Department the most effective organisation of consumers' committees. That is a thing we have never had in the past. It is another protection for the 80 per cent. of private industry, or whatever section it is, that is still in private ownership. Then the Minister said: ..reviewing price policy; examining what steps should be taken to establish better training schemes and to develop research; deciding what other common services it can render to the industry, including possible purchasing and selling arrangements and no doubt some of the services now rendered directly or indirectly by the staff of the Iron and Steel Federation."—[OFFICIAL REPORT, 15th November, 1948: Vol. 458, c. 73.] The suggestions which the Minister made with regard to the way in which the Corporation will function are exactly those which the right hon. Gentleman asked should be the main things which the industry required to have attended to. The right hon. Gentleman dealt with the question of what we had said in "Let us Face the Future," that we were going to nationalise steel, and said that we were going much further than that. From time to time we have had suggestions that we wanted to take over the whole industry but that we were doing it in this way and keeping the names of existing companies because we wanted to hide the fact that they would be operating under State ownership. It is completely silly to say that. In many ways it is obviously good business to keep the old well known names. In the "Manchester Evening News" of 16th October I happened to see a paragraph which had the headline: Lewis's take over wholesale grocers. The paragraph read: Sixty years after it was formed, one of Manchester's biggest wholesale grocery firms, William Hodkinson and Sons, Ltd., has been acquired by Lewis's. The firm will retain its name. Its Board of Directors will include Lord Woolton and three other Lewis's executives. We come then to the point which the right hon. Gentleman was making about there being no pretence that we were going to improve the organisation of the industry. I point out to him that we are, in a sense, substituting for the Iron and Steel Federation a board which has statutory authority and much fuller powers. The Conservative Opposition have shown time and time again—and it is in the latest bulletin of the Iron and Steel Federation itself—that there must be some kind of control in this industry. The argument is whether we want the control to go on as at present in the hands of the people who own the industry and are responsible really to no one, or whether we want it to be in the hands of people who are appointed by and responsible to the State. The Government today are in an impartial position in so far as they are a price fixer. I see very little difference in the position which will result in this respect. Obviously the board will fix prices much as the Minister does today, but instead of it being done in the way in which it is done at present it will be done by a hoard which has the backing of the Minister.

If one reads that interesting document, the Industrial Charter, one will see that the great problem referred to is how to reconcile control of industry at the centre with independence. Those are not the exact words though I believe I have the first part of it right. The way to exercise control of the centre is by the creation of a public authority of this kind free from the Ministry altogether and because of the power which it is absolutely essential to have because of its ownership of these 170 companies, it will be able to carry out the necessary changes and reorganisation giving effect to the different improvement schemes.

There were other things I wanted to say but other hon. Members want to speak as well. I want to take up a point that was made yesterday when it was said we have got to make a case for the nationalisation of steel. I say that the case has been made itself. The Iron and Steel Federation made out a case because no one denies the need for the re-organisation of the industry, and if it is left under separate control we shall never get the proper co-ordination. A forced amalgamation of this kind is the only way to bring it about. The case for a monopoly is there to a certain extent, and hon. Members can argue about the details if they want to. The case for finance is there too, and there is the capacity of the Corporation which we need when things are going well. But other steps are necessary so that when a period comes when the demand is not so great the sort of thing will not arise as arose during the years before the war.

I am worried when I read in the Tory papers about their restrictionist ideas. The "Observer" last Sunday asked what would happen in five years' time when a capacity of 18 million tons of steel was too great? But what about the four million homes in Europe which have to be rebuilt and what about the construction work to be done in Africa and India and China? The whole problem of steel production and steel consumption has yet to be thought out in entirely new and much larger terms. They are the reasons which obviously make it necessary for this industry to be taken over. There is one more point I should like to make.

I should have liked to deal with the question of monopoly in greater detail but I wish to say something about the speech made yesterday by the right hon. Gentleman the Member for Woodford (Mr. Churchill). Through his speech ran the theme that this was a petty party thing we were trying to do. Among other things he said: This Bill is another instance of the same behaviour on a far larger scale. The Socialist Ministers must have something new to feed the flame of Party strife and to prove that they still hate and are trying to maul the other half of their fellow countrymen.It is a feature in party politics intended to keep the Socialist Left Wing as far as possible in order.This is not a Bill it is a plot; not a plan to Increase production.…"—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 228, 232, 233.] His whole speech is full of gibes of that kind, but I want to say quite frankly to someone for whom I have the greatest respect—and like every Member I recognise the amazing piece of work that the right hon. Gentleman did during the war years—that those of us who admired him in the past do not like the pettiness with which he carries on party warfare today. Those of us on this side of the House who came here on a Socialist programme did so because we are Socialists and this cannot be called a manoeuvre in party politics in any sense whatever. I myself have advocated the nationalisation of steel since 1931, and the Labour Party since 1942. For the right hon. Gentleman to say that this is a bit of party politics is so much utter nonsense. The longer the right hon. Gentleman goes on in that way the better it is for the Labour Party in this country. The people generally take little notice of what he is saying in this connection and that is a great pity in view of his record.

I want hon. Gentlemen, particularly those on the other side, to realise that the party on this side of the House has come into office because it believes in Socialism—because it believes that the logical consequence of political democracy is economic democracy. Surely the lessons of the war have taught us that. The collapse of France was as much an economic and social collapse as a military collapse. Our task here and in Europe is to created a society in which we can develop the democratic idea in the fullest way as the basis of our society. That is' not possible where power—any power economic or otherwise—is in the hands of a small section of the people. Democracy is not some sort of possession which we are now enjoying. It is a kingdom we have yet to win in this country, and the only way of converting our country into a democracy, is along the lines of the programme that this party is putting through at the present time.

When I listen to some hon. Members opposite talking about the conflicts of today, I believe they do not realise what is going on in Europe. The conflict in Europe is not between capitalism and anything else because capitalism is dead and finished. That is an 18th century conception. The conflict is between social democracy and Communism. Social democracy must demonstrate that it is able to govern, and to govern it must take over some of the resources of the country. This means the public ownership of the major industries of which iron and steel is one. So I ask the House to give a strong, good Second Reading to this Bill. It is one of the most important Measures ever to come before us. It demonstrates to the working people of this country that this Government are determined to carry out their pledges and are not going to allow the existence of any small section of the community to control basic and fundamental industries and have authority against the State as a whole. It demonstrates, too, that we Socialists have a Socialist faith and are determined to see that faith translated into action.

4.57 p.m.

Photo of Sir John Barlow Sir John Barlow , Eddisbury

I listened with very great interest to the speech of the hon. Member for North-West Hull (Mr. R. McKay) and I did not find his arguments at all convincing. He referred to a number of different things and suggested that the bringing together of all the steel shareholdings in this country would enable the Government to rationalise the steel industry. I see very little force in that argument. The mere fact of bringing the shareholdings together does not give the Government the authority, nor necessarily the ability, to rationalise the whole industry.

The hon. Member likewise suggested that one of the great shortcomings of the present scheme was the probable limitation on finance which would appear in the near future. He showed that in the past there had been some £50 million raised for re-equipping and modernising the industry, but he did not show that there had been any failure in any way to raise the money. He mentioned the fact that in one case some of the capital offered was not taken up by the public, but the fact remains that all the money required by the industry has been forthcoming in one way or another under present existing methods of finance.

There was one other thing that he mentioned to which I should like to refer, namely, the taking over of a grocery business in Manchester by a much larger firm with a certain well-known individual joining the board of the acquired company. He suggested that that was very similar to what the Government propose to do at the present time with iron and steel. I would point out that there is very little in common. It is entirely different. That business was purchased by one private enterprise body from another, and an amalgamation took place enabling them to work together. It is an entirely different proposition when the Government take over the whole shareholding of the steel industry and dominates it completely by the Corporation and the Minister.

In opening my remarks I must say that I have a small interest in iron and steel in this country. It is not in any way a manufacturing interest, but I have been interested for a number of years in the export of iron and steel in quite a modest way. I should like for a few minutes to deal with some of the wider aspects of how this Measure will affect overseas trade. We see from the Bill that the Government propose to take over some 107 existing companies. Many of those companies have subsidiaries, and the Government will acquire, in various ways, an enormous export interest. By "export interest", I mean the exporting of iron and steel, and also the local interest of foreign subsidiary companies. There are many iron and steel manufacturing businesses all over the world which, at the present time, are owned by companies which will very largely be purchased by the Government. I need not emphasise the great contribution made by the iron and steel industry in obtaining the all-important dollars required in this country at the present time. It is of the utmost importance that the export of iron and steel, and of all the materials made of iron and steel, should continue and increase as far as possible. I believe that we all have that great objective in mind.

We shall soon have Government-owned companies dealing with private companies abroad. That is business between un-equals. It is always found to be best to deal with private companies here and private companies abroad, or with Governments here and Governments abroad. If the Government here deal with private firms abroad, trouble may very easily arise. It is quite possible that goods may not be up to standard or that there may be other difficulties such as do arise in business. When they appear between two individual private firms, it it usually comparatively easy for those firms to come to terms of settlement; but when the Government are at the back of a British firm which, perhaps supplies the wrong material, or supplies it too late, that puts the disagreement on a very different basis. We can easily visualise the foreign individual firm appealing to its Government to approach the British Government. That would transfer the business entirely from the private commercial atmosphere to the much more important political atmosphere. It is very likely that trouble will arise in that way.

We are told that when the Government take over all these firms, they are going to retain the existing boards for the time being. They lay great stress on maintaining the goodwill and traditions of the companies. I would like to say a word about the importance of goodwill and traditions in the export trade. To a very large extent, before modern transport made travel so easy, the export trade of this country in textiles, iron and steel, and many other things, was built up by goodwill, tradition and trade marks which became very valuable. But goodwill is a very intangible thing. One cannot transfer it as one can a sack of potatoes. It can be in existence one day, and, owing to something going wrong, it can be entirely destroyed the next. For that reason, I think that when the Government take over these businesses, there will, inevitably and immediately, be a severe blow dealt to existing goodwill.

One already hears that in overseas countries they are very critical of this proposed Bill, and, in many cases, foreign firms are already considering placing orders for machine tools and other steel products in America rather than in this country. They feel that if the personal contact, as they have known it in the past, between themselves and the individual firms in this country once ceases to exist, they will be dealing with an entirely different entity, and one which they do not know. It is largely because they do not know it that they do not trust it.

I mentioned at the beginning of my speech the' difficulty of some of the British owned subsidiary companies abroad. I should like to mention one instance as an illustration, and it is probably typical of many others. We all know the well-known firm of Dorman Long and Company, Limited. They have, I believe, a wholly-owned subsidiary called Dorman Long (South Africa). That South African subsidiary has been built up over a considerable period of time. It has done what the South Africans wish; it has developed in their way, and it has been a good example of private enterprise providing for the requirements of that particular country. If, when the Government take over that subsidiary, exactly the same service is not provided as has been provided in the past, South Africans and the South African Government may become critical of the British Government. It is so easy to transfer these matters from the Board of Trade to the Foreign Office, which is an entirely different thing, and very bad for trade.

If prices diminished, it is probable that the local competitors in South Africa would suggest that the British Government were subsidising the exports to South Africa, and that this was unfair competition to their industry. It is most difficult to refute the idea of subsidies. Of course, if prices rose, as many people expect they will, everyone would say that the Government and the Government-operated firms were not so efficient as private enterprise. Therefore, whatever happens, the Government stand to be shot at. I ask the Government spokesmen to consider very carefully this question of goodwill which it is proposed to transfer. I submit that it is impossible to transfer goodwill in the way the Government hope to do. Enterprise, genius for developing business, and goodwill do not flourish under the shadow of Whitehall.

5.9 p.m.

Photo of Mr Octavius Willey Mr Octavius Willey , Cleveland

I do not propose to follow the hon. Member for Eddisbury (Sir J. Barlow) very far in the argument he has been putting before the House, but coming as I do from a constituency which has a very large area of iron and steel plants, which are at the moment in a state of comparatively high activity, I would like to say a word or two about why I feel that this Bill is of major importance. It is not only a Bill of major importance, but, as was said by my hon. Friend the Member for North-West Hull (Mr. R. Mackay)—to whose speech I think we all listened with very great attention—it expresses something which to some of us at least is not a new idea.

For many years past I have travelled this country, and have made more speeches than I care to remember. Sometimes when I reflect about some of them I wonder why I ever made them. I am frank about that. But about many of those speeches I have no regrets, and as I have thought about this Debate and listened to its course, I have remembered speeches which I made in Jarrow.

As I said in the early days of this Parliament, the thing which is nearest to my heart is the well-being of the people of this country, and until I die I shall never forget the lacklustre eyes of the people of that unfortunate town. Something might have been done for the steel industry in general, and a new hope might have come to the hearts of many of those people much earlier than it did. But it just did not happen. As Jarrow was, so many other places in this country were. It is all very well for hon. Gentlemen opposite to talk in a semi-academic way about the problem of industry, and of how industry should do this and that, thinking always in terms of what they call the prosperity of the industry. To me there is a prosperity which is far more fundamental than anything that is measured in terms of shareholders' returns, and that is the life of the people engaged in the industry.

I come from the constituency of Cleveland, and I realise that it is an honour to represent such a constituency. There is more than iron and steel there. There are ironstone mines, and it is known to some hon. Members, but perhaps not to all, that one of the highest percentages of unemployment in this country during the distressing years between the wars was in the constituency of Cleveland. The people of Cleveland love the place, and they are always wondering what is to be their future. I should be failing in my duty to those people if I did not say plainly that they expect me, every time and all the time, to support this Government in any Measure which is going to make for a deeper security for the people in this country.

It is the problem of manpower that matters. Hon. Members opposite who have talked about the industry from a deep understanding know quite well that manpower is going to be vital. Curiously enough, as I was thinking about this, my mind went back to a conversation between a gentleman named Creevey and the Duke of Wellington in Brussels just before the Battle of Waterloo. I thought it would be rather interesting to point out what the great Duke had to say.

Photo of Mr Octavius Willey Mr Octavius Willey , Cleveland

Certainly, but I want hon. Members to observe what he said. Creevey said to the Duke, "Will you let me ask you, Duke, what you think you will make of it?" The Duke began to talk about his association with Blücher and then, noticing a private soldier of one of the infantry regiments in the park, gaping about at the statues and images there, he said, pointing to the soldier, "It all depends on that article whether we do the business or not." That "article" was a common soldier. The Duke said "That is the man."

Photo of Mr Octavius Willey Mr Octavius Willey , Cleveland

Fancy an hon. Member opposite talking about a volunteer. Has he never heard of the press gang? Has he never heard of how the people of this country were treated when troops and sailors were urgently needed? Come, that will not do. It betrays woeful ignorance. When I listened to the Joint Parliamentary Secretary yesterday I heard the authentic voice of the man employed in the steel industry. I went to my constituency and I took what steps I could to ascertain what the ordinary chap working in the steel industry expected. I found that they did not exactly agree with the view that had been arrived at by the noble Lord the Member for South Dorset (Viscount Hinchingbrooke) when he said that he could not find anybody who was in favour of nationalisation, or words to that effect. It all depends where we look.

But there is another matter to which the right hon. Member for Woodford (Mr. Churchill) referred yesterday. I was extremely interested in what he said. I agree almost entirely with the speech of my hon. Friend the Member for North-West Hull who, unfortunately, has had to leave the Chamber. His was a most brilliant effort in dealing with a great problem such as this. He referred to aspects of the speech of the right hon. Member for Woodford with which I do not propose to deal although, as John Bright used to say occasionally when entering this House, "I think I will go in and do a little prize fighting." I think I should have enjoyed a little prize fighting, but my time is limited. However, I would like to draw attention to the following remarks of the right hon. Gentleman: The Conservative Party in no way abandons the necessary control of the steel industry which has been so long in operation. We certainly consider that the price controls which we ourselves introduced and endorsed, must be taken as an essential and permanent feature of our policy. My hon. Friend the Member for North-West Hull referred to the dissatisfaction which existed in this industry. It was certainly interesting that the right hon. Member for Woodford yesterday said precisely what we have been told from this side of the House this afternoon. He said: Neither do we regard the steel industry in its present state as incapable of further reform."—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 220.] The case for reform has been made. The Joint Parliamentary Secretary made it yesterday. I, personally, believe that the way to reform the industry is to take the steps which this Bill proposes. We believe that the life of the people of this country is vitally important, and that applies to everybody engaged in the steel industry. If manpower is important it is vital that these men should believe in the job which they are doing. They are doing a marvellous job.

There is one thing which I regret I did not hear. I expected to hear it this afternoon. That is the fact that the workers in the industry, freely and of their own volition, altered their whole method of working so that they might co-operate and help to build this industry. Without them the industry is finished. The great Duke was right. It all depends on "that article." Without the people of this country, we shall not get round the corner. It is the ordinary folk who will do the job who matter. Hon. Gentlemen opposite may sit and swing their financial influence, but they will not save Great Britain. It is the people who sent us here who will do that, the ordinary men in the shop. It is the man in the steel industry who will save the steel industry. He is the man who will ultimately give us what we hope to see.

I listened yesterday afternoon to the speech of the Joint Parliamentary Secretary to the Ministry of Supply. He is respected throughout the steel industry. He is a first-class steel worker and he knows what he is talking about. He knows what his men feel. The men as a whole are behind him and behind the present Government in the step which is being taken. It is very interesting to note that "setting the people free" does not mean, so far as the steel industry is concerned, free and unfettered competition in the future. Our attitude of mind about this problem is right. It is good also that the statement of the right hon. Gentleman was so clear. There was no dubiety about it, and it means that the Government need have no hesitation realising that they are not fettering people but actually freeing people. By maintaining price controls they are taking the right step to give a larger measure of freedom.

I think that the right hon. Member for Woodford sometimes forgets that he used some of those expressions, when he tries to gibe at this side of the House. As he rightly said yesterday: "I cannot go over everything I have said for 50 years." It is a very good way out. I expect that he, like my humble self, sometimes says things and then wishes that he had not said them.

Before I sit down I would like to recall that on 5th December, 1945, a voice, alas, now silent for ever! was heard in this House. I remember it well. The hon. Gentleman who spoke was sitting on the Front Bench below the gangway. Slowly and deliberately he began to address a crowded House. We all know what we felt about him as an individual. He began to talk about the duties that were incumbent upon the Government that had been sent by the people of this country to carry out and perform their tasks. Can we not see the finger of Mr. James Maxton pointed at the Prime Minister? At the conclusion of his speech he said: "I want the Labour Government to succeed and I want them to do things for the people of this country that have never been done before, because it is essential." And then he said—and I say this now in this House because I believe it—"Should the Government fail in this great task the power will be shifted from them to a more fundamental party." Hon. Gentlemen sitting opposite will remember how he checked the Leader of the Opposition by saying that he was not referring to the right hon. Gentleman's party.

We know what was in the mind of our old friend, Maxton—because he was a friend. He was seeing clearly what my hon. Friend the Member for North-West Hull has told this House this afternoon, that the fight now is not for the simple preservation of Capitalism but a fight that some of us have seen coming for 40 years. It is the fight for the people. The masses are on the move. The masses are now determining that control and power must be vested in the community and not in groups or sections. I believe that. [Laughter.] Hon. Members have laughed before in this House, but as Maxton told us, the day will come when we shall see a different set-up in this House. I believe that now from the bottom of my heart, and I welcome the Bill and hope that it will be carried by a magnificent majority.

5.26 p.m.

Photo of Mr James Hutchison Mr James Hutchison , Glasgow Central

I should, according to custom, commence by declaring that I have an interest in the iron and steel industry inasmuch as, like thousands of other shareholders, I own some shares in Stewart and Lloyd's. We have just listened to the hon. Member for Cleveland (Mr. O. Willey) who spoke no doubt with great sincerity, and who brought to our notice the part that has been played by the workers in the steel industry.

If there is any common ground in the House it is in the tributes that have been paid by almost every hon. Member to the team work which the iron and steel workers have exhibited during the last few years. But I would like to point out that it was team work. The hon. Member used the analogy of the Iron Duke's tributes to the common soldier. I would like to point out that afterwards the Iron Duke said to a friend: "That was a devilish fine-run thing. If I had not been there, I do not think we should have won." That is team work, exactly the same team spirit which the iron and steel industry have shown over the last few years. But it has been rather exceptional in this way.

If the Bill is a triumph for the Minister of Health it may well turn out to be a disaster for the nation, and particularly for my country which is so dependent upon iron and steel at a reasonable price. The Bill is a monument to the ascendancy of a minority within the Government, a minority propelled by an iron determination to bring nationalisation about and a steely obstinacy not to try to prove that it is going to bring about all that they have claimed. The internal struggle which has gone on within the Government during the last two or three years is underlined by the two voices with which Ministers have spoken about this Measure. As on the question of military service the Government have changed their views.

Let us recall what was said back in 1946 in connection with the proposals at that time to introduce an Iron and Steel Measure. We have heard something about the present Bill being a hybrid Bill but if one thing is clear, it is that the Bill is a product of hybrid thought. In May, 1946, the then Minister of Supply used these words: The decision has been come to after very close and earnest study."—[OFFICIAL REPORT 27th May, 1946; Vol. 423, c. 838.] The Minister went further and explained that the proposal was to take over the industry by including the primary or heavy rolling sections and that taking over the finishing processes was to be the exception and not the rule. Further earnest and close study has shown the first earnest and close study to be all wrong, because the finishing processes are now all to be taken over, for the simple reason that they happen to be tagged on to the production of 20,000 tons of iron or 20,000 tons of steel. As was shown in that most able speech of my right hon. Friend the Member for the City of London (Sir A. Duncan), which let a little bit of ordinary commercial limelight play through the fog of political prejudice, we are to find, for example, that 45 per cent. of the heavy forging production in this country, 94 per cent. of tyres, wheels and axles, and 60 per cent. of the steel wire is to be taken over under the new procedure. The old conception has gone. What was final in 1946 has turned out not to be final at all. The industry was to be nationalised on a functional basis; now it is on a financial basis. Then it was to be socialised processes; now it is to be socialised firms.

As the Minister of Supply asked yesterday, what is the heart of this matter? Why is all this to be done? Because, he says, he needs more than negative powers. Is it realised that at the present time the Government have complete control over prices, have complete control over extensions and permits to modernise and to expand, have complete control over import duties? Can it be solemnly averred that with these strangleholds they cannot force the industry to do exactly what they want? With these powers and controls they could force the industry into bankruptcy, and to pretend that they needed to take this further step to transfer and control the capital in order to be able to get the industry to do what they want is the merest hypocrisy.

In 1946 the Minister ended, in his peroration, with the words that the Government would take these steps because they …believe sincerely that they will bring greater freedom, greater happiness and greater prosperity to British men and women."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423. c. 854.] It is curious to hear the Government having some concern for the public interest and the ordinary consumer, for he is the man who, in all these nationalised processes, is being completely forgotten. In the struggle between the new vested interests which are being set up, the hierarchy of highly-paid management, the departmental thriving bureaucracy, the trade union interests and the workers who, soon to be disillusioned, fondly imagine that they are walking into a new earthly paradise, it is good to hear the ordinary consumer at least entering into the Government's calculations. But the ordinary consumer must smile a wry smile as he sits in his chair, looks at his fire and thinks of the history of coal in quantity, in quality and in price, and must say to himself, "What benefit has come to me from the nationalisation of electricity and of the railways? Am I likely, then, to get any cheaper steel—that steel which enters into so many products which themselves enter into my life?"

That is the acid test of the justification of this Bill. Will steel be produced any better, which means, in the long run, any cheaper? What attempt has there peen to show that this will be so? None at all. As the "Economist" said in its recent article, the balance of evidence is that it will not. How does the Government hope to produce cheaper steel under this nationalisation scheme? Let us for a moment examine the possibilities which are open to it. Past prices were not high. My right hon. Friend the Member for the City of London showed today that we were, throughout, competitive. In 1937, for example, our prices for joists, plates and bars were dearer than those of Belgium, but cheaper than those of the United States and Germany. In 1939 our plates were cheapest and our joists were dearer than those of Belgium and France but cheaper than those of Germany and U.S.A. Today, throughout a large range of steel products we are the cheapest producers in the world, and that is still a fact even when we make allowances for the subsidy which the subsidy on freight and the subsidy on scrap represents. Throughout the whole range at the present time we are competitive. Is it expected that we are going to show even cheaper prices under nationalisation?

Where else can we look for more efficiency—under the Government's proposals—for cheaper prices? Is it to be in increased production? Much appears to be expected from that. In the inter-war period the demand never at any time reached the potential supply. From 1924 to 1934 the capacity of the industry was 12 million tons. Demand never approached that figure. The capacity rose in the period 1934 to 1938 to 14 million tons and demand succeeded in reaching, for one moment, 13 million tons. The 1945 plan—and may I point out that the original thoughts behind this plan were going on in 1944, and I myself saw a draft of the plan dated December, 1944, so that the allegation that this is a death bed repentance scarcely squares with the fact that there was a plan in, existence in December, 1944, six to eight months before there was a Socialist Government—the 1945 plan set forth, as is well known, a capacity of 15 million ingot tons, a capacity which has now been raised by consultation with the planning authorities and the industry to possibly 18 million tons. We hear, a clamour for even higher figures. We heard it from Mr. Cole, who advocated 26 million tons and quickly reduced it to 24 million tons, while others advocated 20 million tons.

This constantly expanding capacity is just the sort of trap into which inexperienced dabblers in international trade are liable to fall, owing to a temporary and clamant demand.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

Would not the hon. and gallant Gentleman tell us that this is exactly the trap into which the industry itself fell after the first world war?

Photo of Mr James Hutchison Mr James Hutchison , Glasgow Central

That ought not to encourage the hon. and learned Gentleman and the Government to follow the same precedent. This habit of using an insistent and clamant temporary demand to build the whole of the programme for the future, is the most dangerous gambler's habit. This has happened before, as the hon. and learned Member for Kettering (Mr. Mitchison) has said, and it is of the greatest importance to the country that it should not happen again. What is going to happen if the demand for our motor cars falls in foreign countries? What is going to happen if the demand for shipbuilding falls? There is not a shipbuilder in the country who imagines that the present high and insistent demand will be a permanency.

Have the Government calculated on the increased capacity of foreign countries? Is it realised that the Canadian output has already been trebled? Is it realised that the European countries, with the exception of Germany, are approaching their pre-war figure, that Luxembourg, Poland, South Africa and Sweden have passed it? Is it realised that the United States of America, with its enormous production figures, is in the course of doubling them? What is going to happen when all these come into operation and play on the international market? If we double the inter-war demand, as it was experienced, we find a total demand of 16 to 17 million tons, which will be taken care of by the existing plan. But is a permanent doubled demand likely? This is the most acute problem which faces every businessman when he is calculating what he is going to do in the future. But mark this: if the businessman miscalculates, it is he who makes a loss. But if the Government miscalculate it will do great damage to the whole of the public.

There is another aspect to this. If this calculation goes wrong and the demand falls how are the Government to succeed in maintaining their production and fill their capacity? Surely, the only thing they can then do is to cut prices. What sort of international complications are to arise if the British Government, who own all the steel production here, start to compete in that way? How will it be received by the nationals of foreign countries who realise that they are in a cutting campaign against the British Government? What, for example, is the new and expanding industry in India and Australia to say then? If the Government cut prices they automatically tend to make losses; but they cannot make losses under the Bill; they are charged not to make losses. Therefore, what are they to do in order to keep up their production and their profits? The only one thing left to do is to increase prices to the home consumer. That is very likely to happen. It has happened on the Continent—home consumption subsidising exports time and time again. What happens then to the aim outlined by the Minister in 1946, that the consumer would benefit out of all this?

A word on taxation. What is to happen on the taxation side? In the coal industry very large annual sums in taxation were contributed to the Exchequer before nationalisation. Now they are all gone. In the steel industry at present, each company pays its own separate taxation. If it makes a profit it pays the appropriate tax. If one company makes a loss, that cannot be set off against the profits of another. Under this Bill that can be done, and so it is almost inevitable that the country will receive less in taxation from this industry. Who is the taxpayer but the consumer? So here is the consumer, who is supposed to benefit by this Measure, who is likely instead to find steel dearer, and who, it is quite certain, will have to pay more in taxation because of this Bill.

Let us examine for a moment the third of the trilogy of noble objectives which the Minister outlined in that peroration to his speech—freedom: the greater freedom the Bill is to bring to British men and women. I do not think it has been contended, and I do not believe anyone would seriously contend, that by buying from a Government corporation the ordinary consumer can have more freedom than if he were able to pick one of the ordinary competing companies at the present time which, admittedly, are linked together. I do not think anybody will claim the consumer is going to have more freedom under the new system. Therefore, the freedom policy must apply to the workers. How is the worker to stand? The Minister yesterday made a most interesting, a most illuminating, and, I think, most dangerous remark when he was talking about the necessity of having more control of a non-negative kind. He said, for instance, that he had not been able to prevent the Steel Board resigning. Consequently, by implication, he said that under the new dispensation people who are under contract—and whose contract was finishing anyhow—could be prevented from leaving Government employment. That seems to me to be a most dangerous theory.

Photo of Mr John Jones Mr John Jones , Bolton

My right hon. Friend the Minister made it very clear in his speech that members of the Steel Board were at perfect liberty to leave the Board, and so can members of any other board in like circumstances.

Photo of Mr James Hutchison Mr James Hutchison , Glasgow Central

Certainly he did. I quite agree. However, he went on to indicate that the possibility of their leaving in that way was a highly undesirable feature. That is a very curious theory, because it means that he wants to use this Bill in order to prevent people from being able to leave their employment. [HON. MEMBERS: "Rubbish."] Does that extend to the workers in the industry? Well, I think the Minister should have used different words, or should have made the words he used very much clearer.

There is a profound evil inherent in nationalised industries, and that is that the worker has only a single employer, an employer who is distant, intangible and impersonal. If he quarrels with that single employer he is virtually a lost man. The facade of this Bill will not disguise from anybody the fact that at the pinnacle of the structure of the industry there is a single employer. No one will be deceived into thinking that the worker will be able to move from one employer to another more freely.

The boards and corporations set up by the Government are in a dilemma in this matter. It is not their fault, but the fault of the system. What are they to do? If they do not dismiss those men who are, perhaps, not pulling their weight, who are undesirable influences in a concern, or who for other reasons ought to be got rid of, then they will either have to keep men on the payroll who ought not to be there, or, on the other hand, get rid of them and virtually condemn them to unemployment, because it is clear that a man dismissed from the Government's own industry cannot easily get employment in that industry again. Therefore, the worker will have to seek work elsewhere, in quite another trade, perhaps in a trade in which he is not skilled, and must, in consequence, accept rates of pay for unskilled people. What should he do? Should he try to be accepted in another industry at rates of pay for the unskilled worker? Or should he emigrate, perhaps? But that is a savage sentence. Is he not much more likely to come back, cap in hand, to his former employers and ask for forgiveness? That is the way the State will create a race of sychophants, of men hanging on their immediate bosses smile. Shakespeare said: Oh, how wretched is that poor man who hangs on princes' favours. Those are wise words. Yet under nationalisation we are to create a race of men who are to hang on princes' favours. These are not fanciful illustrations. We have the case of the eight Cresswell miners. I hold no brief for them. No doubt, they were very troublesome. But it was a savage sentence. Then there was the case in Scotland of Captain Fresson, one of the only three men who had flown civil aircraft for profit and who were taken on by B.E.A. When he saw foolish things being done, things that were uneconomic, he raised his voice in criticism. Officialdom abhors criticism, and so he was dismissed, with no possibility of ever again being employed in the only trade he knew.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

Has the hon. and gallant Member ever heard of a black list among shipbuilding employers on the Clyde?

Photo of Mr James Hutchison Mr James Hutchison , Glasgow Central

I dare say that there is an interchange of information. I do not admit it because I do not know. However, I cannot believe that that is nearly as complete as it is to be under one employer. That is 100 per cent. control. I wonder if the workers realise into what noose they are putting their unwitting heads. Perhaps they do. For in spite of all that has been said on the other side of the House, their support for this Measure is, to say the best for it, lukewarm. Their possibility of freely changing their employment is disappearing. The possibility of their obtaining increased freedom, which the Bill was supposed to provide, is being destroyed.

Never were reasons for producing a Measure so clothed in hypocrisy. Never was the market of argument scraped so bare. Never were so many contradictory arguments brought forward to support a Measure. Never did hon. Members supporting a Bill contradict other hon. Members also supporting it so often and so forcibly. If the industry concentrates itself, it becomes a monopoly: if it does not it is backward and should be swept away. If the industry fixes its prices to make a reasonable profit, it exploits the public; if it makes a loss, it is inefficient and ought not to be allowed to continue. If it plans, it becomes a cartel and menaces the State: if it fails to plan, it is decadent and unworthy to continue. A steel coin has been tossed into the air to the cry by the Government. "Heads I win, tails you lose."

5.50 p.m.

Photo of Mr Alexander Anderson Mr Alexander Anderson , Motherwell

I count myself fortunate in being called in this Debate, since this subject of steel is of vital interest to my constituency and to the West of Scotland. I am surprised that the hon. and gallant Member for Central Glasgow (Colonel Hutchison) did not pay more attention to the problems of the industry in the area which he represents. I know that he had an opportunity of gaining an intimate knowledge of the working of the steel industry, because during the Recess he had a much publicised week in the steel works of Lanarkshire, but he has not conveyed to us the information which he got from the workmen in the industry about their attitude to this Bill. Possibly he may find himself black-listed if he tries to make a return to the industry after the next General Election.

We in Scotland are vitally interested in the future of iron and steel. Today we produce 15 or 16 per cent. of the total steel production of the country. We have built up around steel a vast, complex organisation of ancillary and processing industries whose very life depends upon a constant supply of cheap steel. We have contributed to the full to the increased production for which the steel industry has got much credit from all speakers since nationalisation began to be mouthed about. We are told that this increased production is the result of team work in the steel industry, but I fail to see how this Bill in any way infringes upon the continuation of team work in the industry. There need be no disturbance of the essential structure of the industry, and I would like to state quite bluntly tonight that the increased production in the industry is due very largely to two factors with which the controlling power in steel has had very little to do.

The first of these is that, for the first time in the history of the industry, it has tried to produce the maximum amount of steel in this country. Secondly, it has been staffed by a body of operatives who have put their backs into meeting the country's need for steel. I wonder how much the increased production of steel today is due to the introduction of the continuous working week in the steel industry. I wonder, too, how much of it is due to the hard-working men putting their backs into the driving of obsolescent and out-dated plant in order to meet the immediate demands of our expanding industry. I am certain that if a proper assessment were made, it would be found that the steel industry owes more to the operatives who are working it today than it does to the executives who have been directing it in the past.

I would like also to say quite frankly that we in the West of Scotland have no confidence whatever in the future of Scottish steel under private control. We base that knowledge on two sets of circumstances. It is no use the right hon. Member for the City of London (Sir A. Duncan) telling us that we must not talk about the past. The people who are responsible for the past are the people who are again to be responsible for the future of the organisation of steel in our area, and we have had from them something which we do not look back upon with any great pleasure. I think of the vicissitudes of that industry during the time that I have been in contact with the steel industry—the strain thrown on local authorities, the closing down of plants suddenly, without consultation and without consideration for the social services developed in the area. In my little area I can look back to the closing of the Glasgow Iron and Steel works, with 3,000 workers, to the closing of the Pather Iron Works, to the dragging up by the roots of Messrs. Stewart and Lloyds at Bellshill and its planting down at Corby. These concentrations may be in the interests of the steel industry, but they were not decided by community interests, and the result was that areas of Lanarkshire were left derelict at that time by the people who ordered these transfers. Certain areas have not yet recovered. There is an indelible mark upon them because of the inconsiderate way in which those transfers were made.

We can remember, too, in the steel industry periods when it gave us pros- perity. Those were the only periods—the periods of boom—when there were decent wages paid in the steel industry. The wages in the steel industry were at starvation level except at boom periods. We can remember, too, the fact that we have had from the steel industry in our area industrial casualties on a large scale, and that one of our greatest problems in the 20 years past has been trying to find work for the men broken in that heavy industry, and on whose behalf we have had to fall back on the State, and not upon the industry, for support. We do not believe, those of us who know the industry, that the steel industry in Scotland is efficient. By its own admission, the steel industry is 30 per cent. inefficient. It must be more than that in our own area. From the speech of the hon. and gallant Member who preceded me, I can only think that in the minds of those who shape that industry today, restriction and dear prices are still the things on which they rely.

We have had in Scotland difficulties in making steel. We have had our troubles and problems, but we have never faced them as they should have been faced, because the industry has been sheltering behind a monopoly façade. In Scotland today there is not one balanced steel plant. There have been sectional improvements and bits and pieces fitted into works, but there has been no long-term application to the industry of private planning for the future. We in Scotland are facing big problems of reconstruction. The iron and steel industry needs concentration, and it needs modernisation, which may possibly mean new sites. We believe that the people running it privately today are not the people who can reconstruct it for the benefit of the community.

We have heard it stated that they can find the finances. We believe that there is more to it than that. The whole life of these localities is affected, and we think that in such a time and in such a question, when the whole life of the industrial part of the West of Scotland is to be affected by the reorganisation of the steel industry, that decisions should not lie in the hands of a handful of people who are primarily responsible to their shareholders and completely irresponsible to the community among whom they live. We believe that to leave that power in the hands of a number of people, is dangerous to them and bad for the community. I make no suggestion that they are not capable, and I do not suggest that they are not public-spirited, but I do suggest that they must be influenced in their decisions by motives and ideals which are not for the benefit of the community but for the benefit of the interests of which they are the servants.

We on this side believe that this Measure will give the steel industry in the West of Scotland an opportunity to plan efficiently a modern, a concentrated and an integrated industry, and we believe that in no other way can that be assured. I hope that the House will give the Bill the majority which it deserves.

6.0 p.m.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I have listened to most of the speeches during the three days of this Debate. So far, there has not been a constructive speech from the opposite side showing what they propose to do with the industry and how they propose to make it efficient. We have had the same platform speeches, the same vague phrases and the same doctrines put forward over the entire three days by all hon. Members opposite, including the Minister of Supply and the hon. Member for Motherwell (Mr. Alex. Anderson).

I must make one protest before getting on to my main theme. Although it has given me great pleasure to listen to the flow of oratory which has come from the Front Benches, it would have given me even greater pleasure if some of the speeches had been a shade crisper, neater and shorter, and so given the back benchers on both sides a little less anxiety about making their contributions. Right hon. Gentleman on the Front Benches on both sides might realise that every alliance is the result of a shared hatred, and it may be that the back benchers in future will be combining in order to get more time for themselves.

I shall try to be short in order to give hon. Gentleman opposite a chance of making their contributions. First, may I say that I am not a shareholder in any steel company and I have never been a shareholder in any steel company. But I am a consumer of the product, and I presume that I shall be represented by these consumers' committees about which the Minister of Supply spoke yesterday. I use large quantities of steel sheet piling and rails. My experience of committee work does not give me the same pathetic reliance which hon. and right hon. Gentlemen opposite place on their efficiency. The only way the consumer can really be protected is by taking effective action against the individual who is supplying him. When I have had difficulty with Government Departments about building and constructing I have never yet received any positive help from any committee they have formed. It is entirely the fault of the committee system, for the simple reason that it can be negative but it is rarely positive; it can go into history but it can rarely affect the future. All that happens is that a stereotyped Civil Service letter comes from the committee apologising for its inability to do anything.

It reminds me of a friend of mine who was travelling in the United States in a railway coach over-night and was bitten by one or two insects that were travelling with him. He complained to the railway company and received a letter in reply saying, "This is extraordinary. It has never happened before in the history of the company. We will send a team of trained investigators to the spot to see that it does not happen again"—the usual Civil Service nonsense. My friend was quite satisfied until he held the envelope up to the light and saw in it a slip of paper which said, "Send this guy the bug letter."

Photo of Dr Mont Follick Dr Mont Follick , Loughborough

How many civil servants are there running the railways in America?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I said "the usual Civil Service nonsense."

Photo of Dr Mont Follick Dr Mont Follick , Loughborough

From private enterprise.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

From State-owned railways. [HON. MEMBERS: "No."] There are two aspects of this problem and this was clearly stated by the Leader of the Liberal Party. The first is economic and the second is political. My first remarks concern the economic angle. The important question to ask ourselves is whether this Bill will produce cheap steel? At the present time the life of this country depends upon its success in solving the question of the balance of payments, and while it is important that the political question should be discussed, it is even more important at this juncture that the economic angle should be discussed. "The Economist" of 6th November, puts it well: 'The first and last test of this Bill is therefore this, will it produce steel at lower prices than would otherwise be charged? The onus of proof that it will do so is entirely on the Government, and it is the duty of the Opposition to examine their arguments and criticise them if they can. That puts me in a dilemma, because no solitary argument has been adduced by the opposite benches to prove that the Government will produce steel cheaper and more plentifully than it is being produced now. In default of that, I propose to advance a few of my own reasons to show how steel will be produced less efficiently and less cheaply in the future and less easily than it is being produced.

In addition to being a consumer, I am one of the hon. Gentlemen on this side of the House who have been the recipients of some sneers from the opposite benches because we have done our level best to go round the steel industry during the Recess in order to find out the facts. I do not think those sneers were deserved, because it is part of the duty of every Member of Parliament to find out what he can. I went round the industry not only to get the hones and the flesh of the facts, but the spirit of the facts, and this can only be obtained if a Member goes into the industry itself. I make no apology to the Joint Parliamentary Secretary for trying to glean information which he has been fortunate enough to get during the course of his working life. I extend to him an invitation: any time he likes to come to any of my building sites, I will do what I can to give him the spirit of the facts in the building industry.

The present position in the steel industry is that it is relatively efficient as compared with other industries. If we take the cost of ingredients, the raw materials have increased 80 per cent. over 1938 and the earnings have increased 100 per cent. But the final price of steel has increased only 69 per cent. That shows a fair degree of efficiency.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

What is the increase over 1937?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I have not got the increase over 1937 but I should think it is somewhat lower.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

It is substantially heavier.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

If the hon. Member wants to give his contribution later, he can produce figures to show the House that it is substantially heavier, but as compared with 1938, the last full year before the war, the industry had advanced and shown great efficiency. Wages paid are greater than in almost any other industry in this country. They are much higher than in the building industry. The average wages in November, 1948, are £6 12s. 11d. in iron and steel while wages in the building industry are £6 0s. 5d.; therefore the industry is relatively efficient compared with other industries. However, that does not necessarily mean that it is absolutely efficient.

There are two main reasons why, in my opinion any business is 100 per cent. efficient. The first is that the psychological climate should be right and the second is that mechanical methods of producing whatever the end product is should also be right. However, the most important aspect is the psychological climate. If that is wrong then no business can be efficient. A good administrative framework, excellent technical achievement, a smooth rhythm and flow of production cannot make an industry efficient without the right psychological climate. The hon. Member for Reading (Mr. Mikardo), who has had a good deal of experience in this respect, will agree with me that the psychological atmosphere is the most important thing in industry. Hon. Gentlemen opposite used that fact when they were discussing the coal industry, and it assisted their arguments a great deal, because they were able to prove that the psychological atmosphere in the coal industry was such that it was impossible to make it efficient unless something was done about it. The only thing they did not go on to say was why the psychological atmosphere was bad, and it was really because politicians deliberately created bad feeling in order to obtain political power. In his speech the Minister proposed to take over the esprit de corps of the iron and steel industry by legislation. He said: Their personnel and internal organisations, and such esprit de corps as they may have achieved, will be unaffected. Indeed, on the morning after Vesting day the only difference for them will be that the ownership of the securities has changed hands."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 63] Sooner or later, the Minister of Supply will find that esprit de corps cannot be taken over by legislation, and one of these days I expect the Socialist Party will produce a Bill to abolish original sin. They will give it three Readings and the Royal Assent. Then we shall all live happily ever after. Confidence and the correct atmosphere are difficult things to obtain in any industry. It takes hundreds of transactions, satisfactorily concluded to the benefit of both sides, before that confidence is built up, but it takes only one or two transactions at the most to destroy it. It is very easily destroyed and very hard to obtain.

When I visited the industry I found that the psychological atmosphere and climate were extremely good. Taking the men first and the management second—otherwise we shall be open to a charge from hon. Members opposite—the relations between men and managements were very sweet and smooth. Queries were hammered out on the spot, efficiently and with lightning rapidity. The men also received their whack—I will call it whack because that is the best way of expressing it—of whatever cash benefits increased mechanisation had brought about. Some of the men in the melting shops were receiving £24 a week—quite rightly so, for they were producing the output. The point is that the sharing of the benefits of mechanisation had created confidence in the industry. I remember walking into a melting shop and the manager quite seriously told me I should not smoke a cigar in case the men were jealous of me for earning as much money as they were. The men are happy.

I now turn to the psychological climate, so far as the management are concerned. If I harp on the management it is not because I am being partisan in any way, but because I think they are the most affected by the Bill. I wish to take four separate factors on management, which are important, and examine how those factors apply today and how they will apply after this Bill has passed. The first factor is promotion. At present the ladder of promotion is a reality and not a fiction. In some of the companies I visited, general managers and assistant managers of various steel melting shops were promoted from the floor of the shop. One, who was a general manager, started by earning a few shillings a week, and a good percentage of the managers came up in the hard way. I met and interviewed about 40 managers altogether. It was my experience that throughout the industry the impression exists among the management that the ladder of promotion is a reality.

I ask hon. Members opposite to consider this next point very seriously. The managers think that under nationalisation party political faithfulness will be the test for promotion. I do not say they are right, but that is what they think and if they think it the reactions on the industry will be just as bad as if it were right, because they have it in their minds. A story might illustrate that point. It is about a trade union delegate, a very efficient worker, who was offered promotion to become the foreman of a gas producer plant. He refused instantaneously because he said he would prefer to wait until nationalisation, when he would get a very much better job. He magnanimously went on to say to the manager, "It is all right, you have been a good manager and I will look after you and see that no harm comes to you." Hon. Members opposite know that that kind of thing is true of the industry. It has a very painful and harmful effect on the minds of the management. They think promotion will be dominated by pressure groups within the trade unions. This may be right, or wrong. All I say is that it is definitely in the minds of the management and, therefore, will affect their working when the industry is nationalised.

The second factor of management is the question of hours spent on the job. At present managers come in on Sundays and some of them have a telephone by their bedside, and are prepared to spend an enormous amount of their own time, 24 hours a day if necessary, on the job. They say, "If we are made into a Civil Service, we do not expect to work those hours. We shall work the hours of any normal nationalised industry," which is by no means the same as in private enterprise. They intend to do the minimum. I telephoned a nationalised industry last Saturday morning to get some information about a very important contract which ran to more than £1 million, but no one was there to answer the telephone.

The third factor of management is the question of making decisions. Making decisions in any industrial factory or any process which has to produce an end product is the most important factor of all, in my opinion. A quick decision is often more vital than a correct decision. It is not always a question of choosing between a good decision and a bad decision, or between a right decision and a wrong decision, but often between the lesser of two evils, and a quick decision may be more important than a correct decision.

I illustrate that by comparing it to a school which was opened last week and which my own firm built. The Minister of Education performed the opening ceremony last week. So far, it is the only school to be completed in contract time, and there are no extras of any sort to be paid for. One important reason for that—I am modest enough to withold the main reason—the subsidiary reason, is the fact that the architect of the local authority prepared his plans in plenty of time and in great detail. Further he delivered those plans to us and made instantaneous decisions so that unobtainable materials could be replaced by other materials which were available. Consequently, the school was built in time. Now at precisely the time that we started that school we started a similar school of the same size nearby. The same organisation, the same general manager and the same plant were available. Yet that school is not yet completed. It will take nine months more before it is completed. It will cost £40,000 in extras and the reason is that in the second case the architect has made decisions which were correct but never made them at the right time and early enough. Consequently the entire flow and rhythm has been disturbed from beginning to end.

At the present time, in the iron and steel industry decisions are made verbally on the spot and if a man makes a wrong decision, providing he has made it in good faith, there is no post mortem which damages him, no loss of confidence and no "loss of face." When nationalisation comes, promotion will depend on two things, first, seniority, and, second. making no mistakes.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

How does the hon. Member know?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

Merely because it has happened in every nationalised industry. If a person is in a nationalised industry, or in the Civil Service for that matter, and makes a correct decision, he does not get promoted, but if he makes a wrong decision, he gets thrown out. That is the reason why he makes sure that his decision is a correct decision at the expense of time. That has happened in all the nationalised industries and will happen now, particularly if a trade union pressure group is able to pillory a manager they dislike because he has made a wrong decision.

The fourth and final factor is top-level decisions. It is very important that a board which decides to have a new scheme shall be there when the scheme is created and still be there when it comes to fruition. They will then be responsible for their own scheme and accountable for the success or failure of it. It takes five years to build a steel plant, and it will probably take a little longer as steel plants get bigger. It is essential that there should be continuity at the top level. At the present time there is such continuity. Will there be continuity of these hoards under nationalisation? If political nominees are put on them, what will happen when political parties change? It is more than likely that the Ben Smiths and Citrines. if the Government intend to put them on the nationalised board, will have moved to another nationalised industry, and having approved a scheme will not he there to put it into operation, which is important from a business point of view.

I intended to say something more about, management, but I turn for a moment to the political angle, mostly because of what the Chancellor of the Exchequer said last night. He appeared to think that only the Socialist Party in this country could stop Communism. He appeared to think that no one else could stop it. That made me look up the objects of the Socialist Party, which are the common ownership of the means of production, distribution and exchange. The object of the Communist Party, as set out in the constitution of the Young Communist League, is: A Socialist Britain, in which the means of production, the factories, the mines and the land are owned by the people. By "the people" they mean the State. So the object which the Socialists have in mind is precisely the same as the object which the Communists have in mind, namely, that the State shall own all property. They have the same end and they are both exerting their wills to achieve that same end. But the methods and means of getting there are different. The Communists, unlike the Socialists, will not only the end but the means of getting there. They- impose physical sanctions, which are enforced to make people work and to make sure that the object of common ownership is a reality and will work. The Socialists have not that sanction. In its place they are hoping to change human nature. We have the Lord President of the Council saying in a speech "We must socialise men's minds." We have the hon. Gentleman the Member for North East Ham (Mr. Daines) saying in this House: The plain fact to be faced—and I, as a Socialist, recognise it—is that Socialism is not only a means of economic change. Unless it has a spiritual content which is capable of changing men and men's nature, then it is bound to fail.…We must change men and their outlook."—[OFFICIAL REPORT. 21st November, 1946; Vol. 430, c. 1045.]

Hon. Members:

Hear, hear.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

Hon. Gentlemen agree with that. But human nature has not been changed for 2,000 years, and when I see those faces across the Chamber I do not see much reason why it should change for them. Then there was the hon. Member for Walton (Mr. Haworth) who, in a sincere speech, said he was disappointed because the workers had not responded and worked for the nationalised industries as he thought they would. He was perfectly honest and sincere about it. Of course, they will not work harder for a nationalised industry than for a private industry. They are mostly interested in their own immediate surroundings and how they are faring in their job.

Hon. Gentlemen think that this is a new problem. I went even further back than the Lord President of the Council, as far back as Aristotle, who is older and much wiser. He said: Laws advocating it"— that is, communal property— have a specious appearance of benevolence…Men readily listen to them and are easily induced to believe that in some wonderful manner everybody will become everybody else's friend.These evils"— he concludes, somewhat brutally— are due to a very different cause, the wickedness of human nature. The real answer is that the system that hon. Gentlemen opposite have in mind is a perfect system providing always they alter men's natures. They are hoping to alter men's nature and bend men to their system. They have made two vital miscalculations. The first is that they cannot produce motive power to move men to make them work for communal property. One of the most powerful and consistent urges—and this applies to politicians as well as to industrialists and workers—is personal interest. It is easy for a politician to see that if we increase men's wages they work much harder than if one turns their factories into State-owned property. If we doubled the wages in the steel industry today, we should get a better output than will be achieved merely by changing the ownership of the industry. That fact has to be faced by hon. Members opposite.

The entire science of social organisation consists of steering that personal interest so that man may find his own advantage and profit in doing what is useful to society. In the olden days the Liberals used to affirm that laissez-faire was a good thing, and they realised a psychological truth when they said that the more freely men follow the impulsions of nature the greater would be the measure of their activity. They were perfectly right. The error they made was in assuming that the collective interest would always be served by the sum total of the individual interests. That will only occur when a very wise Government arranges its affairs so that what is disadvantageous to society is disadvantageous to the individual and what is advantageous to society is advantageous to the individual. It is advantageous today for a man to go into the black market, whereas the Government ought to make sure that what is good for the State is good for the individual and that what is bad for the State is bad for the individual. Until such time as they recognise that, they will never have any success on the production side of our affairs.

Another good reason why the Chancellor of the Exchequer was wrong in saying that Socialism was the only thing that could stop Communism is provided by a quotation from the pen of his right hon. Friend the Minister of Food. In "The Theory and Practice of Socialism" the Minister of Food said: It is quite impossible to establish Communism as the immediate successor to capitalism. Hence Communists work for the establishment of Socialism as a necessary stage on the road to Communism. Where is the Minister of Food? Does he still hold to that theory? If he thinks that, why does he not join the Communist Party? [An HON. MUMBER: "What about the Minister of Supply and the Minister of Health?"] I finish on this note: the survival of the fittest is a law which still holds good. The only difference is that the test of what is fit and what is not fit has altered. Previously it was efficiency in the economic field; now it is oratory on the soap box. The difference is that now it is political and no longer economic.

Napoleon once said that we were a nation of shopkeepers. That is no longer true. We are a nation of politicians, and the pressure group with the greatest intensity of will and the most weight behind it will succeed in dominating our economic affairs. A distinguished foreigner said to me a few days ago, "It used to be said that 40 million Englishmen blew their noses. Now it is being said that Britain blows the noses of 40 million people." That shows what is happening in this country, with the Government taking charge of almost every side of our activity. Iron and steel is being thrown into the politicians' pool and will be divided out. It will be a most unedifying spectacle. I will conclude with the words of Balfour, which describe what will happen to any Socialist Party. He sent a message in 1920 to the Soviet Union, which was written in the third person. He said: Mr. Balfour has never doubted the complete efficacy of the Soviet system for making rich men poor. It is in the more difficult, and in Mr. Balfour's opinion the more important task of making poor men rich that failure is to be feared. So it is with the Socialist Government.

6.30 p.m.

Photo of Mrs Jean Mann Mrs Jean Mann , Coatbridge

I represent a constituency known as "the Pittsburg of Scotland." I have entered this Debate with some trepidation, particularly as I have learnt how hon. Members opposite were becoming expert enough to enter the Debate by serving one week, sometimes two weeks, in the steel mills. I am sure that those of us who have listened to the hon. Member for Wallasey (Mr. Marples) will all congratulate him on the knowledge he has revealed of the importance of integration and its effect on the price level, and the knowledge he has displayed about iron ore deposits and the workers within the industry. It has, indeed, been very edifying to profit from that week's excursion into the steel industry by hon. Members opposite.

I wish to reply to the statements made that the Bill has been brought forward because of pressure from the Left, that it is an election plot and that it has been introduced for political reasons. I wish to draw attention to the fact that in my constituency, even before I was adopted as candidate, the workers in the British iron and steel and kindred trades approached me about the conditions in that industry in Coatbridge. They said that because of non-co-operation and the non-integration of processes, prices were 50 per cent. above world prices. They said their average wage was £4 16s. 0d. per week. I am still using the same little piece of flimsy paper with the notes which I got about these matters before I was even chosen as a candidate. Those men said they were operating a 1783 two-roll system for rolling puddled iron and that the plant was still operating. In their memorandum to me they said the units were small, numerous and widespread throughout the district. Amongst the great many other things of which they talked, the mixed mills were said to be small and out of date and unable to compete with modern mills. But they are still being retained, in spite of all that was said this afternoon by the right hon. Gentleman the senior Member for the City of London (Sir A. Duncan).

They said that the prosperity of Coat-bridge could not be left to the whim of unco-ordinated private firms. They were joined by one for whom, I think, all in the industry have a great respect. I refer to William Stewart, of Stewarts and Lloyds. I like Mr. Stewart and I like his name, because it is the same as one most dear to myself who served 50 years in the industry—another William Stewart. I have good reason to respect both these William Stewarts. My father gave of his best. He worked long and hard and arduously. He considered it was a great compliment that when there was a payoff and a dismissal he was always the last man to go.

But I wish to speak of the Mr. Stewart of Stewarts and Lloyds, because it has been pointed out that there has been a reorganisation between the two wars. I think the right hon. Member for the City of London told us how well the industry had done between the two wars. He told us that the subsidy which they got was not, as Mr. Crowther, of the "Economist" said, a waste of money, and that reorganisation did not take place. "Any benefits could hardly be detected through a microscope."

The right hon. Gentleman painted an entirely different picture. He said that the subsidy was a subsidy to the consumer. I wonder, then, why Lord Nuffield became so impetuously angry as to remark that, were he a younger man, he would start up himself. If it were a subsidy to the consumer, can we have an explanation why so many consumers still bought from abroad? The right hon. Gentleman told us about the reorganisation and we are left to believe that everything is all right now. But Mr. Stewart, of Stewart and Lloyds, in an address to a conference of the Town and Country Planning Association said: Scottish steel works, with one exception (Clydebridge), are not integrated…they have no coke ovens and no blast furnaces and have to manufacture gas specially for smelting cold pig iron and scrap, whereas in an integrated work the flow of materials from one operation to the next with the minimum of handling and the maximum conservation of heat, and the use of the blast furnace and coke oven gas, combine to reduce the cost of production to a level unattainable in unintegrated works… Mr. Stewart pointed out that as long ago as 1929 American consultants had come to the Clyde and had spoken of the necessity of co-ordination. He remarked upon his agreement with them. But then the Imports Duty Advisory Council, of whom Mr. May was Chairman and which issued from time to time what was known as the May Reports, suggested that the Clyde-bridge site—which, however, would add shillings per ton to production costs—should be the chosen site. Mr. Stewart says that the reasons given in the May Report were unconvincing and that one of them—that Messrs. Colville's undertaking was already largely concentrated in Clydebridge—was definitely wrong. I notice he also told the delegates, If nationalisation of the steel industry goes forward"— and he did not say it was merely a political plot— as we must assume it will in view of the utterances of the Labour Government he hoped that this integration would take place.

I noticed also that the right hon. Member for Woodford (Mr. Churchill) made one or two statements in favour of the industry. I will pass over the one that the Socialist Government have selected this industry for its malice. I think that is a statement unworthy of the right hon. Gentleman. However, I want to dwell on this one. The right hon. Gentleman said that the steel industry in war time did not let him down. The steel industry is responsible for equipping the Army, the Navy and the Air Force. It is most important, in my opinion and the opinion of most Socialists, that a lifeline like that should not be owned and controlled on a profit motive basis. I am not saying anything against the profit motive. As a Scotswoman I like incentive, and if I am in business I certainly expect to make a profit. I consider, however, that there are some things which must be regarded above profit, important as that is.

I want to know whether the steel industry did not let down the right hon. Gentleman the Leader of the Opposition in peace time. I remember that on the last Sunday in March, 1944, the right hon. Gentleman told us in a broadcast that the steel industry would give us 500,000 houses. Has anyone seen those Portal houses? Who let down whom? The houses have not materialised. Did the right hon. Gentleman thoroughly analyse this matter before he made such an important statement to the nation, a statement which keyed up all men and women at home and abroad, or was he talking through his hat? Did the steel industry not co-operate with him? There is something here which we and he ought to get straight.

Not only does the steel industry control our lives in peace and in war; I find that it controls pins and needles, razor blades, cutlery, jam tins and biscuit tins, chairs, hardware and hollow-ware, wire and wire manufacture, coal-cutters, textile looms, milking machines, tractors, bridges, buildings, factories and office blocks, mills, shipbuilding, marine and mechanical engineering, railways and rolling stock, rivets, bolts, nuts, screws and chains, forgings, motor cars and motor cycles, aircraft, collieries, and electric engineering, to mention a few. Does any reasonable person pretend that such power should be in the hands of a private monopoly? I find that there are jobs for the boys.

Photo of Mrs Jean Mann Mrs Jean Mann , Coatbridge

They hold seats in companies ranging from iron and steel proper to chemicals, motor cycles and bicycles, shipbuilding, docks, engineering, aircraft and cable works, down to Smith's potato crisps. Yet we were told by the hon. Member for Solihull (Mr. M. Lindsay) that the young men from the London School of Economics would find jobs in our proposals. An hon. Member remarked there were jobs for the girls. We do not mind people having had jobs; what we do mind is people having remuneration and never having had jobs. It is very peculiar that those who all through their lives have drawn unearned income, the boys who never had jobs, should be the first to talk about a few directors who earn £7,000 a year, most of which is subject to 19s. 6d. in the £ in Income Tax. So far as the girls are concerned, hon. Members can ask their aunt or their grandmother what she did in industry to derive constantly from year to year unearned increment to such an extent that her very appearance at a garden party would bring the exclamation: They toil not neither do they spin. And yet I say unto you, that even Solomon in all his glory was not arrayed like one of these. Hon. Members opposite defend the system which has provided for those who never made any contribution to the cause of humanity.

The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) said: We believe that the prices charged by the industry should be subject to Government supervision and approval."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 95.] That is a statement of the policy of the Opposition. I wonder when they believed that the prices should be subject to Government supervision and approval. Only when they were forced by economic circumstances and public opinion did they even agree to go that length with us. That statement means responsibility without power. We have heard criticism about people having power without responsibility, but when the Opposition lay down their policy that the prices charged should be subject to Government supervision and control, it is nonsensical to give the Government responsibility without giving them adequate power. The Bill is necessary in the interests of our great country. It will make her a greater country.

6.48 p.m.

Photo of Lieut-Colonel Sir Cuthbert Headlam Lieut-Colonel Sir Cuthbert Headlam , Newcastle upon Tyne North

I do not intend to detain the House many minutes. It has been a misfortune in this Debate that there have been so many long speeches from both sides of the House. I agreed with the hon. Member for Wallasey (Mr. Marples) when he made a similar remark, but he then proceeded to speak for the same length of time as, or rather longer than, the previous speaker, which rather disappointed me.

Anybody who represents, as I do, a constituency in the Tyne area must say a few words on this Bill, which must affect many of the inhabitants of this great industrial area. I have listened to the greater part of the Debate. I do not think that any completely impartial person following the Debate would say that the Government have disclosed any practical policy for the future conduct of the iron and steel industry and its development under State ownership. No Minister or other hon. Member on the other side of the House has shown how the industry is to be made more efficient by its transference from private to public ownership. The Minister of Supply in his opening speech, which seemed to me to be a partisan and political pronouncement and therefore scarcely worthy of such an occasion, made no serious attempt to enlighten the House as to how a Government monopoly of the industry could improve upon the work of the Government controlled monopoly which now exists.

The Minister told the House: In our view it would be madness for a Government determined to build the nation's future prosperity on sound economic foundations to perpetuate in this basic industry a system in which serious clashes on matters of major policy between private and public interests are bound sooner or later to arise, possibly with the gravest consequences."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 57.] The Chancellor of the Exchequer in his speech last night made very much the same observations. Yet neither Minister gave the House any example of what they meant, or explained how the industry, which is already under the control of the Government, could effectively oppose their policy.

It would appear that the possibility of conflict is the real case for the Bill, for as "The Times" put it—and I quote an English paper, rather than an American, as did the hon. Member for North-West Hull (Mr. R. Mackay)—in its leading article yesterday: This is the bogy produced to explain it away. If the industry is not nationalised, it is alleged, a conflict is bound to occur, at some unstated date in the future, between 'the steel-masters in Steel House' and the public interest. I find it almost impossible to accept this point of view. It is based, presumably, on the supposition that the steelmasters are wholly concerned with their own profits and their own private interests, and are entirely destitute of any public spirit whatsoever. There is no foundation for such an opinion—except that they may, as individuals, differ from the Socialist Party in its conception of politics and economics. In any case, even if the steelmasters be old-fashioned enough to believe in the capitalist system—which, incidentally, has done so much to build up the greatness of this country and to improve the standard of living of the people—they are today sufficiently under the control of the State to find it impossible to obstruct, as was suggested, the policy of the Government, whichever party may be in power. This should be evident to the meanest intelligence.

The monopoly which the steelmasters now possess is a controlled monopoly, because steel prices are now fixed publicly by the Minister of Supply through a Government Order. There is therefore, no question of the steelmasters themselves fixing prices to the detriment of the consumer. There is no trade or industry about which more definite knowledge is available to the Government, or over which the Government have more power. The interests of the steelmasters lie in extending output and in reducing costs. The interests of efficient production are identical in both cases, and the discipline of private responsibility in competition between firms ensures the drive towards efficiency.

The alternative proposed in the present Bill is a tight and rigid monopoly, with all the powers concentrated instead of dispersed, as under the present system. Prices are to be fixed by the new Corporation: this would constitute a true monopoly, with the interest in high profits and high prices in the same hands, and with no effective control on the efficiency of firms. We have already had experience in nationalised industries of the tendency to put up the price to the consumer, and there is nothing that I can see in this Bill to prevent the same thing happening if this Bill becomes law. It is even a matter of doubt whether, under the terms of the Bill, the Minister will have much, or indeed any, power in the fixing of prices: this power is to rest entirely with the Corporation.

No evidence has been brought forward in the Debate by responsible speakers opposite to suggest that the iron and steel industry is not being conducted to the best advantage. Facts and figures are far too strong for any such suggestion to be made. Why then, except for political motives, should there be this wanton abandonment of a great development scheme which has already been accepted by the Government and is working well? This is a time when the efficiency and productivity of the steel industry are all-important for our national economic regeneration and recovery. There is nothing in this Bill to convince me that it will do anything to provide such recovery, while it must inevitably, if it becomes law, create much unrest and dissatisfaction within the industry itself.

Under the Bill the State abdicates its present impartial position between producer and consumer and becomes a competitor in many different industries, subjecting them to a risk of disorganisation and unrest. Within the iron and steel industry itself a State monopoly is to be substituted for invigorating competition, the value of which even Ministers have admitted. The Corporation which the Bill sets up is assigned no duty, as far as I can make out, to produce effectively at the lowest possible cost; is given no direction to be impartial in its price schedules or in the distribution of its products; and is subjected to none but the vaguest kinds of safeguards to the consumer. It seems to me unnecessary to bring in the Bill. It is brought in only because of the clamour of the extremists opposite, who are anxious to do all they can to set up in this country an economic system such as exists in Russia.

It has been truly said by my hon. Friend the Member for Wallasey that there is little difference between the economic State desired by Social democrats and that which is desired by Communists. That is absolutely true. The only difference between the party opposite and the Communists is that the party opposite is proceeding by the obvious and correct legal procedure in its attempt whereas the Communists might use force—as, indeed, was suggested by the Chancellor in his speech last night; he brought that in at the end of his speech, I suppose as a bogy to alarm us on this side of the House. We are not alarmed. We are prepared to believe in the commonsense of the majority of the British people, whose support we believe is behind us in our opposition to this Bill.

6.59 p.m.

Photo of Mr William Paling Mr William Paling , Dewsbury

I shall not detain the House long in the remarks I have to make, therefore perhaps I may be excused if I do not follow the line taken by the right hon. and gallant Member for North Newcastle-upon-Tyne (Sir C. Headlam). This Debate has created much interest, both inside and outside the House, because of the issues involved. Much interest has also been aroused because the question of nationalisation has been an issue before the country for many years. The people of our country are fairly well aware of the object behind nationalisation, and of the economic circumstances behind the policies of this Government in bringing this Iron and Steel Bill to the House. The Government are charged with having no justification for bringing this Bill forward. Apparently everything is as it should be inside the iron and steel industry. It has been said before this afternoon, that in order to be able to gain some idea of the future we often have to look to the past form which we gain valuable experience. In the past history of industry we can trace the development of private enterprise, and it is because of that past experience that the people of this country have come to regard the idea of nationalising this basic industry as in the interests of the country.

Without going into too many facts and figures about past history, we can divide private enterprise in the basic industries into two categories. The first category concerns those who owing to their inability to organise or amalgamate have failed lamentably in their efforts to rejuvenate the basic industries in the interest of the progress of the country. Most of those industries have now been taken over and nationalised. The second group, in which iron and steel are included, has after many failures and attempts to organise and amalgamate eventually came to some agreement for organisation and amalgamation after large financial assistance was forthcoming, and gradually a monopoly or cartel was formed. Inside that monopoly, however, we have seen very little done in regard to the reorganisation of the industry with a view to making it a more efficient unit.

So much so is that the case that the companies in that monopoly have sheltered themselves inside the cartel or monopoly and have not had the experience of competition in the open market. The sectors they did recognise, to some extent became efficient organisations and units in this great industry. That is where the industry finds itself at the present time, but during the whole of the time that the monopoly of iron and steel was being built up, they failed to take the initial steps to safeguard their own particular interest by making it sufficiently important and efficient to be able to supply the needs of this country at the present moment.

We are asked how we prove that the industry is not up-to-date and is incapable of the job required of it in the future. In that connection we have had quotations from my hon. Friend the Member for North-West Hull (Mr. R. Mackay) as well as from others. I want to make an addition to those, and it is from the United States' report on the United Kingdom's part in the European Recovery Programme, which is as important and impartial a statement as any which we could get on the industries of this country. Here is the quotation: In iron and steel the plant capacity is inadequate for current needs. Tonight we have had another statement, which came this time from the hon. Member for Wallasey (Mr. Marples). He was discussing the position of the iron and steel industry today and he said that the industry was relatively efficient. He went on later to argue that in relative efficiency it compared well with other industries. Is he comparing it with those basic industries which got into such an unholy mess that this Government had to nationalise them? Is he saying that the iron and steel industry today is only relatively efficient when compared with the standard prevailing in those other industries in 1945? In words which were formerly used by the Opposition, what has been said about the efficiency of the industry apparently stands condemned.

Secondly, we see the industry as a monopoly or as a huge octopus with its tentacles sticking out in every direction, and it is most important it this country is going to rebuild its industrial life in the future and regain its place as the foremost industrial nation of the world, that something should be done to make sure that the basic industries should be in the front rank of efficiency. It is the Government who hitherto have entered those industries to see that proper efficiency was carried through. The point I wish to make is that up to now the initial steps have not been taken to provide an industry commensurate with the needs of this country. Because of that I support the Government in bringing forward this Bill to nationalise this most important industry.

The third point—and on this I finish in order to give other speakers a chance —is that the power of the iron and steel industry as a monopoly is in itself sufficient to make the Government take it into their own hands. We are told that the Government have some supervisory control over this monopoly, but that control is not sufficient to demand the re-equipment and reorganisation of the industry. It is the Government's job to step in and take over the industry in order that it can become more efficient in the future.

There are many other points arising out of this question of iron and steel and the efficiency of the industry on which I should like to touch, but I shall content myself with saying that efficiency is demanded in this industry because of the demands which the country must make upon it for future development. If this country is to become an important industrial nation, taking its place side by side with other countries, something must be done immediately, and I hope that this Bill, because it is taking the right step, will gain all the support necessary.

7.10 p.m.

Photo of Mr Edgar Granville Mr Edgar Granville , Eye

I agree with the hon. Member for Dewsbury (Mr. William Paling) that this Debate, which has now gone on nearly three days, has centred around public ownership of the iron and steel industry as against public control. It is generally agreed, I think, that this major industry is not likely to go back to purely private enterprise as such in our lifetime. In the case of many major industries, this question of public ownership as against public control has very often become in practice a question of degree rather than of pure principle. As has been said, in this country today, and in many industrial countries, we have in effect a good deal of State-aided monopoly capitalism based on material allocations. The one thing that this Debate has brought out is that if we are to remain a free democracy, then this House and Parliament must be the final check and control.

In 1945 the Government began their programme for nationalising the essential public utilities, and the Liberal Party supported them. The Government were then faced with a world shortage of raw materials, and with large-scale industry having been under Government control for six years and dependent very largely on Government orders. I think Members opposite have admitted in this Debate that the Government had not thought out the technique for running these new State industries, and experience during the Committee stages of the Measures setting them up and in the industries themselves has shown this to be true. We do not, quite frankly, know the answer to a lot of the difficult questions which have arisen. We do not yet know what is the incentive to efficient production in these State industries, or what is to be the new technique of supervision and management. We do not know what is to be the technique or methods of the new joint councils, or what is to be the basis or working system for the allocation and distribution of essential materials. We do not know what is to be the position of the small, efficient producer-units competing with Government industries. The right hon. Gentleman the Member for Bournemouth (Mr. Bracken), in the Debate on the Address, made a number of suggestions regarding the sub-division of the area boards, but we do not know whether we are right in thinking in terms of central boards, area boards, or even smaller boards to run and advise these industries. We are still in the experimental stages.

The Lord President of the Council has said, in one of the many statements he has made upon this subject, that there is a place for public enterprise and a place for private enterprise, but the determining factor is that it must be enterprise. What the right hon. Gentleman did not say is what is to be the working relationship in the new type of national controlled economy between public and private enterprise. Take the position of the small producer. Is he to have a charter and "Bill of Rights" in this Iron and Steel Bill? Is he to have a licence or not to have a licence if he is too small? Is a licence to be his only safeguard against monopoly with all its tremendous advantages? Is the small producer to be allowed to use the processes of the consumer committees, and to use the national facilities, such as research? I notice that the Parliamentary Secretary nods his head in assent. Then I ask him whether there is any avenue whereby the small efficient producer, in contradistinction to the consumer of steel, can make his views known to the consumer committees and thereby have his problems raised here by Question and answer in Parliament? I have yet to hear the Government indicate that they have given this sufficient study.

There was nothing in the other nationalisation Measures to safeguard the small, efficient producer, or the man with new techniques and ideas. There was nothing put into the Civil Aviation Measure. The Conservative Party were apathetic, while some of us were pressing for some such positive statutory right in the Bill. The Conservatives are the fathers of monopoly. In 1937 they started it in Civil Aviation. In 1932 they began the process in the steel industry. If the Conservatives are the fathers of modern monopoly, the Government must be the mothers, and that is why this present hybrid economy has been produced.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Bournemouth

The hon. Member supported that Bill.

Photo of Mr Edgar Granville Mr Edgar Granville , Eye

I have tried to say something in practical defence of the small producer, but the right hon. Gentleman and his friends did not think that was worth while then. The newcomer surely is the lifeblood of private enterprise. We have to face the fact that many of the State omelettes will never be unscrambled, and we have to study them accordingly. No doubt we shall have chairs in the universities and so on for the study of the hundred and one technical problems involved in these large industries under Government direction.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Bournemouth

Professors of nationalisation.

Photo of Mr Edgar Granville Mr Edgar Granville , Eye

The Liberal Party have studied this Bill carefully, although, judging from many of the interruptions, a lot of Members may not even have read it. We have listened to the speeches from both sides, and we are certainly not impressed with the speeches that have come from the Conservative Opposition. We are not convinced that major changes cannot be effected in the iron and steel industry without a change in the share ownership. My right hon. and learned Friend the Member for Montgomery (Mr. C. Davies) has said that by taking this new step the Government are putting the cart before the horse, but I would say they are putting the cartel before the horse—in this case the horse being the public.

We think there should be an inquiry to study the results of the existing experiments, an inquiry into the relationship between the State and ordinary industry, and a study of the forms of control and of the present iron and steel set-up. The Liberal Party is pledged to judge each of these cases on its economic merits. We think that the economic case for a share transfer as a prerequisite has not been made out so far and that many of the great changes envisaged in this Bill could be carried out without that happening. Therefore, we do not feel justified in supporting the Second Reading of this Measure, and it is our decision as a party to vote against it tonight.

7.20 p.m.

Photo of Mr William Kendall Mr William Kendall , Grantham

I wish to be very brief, and put only one or two points to the House, but before doing so I would like to congratulate the right hon. Gentleman the Member for the City of London (Sir A. Duncan) on the speech which he made today. I thought it was one of the most brilliant I have listened to in this Debate. The right hon. Gentleman stated that the steel industry had been very efficient between the two wars. I lived and worked on the Continent in those days, and, among other steels, I purchased a great deal of sheet steel. I had the markets of the world open to me, but I always found that both in quality and cost the sheet steel I could buy from America was better than that which I could buy in this country. It seems to me that the Tory Party have failed to make their case on at least the issue of efficiency, especially as they found it necessary to put on such big tariffs on steel imports to protect the industry. If the steel industry was as efficient as it is now claimed to be, it could have done without tariffs, and sold its products in world markets in competition with other steel manufacturers.

On the other hand, I must say that the Government themselves are causing a great deal of concern to many ordinary people. That concern is based not on the merits of this Bill, but on the industries the Government are already operating as nationalised industries. Those industries have not been made as efficient as they should be—judging by the signs the Parliamentary Secretary is making he is probably trying to indicate that the Government have not had sufficient time. That reinforces the fears of people outside this House, who would rather see the Government make the industries they have taken over really efficient before any more industries were nationalised. It is quite possible for the administration of the State to weaken and indeed collapse, if it takes on too much at once.

If it were simply a case of taking a monopoly out of the hands of private enterprise I should unhesitatingly vote with the Government tonight, because I and others who do not belong to either of the big parties have pledged ourselves to try to help the little man against monopolies. But it is not so simple. There is something, however, which can be done which would help me to make up my mind as to how I shall vote tonight. I think it is about time that a responsible Minister let the country know when nationalisation will stop. Unless such an announcement is made, people in other industries which have not been nationalised, especially the small industries, will be afraid to put forward their best efforts; they will not know if and when they themselves will be taken over. If I could be satisfied that apart from public utilities, the Government would stop their nationalisation with the taking over of the iron and steel industry I might feel inclined to say, "I will give you a chance once more to show what you can do, in the hope that you will get on faster and better with this job than with some of the jobs you have taken over." But unless I can be absolutely satisfied on this major point, I shall unquestionably have to go into the Division Lobby against the Government.

7.25 p.m.

Photo of Wing Commander Geoffrey Cooper Wing Commander Geoffrey Cooper , Middlesbrough West

I am glad that I have caught your eye even at this late hour, Mr. Speaker, because my constituency, which is in the North-East area of England, produces over one-fifth of the steel of this country. As I listened to the case of the Opposition, it seemed that they are faced with two dilemmas. One is the attempt to base their opposition to the Government's nationalisation policy on the past record of the industry, on a case which, I believe, cannot stand up to a fair analysis. The other is their attempt to base their case on the future prospects of the industry. They say they intend to remedy the defects of the past, but if we refer to the past, we find that certain questions must emerge. Are the Opposition really satisfied that the management and control of the steel industry in the past has been exemplary? Are they satisfied with the progress and efficiency of the industry as compared, for instance, with the steel industries of the United States, Luxembourg, Belgium and prewar Germany?

The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) blamed past Tory policy for not giving the steel industry an opportunity such as was given to the steel industries of the foreign countries I have just mentioned. He said that those industries had gained advantages which our industry at home had not received. Surely that is an argument for closer co-operation with the Government than was possible by the old methods of organising the industry.

Photo of Mr William Shepherd Mr William Shepherd , Bucklow

When my right hon. Friend made his statement about the advantages which had been obtained by Belgium and Luxembourg he was referring to plants established as a result of reparations, and very low-level wages. The hon. Member should not misrepresent my right hon. Friend in the way he is doing now.

Photo of Wing Commander Geoffrey Cooper Wing Commander Geoffrey Cooper , Middlesbrough West

The right hon. Gentleman made the point that the industries of those countries received tariff advantages before our industry. If that was a sound argument—and I am not suggesting it was—surely the steel industry will benefit from closer co-operation with the Government than there was in the past. I have just been handed a copy of HANSARD, and here is what the right hon. Gentleman said: …the industry had no tariff protection while its competitors had."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 80.] That supports what I have just said.

There are one or two examples to show that the industry has made some efforts to reorganise itself, but they are only isolated examples. This is confirmed by a quick look into the past. We recall that in 1930 the second Labour Government appointed a committee of inquiry into the steel industry. That inquiry was conducted by Lord Sankey. Their report was never published, but this was said by D. L. Burn in his "Economic History of Steel Making": The report judged the smelting and coke making branches of the industry wholly inadequate and antiquated; ore-mining and steelmaking branches less so, but still in need of great expenditure. Apart from a few examples, the same position obtains today. This condition is admitted by the Iron and Steel Federation's own plan, which they published in 1946. They suggested that they would need to spend £168 million—a figure which would probably have to be vastly increased today. Is this adequate? In any case would this plan be carried out if the steel industry were left to itself and the demand for steel, for example, started to fall off in a year or two? It may well be that under those circumstances it would be abandoned.

Looking at the question whether the plan is adequate, we recall that the steel consumption in this country works out at 3 tons per head of the population, whereas in America it is 6. We can take that as an indication of the standards of living in the two countries. This plan suggests that we should increase steel production in this country to only some 18 million tons. Is it not necessary to think in terms of a maximum production far greater than that—something nearer 30 million tons, which would bring the consumption of steel per head of the population nearer to that of the United States?

When the right hon. Gentleman the Member for the City of London (Sir A. Duncan) referred to this plan as having been agreed by all concerned, and consequently received a cheer from hon. Members behind him, I recalled that in the local newspaper, shortly after this White Paper was published, there were reports of considerable complaints from sections of the industry which it was suggested should be closed down. That indicated that by no means was there the agreement which he suggested. I took the trouble to look up the copy of "The Times" and I can quote from the issue of 9th May, 1946, which reads: The South Durham Steel and Iron Company stated yesterday that the report of the British Iron and Steel Federation on the iron and steel industry, so far as the company and its subsidiary, Cargo Fleet Iron, are concerned, would require some modification. If the proposals were carried out, the company added, dislocation of a large body of labour at West Hartlepool would result. I suggest that that refutes his suggestion that it was an agreed scheme. What would occur if, as was suggested under this scheme, certain plants were to be closed down? Does he suppose there would be no objection from those inefficient firms? What would they do in those circumstances? Would they have to come to this House and ask for a measure of authority to be given them so as to ensure the closing down of these plants? Or was it supposed they would be able to squeeze them out in some other way having little regard to the labour employed in those works? I wonder who would stand for such power being given to a private monopoly? I do not think that such a Bill would be passed if it were asked for in this House.

Under private capitalism financial considerations must always predominate. The Government are being accused of one of two things, either merely taking the steel owners' plan and turning it to their own account or not having any vast new plan of their own. That was the accusation made by the right hon. Member for Aldershot when he complained that there was no new plan put forward from this side of the House. I ask the Opposition—are plans put into Bills in this way? Of course not. They know perfectly well that any plan, however expertly devised, is bound to be subjected to all sorts of variations, and it would not be possible to come to this House and ask for permission to vary them. I suggest, therefore, that to say that, because the Government have not included in the Bill plans which might be criticised on the Floor of the House, they have no plan, is a shallow criticism. The important thing with any plans is to consider whether they will work. Is it intended to carry out those plans? That can be determined only by actual practical application.

Photo of Wing Commander Geoffrey Cooper Wing Commander Geoffrey Cooper , Middlesbrough West

If the right hon. Gentleman wishes to intervene, I will allow him to do so. He is apparently allowing me to continue, and anyway I will refer later to some of these plans. The industry gave an undertaking to reorganise itself after a 33⅓ per cent. tariff had been given. This tariff was introduced by the National Government in 1931. It was renewed two years afterwards, in 1933, for a further two years, at what amounted to a 50 per cent. tariff, on the recommendation of the Tariff Advisory Board. But they made a condition that satisfactory progress was made in introducing a scheme for reorganisation.

The extraordinary thing is that a national committee representing the owners of the industry, in March, 1933, actually advocated the formation of a national body. The Iron and Steel Corporation of Great Britain was proposed. There were to be 11 sections, and the Corporation was to work through regional committees. This complete centralisation was nothing more nor less than advocating nationalisation in principle, but they proposed that it should still be held in the hands of owners. That was advocated by the owners themselves over 15 years ago, and yet now the Opposition are actually criticising the same plan that this Government is proposing to introduce.

It is interesting to note the comment of the Chancellor of the Exchequer at that time. When he had seen these proposals, he said that much remained to be done before the industry could be considered to be properly equipped and organised. That was a comment coming from a Tory Chancellor of the Exchequer, Mr. Neville Chamberlain. Yet in 1934 a new scheme was put forward which was even less effective, and "The Times" commented: The new scheme may mean anything or nothing.…If the industry fails to take reorganisation seriously, then it can hardly expect either the public or the Government to view its inactivity with indifference. The rub over this Measure which the Government are introducing is that the Government propose to take some real action and not to follow the inactivity and indifference of previous Governments. I can speak for Teeside, and I can speak with some authority. I have seen the conditions which prevailed there between the two wars. The workers in that part of the country were under the constant stress and fear of unemployment. If any man who remembers that period is asked, he will express that fear as one of the things which persuades him of the need for a national policy to be proceeded with in connection with steel in the future.

The real tragedy is that the steel industry has been prosperous and has had assured employment only during periods of war and rumours of war. What the Government are proposing to do is to see that there are the same conditions of security even in peace time. If we look to the future we shall sec that there is full employment for the industry and full prosperity. Can those things be in any way guaranteed or assured by the Opposition if the same methods and organisation continue in the industry as apply now? I suggest that these things cannot possibly obtain without full Government backing and support. In fact the Conservative Party's recent leaflet, which was quoted earlier in the Debate by the hon. Member for Central Southwark (Mr. Jenkins), even gave support to the contention that there is need for full Government backing before any progress can be expected in the industry.

I was questioned by the right hon. Member for Bournemouth as to what were the plans of this Government for combating these evils of the past. I suggest that this Government would do several things—and I can only speak in general terms. They would plan production—that is obvious. They would increase efficiency—that is obvious. They would reduce costs. This Government would see that the inefficiency of the past is remedied in the future. One important consideration is that this Government would see that there was a planning of consumption. But none of these things is in the Tory Party policy. What if there were a trade recession such as was referred to by the hon. Member for Stockport (Sir A. Gridley)? What would they do? Would they restrict output and cut wages? That is what they did before. Would they do something different in the future?

Photo of Mr Niall Macpherson Mr Niall Macpherson , Dumfriesshire

What would a nationalised industry do in that case?

Photo of Wing Commander Geoffrey Cooper Wing Commander Geoffrey Cooper , Middlesbrough West

I thank the hon. Gentleman for giving me an opportunity to continue. The Government would immediately initiate the speeding-up of such schemes as the Colonial development schemes on which we have already embarked. At present we are putting all the resources we can possibly spare into the building up of Colonial development schemes. Similar schemes could be implemented to make up for some of the neglect of the Colonies which has been allowed at the instigation of the Opposition. We should build up schemes of Colonial development even greater than those now in process in order to absorb the steel which would be produced as a result of the increased capacity of the nationalised industry.

Photo of Wing Commander Geoffrey Cooper Wing Commander Geoffrey Cooper , Middlesbrough West

No question of over-production could occur for 50 years if the full schemes of development were put forward, such as are required for colonial development at present.

I do not think that this is a perfect Bill. In subsequent stages of its passage through this House certain Amendments will be put forward, perhaps by both sides. I was impressed on reading the proposals which the workers in the industry put forward in 1933 and 1934. They were published in a pamphlet by the Iron and Steel Trades Confederation. In comparing these proposals with this Bill, I see that there are certain omissions. I consider these omissions so important that they should be mentioned. The Chancellor of the Exchequer referred to the need for increasing the power and influence of democracy in this country—the need to spread democracy right into industry. I am not sure that this Bill will achieve that. In the pamphlet published by the workers' organisation, they ask for participation in management. They ask for an opportunity to have some say even in policy. I consider that the ideas they put forward are ideas which we must take into account if we are to ensure the very necessary good relationship in the industry and the right psychological atmosphere which is so important to the running of any successful industry.

Therefore, I wish to make one proposal of which I hope the Parliamentary Secretary will take note. In order to give effect to this idea, there should be some system for spreading the democratic influence of the workers in the industry. That could be achieved by forming a national council made up of representatives of the technicians and the workers, the producers and consumers. That council should be brought together at a national level so that it can consider and debate the problems of the industry at top level. At present the workers in some of the existing nationalised industries have a feeling of remoteness from the Boards which have been set up. I think that the council which I propose would give effect to that greater democratic spirit which we all want to see. A fuller argument on that point can be put forward at a later stage. If effect is given to this proposal, which would permit important democratic opinion in the industry to be expressed, then there need be no fear but that the industry will go forward to greater achievements than it has ever known in the past.

7.45 p.m.

Photo of Mr Claude Lancaster Mr Claude Lancaster , Fylde

It is inevitable by the end of a three-day Debate that a variety of reasons should be put forward by the Government supporters in support of a Bill of this nature. The one supplied by the hon. Member for West Middlesbrough (Mr. Cooper) about the expansion of the industry to a level of 30 million tons seems somewhat original. The disturbing fact to hon. Members on this side of the House has been that no speaker either from the Government Front or Back Benches has supported the contention which the Lord President of the Council made that this Bill should be judged on its merits. That seemed to me a most sensible yardstick to apply in a case such as this. We expected to hear a number of reasoned statements showing that by virtue of passing this Bill we should have as much steel and iron as we require and that it would be of the right quality at the right price. I have listened most attentively during this Debate in the hope that I should have some guidance about how that was to be achieved. I must say that certainly no Front Bench speaker has addressed himself to this practical and important consideration.

Before I go further I must, as is customary, acknowledge that I have a personal interest in this matter. I am that most evil of all combinations—a coal baron and an ironmaster. If in the course of my remarks I tend to make some comparison between the experience of the one industry compared with the other, it is because before deciding this matter I think that we should be well advised to consider what the Government have done in their previous nationalisation of a basic industry. The circumstances of the introduction of this Measure are quite different. Psychologically, the ground had been laid for coal nationalisation over a generation, and the conditions in 1945 were ideal for the putting forward of a case to the nation. There was low output, maintenance had fallen, Government control had had its effect, the Essential Work Order and a number of other factors had brought about conditions which gave an admirable opportunity for showing what could be done to bring the industry from the low level to which it had fallen. A fly in the ointment from the point of view of the supporters of that case was that there were somewhat annoying figures in 1938 and 1939 and a tendency, just prior to vesting date, for an improvement in the industry. Of course, that was put down to enthusiasm at the prospect of nationalisation. We heard something of the same argument this afternoon.

There the analogy ends. None of those reasons can be put forward on this occasion. Therefore, we must compare the industries so far as they can be compared. First, this is primarily an extractive industry. The iron ore must be won before either steel or foundry iron can be made. I have not heard it suggested, and I do not expect to hear it, that the extraction of iron ore in this country is carried out inefficiently. It may interest hon. Members to compare the cost of the extraction of iron ore to that of the cost of opencast mining. They are similar processes with very much the same amount of over-burden, and the product is not wholly dissimilar. The average cost of winning a ton of iron ore is between 5s. and 6s. The average cost of winning a ton of opencast coat is nearly 50s. What is the reason for that? One system was introduced during the war under Government control. Civil engineering firms took on the job at an enhanced price and that system has been continued under nationalisation. There is a disparity there which wants a great deal of explanation, and I mention it in particular because its psychological effect at this moment in the coalfield is very considerable. When we go from the extractive to the primary processing part of the industry, we have to remember—

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

Can the hon. and gallant Gentleman tell us if the cost of dealing with opencast coal includes restoring the ground to agricultural use or not?

Photo of Mr Claude Lancaster Mr Claude Lancaster , Fylde

If it included that cost, it would be a very small portion of the whole, something of the nature of 2s. or 3s. per ton. It would not invalidate the argument which I am putting, which is a comparison as between 5s. or 6s. and 50s.

The next process is the production of the basic or foundry iron, and, again, this has not so far been questioned as being inefficiently undertaken. What we have at this moment to decide is whether nationalisation is going to bring about a more efficient product, because, whereas the test of the introduction of the previous Bill was one of production first and then cost and then quality, the test on this occasion must undoubtedly be quality, followed by price and then production. Unless we can get an assurance on this matter of quality, the Bill, from a practical point of view, falls to the ground.

I know very little about steel works, but, so far as foundry work is concerned, unless the quality of pig iron is satisfactory, the further processes are impossible. Hon. Members will realise that the whole motive power of this country is based on foundry iron. Turbines, cylinder blocks, oil engines and farm tractors are all dependent on foundry iron, and that is based on quality. Unless we can be assured that the quality will be retained, we are taking a step from which there will be no recovery. The City of Birmingham alone has some 300 concerns taking over 1,000 tons of foundry iron a year, and they are entirely dependent on that material being of the right quality. Once the industry is nationalised, it will be able to turn in one direction only, and, if these people do not get satisfaction, they have no other recourse except through these consumers' councils which can only be of limited value.

I was talking to one of the biggest iron makers in the country a week ago and he said: "Our trouble at present is that we have 3 per cent. additional ash in our coal, but, at least, we get the satisfaction of being able to write a letter to the National Coal Board. Although the National Coal Board do nothing about it, we do get a reply." He went on to say that, once the industry was nationalised, they would not even bother to write a letter, because no one is going to risk unpopularity and take the trouble to do something to which they know there will be no effective or immediate response.

That is one of the matters which worries me about this Bill. Hon. Members will find that a condition will be created in which, so far as the cast iron side of the industry is concerned, the whole of the consumers will be entirely at the mercy of this industry, which will be the only provider of their basic material. In that connection, I was by no means satisfied that a case had been made out for leaving the blast furnaces of the Ford Company out of the Bill. Where is the difference between their requirements in regard to cylinder blocks and those of any other motor manufacturer in this country? Where is the difference between the Ford Company wanting their own blast furnaces for their own purposes as suppliers for the end materials in their own business, and the requirements for end materials of other firms?

On this question of quality and price, the Government will probably reply by asking why they should not obtain the same standard as that already obtaining and even improve upon it. We are taking over these companies and we will keep the good will which they have already. During the passage of the Coal Industry Nationalisation Act, I remember very well, during the Committee stage, hearing an assurance from the then Minister of Fuel and Power that all the managerial and administrative brains in the industry would be called upon to help. Then, two months after that, we found that 75 per cent. of the administrative executives of the original industry had, if they had not quitted the industry, not been invited to take part in the new organisation.

After that, what sort of assurance are the present boards of directors going to have that they will remain there except on sufferance? They will be required, along with the managers and technicians. How can technicians and managers function without leadership from above? We can see that every day of our lives. Technicians, managers and workmen respond to good leadership, and, if the industry is to be unified, as it will be by the passing of this Bill, it is idle to suppose that we shall have any guarantee that the conditions in the industry will approximate to the level at which they obtain at this moment.

On the last occasion, we had the substitution of a hotch-potch of civil servants, barristers, soldiers and politicians thrust into the industry instead of men who were experienced and already knew their job. There is no sort of guarantee that the same sort of thing will not happen again. This is a matter to which hon. Members on both sides of the House must address themselves. We cannot get past on this occasion with platitudes and generalisations about steel barons, monopolies and matters of that sort. What we have to be certain of, before we decide this matter, is whether we are going to get the quality material and at the right price, and, until that case is proved, none of us, on either side of the House, has the right to risk this further experiment. We have seen what has happened elsewhere. It may be that, in due course, we shall see great improvements in the industries nationalised up to date, and I hope we do, but no one can honestly say that, at this moment, we have achieved that state. We have a long way to go in every one of these industries which has been taken over—coal mining, transport, gas and electricity. We have not solved the problem, and yet, at this moment, we are asked to take a further step, and in some ways a much more final step, than we have taken already.

If we produce coal inefficiently, in the last resort, the country can obtain its power, though more expensively, and the wear and tear of plant will be greater. If we produce pig iron, steel, cast iron, foundry iron or what you will, inefficiently, we strike at the very roots of our export trade, and that will be something which we shall never recover. Until the Government prove to this House that they have a plan and that they know how to do these things, none of us, whatever our political ideology, is justified in taking this further step, and I for one, with such experience as I have of the industry, must say that I am not prepared to take that risk.

8.0 p.m.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

The speech we have just heard from the hon. and gallant Member for Fylde (Colonel Lancaster) invites, and deserves, a fuller answer than I have time to give it, but I will make one or two observations, and those quite shortly. I feel certain that if the coalmines had not been nationalised, the production of coal would have gone down, and, industrially, that trouble throughout the coalfields would have resulted in stoppages which would have done far more damage to national interests than any less important change could possibly have done. I would remind right hon. and hon. Members opposite that the increase in the price of coal was the result of paying miners proper pay, at long last. They would have had to choose between cheap coal and underpaid miners, on the one hand, and reasonable pay and a reasonable price on the other. That choice would have been inevitable, whatever the form and whatever the structure of the industry.

I suggest to the House that, in structure, this Bill is simple enough. There is no reason whatever that I can see—and certainly no reason that I have heard in the course of this three-day Debate—for supposing that there will be any interference with the ordinary technical and commercial management of the industry. Prices, as has already been pointed out repeatedly by both sides of the House, are already controlled. The development plan which was prepared by the industry itself is, so far as I know, and so far as we have been told, still proceeding. The actual day-to-day running of the large and the small steel works should, provided it is efficient, go on as before.

I have much more confidence than have right hon. and hon. Members opposite in the efficiency of the managers and other technical men who have spent their lives in the industry. The simple fact—which we must take into account in these cases—is that these men are keen on their job, and will continue to do it well. If they had to depend on the leadership of some of the directors in this industry, as the hon. and gallant Member for Fylde suggested, I do not believe that we should have had the keenness or the efficiency which we now find among so many of them.

After all, what is the substance of the change? It is not that this works or that works is now being altered in its day-to-day running, but that the ownership of the industry is being altered, and that an industry which, as has been repeatedly admitted by hon. Members opposite, is already a monopoly, will become a public monopoly instead of being a monopoly at present under the effective control of the British Iron and Steel Federation. How can anybody suggest, for one moment, that a monopoly entailing so much power and so much responsibility to the public and the country should continue to rest in those few hands? It certainly cannot be done on the record of the past. I am not here to go into the matter in any detail, but when I say that those I represent in Corby are some of the people who worked near Glasgow and in the West of Scotland in the past, and who experienced those years of unemployment and underemployment, I think I have already shown the reason why they, at any rate, are so anxious that the final control of policy should be taken out of the hands of the few leaders of the industry who now have it.

Let me put that question in another way. There has been considerable talk tonight about the proper capacity to plan for the industry. What is the history in that matter? It is that the industry itself, at the end of the last war, over-planned its capacity hopelessly. It then proceeded to allow works after works either to go into disuse, or actually to become shut down. It entirely failed to anticipate future demand, and it has been quite correctly said today, that now is the first time that this industry is working to its full capacity. They have never got the answer right before, and is there any more reason to suppose that they will get it right now? There is no such reason, because the answer, in the nature of the case, cannot be a certain answer and must be a matter to be estimated on much more than merely technical and industrial considerations. It involves the whole future policy of the Government; it involves the Government's future policy at home, and, what has been singularly neglected tonight, it involves the Government's future policy abroad.

We have heard much about the requirements of this country, and quite rightly; but a very important factor in planning the future capacity of the industry is exports. I, personally, would have criticised the estimate made by the Federation far more on that score than on the question of what output they anticipated for internal consumption. In any case, the decision to be made as to future capacity cannot, of course, be a fixed one. It must be made and altered from time to time—that is inevitable—with regard not only to the estimated demand but to another matter. The industry itself has always considered—and we have had it repeated from the benches opposite during this Debate—that the thing to do was to keep capacity, if possible, short of demand. The idea was to be certain, so far as one could, that all the works would be fully engaged. That is what they tried to do, and that is what has been said repeatedly from the benches opposite during the last three days.

We take a different view. We take the view that it is better to have a little extra capacity, and to be sure that we can provide for the needs of the country, both at home and in its relations with other countries, and for developments in our own Dominions and Colonies. Essentially, that broad difference runs deep. The motive in the industry has necessarily been—I am not saying that these are narrow-minded men, or that they are lacking in public interest—to get profits out of the industry. The motive ought not to be the making of profits, but the supplying of the full quantity of steel required.

I do not say that price is unimportant. Costs are obviously important, but the essential difficulty with this industry has always been not principally one of price or cost; it has been the continual difficulty of adjusting supply and demand, and of dealing with the present and prospective capacity of the industry itself. I know of no better illustration, and no more fundamental illustration, of the kind of change that this Bill will make. It is not intended to interfere with day-to-day management unless that management is incompetent. But the Bill must necessarily interfere with the long-term policy of the industry, above all on that essential question of capacity.

I have given one illustration, and I should like to add one or two minor points. I am not an expert in iron and steel, although, like other people, I have been over certain works. It strikes me that there are some matters in the industry which need attention, although I do not say that they can be attended to in a Bill of this sort. I mention them in the hope that they may have attention later. This is an industry which, like other major industries in this country, has its tied houses. We have them in Corby. It seems to me that in this industry, at any rate, it ought to be possible to get rid of those tied houses at an early date and hand them over to the local authorities. Again, in the past this industry has been responsible for rooting up and leaving rooted up roughly half of Northamptonshire. I hope that somehow or another that ground will be restored to agricultural use. At present it is a monument to what private enterprise has done in the county.

I will mention one further point. I am, as I have said, no technician, but I cannot regard it as sense that throughout the week, particularly on Saturdays, a large amount of gas is blown out of the works chimneys of Corby and scattered to the winds without being used, and that it is so scattered as to be a menace to public health in that town. I mention those three matters as needing consideration at a later stage.

We have been told that there ought to be a policy in the Bill. How can we put into a Bill a policy in the sense of detailed plans or anything like that? Obviously in the proper management of an industry there should be a plan, and, as no one would deny in the case of a private industry, it must be a flexible plan. It must continually be flexible. We are planning not in a fixed and static world but in a changing one. Take the case of supply and demand. Does any private industrialist for a moment fix ahead with absolute certainty what the capacity is going to be in such and such a time? He makes his plans as best he can. He alters them when he must, owing to changing circumstances. But to put a plan of that sort into an Act of Parliament would be an act of idiocy of which I can conceive no Legislature possibly capable.

What we want in a Measure of this sort is to set up proper and flexible machinery. We want to give a broad outline of the purpose for which it is to be used and of the methods of its functioning. We want to make ancillary provisions, such as are made in this Bill, for compensation to shareholders, for dealing with labour relations and matters of that sort in the future. That is quite right and proper. But to attempt to put anything more into it would be to take a step which no private industrialist would ever dream of taking in his own affairs, and which only a lunatic, bereft of foresight and any appreciation of what a changing world this is, would attempt for a moment to put into an Act of Parliament. To ask for a policy in a Bill of this sort is only to make the kind of party point that occurs to people when they can think of nothing better. Anyone who asks for it must know perfectly well that no policy, in the sense of an industrial policy, could possibly be put by any party or any Government into a Measure of this kind.

This is a Bill for establishing proper machinery for stating the purpose for which it is to be used, and for matters incidental to that. It effects a change, and it is certainly a very large change, but fundamentally the important point is that it shifts the power to deal with something absolutely vital to the people of this country from the hands of a small limited number of people who have no moral right whatever to have it at present, into the hands of those who are, at least, responsible to this House and, through us, to the people of the country. For that reason, as a step towards a real industrial democracy, I hope that this Bill will receive its Second Reading tonight, and will be passed with the consensus of public opinion behind it.

8.15 p.m.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

Coming to the end of a three days' Debate as we are, I would like to put to the House the salient facts, as I see them, which have emerged from the Debate, and to ask the Lord President of the Council if he will answer questions which have been put from this side over and over again and which as yet have not been answered.

It seems to me that the salient fact is that the industry is doing very well at the moment. That has been agreed on all sides. It has also been agreed that it is playing a vital part in our economy, both internally and in our exports. What the Government have to do is to show how nationalisation will do better than has been done so far, and in some way give us some indication of how that is going to be done. The most forceful argument that has been put forward by the other side is the one of public monopoly versus private monopoly, but the question which I would put to hon. Members opposite is whether they are quite certain that the steel industry at the moment is a private monopoly.

I can give five very good examples of where competition comes in. First of all, take exports. Thirty per cent. of production of the steel industry, directly and indirectly, goes for export and it goes in competition with other industries. That is a definite point of competition which the Government will have to face. Secondly, there is competition in business. Some firms have increased their business up to 80 per cent., and they are competing the whole time to get business. Thirdly, there is competition in efficiency. The price which is fixed does not give profits to all. In point of fact, in the first quarter of 1947, 10 per cent. of the industry made a loss. All the time there is competition for efficiency. Fourthly, and possibly most important, there is competition in quality, and we in Sheffield know that above all things. People come to Sheffield because they can get high quality steels, irrespective of the price, and there is competition the whole time between firms to keep that quality high. Fifthly, there is competition in labour and skill.

The public monopoly will do away with four out of those five points. It will do away with competition for business, in efficiency—one only has to see what has happened in the case of coal; the Coal Board have put up the price to cover their losses—competition in quality, and in labour. Those are the points to which I think the Government must give answers if they wish to make out that public monopoly is better than private industry under supervision. Private industry under supervision, under the present set-up, is definitely competitive.

The next argument, as I understand it, is more of a political one in that hon. Members opposite, one after another, have gone back into the past. I want to ask how, in the minds of hon. Members opposite and particularly in the mind of the Lord President, nationalisation will solve the problems which they themselves criticise? Take low production, for example. Between 1920 and 1934 the capacity of the industry on an average was 12 million tons a year. The average demand was only seven million tons a year, leaving a surplus of five million tons capacity over that period. Even between 1934 and 1938 there was an average excess of capacity of nearly two million tons.

Does the Lord President really think that people working under a bureaucracy in a nationalised industry, when they see a 40 per cent. excess of capacity and the demand going down, are going to increase that capacity and take the risk of censure from the Government and the public? It is most unlikely from the evidence which we have had in the past that a nationalised industry faced with a 40 per cent. excess of capacity would go on increasing that capacity.

The next point which the Lord President must answer is how nationalisation of steel will affect shortages of materials such as those which my right hon. Friend the Member for the City of London (Sir A. Duncan) mentioned, of coking coal, bricks, gas and all those other matters. I cannot see that the nationalisation of steel will increase capacity if there are shortages of that kind in other quarters. The next point was unemployment. The point about unemployment before the war has been made, over and over again. How will the nationalisation of steel itself solve that problem? Let me recall the year 1931 when in Sheffield there was a great deal of unemployment under the Socialist Government and, as we have been told, in the whole industry to the extent of 40 per cent., due to a lack of demand in the world. How will nationalisation of steel affect that problem? Surely the whole question of full employment is on a much higher national level. The question of the Government putting money into capital business in time of slump, does not depend upon nationalisation of one industry or another.

Are we to be told that the Government are only to subsidise national industries in time of slump? This is a very relevant point and I hope that the Lord President of the Council will deal with it. Unless the Government say that through the nationalisation of steel they are going to subsidise the workers in industry in time of slump to the exclusion of other industries, I must say that I do not see the logic of their arguments. The third point made on the other side is that price manipulation has taken place in order to produce vast profits. The point has been made from this side that in point of fact in a decade £42 million were lost in the industry. My right hon. Friend has also given the figures of what the profits were during that decade.

Of the present capital employed at present prices the average rate of profit is somewhere about 5 per cent. The only issue is that the Government will take that profit away from an industry which at the moment is supporting the Chancellor of the Exchequer by producing taxes. That will not help us in our recovery. The industry is going to be turned, like the coal industry, into one which will show a loss and be a drag on the Exchequer. There appears to have been no proper case made out by the other side to show how nationalisation will solve those problems. We have had merely a lot of statements and opinions.

We have not yet been shown that the experiments which have been done in nationalisation have proved that the Government can do what they say they will do. The hon. Member for Wednesbury (Mr. S. N. Evans) described this Bill as a great experiment and perhaps the greatest experiment of all time. I am certain that the people of Sheffield, great numbers of whom not only work in, but are dependent upon, the industry, are not satisfied that the Government have proved that this is the time or the way that those people's livelihood should be experimented with. Until we have some better proof this House should give a decisive rejection to the Second Reading.

8.23 p.m.

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

We are now in the closing stages of this three-day Debate. I should like to begin my observations, since the Chancellor of the Exchequer has been courteous enough to be here, by making one preliminary observation about compensation. The right hon. and learned Gentleman dealt with that point last night, and deployed all his well-known legal skill to demolish, as I thought, a case which we on this side of the House had never presented to him. So far as I am concerned, he proved conclusively his argument that Stock Exchange quotations are a fair measure of value of individual shareholdings transferred on a given day between a willing seller and a willing buyer. We have no dispute on that point.

Our argument is that where an entire company is taken over as a going concern, then a whole lot of different considerations apply. When this point was made by the junior Member for the Combined English Universities (Mr. H. Strauss), the Chancellor dismissed the argument as having no logic. Like him I have had enough dealings with some of our Continental friends to be sometimes distrustful of logic. However that may be, I think the Chancellor will admit that this argument has been consistently accepted by the courts in considering cases of this nature. I want to refer particularly to the words used by the Master of the Rolls in 1944 in a case concerned with the valuation of certain Stock Exchange assets of a certain company. He said: Public market quotations are often related to quite small shareholdings, and isolated transactions are notoriously no guide to the value of investments of this character, particularly when the amounts involved are large. That is a very important part of our argument and the Chancellor did not say anything last night to rebut it. Perhaps the Lord President of the Council will have a chance to do so in collaboration with his right hon. and learned Friend.

My main sentiment has been one of very considerable sympathy with the words of the General Secretary to the Iron and Steel Trades Federation in April: This is going to be an issue at the next General Election. Remarkable speeches have been made by hon. and right hon. Gentlemen on both sides of the House who are in close contact with the industry. I would single out—and I hope I shall not embarrass him—my right hon. Friend the Member for the City of London (Sir A. Duncan), and on the other side of the House—and I hope I may say it without embarrassing them—the hon. Member for East Swansea (Mr. Mort) and the hon. Member for Brightside (Mr. Marshall) yesterday. I should like at once to give one reassurance to the hon. Member for Brightside. He paid a tribute to the quality of the steelworkers in this country, and he used these words: Those who think that nationalisation will make these sturdy steel men into slackers, men who will not pull their weight, have certainly got to think again."—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 277.] Those were his words, and they were much in the tempo of what was said by the right hon. and learned Gentleman. But nobody in this House does think it, or has even suggested it. Member after Member has paid tribute to the relations which have existed in the industry in the past, despite external problems which might very well have ruined all co-operation. The only discordant note came from the hon. Member for Brigg (Mr. E. L. Mallalieu). He told us that in his view the relations in the industry were worse than at any time in the last 20 years. I am surprised at the diagnosis. It is not borne out by anything I have ever heard said. I was interested to know what one of his constitutents said about his statement. I will read a quotation from the "Yorkshire Post." The chairman of the divisional Labour Party, Mr. Deece, said: I am of the opinion that things are probably not all they might be in the industry, but I certainly would not say that the feeling is worse than 20 years ago. I do not believe that is true of this area, at any rate. Another even more delightful quotation in the "Yorkshire Post"—a very cautious, a very Yorkshire observation—was by the chairman of the local Iron and Steel Trades Confederation, a Mr. Lawman Welch, whom perhaps the hon. Gentleman knows. He said: Mr. Mallalieu may have been referring to another area—probably South Wales—and not here. Very Yorkshire, that one. I hope the hon. Member for Brigg will read the observations of his own constituents. I am sorry that in this Debate he should have been the one hon. Member to state that relations in the industry were worse than at any time in the last 20 years.

Another argument which has been used a good many times in this Debate is about the continuous working week, the existence of which I should imagine we all agree is, in itself, a remarkable tribute to all engaged in the industry. We have been told in this Debate, for the first time, that agreement was reached on this only because of the prospect of nationalisation. Well, that may be so, but nothing of the kind has ever been said by any member of the industry. We have been told in this Debate—not by the hon. Member for Brigg; it has been argued from the other side—that agreement was reached because nationalisation was held out.

I have to point out in reply that the General Secretary of the Union, in his reference to the continuous working week, gave four reasons for it—if I may say so, four very good reasons. They were, first, that it meant reducing the hours for preparatory workers who hitherto had worked in excess of 48 hours. Secondly, it was the first stage in the claim for a 42-hour week which, in the present economic crisis, was deferred. Thirdly, it was a desire to help the nation and the Government in the struggle for recovery by full utilisation of existing plant. I believe that is right. Fourthly, it was to bring our melting practice into line with that of every other major steel producing country. These were the arguments used by the General Secretary and I can only point out that the word "nationalisation" does not occur among them. I hope nobody else will say that the continuous working week worked only because the prospect of nationalisation was dangled before the industry. If we agree on that, we are always one step further forward.

I will not deny, in reply to the hon. Gentleman the Joint Parliamentary Secretary, who spent much longer on this point yesterday, that the trade union leaders of the industry are in favour of nationalisation. Of course, they are. Equally, of course, many of the men in the industry—maybe the majority of the men in the industry—wholly loyal to their leaders, share their view. But I will add something else: there are others, and there is among many of them a considerable measure of doubt whether the transfer of ownership of the industry from free enterprise to the State is, of itself, going to result in greater prosperity for the industry.

There is another argument, and it is a very important argument, which I have no doubt has had its effect, not only in this Debate but outside in the country. The idea is—we have had it hinted at and, indeed, it has been mentioned tonight—that if the State owns an industry, then in bad times the industry will be carried along, and employment will continue, more effectively than under free enterprise. I think it is fair to say that that is the argument. But is this really true? Does the hon. Gentleman think it is true? In the long run, can the State afford to make losses any more than can private enterprise—this quite apart, of course, from the fact that the Bill forbids the Corporation to make any losses at all.

Let us see what happens. Take the example of civil aviation today. It is not only a Government-owned organisation, but also a Government-built organisation. What is going on there? Because the nationalised Corporations are running at a loss, the Government have been compelled drastically to reduce the number of men they employ. I am not saying that is wrong. I am only drawing attention to the fact. It is described in the "Daily Herald." On 16th October, it was said in the "Daily Herald": When the full cuts are in force, 10,000 employees are likely to be on the redundant list. That is in a Government controlled, owned and built organisation. Are the workers so sure that when the Govern-men are the sole owners and the sole court of appeal, their employment will be more assured than it would be under any other system? The truth is that Lord Keynes was very right when he demonstrated a long time ago that if the State is to counteract the adverse periods of slump, as we all want it to do, then the way to do that is not by the State's owning the industries, but by the State's trying to ensure that there is a demand for the products which those industries turn out. It was just that world fall in the demand for steel and other products that led to unemployment in the steel trade and other trades in the twenties and' thirties. Everybody knows that is true, and that a nationalised industry would have been affected by those world economic conditions just as the privately- owned industries were. The demand was not there; that is all.

Indeed, I must remind the House—and some hon. Members here will recall it—that when in 1923 we sought permission from the country to make use of tariffs—I know that hon. Gentlemen below the Gangway disagreed; but Mr. Baldwin, as he then was, went to the country to get those tariffs—so that we could maintain our trade on equal terms with that of other countries that were dumping steel in this country, none was more eloquent in denial of that than some hon. and right hon. Gentlemen opposite. When the Chancellor of the Exchequer said last night that the industry had enjoyed the protection of tariffs since 1932, he appeared to regard that as some particular favour for the industry. It is perfectly true that that happened in 1932, and that the industry at long last enjoyed a measure of protection which the industry of every other country had enjoyed before that. I do not think that was so much of a favour. It was certainly a necessity.

I should like to tell the House what I believe to be the mood of the nation today on this subject of nationalisation. I submit this to the Lord President, who is acknowledged to be one who has his ear to the ground and knows all about public opinion. I think that the nation is saying something like this, "In this one Parliament we have seen a great many Measures of nationalisation—nationalisation of coal, transport, electricity, gas, Cable and Wireless, and so forth"—[HON. MEMBERS: "The Bank of England."] And of the Bank of England. I should have thought that even the most ardent advocate of nationalisation would have admitted that in respect of some of these industries, at any rate, the case for the success of nationalisation has not yet been fully established. I will not put it any higher than that. It is not necessary to put it any higher than that for the purpose of my argument. There has been anxiety—and I would say to the Lord President that there is anxiety—on many counts.

I here quote—not myself, because the right hon. Gentleman may not think that very good evidence—but the hon. Member for Walton (Mr. Haworth), who said in the House on 2nd November, in a speech to which I listened and which greatly impressed me: On these benches"— that is, on the benches opposite— we have got to admit a disappointment over one of our theories. The hon. Member for Hornsey spoke about the tragedy of a theory killed by a fact. Here is one. I am disappointed at the fact that what I have advocated on public platforms for the last 25 years, that if we nationalise an industry the people in that industry would work harder because they were working for the State than if they were working for a private employer, has not altogether worked out. I believed that, as did my hon. Friends on these Benches. I do not know what my hon. Friends feel about it now"— they got a bit restive I remember— but I am very much disappointed that we have not had the results one would expect."—[OFFICIAL REPORT, 2nd November, 1948; Vol. 457, c. 754.] I would say to the right hon. Gentleman, in the light of that, which I think expresses the feeling of a good many people in the country, that the mood of the nation about nationalisation today is this: "For the moment we have had enough nationalisation. Let us see how the existing schemes work out. If they prove themselves, very well, then we are ready to consider and proceed to further measures of nationalisation, but, for the moment, we have had enough." I would say to the right hon. Gentleman that to proceed at the present time against this temper is forcibly to feed the nation on nationalisation, and this course, I am confident, the nation will resent and resist. I apologise for making these observations to the right hon. Gentleman because, knowing his political wisdom, I have some suspicion that he has already said something like that to his own colleagues. The Chancellor of the Exchequer told us last night that: The opposition to this Bill stems from two main sources—those who believe that private enterprise and free competition are essentially the best way of serving the national interest and those who resent bitterly this attack upon the citadel of the power of the property owners."—[OFFICIAL REPORT. 16th November, 1948; Vol. 458, c. 325.] The Chancellor of the Exchequer knows very well that we have never argued on behalf of either of those classes, but I must tell the Government, since they do not seem to know, that opposition to this Bill stems also from a third class whom the Chancellor of the Exchequer never mentioned—those who maintain that this Bill and the Government speeches have so far produced no argument to show that the Bill in any way improves on the present system of free enterprise and management, subject to public supervison and control. That is our case.

Photo of Mr David Jones Mr David Jones , Hartlepools, The

Why public supervision of private enterprise?

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

Because it seems to work well in this case, and we are willing to accept it. Here is an industry which is producing at an all-time record level and at competitve prices. There is no dispute about that. It is an industry which has embarked on a scheme of modernisation approved by the Government. We know that the industry is efficient today. There is no particular dispute about that. But it has yet to be established by any speech from the Government Benches that when the ownership is transferred it will be as efficient as it is today, let alone more efficient. Not one single time has the efficiency argument been used. It is quite true that we are told that the old boards of management are to remain for a time, at any rate; that they are to be responsible not to the shareholders, but to Whitehall; but they will be hedged round with all sorts of restrictions set out in the Bill which, to put it mildly, are unlikely to inspire them to initiative or to take any risks.

The Chancellor of the Exchequer told us yesterday that there is need for foresight and planning. Of course there is, but our whole case against this Bill is that there is not one glimmer of it within its 88 pages. The hon. and learned Member for Kettering (Mr. Mitchison) asked how could we expect to have a plan in a Bill. Perhaps it is a bit old-fashioned to expect a plan in a Government Bill, but if we cannot have a plan in the Bill, we should at least have an indication of some sort of plan in the speeches. So far there has not been a glimmer or a sign of that. Personally, I believe that no such plan exists.

I have in mind the warning given by the then Minister of Fuel and Power in another connection—and the right hon. Gentleman must have heard that speech, because it was delivered at the Labour Party Conference. The then Minister of Fuel and Power was in reminiscent mood about the coalmining industry, and he said: Unhappily, while the Labour movement is quite properly focused on the fundamental ideals of Socialism, little attention has been paid to the extremely difficult, technical administrative problems which the carrying out of nationalisation involves. There has been, I regret to say, very little guidance on detail, and so we have had to improvise in the light of existing circumstances. Well, I know that speech got the right hon. Gentleman into trouble somewhere up above; but what troubles me about that speech is that, on the evidence of everything said by the Government spokesmen so far, there is no indication at all that their position in respect of iron and steel is in any respect further advanced than it was in respect of coal. And how disastrous it would be if the right hon. Gentleman's confession about coal were now to be repeated in respect of iron and steel. We are still without any indication that the Government have got any plan for the future of the iron and steel industry when it is transferred to the State.

Now, the Chancellor of the Duchy, whom I am glad to see here, has been making one or two speeches lately. A few nights ago he spoke to the Fabian Society in London, and what he told them interested me very much, because I thought that there I could find the plan I was pursuing. He said that the national interest demanded that we should have an iron and steel industry more efficient, more up-to-date and larger than now, or than its present owners proposed that it should be.

Does the Lord President endorse that? If so, how much larger? The industry, as was explained by my right hon. Friend this afternoon, has now planned—we understand in agreement with the Government—an expansion to 18 million tons in the early fifties. What is the expansion the Government have in mind in excess of that figure?—a figure agreed between the industry and the Government. There must be some further figure, or I am sure the Chancellor of the Duchy would not have said that we must do better still. What is that figure? Twenty million? Any advance on 20 million? Twenty-five million? I suppose there must be some figure. And I suppose that the Lord President will tell us what it is.

What about the development programme of the industry which the Government have approved? This afternoon we heard from the hon. Member for North-West Hull (Mr. R. Mackay) a lot about finance. I do not think he need really worry about that finance. I will not go into the question of the loan which he mentioned; there were a good many other loans that were not a great success at that time, but they were all underwritten and they got the money. On the question of the development programme of the industry I would say that the Government have approved it, and that its finance is assured. I believe that over two-thirds of the scheme has actually been approved in detail.

I want to ask the Lord President this: Do the Government maintain that this development plan, which has been approved by them in detail as to two-thirds of it at least, ought to be larger? Is that what the Chancellor of the Duchy meant? If so, in what respect ought it to be larger? Where are the material resources to come from to enable the industry to carry out this further expansion? We are entitled to know. Here is an agreed plan into the early fifties, and here are Minister saying "We must have a larger plan." Well, what is the larger plan which the Government want? Why is it that it cannot be carried out in the same way as the present one is carried out? Everybody knows that supplies of raw materials are the limiting factor.

Some hon. Members have called in aid Mr. Lincoln Evans, the general secretary of the Iron and Steel Trades Confederation. At Margate in September of this year he made a speech—which right hon. Gentlemen opposite probably also remember—part of which I must read to the House, and particularly the Chancellor of the Duchy, who I know will want to agree with this. Mr. Lincoln Evans is no wicked Tory. This is what he said: People talk about expanding capacity. It does remind me of the old saying—'Ignorance is not so much a question of not knowing anything; it is knowing too much.' If by some magical means we were able to increase the productive capacity of the industry to 20 million tons next year, can anyone guarantee we are going to supply the 8 million tons of extra coal that will be necessary? Unless you have the raw materials to maintain the capacity in existence, you are simply"— I am sorry, Mr. Chancellor— misleading the public by saying you can produce more steel. The essential question is not that of productive capacity, but the question of raw materials. Again, I ask the Government what is their plan, and what is the target of greater production they wish to reach? Have they ever suggested to the Steel Board that the development plan ought to be larger? The Chancellor of the Exchequer said yesterday that the present demand is very exceptional. I agree, but every exception carries with it its own dangers, which I need not emphasise, once the time of exceptional demand, which the Chancellor referred to, is past.

I must say that perhaps the most unconvincing part of the whole of the Minister's speech was his reference to the Steel Board. At no time, so far as we know, when the Board was in existence, did we hear one word of criticism against it from any Minister. If the Government were not satisfied with the Board, or the results the Board produced, why did they not say so? But then, the Minister said, it was always meant to be a stop-gap. If, however, it is producing good results, and if the sole test, as the Lord President has told us, is to be results, surely the, life of the stop-gap might usefully be prolonged; its efforts might be encouraged, and even its terms of reference might perhaps be amended.

Most ludicrous of all is the argument that it was the action of the steel masters that brought the life of the Steel Board to an end. It was the Government's own action in proceeding with nationalisation that killed the Steel Board. Let the right hon. Gentleman look at their terms of reference and he will see that it was not only the steel masters, who resigned, but the chairman and all the other members, except the trade unionists. [HON. MEMBERS: "Oh."] Naturally—they were pledged to nationalisation. Then what about Sir Alan Barlow, a very distinguished Treasury official? Are we going to be told that he was a wicked industrialist in disguise during all the years he has been in the Treasury?

The only criticism of the Board which the Minister of Supply has ever made was in his speech on Monday. I want to quote what he said. I think it is fair criticism. He said: Any proposals put up to us by the industry can be vetoed, neither the Board nor the Minister has effective power to ensure that other proposals, however desirable they may be, will be initiated, let alone carried out, if the directors of the individual concerns do not like them."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 56.] That is the only reason the Minister adduced, in his speech on Monday, against continuing a system of public supervision of a privately-owned industry, yet that system has worked pretty well over the last two years. It has not been perfect and could be improved, but under this system we have had a record output to which everyone has paid tribute, and under the system two-thirds of the development plan has received approval of the Government acting through the Board. We feel that the Government ought to produce strong, convincing reasons, apart from ideological reasons, if they are to justify their action in breaking up this system and their insistence on replacing it by a State monopoly. Yet the only argument we have had so far is this one which will not bear a moment's examination.

I have searched the Bill—and I ask the Lord President to correct me if I am wrong—and can find nowhere any powers given to the Minister whereby he can order the Corporation to undertake a specific project. The Minister said on Monday that no controller had any authority to compel shareholders to spend money which he considered it necessary to spend. All right, but what powers has the Minister in the Bill to compel the Corporation to spend money on what they consider to be an unwise project? The Corporation are bound by Clause 29 to pay their way. Has the Minister any right to override that? I cannot find it anywhere in the Bill.

What it means is this: if the Minister cannot give specific directions, he must rely on co-operation from the Corporation. The Minister has received cooperation—of which no complaint has been made by anyone—from the Steel Board in the last two years. What justification has he for expecting to receive fuller co-operation than that which he already has had from the industry? I challenge the Minister, or the Lord President, to tell us of any project which the Government have commended to the industry in the last two years, while the Steel Board has been in existence, which the industry has refused to carry out. The truth is, as we believe, that so far from planning and advocating projects, the Government have been unable to make any contribution at all to the broader economic aspects of steel policy.

Our case is this: an evolution in the use of the Steel Board and, if necessary, some amendment, in agreement, of the powers of the Board would be a far better method of ensuring what the Government seek and of maintaining the prosperity of the industry than the abrupt transfer of ownership for which the Bill provides. I must say, in passing, that I do not think the Chancellor of the Exchequer's references last night to strategy were particularly convincing. The right hon. and learned Gentleman drew a parallel between control of the naval dockyards and ownership of our steel-making resources in relation to national defence. If that parallel has any meaning at all, it would presumably apply to a firm like Vickers, whose armaments activities are not nationalised at all.

As for the ability of the industry to fulfil the orders required of it, during the inter-war years it never failed the Government of the day, so far as I know, in discharging any programme that was put to it. Nor does it lie with hon. Members opposite to suggest that the programme put to the industry ought to have been larger, since they consistently voted against whatever programme there was. The programme is the responsibility of the Government, and the discharge of the programme is the responsibility of the industry. I repeat that in my experience I have never known the industry fail to fulfil the programme put to it.

One of the arguments constantly used in this Debate is that the industry must be nationalised because it is of the utmost importance to our national economy. I should have thought that its very importance makes it all the more necessary that the decision tonight should be taken on grounds of economic efficiency, and not on the purely ideological grounds that Ministers have so far advanced. The fact is that if steel is vital to our economy, or to the defence of the country, then so are a great many other industries—the chemical industry—[HON. MEMBERS: "Hear. hear."]—that cheer from the benches opposite is what I hoped for—the machine tool industry, the agricultural industry—[HON. MEMBERS: "Hear, hear."] Yes, it seems that they all ought to be nationalised, according to hon. Members opposite. So hon. Gentlemen opposite agree with me. Right hon. Gentlemen on the Front Bench opposite do not seem quite so agreeable. Hon. Gentlemen and I agree that if this argument applies to steel it applies to the industries I have mentioned, and to a great many others, too. In logic—an expression of the Chancellor's—it does. [HON. MEMBERS: "Hear, hear."] Hon. Gentlemen opposite still agree with me. We are getting to agree on almost too much—apart from the Front Bench. We are agreed that this will lead to wholesale nationalisation and to the steady reduction to a negligible proportion of the remaining free sections of our national economy. The Minister of Health agrees. I thought he might. The agreement is reaching the Front Bench now.

Having listened to this Debate, I would say that so far there does not seem to be any agreement on the Government Benches as to the underlying motives behind this proposal to transfer the ownership of the industry. The Minister of Supply wound up his defence of the Measure by pointing to its overwhelming merits and claiming that this great reform removes from the private to the public sector of our economy an industry which is the citadel of capitalism. The Chancellor of the Exchequer took very much the same line in rather more austere language. That is definitely their justification; but is it the justification of the Lord President of the Council also? He used entirely different language two years ago, and the arguments which he used then seemed to me a much more acceptable basis for discussion between us. The right hon. Gentleman said that this was not in essence an issue of party politics at all. He said that it was in essence a matter of business, namely, what was the best course to take in the interests of the community for the handling of this great basic industry? Here is what he said: …although political theory and party politics are bound to flit across the Chamber"— certainly they have done that in the last few days and they have bumped against each other once or twice, too— and we all enjoy that on all sides, it is really not a party political matter. It is a matter of business, and national business at that"—[OFFICIAL REPORT, 28th May, 1946; Vol. 423, c. 1106.] I think that is the right test to take, because the nation is going to approve those who are least doctrinaire in their approach to the future of this great industry. The nation wants results and it will judge by them. The results today are very good, and it is for the Government to show that the results following upon the transfer of ownership are going to be better than are the results today.

Is the right hon. Gentleman's position still the same as in 1946? If it is, I hope he will give us some practical reason why he thinks that this industry will be more efficient and will better serve the nation than it does at the present time once the ownership has been transferred. We have not yet been flattered by one such argument. We have had no indication of the plan which the Government intend to put into effect. Over and over again we have had arguments put forward about how important it is to capture this citadel. I have listened to this Debate and I am driven to this conclusion, that the Government's sole purpose is, by means of this Bill—and the cheers by hon. Members opposite support the view—to bring free enterprise in industry in this country to an end. The Bill gives the State a wide interest in all sorts of activities beyond the primary processes of steel making and steel rolling. The State is going to enter as a competitor into a wide range of engineering, machine tool manufacturing, chemicals, and other activities.

Does anyone in this House really expect that a duality of that kind will last very long? One of two things will happen. Either the Government will become weary of operating these varying activities which they can neither understand nor control, or step by step they will seek to nationalise all those industries in which this Bill gives them some share. If this last is really the Government's purpose, as I believe it is, the voter at the next General Election will have to decide not merely on a change of ownership in the steel industry, but at the same time on a change of ownership in the engineering, machine tool and a whole score of other industries. I will quote the words of the "Manchester Guardian" last Tuesday, which seem to me succinctly to describe the position: That this is the natural outcome of the Steel Bill is now becoming convincingly clear. There is no point after this at which the advance towards the extinction of private enterprise in British industry could be halted. That is the position. That did not get quite as many cheers from the other side as I should have hoped. As I listened to the Chancellor of the Exchequer last night, it seemed to me that his view of democracy, as he expressed it then, was indeed a very strange one. It seemed to amount to this, "I am a constitutionalist if the country agrees with me; if not, I am still a revolutionary."

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

Sir S. Cripps indicated dissent.

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

All right, the right hon. and learned Gentleman shakes his head. I will now ask the Lord President a question in order that we may elucidate this point. At the last General Election admittedly iron and steel figured in the programme, the Socialist catalogue, among many other things. At the next General Election, unhappily perhaps, iron and steel is bound to be a major, if not the major, issue. Supposing that at the General Election our party receives a clear majority from the nation, would the right hon. Gentleman then accept that we have the full right not only in the strict letter of the Constitution but in its spirit also as a free democracy, to repeal the legislation which the Government are tonight asking us to pass, or would he regard that as a provocative act justifying revolutionary action?

We are at the concluding stage of this three-day Debate. So far, no single argument has been produced on the grounds of efficiency to show that under this Bill this essential industry will operate more successfully or at a lower cost or with better industrial relations than exist today. At a critical time, when we still depend for our life on foreign help, when we are daily consuming our accumulated foreign assets, the result of the thrift of our ancestors, or, if hon. Gentlemen prefer, the result of the wicked capitalist instincts of our ancestors—[Interruption.] They are very glad to consume them all the same. How long have we been eating the Argentine railways? At such a time, I say, the Government are deliberately taking a gamble with the future efficiency of this industry whose recent record is one in which all sections of this House take pride. In our judgment it is a gamble which no Government would be justified in taking. There was never a case where the onus of proof for change of ownership lay more clearly with the Government that demands that change. There was never one where less evidence has been adduced of any advantage to the nation in such a change. So, therefore, we ask the House to oppose this wanton and foolish step and to reject the Bill which embodies it.

9.11 p.m.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

This has been a notable three-day Debate on the Second Reading of the Iron and Steel Bill. I think that the level of the Debate has been good, that we have all learned something from each other, as the discussion has proceeded, and that the three days have been well spent. I, of course, recognised it as inevitable that the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) would assert—as is asserted on every occasion not only by the Opposition Front Bench, but particularly by Conservative newspapers—that the Government have made no case. That is common form. It would be extraordinary if they did not make these empty allegations every time a controversial Measure comes before this House. Time after time we have made our case. Time after time we have engaged in the tragically easy task of proving the Opposition wrong.

It has almost ceased to be interesting to prove the Opposition wrong, but, Sir, that does not matter. Every time issues come before the House, or before the newspapers of the Conservative variety, always they assert, whatever arguments may have been advanced, that no case has been made. That is partly sheer political prejudice and partly because the Conservative Party is incapable of understanding a case which is argued in the public interest. [HON. MEMBERS: "Argue it then."] I will indeed. What they can always understand, almost before the case is made, is an argument in favour of private interests. That, Sir, is instinctive.

Any fair-minded person who heard or read the speech of my right hon. Friend the Minister of Supply in moving the Second Reading of the Bill—whether they agreed with him or not—ought to agree that he directed his arguments carefully and constructively in establishing a positive case for this Bill. My hon. Friend the Joint Parliamentary Secretary who, as the right hon. Gentleman the senior Member for the City of London (Sir A. Duncan) said, has a great personal knowledge of the industry and who worked in it until three and a half years ago, gave us out of the richness of his experience the case for the Bill, as he saw it. My right hon. and learned Friend, the Chancellor of the Exchequer, made a speech of such outstanding positive merit and so completely devastated the arguments of the Opposition that the right hon. Gentleman the Leader of the Opposition could not stay in his seat for five minutes on end. The Leader of the Opposition, who is bad at giving way himself, caused my right hon. and learned Friend to give way time after time. There were indeed some sustained interruptions at the end which have caused the Opposition, either wilfully or, otherwise, totally to misunderstand the peroration of my right hon. and learned Friend.

As the right hon. Gentleman has just said, we have had many good speeches from hon. Members on both sides, and I thought that the outstanding speech—easily the outstanding speech—of the Opposition, as it was on the occasion of the previous Debate, was the speech of the right hon. Gentleman the senior Member for the City of London. It was a speech worth hearing and worthy of the most careful study, whether we agree with it or not. [Laughter.] I hope hon. Gentlemen opposite who are politicians, which the right hon. Gentleman the Member for the City of London primarily is not—I hope Tory politicians opposite will not be too jealous when I make friendly references to the right hon. Gentleman. His was a great contribution to this Debate, and I was glad that the right hon. Gentleman was followed by my hon. Friend the Member for North-West Hull (Mr. R. Mackay), who made a contribution of constructive ability and great force which much impressed the House.

We finished up in somewhat lively circumstances last night, but not quite so bad as the "Daily Mail" has made out. The "Daily Mail" headline says—I am sorry if the hon. Member for Oxford (Mr. Hogg) gets pained when I mention the "Daily Mail." I thought he liked the "Daily Mail," but, directly I mentioned it, he groaned. There is a lot to be said for it. I think the headline was typically-misleading and typically inaccurate when it said "Cripps Howled Down." I did not know that my right hon. and learned Friend was howled down last night, even though he did have some interruption, and indeed—

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

Most of us who speak last from this Box in a Debate expect a certain mood and atmosphere and certain noises from hon. Members opposite on these occasions.

The right hon. Gentleman who has just sat down asked me a very elementary question, to which I will give him a very elementary reply. It was that, if, unhappily—he did not say "unhappily," but I say it—the Conservatives won the next General Election, and, if in the course of their Election Manifesto, they sought a mandate for the repeal of this Bill, would the Labour Party say it was constitutionally wrong to repeal the Act of Parliament based upon this Bill. My answer is that, constitutionally, it would clearly be perfectly legitimate for that to be done. We are not a party which says that, if the electors have voted for a course of policy, the House of Lords should throw it out.

If the electorate did, unhappily, vote for a Tory majority next time, the electorate must take the consequence of its action. But if they claim the right to repeal, then I say—and I want the leaders of the party opposite to understand this, and another place to understand it—if they get an electoral mandate to repeal this Measure, then we also have the right now to carry this Measure for which we have a specific electoral mandate. The Tory Party in this House has no right to use another place for the purpose, and the deliberate purpose, of upsetting the expressed will of the people. That is my answer to the right hon. Gentleman. That seems to me to be elementary and sound Parliamentary democracy, to which, I assure him, we can live up, and I invite him and his hon. Friends to live up to it also. Of course, we should, I suppose, have a right to oppose the repeal.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

We should have the right to argue and vote against the Bill just as the Opposition tonight and during these three days have the perfectly legitimate right to argue against the Bill, and to vote against it. I hope that this respectable constitutional doctrine comforts the right hon. Member for Warwick and Leamington.

The right hon. and learned Member for Montgomery (Mr. C. Davies)—I extend to him my regret and sympathy—has been completely tied up on two separate occasions in regard to this Measure. If I may say so, I tied him up in the Debate on the Address, where I had more than one authoritative quotation from Liberal quarters as to why the Liberal Party had, in principle, declared for this Measure and for this policy. My hon. Friend the Member for North Cornwall (Mr. Horabin) made a specific quotation from a document specifically signed by the right hon. and learned Gentleman himself in favour of the policy upon which this Bill is based. It could, indeed, hardly have been more specific as a justification for the Bill of my right hon. Friend.

I do not wish to be bitter about the difficulties of the Liberal Party. I know they are opposed to us in certain respects, and are opposed to the Conservatives in certain respects. Their difficulty is to say of what they are in favour. But I really think it is going a bit far, when these specific commitments have been entered into by the right hon. and learned Gentleman and he comes here and switches clean round and abandons his electoral mandate, and acts in defiance of it. It is a great pity. Liberal Members will, of course, do what they wish tonight, but if they go into the Lobby with the Conservatives, if they make a combination with the Conservatives on this Bill, they are acting in defiance of the principles which they advocated at the Election and to which the right hon. and learned Gentleman—

Photo of Mr Charles Byers Mr Charles Byers , Dorset Northern

Does the right hon. Gentleman realise that there was no reference to iron and steel in the Liberal Manifesto upon which the Election was fought?

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

I invite the hon. Gentleman to read the speech I made at the conclusion of the Debate on the Address, and I invite him to read the speech made by my hon. Friend yesterday. It is, of course, competent for the Chief Whip to repudiate his leader, as the hon. Member has just done. It is competent for him, but I think it is a bit uncomfortable when Whips do that sort of thing. The commitments in principle are all too real, and I would only say to our Liberal friends—I am not one of their bitter or intolerant critics, as they know—that if they go on retreating in this way and get led astray by the Tory Party, when it comes to the issue of whether they are going to vote for Liberal principles or not, Liberalism in Parliament has an even dimmer future than it seems to have at present.

It has been argued that all has been well and is well with the iron and steel industry. I agree in principle with the right hon. Member for the City of London (Sir A. Duncan) that the future of the industry and what we are going to do with it are more important than having arguments about the past. I only want to read two quotations—[HON. MEMBERS: "Oh!"] Well, hon. Members opposite have got to take it. Those quotations are from quarters that are opposed to this Bill, and I want to read them in order to show that in their judgment all was not well with the iron and steel industry between the wars. Having read those two quotations, I will leave it at that, because I agree with the right hon. Gentleman that we must now proceed to argue out what is the wisest thing to do with the industry for the future.

The first quotation is from the present editor of the "Economist," who has often been quoted in this House by the Conservative Party since the Election, just as he was often quoted before the Election by us. In his observations in "Economics for Democrats," published in 1939, Mr. Crowther, for whose ability I have a high regard, said: The result of Conservative steel policy has been to confer enormous advantages on the businessmen of the industry. They have been granted a monopoly and assured of its exclusivity and permanence; and they have been encouraged to use it to raise prices for their product. The policy has beyond question put large profits into the pockets of steel shareholders. And it is equally beyond question that some at least of these profits have come out of the pockets of the consumers of steel—who include, directly or indirectly, almost every inhabitant of the island. But the return that the community has received for this assistance could hardly be detected with a microscope. That was what he said about the years between the wars.

Photo of Mr Nigel Birch Mr Nigel Birch , Flintshire

What did he say about the Bill?

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

The hon. Member for Flint (Mr. Birch), has just wakened up. I said before I quoted this observation that Mr. Crowther was opposed to the Bill. As a matter of fact, that had something to do with my making the quotations from that source. "The Times" is also opposed to the Bill. Let me make that clear.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

Yes, and the "News Chronicle" and the Parliamentary Liberal Party. The industrial correspondent of "The Times" on 25th October, 1948, said: It would be easy to draw the conclusion that the difficulties confronting British steel makers were all unavoidable and due to circumstances. He went on to say: It can be argued that dear fuel in Europe and dear labour in America forced the pace of technical advance, but the same technical advances would have been economically and technically advantageous here, and it was a bad tradition which impeded them. There was a lack of the right kind of knowledge, so that in introducing changes this country followed others 'after the cream had been skimmed.' There was some lack of the right kind of leadership, in part because of the way in which son followed father at the top. There was a relative neglect of technical education in this country which served as a contributory drawback—though fortunately this country continued to take a leading part in making special steels for new purposes. Those are two quotations from quarters which are opposed to the Bill and they are relevant to our discussion. Having quoted them, I now leave that aspect of the case.

The Opposition attitude to the Bill is a difficult one and, of course, they themselves are in a great dilemma. What they should be saying to and about the iron and steel industry is, "Set the people free." They should be the advocates of free competition in this industry,. of letting the industry go ahead in its own way and, particularly, of letting its indi- vidual firms compete against each other in the freest possible manner. That is classical Conservative doctrine. It is also certainly classical Liberal doctrine. But what do they say? They do not advocate private enterprise in this industry; they have demonstrated that they are opposed to private enterprise in this industry. They are not advocating free competition between the units of the industry. It was therefore quite appropriate that the rejection of this Bill should be moved by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), who knows about these activities in another sphere.

The truth is that the people who led the retreat from private enterprise were the private enterprisers of the Conservative Party themselves—and this is where they have got to. They are upholding the monopolistic or cartel nature of the industry, as it has evolved. I am not criticising that as far as the industry is concerned; I understand its motives and I understand its difficulties. But the fact is that the industry has become a near monopoly, a near cartel, and the Conservative Party, the advocates of private enterprise, the urgers of free competition, say that is all right. As advocates of the abandonment of controls to the greatest practicable extent—they are a little bit uncertain what that extent is—they first accept the end of private enterprise in the industry, yet superimpose on that acceptance, the argument, "You can get all you want by imposing control on the iron and steel industry." They are not advocating traditional capitalist enterprise. What they are advocating is the acceptance of the near monopoly and the near cartel—through the instrument of the British Iron and Steel Federation—and are prepared to superimpose on that control a further control by the politicians which they are denouncing every day of the week outside the House.

This is the utterly absurd and ridiculous position into which the Conservative Party have got themselves. So they finish by advocating the very policy which they sometimes, wrongly, believe is our policy, and they embrace that policy whilst on other occasions criticising us for it. It seems to me, therefore, that Toryism has ceased to be the party of true private enterprise and has become the Party of monopolistic cartel capitalism.

They also talk a lot about Communism. The Leader of the Tory Party was trying to make out last night that there was nothing to choose between the objectives of the Labour Party and of the Communists, even though we are opposed to them. But what is this State supervised, cartelised, monopolistic capitalism if it is not the very Nazi economic system? It is also similar to the so-called and miscalled system of corporations of Mussolini, about which he theorised a great deal but did not do much. So the Leader of the Liberal Party sat at the feet of Dr. Balogh—though he subsequently went away from them—and the Tories are sitting at the feet of Dr. Schacht. I think, my hon. Friends think and the Government think that we shall not get the best out of the system of private enterprise if it takes the form of the private monopoly, the private near-cartel with supervision by the Iron and Steel Federation, which is the instrument of the industry itself, and has a good deal of independence in its day-to-day working, and, on top of all, the most meticulous control by my right hon. Friend, of all people. If we are to have private enterprise, for heaven's sake let us have it, and let it be enterprising and let it go ahead. But so-called private enterprise which is subject to all these checks and balances and controls will not give us the best system.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

The right hon. Gentleman says it is doing it now. Why does he pick the iron and steel industry as being wholly fitted to be controlled by what is alleged to be bureaucratic State legislation and control? Why does the right hon. Gentleman the Member for the City of London deserve to be picked out for all this meticulous control and legislation? The Tories denounce it elsewhere. They defend it here. They defend it here because they see it as the last defence they can make for and in favour of private monopoly in this industry—that is their only motive.

At one time this was an industry of private enterprise. Then, because of the encouraging and stimulating activity of Conservative Governments, the Confederation was formed; and it has done the work of which we know. I am not by any means saying that all the work of the British Iron and Steel Federation has been bad and wrong. It has done some good things. It has discharged some useful functions. However, the more I listened to the speech of the right hon. Gentleman the Member for the City of London, and the more he showed how the industry had evolved from competition to the period when the tariff was secured, and when the Conservative Government insisted, as the price of the tariff, that the industry should be reorganised, that the Federation should be established to control the individual units as best it could, and how that control had further developed into control by the Ministry of Supply—and I understood his case, and he stated it, as we all know, with great ability—the more I listened to his speech, the more I thought the right hon. Gentleman was really tracing a state of evolution which would, reasonably and logically, lead to this Bill as the next stage in its evolution.

We cannot go on for all time with the Conservative idea of large-scale, big self-governing economic units, economic Empires within the State, albeit subject to public supervision. That is not a doctrine which is going to be permanently acceptable to the British people. When we get to that point, it is far better that we should take the logical next step and take over the industry. [Interruption.] The Leader of the Opposition cannot talk about not mentioning the Bill. As a matter of fact, not being able to discuss this Bill in detail in the Debate on the Address, he got his revenge yesterday by devoting a third of his speech to the Debate on the Address.

Photo of Mr Winston Churchill Mr Winston Churchill , Woodford

I am sorry if I interrupted the right hon. Gentleman, but we were getting a little concerned to know how we would fill in the rest of the time and whether arrangements would be made from our side, and, therefore, I reassured my hon. Friend the Chief Opposition Whip with the fact that the right hon. Gentleman had not yet reached the subject of the Bill.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

The right hon. Gentleman, of course, is not very familiar with the Bill, otherwise he would know that I have been talking about the subject of the Bill for quite a time.

We make these claims: that there are disadvantages in the Opposition's line; that the doctrine to which I have referred cramps the style of management and impedes its freedom of action. It is impeded in its freedom both by the Federation and the State. We think that under that system it is more difficult to rationalise and modernise the industry, since if it is a question of expanding here or contracting there, the fact of the industry being in private hands is bound to cause the maximum of difficulty. Next, we think that it is difficult for the industry to achieve the necessary freedom of movement in reorganisation and to change the physical characteristics of many of its undertakings, when there are a large number of separately owned undertakings, even if they are not a cartel. The separate bodies of shareholders are an added difficulty. Of course, there is also the political difficulty in a private monopoly of expanding or contracting the industry in particular areas. Moreover, in the raising of capital—and the industry must raise very large sums of capital—it cannot raise capital as well as it can be raised under State guarantee, either in speed, or in amount, or in the rate of interest which has to be paid. Therefore, we think that also is a disadvantage.

The proposals that we submit to the House meet these difficulties, and I will tell the House why. It is, of course, a complex industry, as we all understand, and it is the most controversial of the socialisation—[Interruption.] This is the old game of the gentlemanly party. They will get it back one of these days. We are quite used to it. This is, we quite agree, a complex industry; and this is the most controversial of all the socialisation Measures. But, in our submission to the House, this Bill is the best way of dealing with the problems of the industry. [HON. MEMBERS: "Why?"] That is what I am about to tell the House.

It is thought that if the shareholdings of the various classes of the individual undertakings pass from the present shareholders to the public corporation, which is to be set up under the Bill, then the management can get freedom of enterprise, freedom of adapta- tion, and freedom to develop and modify the physical assets of the industry to a far greater extent than is now possible.

I thought the right hon. Member for the City of London was arguing both ways. He complained that we were taking over too much in some respects; but he also appeared to complain that we were taking over only 107 undertakings instead of 2,000. I thought that was a little inconsistent. Surely the right thing to do is to take over the undertakings as they are within the appropriate sphere, and then afterwards see what, if anything, is superfluous, and what is not. It is perfectly true that in many of these private undertakings there are associated with them, or with part of them, as ancillaries a number of undertakings, which sound strange in relation to the iron and steel industry. But if they sound strange, why did they not sound strange when they were under private ownership? Why should they suddenly be strange, if they are taken over by the State? The alternative would have been to cut off or dislocate them before they were taken over, or provide in the Bill that on a specific date, parts of those undertakings should be severed. But that would have created the very dislocation, the very confusion and the very muddle which have been urged against this Bill and the policy that we are pursuing.

It is, surely, the rational, the sensible and the wise course for us to take over the undertakings and their subsidiaries within the appropriate sphere and for the Corporation to examine them when they are in public ownership. If it is expedient to continue the subsidiaries in the hands of the Corporation, they can be continued; otherwise they can conveniently be shed in due course. That seems to me to be a far more sensible plan than trying to cut them off in some arbitrary way on the coming into operation of the Bill. That is the policy which we have pursued, and that is the answer to that point. We, therefore, think that that was the right thing to do, and I submit to the House that it is a perfectly reasonable course.

It is next argued that we ought to have embodied in the Bill specific and detailed plans for the future organisation of the industry. This seems to me to be a preposterous suggestion. It comes from the academic mind of the right hon. Member for Warwick and Leamington. It really is a preposterous suggestion that before the industry has been socialised, before the Act of Parliament has been brought in, and before any powers have been obtained at all, my right hon. Friend, a politician, should work out in detail the specific technical future of the industry, down to considerable detail, embody it in the Bill, and thereby deprive the scheme of all fluidity.

That is the clear implication of the complaints which have been made that the future technical development of the industry is not laid down in fixed statutory terms in the Bill. It really does illustrate the lack of practical minds of Members opposite and the unreal world in which they live. Surely the wise thing, if the industry is to be socialised, is to provide for it to be taken over, to let the shares be vested in the Iron and Steel Corporation of Great Britain, and then to let the Iron and Steel Corporation, composed of competent business people—[Laughter.] What is the matter with the Opposition? Whom do they want to man the industry? As I was saying—composed of competent business people, be responsible for the management of the industry, subject to such general directions as the Minister of Supply may give them. That is surely the sensible and rational way in which to proceed on this matter.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

That allegation is a little premature—[HON. MEMBERS: "Hear, hear."]—and a little late, because prices have already been increased. The advantages of that line of policy are, I submit to the House, reasonable and sensible. Having given effect to that policy we shall have greater freedom to modify and develop the industry in the public interest. I would also add that this Bill in that sense and in that realm is not only a Bill for the transfer of the ownership from private ownership to public, but is also a Bill which will not only give greater dignity and freedom to the workpeople in the industry, but will represent an act of emancipation and a charter of advance for management and technicians as well.

We shall not discourage competition. There will be plenty of room both for competition and emulation between the separate undertakings of the industry. The facts about each undertaking, and its costs, will be known to the others, and we shall encourage every degree of proper competition. The Bill does not dislocate the industry at all. It is carefully framed so that there is no real disturbance, no dislocation, and the industry can be improved and reorganised without any violent upset in any sense of the term.

The right hon. Gentleman the Member for the City of London was in error when he claimed that the Iron and Steel Board had the power to review and to produce plans for the industry. The Board's functions were to review and supervise plans of development, but they had no specific authority to produce plans of their own. Indeed, one of the difficulties of the Ministry of Supply has been that the Board could only check up on the schemes put to it by the Iron and Steel Federation. The technical experts were in Steel House, and in control of the industry, and what inevitably happened was that the Ministry of Supply Iron and Steel Board was, to a great extent—and I am not complaining, except that I think it was wrong—dependent for technical guidance not on the officers of the Ministry but on the very able staff of the British Iron and Steel Federation. I do not think that is an unfair statement.

Photo of Sir Andrew Duncan Sir Andrew Duncan , City of London

I think it is a little unfair in this sense: that the consultants were independent consultants. It is true that they were consultants to the Iron and Steel Federation, but, equally, they were independent consultants to the Ministry of Supply and the Steel Board.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

I think the right hon. Gentleman will agree that the real information, the technical knowledge about the day-to-day affairs of the industry, was within the Federation rather than the Iron and Steel Board. That was bound to be so in the circumstances. That will rejoice the hearts of Members opposite, because they do not wish State Departments to be as expert as private enterprise. One of the incidental consequences of the passing of this Bill will be that this expert technical knowledge will be at the disposal of public authorities, and will not be retained in private hands.

In conclusion, I wish to refer to the criticism made of my right hon. and learned Friend the Chancellor of the Exchequer because of what he said last night about the danger of Communism and revolution—

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

The right hon. Gentleman heard the word "violence," and violently went off the deep end himself. The Chancellor's argument—and the right hon. Gentleman opposite would have understood it better if he had not interrupted so much—was that with a Government which is progressive, which is understanding of the difficulties of the people, which seeks to protect and promote the standard of life of the people, and which frames its economic policy in the public interest, there is the best guarantee of social and economic stability. But with a Government and State which is reactionary, which is contrary to the popular interest, which is against the interests of the people, there is the risk of violent disturbance. I am confirmed in that belief by the fact that the Conservative Party are trying to work up a Communist menace for their own advantages. They had better leave that problem to us, because we understand it.

Secondly, it is also not without significance that the policy of the Communist Party itself in Europe, starting with Hitler in Germany and going on to the present situation in France and to the recent election in America, is to welcome the political triumph of the Conservative Party plus the Fascist parties as well, because it is their belief—

Photo of Mr Nigel Birch Mr Nigel Birch , Flintshire

What about the Chancellor and his united front?

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East

—that Toryism, which has no understanding of the people and represents reaction against the people, is most likely to stimulate Communist revolution and Communist violence.

Question put, "That 'now' stand part of the Question."

The House divided: Ayes, 373; Noes, 211.

Division No. 4.]AYES[10.0 p.m.
Acland, Sir RichardDiamond, JJeger, G (Winchester)
Adams, Richard (Balham)Dobbie, W.Jeger, Dr. S. W. (St. Pancras, S. E.)
Adams, W. T. (Hammersmith, South)Dodds, N. NJenkins, R. H
Atbu, A. H.Donovan, T.John, W
Alexander, Rt. Hon. A. VDriberg, T. E. N.Johnston, Douglas
Allen, A. C. (Bosworth)Dugdale, J. (W. Bromwich)Jones, D. T. (Hartlepool)
Allen, Scholefield (Crewe)Dumpleton, C. W.Jones, Elwyn (Plaistow)
Alpass, J. H.Dye, S.Jones, J. H. (Bolton)
Anderson, A. (Motherwell)Ede, Rt. Hon. J. CJones, P. Asterley (Hitchin)
Anderson, F. (Whitehaven)Edelman, M.Keenan, W.
Attewell, H. C.Edwards, Rt. Hon. Sir C. (Bedwellty)Kenyon, C
Attlee, Rt. Hon. C. REdwards, John (Blackburn)Key, Rt. Hon. C. W.
Austin, H. LewisEdwards, Rt. Hon. N. (Caerphilly)King, E. M.
Awbery, S. S.Edwards, W. J. (Whitechapel)Kinghorn, Sqn.-Ldr E
Ayles, W. HEvans, Albert (Islington, W.)Kinley, J
Ayrton Gould, Mrs. BEvans, E. (Lowestoft)Kirby, B. V
Bacon, Miss AEvans, John (Ogmore)Kirkwood, Rt. Hon D
Baird, J.Evans, S. N (Wednesbury)Lang, G.
Balfour, AEwart, R.Lavers, S.
Barnes, Rt. Hon. A. JFairhurst, FLawson, Rt. Hon. J. J.
Barstow, P. GFarthing, W. JLee, F. (Hulme)
Bartlett, VFernyhough, ELee, Miss J. (Cannock)
Barton, CField, Capt. W. J.Leonard, W.
Battley, J. R.Fletcher, E. G. M. (Islington, E.)Leslie, J. R.
Bechervaise, A. E.Follick, M.Lever, N. H.
Bellenger, Rt. Hon. F. JFoot, M. M.Levy, B. W.
Benson, G.Forman, J. CLewis, A. W. J. (Upton)
Berry. H.Fraser, T. (Hamilton)Lewis, J. (Bolton)
Beswick, F.Freeman, J. (Watford)Lewis, T. (Southampton)
Bevan, Rt. Hon. A. (Ebbw Vale)Freeman, Peter (Newport)Lindgren, G. S.
Binns, J.Gaitskell, Rt. Hon. H. T. NLipton, Lt.-Col. M
Blackburn, A. R.Gallacher, W.Logan, D. G
Blyton, W. R.Ganley, Mrs. C. SLongden, F.
Boardman, H.Gibbins, J.Lyne, A. W.
Bottomley, A. G.Gibson, C. WMcAdam, W
Bowden, Flg. Offr. H. W.Gilzean, A.McAllister, G.
Braddock, Mrs. E. M. (L'pl. Exch'ge)Glanville, J. E. (Consett)McEntee, V. La T
Braddock, T. (Mitcham)Goodrich, H. E.McGhee, H. G.
Bramall, E. A.Gordon-Walker, P. CMcGovern, J
Brook, D. (Halifax)Greenwood, Rt. Hon. A. (Wakefield)Mack, J. D.
Brooks, T. J. (Rothwell)Greenwood, A. W. J. (Heywood)McKay, J. (Wallsend)
Brown, George (Belper)Grenfell, D. R.Mackay, R. W. G. (Hull, N. W.)
Brown, T. J. (Ince)Grey, C. F.Maclean, N. (Govan)
Bruce, Maj. D. W. TGrierson, E.McLeavy, F.
Burden, T. W.Griffiths, D. (Rother Valley)MacMillan, M. K. (Western Isles)
Burke, W. A.Griffiths, Rt. Hon. J. (Llanelly)MacPherson, M. (Stirling)
Butler, H. W. (Hackney, S.)Griffiths, W. D. (Moss Side)Macpherson, T. (Romford)
Callaghan, JamesGuest, Dr. L. HadenMainwaring, W. H.
Carmichael, JamesGunter, R. JMallalieu, E. L. (Brigg)
Castle, Mrs. B. A.Guy, W. H.Mallalieu, J. P. W. (Huddersfield)
Chamberlain, R. A.Haire, John E. (Wycombe)Mann, Mrs. J.
Champion, A. J.Hale, LeslieManning, C. (Camberwell, N.)
Chater, D.Hall, Rt. Hon. GlenvilManning, Mrs. L (Epping)
Chetwynd, G. RHamilton, Lieut.-Col. R.Marquand, H. A.
Cluse, W. S.Hannan, W. (Maryhill)Marshall, F. (Brightside)
Cobb, F. A.Hardy, E. AMayhew, C. P.
Cocks, F. S.Harrison, J.Medland, H. M
Coldrick, W.Hastings, Dr. SomervilleMellish, R. J.
Collick, P.Haworth, J.Messer F.
Collindridge, F.Henderson, Rt Hn. A. (Kingswinford)Middleton, Mrs. L
Collins, V. J.Henderson, Joseph (Ardwick)Mikardo, Ian
Colman, Miss G. M.Herbison, Miss M.Millington, Wing-Comdr. E. R
Comyns, Dr. L.Hewitson, Capt MMitchison, G. R
Cook, T. F.Hicks, G.Monslow, W.
Cooper, Wing-Comdr. G.Hobson, C. R.Moody, A. S.
Corbet, Mrs. F. K. (Camb'well, N. W.)Holman, P.Morgan, Dr. H. B.
Corlett, Dr. JHolmes, H. E. (Hemsworth)Morley, R.
Cove, W. G.Horabin, T. LMorris, Lt.-Col. H. (Sheffield, C.)
Cripps, Rt. Hon. Sir SHouse, GMorris, P. (Swansea, W.)
Crossman, R. H. S.Hoy, J.Morrison, Rt. Hon. H (Lewisham, E.)
Cullen, Mrs. AHubbard, T.Mort, D. L.
Daggar, G.Hudson, J. H. (Ealing, W)Moyle, A.
Daines, P.Hughes, Emrys (S. Ayr)Murray, J. D
Dalton, Rt. Hon. H.Hughes, Hector (Aberdeen, N.)Nally, W.
Davies, Edward (Burslem)Hughes, H. D. (W'lverh'pton, W.)Naylor, T. E.
Davies, Ernest (Enfield)Hutchinson, H. L. (Rusholme)Neal, H (Claycross)
Davies, Harold (Leek)Hynd, H. (Hackney, C.)Nichol, Mrs. M. E. (Bradford, N.)
Davies, Haydn (St. Pancras, S. W.)Hynd, J. B. (Attercliffe)Nicholls, H. R, (Stratford)
Davies, R. J. (Westhoughton)Irvine, A. J. (Liverpool)Noel-Baker, Capt. F. E. (Brentford)
Davies, S. O. (Merthyr)Irving, W. J. (Tottenham, N.)Noel-Baker, Rt. Hon P. J. (Derby)
Deer, G.Isaacs, Rt. Hon. G. A.Noel-Buxton, Lady
de Freitas, GeoffreyJanner, B.O'Brien, T.
Delargy, H. J.Jay, D. P. T.Oldfield, W. H.
Dliver, G. H.Shackleton, E. A. A.Tomlinson, Rt. Hon. G
Orbach, M.Sharp, GranvilleTurner-Samuels, M
Paget, R. T.Shawcross, C. N. (Widnes)Ungoed-Thomas, L
Paling, Rt. Hon. Wilfred (Wentworth)Shawcross, Rt. Hon. Sir H. (St. Helens)Usborne, Henry
Paling, Will T. (Dewsbury)Shinwell, Rt. Hon. E.Vernon, Maj. W. F
Palmer, A. M. F.Shurmer, P.Viant, S. P.
Pargiter, G. A.Silkin, Rt. Hon. L.Walkden, E.
Parker, J.Silverman, J. (Erdington)Walker, G. H.
Parkin, B. T.Simmons, C. J.Wallace, G. D. (Chislehurst)
Paton, Mrs. F. (Rushcliffe)Skeffington, A. M.Wallace, H. W. (Walthamstow, E.)
Paton, J. (Norwich)Skeffington-Lodge, T. CWarbey, W. N.
Pearson, A.Skinnard, F. W.Watkins, T. E.
Peart, T. F.Smith, C. (Colchester)Watson, W. M
Perrins, W.Smith, Ellis (Stoke)Webb, M. (Bradford, C.)
Piratin, P.Smith, H. N. (Nottingham, S.)Weitzman, D.
Platts-Mills, J. F. F.Smith, S. H. (Hull, S. W.)Wells, W. T. (Walsall)
Poole, Cecil (Lichfield)Snow, J. W.West, D. G.
Popplewell, E.Solley, L. JWheatley, Rt. Hn. John (Edinb'gh, E.)
Porter, E. (Warrington)Sparks, J. AWhite, H. (Derbyshire, N. E.)
Porter, G. (Leeds)Steele, TWigg, George
Pritt, D. N.Stewart, Michael (Fulham, E)Wilcock, Group-Capt. C. A. B
Proctor, W. T.Stokes, R. R.Wilkes, L.
Pursey, Comdr. H.Strachey, Rt. Hon. J.Wilkins, W. A.
Randall, H. E.Strauss, Rt. Hon. G. R. (Lambeth)Willey, F. T. (Sunderland)
Ranger, J.Stross, Dr. B.Willey, O. G. (Cleveland)
Rankin, J.Stubbs, A. E.Williams, D. J (Neath)
Rees-Williams, D. R.Summerskill, Dr. EdithWilliams, J. L. (Kelvingrove)
Reeves, J.Swingler, S.Williams, R. W. (Wigan)
Reid, T. (Swindon)Sylvester, G. OWilliams, W. R. (Heston)
Rhodes, H.Symonds, A. L.Willis, E
Richards, R.Taylor, H. B. (Mansfield)Wills, Mrs. E. A
Ridealgh, Mrs. M.Taylor, Dr. S. (Barnet)Wilson, Rt. Hon. J. H.
Robens, A.Thomas, D. E. (Aberdare)Wise, Major F. J.
Roberts, Goronwy (Caernarvonshire)Thomas, George (Cardiff)Woodburn, Rt. Hon A
Robertson, J. J. (Berwick)Thomas, I. O. (Wrekin)Woods, G. S
Rogers, G. H. R.Thomas, John R. (Dover)Wyatt, W.
Ross, William (Kilmarnock)Thorneycroft, Harry (Clayton)Yates, V. F
Royle, C.Thurtle, ErnestYoung, Sir R (Newton)
Sargood, RTiffany, SYounger, Hon Kenneth
Scollan, T.Timmons, J.Zilliacus, K
Scott-Elliott, WTitterington, M. F.
Mr. Whiteley and Mr. R. J. Taylor.
Agnew, Cmdr P. GDigby, S. WHerbert, Sir A. P.
Aitken, Hon. MaxDodds-Parker, A. DHinchingbrooke, Viscount
Anderson, Rt. Hn. Sir J. (Scot. Univ.)Donner, P. W.Hogg, Hon. Q
Astor, Hon. MDower, Col. A. V. G. (Penrith)Hollis, M. C.
Baldwin, A. E.Dower, E. L. G. (Caithness)Holmes, Sir J. Stanley (Harwich)
Barlow, Sir J.Drayson, G. B.Hope, Lord J.
Beechman, N. A.Dugdale, Maj. Sir T. (Richmond)Howard, Hon. A.
Birch, NigelDuncan, Rt. Hn. Sir A. (City of Lond)Hudson, Rt. Hon. R. S (Southport)
Beles, Lt.-Col. D. C. (Wells)Duthie, W. S.Hulbert, Wing-Cir. N. J.
Boothby, R.Eccles, D. M.Hurd, A.
Bossom, A. CEden, Rt. Hon. AHutchison, Lt.-Cm. Clark (E'b'rgh W.)
Bowen, R.Elliot, Lieut.-Col. Rt. Hon. WalterHutchison, Col. J. R. (Glasgow, C.)
Bower, N.Erroll, F. J.Jarvis, Sir J.
Boyd-Carpenter, J. A.Fleming, Sqn.-Ldr. E. LJeffreys, General Sir G.
Bracken, Rt. Hon. BrendanFletcher, W. (Bury)Jennings, R.
Braithwaite, Lt.-Comdr. J. G.Foster, J. G. (Northwich)Joynson-Hicks, Hon. L. W.
Bromley-Davenport, Lt.-Col. WFox, Sir G.Keeling, E. H.
Bullock, Capt. M.Fraser, H. C. P. (Stone)Kendall, W. D
Butcher, H. W.Fraser, Sir I. (Lonsdale)Kerr, Sir J. Graham
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)Fyfe, Rt. Hon. Sir D. P. MKingsmill, Lt.-Col. W. H
Byers, FrankGage, C.Lambert, Hon. G.
Carson, E.Galbraith, Cmdr. T. DLancaster, Col. C. G.
Challen, C.Gammans, L. D.Langford-Holt, J.
Channon, H.Gates, Maj. E. E.Law, Rt. Hon. R. K
Churchill, Rt. Hon. W. SGeorge, Maj. Rt. Hn. G. Lloyd (P'ke)Legge-Bourke, Maj. E. A. H
Clarke, Col, R. S.George, Lady M. Lloyd (Anglesey)Lennox-Boyd, A. T.
Clifton-Brown, Lt.-Col. GGlyn, Sir R.Lindsay, M. (Solihull)
Cole, T. L.Granville, E. (Eye)Lipson. D. L.
Conant, Maj. R. J. EGridley, Sir ALloyd, Selwyn (Wirral)
Cooper-Key, E. M.Grimston, R. VLow, A. R. W.
Corbett, Lt-Col. U.Gruffydd, Prof. W. JLucas, Major Sir J
Crookshank, Capt. Rt Hon. H. F. C.Hannon, Sir P. (Moseley)Lucas-Tooth, Sir H
Crosthwaite-Eyre, Col. O E.Harden, J. R. E.Lyttelton, Rt. Hon. O.
Crowder, Capt. John EHare, Hon. J. H (Woodbridge)MacAndrew, Col. Sir C.
Cuthbert, W. N.Harris, F. W. (Croydon, N.)McCallum, Maj. D.
Darling, Sir W. Y.Hams, H. Wilson (Cambridge Univ.)McCorquodale, Rt. Hon. M. S
Davidson, ViscountessHarvey, Air-Comdre. A. V.Macdonald, Sir P. (I. of Wight)
Davies, Rt. Hn. Clement (Montgomery)Headlam, Lieut.-Col. Rt. Hon. Sir CMcFarlane, C. S.
De la Bère, R.Henderson, John (Cathcart)Mackeson, Brig H. R
McKie, J. H. (Galloway)Peto, Brig. C. H. M.Studholme, H. G.
Maclean, F. H. R. (Lancaster)Ponsonby, Col. C. E.Sutcliffe, H.
MacLeod, J.Poole, O. B. S. (Oswestry)Taylor, C. S (Eastbourne)
Macmillan, Rt. Hon. Harold (Bromley)Prescott, StanleyTaylor, Vice-Adm. E. A. (P'dd't'n, S.)
Macpherson, N. (Dumfries)Price-White, Lt.-Col. DTeeling, William
Maitland, Comdr. J. W.Prior-Palmer, Brig. O.Thomas, Ivor (Keighley)
Manningham-Buller, R. E.Raikes, H. V.Thomas, J. P. L. (Hereford)
Marlowe, A. A. H.Ramsay, Maj. S.Thorneycroft, G. E. P. (Monmouth)
Marples, A. E.Rayner, Brig. R.Thornton-Kemsley, C. N.
Marsden, Capt. A.Reed, Sir S. (Aylesbury)Thorp, Brigadier R. A. F.
Marshall, D. (Bodmin)Renton, D.Touche, G. C.
Marshall, S. H. (Sutton)Roberts, Emrys (Merioneth)Turton, R. H.
Maude, J. C.Roberts, H. (Handsworth)Tweedsmuir, Lady
Medlicott, Brigadier F.Roberts, P. G. (Ecclesall)Vane, W. M. F.
Mellor, Sir J.Roberts, W. (Cumberland, N.)Wadsworth, G.
Molson, A. H. E.Robertson, Sir D. (Streatham)Wakefield, Sir W. W.
Moore, Lt.-Col. Sir T.Ropner, Col. L.Walker-Smith, D.
Morris, Hopkin (Carmarthen)Ross, Sir R. D. (Londonderry)Ward, Hon. G. R
Morris-Jones, Sir H.Salter, Rt. Hon. Sir J. A.Watt, Sir G. S. Harvie
Morrison, Maj. J. G. (Salisbury)Sanderson, Sir F.Webbe, Sir H. (Abbey)
Morrison, Rt. Hn. W. S. (Cirencester)Savory, Prof. D. L.Wheatley, Colonel M. J. (Dorset, E.)
Mott-Radclyffe, C. E.Scott, Lord W.White, Sir D. (Fareham)
Mullan, Lt. C. H.Shephard, S. (Newark)White, J. B. (Canterbury)
Neill, W. F. (Belfast, N.)Shepherd, W. S. (Bucklow)Williams, C. (Torquay)
Neven-Spence, Sir B.Smiles, Lt.-Col. Sir W.Williams. Gerald (Tonbridge)
Nicholson, G.Smith, E. P. (Ashford)Willoughby de Eresby, Lord
Nield, B. (Chester).Smithers, Sir W.York, C.
Noble, Comdr. A. H. PSnadden, W. M.Young, Sir A. S. L. (Partick)
Nutting, AnthonyStanley, Rt. Hon. O.
Odey, G. W.Stewart, J. Henderson (Fife, E.)TELLERS FOR THE NOES
O'Neill, Rt. Hon. Sir HStoddart-Scott, Col. M.Mr. Buchan-Hepburn and
Orr-Ewing, I. L.Strauss, Henry (English Universities)Mr. Drewe.
Peake, Rt. Hon. O.Stuart, Rt. Hon. J. (Moray)

Bill read a Second time.

Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington

I beg to move, "That the Bill be committed to a Committee of the Whole House."

Question put.

The House proceeded to a Division.

Photo of Mr Quintin Hogg Mr Quintin Hogg , Oxford

(seated and covered): On a point of Order. After you had given instructions for the door to be locked, Mr. Speaker, I saw the hon. Member for Widnes (Mr. Shawcross) assault the attendant and force his way into the Lobby. Is that in Order, Sir?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

The correct time for that point to be raised is when the Tellers have come to the Table, and before I declare the numbers. It will then be the correct moment for the hon. Member to raise the point.

Photo of Mr Quintin Hogg Mr Quintin Hogg , Oxford

Seated and covered?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

No, I have called the House to Order. Therefore, one does not have to be seated and covered. It is a point of Order.

The Tellers having come to the Table

Photo of Mr Quintin Hogg Mr Quintin Hogg , Oxford

On a point of Order, Mr. Speaker. After you had given orders for the doors to be locked, I saw the hon. Member for Widnes assault the attendant and force his way into the "No" Lobby. Is that in Order, and what is the effect upon the Division?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

There I am afraid I must declare that if the door was opened for the hon. Member after I had said, "Lock the doors" his vote cannot be counted, and, therefore, one vote must be taken off, whichever way he voted. I should not say whether he voted "Aye" or "No," but his vote cannot be taken after I have said "Lock the doors" if he had not been through the doors.

Photo of Mr Thomas Scollan Mr Thomas Scollan , Renfrewshire Western

Further to that point of Order, Mr. Speaker. Is this challenge to be accepted without further sifting the evidence?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

As a matter of fact, there is no need for that. I happened to observe it from my seat and I saw the attendant open the door to him. There was no question about it. The hon. Member was here. The attendant was really at fault for opening the door to him. I saw it myself. The paper must be altered for one vote less for whichever way the hon. Member voted.

Photo of Mr Ernest Popplewell Mr Ernest Popplewell , Newcastle upon Tyne West

I have no idea which way the hon. Member for Widnes (Mr. Shawcross) voted.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

As I told the hon. Member, I happened to see the incident myself and I saw him go into the "No" Lobby.

Ayes, 212; Noes, 366.

Division No. 5.]AYES[10.12 p.m.
Agnew, Cmdr. P. GHarden, J. R. E.Nield, B. (Chester)
Aitken, Hon. MaxHare, Hon. J. H. (Woodbridge)Noble, Comdr. A. H. P
Anderson, Rt. Hn. Sir J. (Scot. Univ.)Harris, F. W. (Croydon, N.)Nutting, Anthony
Astor, Hon. M.Harris, M. Wilson (Cambridge Univ.)Odey, G. W.
Baldwin, A. E.Harvey, Air-Comdre. A. V.O'Neill, Rt. Hon. Sir H.
Barlow, Sir J.Headlam, Lieut.-Col. Rt. Hon. Sir C.Orr-Ewing, I. L.
Beamish, Maj. T. V. HHenderson, John (Cathcart)Peake, Rt. Hon. O.
Beechman, N. A.Herbert, Sir A. P.Peto, Brig. C. H. M.
Birch, NigelHinchingbrooke, ViscountPonsonby, Col. C. E.
Boles, Ll.-Col. D. C. (Wells)Hogg, Hon. QPoole, O. B. S. (Oswestry)
Boothby, R.Hollis, M. C.Prescott, Stanley
Bossom, A. CHolmes, Sir J. Stanley (Harwich)Price-White, Lt.-Col. D
Bowen, R.Hope, Lord J.Prior-Palmer, Brig. C
Bower, N.Howard, Hon. A.Raikes, H. V.
Boyd-Carpenter, J. A.Hudson, Rt. Hon. R. S. (Southport)Ramsay, Maj. S.
Bracken, Rt. Hon. BrendanHulbert, Wing-Cdr. N. J.Rayner, Brig R.
Braithwaite, Lt.-Comdr. J. G.Hurd, A.Reed, Sir S. (Aylesbury)
Bromley-Davenport, Lt.-Col. W.Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Renton, D.
Bullock, Capt. M.Hutchison, Col. J. R. (Glasgow, C.)Roberts, Emrys (Merioneth)
Butcher, H. W.Jarvis, Sir J.Roberts, H. (Handsworth)
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)Jeffreys, General Sir G.Roberts, P. G. (Ecclesall)
Byers, FrankJennings, R.Roberts, W. (Cumberland, N.)
Carson, E.Joynson-Hicks, Hon, L. WRobertson, Sir D. (Streatham)
Challen, C.Keeling, E. H.Ropner, Col L
Channon, H.Kendall, W. D.Ross, Sir R. D. (Londonderry)
Churchill, Rt. Hon. W. S.Kerr, Sir J. GrahamSalter, Rt. Hon. Sir J. A
Clarke, Col. R. S.Kingsmill, Lt.-Col. W. H.Sanderson, Sir F.
Clifton-Brown, Lt.-Col. GLambert, Hon. G.Savory, Prof. D. L
Cole, T. L.Lancaster, Col. C. GScott, Lord W.
Conant, Maj. R. J. ELangford-Holt, J.Shephard, S. (Newark)
Cooper-Key, E. M.Law, Rt Hon. R. K.Shepherd, W. S. (Bucklow)
Corbett, Lt.-Col. U.Legge-Bourke, Maj. E. A. H.Smiles, Lt.-Col. Sir W.
Crookshank, Capt. Rt. Hon. H. F. C.Lennox-Boyd, A. T.
Crosthwaite-Eyre, Col. O. E.Lindsay, M. (Solihull)Smith, E. P. (Ashford)
Crowder, Capt. John ELipson, D. L.Smithers, Sir W.
Cuthbert, W. N.Lloyd, Selwyn (Wirral)Snadden, W. M.
Darling, Sir W. Y.Low, A. R. W.Stanley, Rt. Hon. O.
Davidson, ViscountessLucas, Major Sir JStewart, J. Henderson (Fife, E.)
Davies, Rt. Hn. Clement (Montgomery)Lucas-Tooth, Sir H.Stoddart-Scott, Col. M.
De la Bère R.Lyttelton, Rt. Hon. O.Strauss, Henry (English Universities)
Digby, S. W.MacAndrew, Col. Sir C.Stuart, Rt. Hon. J. (Moray)
Dodds-Parker, A. D.McCallum, Maj. D.Studholme, H. G.
Donner, P. W.McCorquodale, Rt. Hon. M. S.Sutcliffe, H.
Dower, Col. A. V. G. (Penrith)Macdonald, Sir P. (Isle of Wight)Taylor, C. S. (Eastbourne)
Dower, E. L. G. (Caithness)McFarlane, C. S.Taylor, Vice-Adm. E. A. (P'dd't'n, S.)
Drayson, G. B.Mackeson, Brig. H. R.Teeling, William
Dugdale, Maj. Sir T. (Richmond)McKie, J. H. (Galloway)Thomas, Ivor (Keighley)
Duncan, Rt. Hn. Sir A. (City of Lond.)Maclean, F. H. R. (Lancaster)Thomas, J. P. L. (Hereford)
Duthie, W. S.MacLeod, J.Thorneycroft, G. E. P. (Monmouth)
Eccles, D. M.Macmillan, Rt. Hon. Harold (Bromley)Thornton-Kemsley, C. N.
Eden, Rt. Hon. A.Macpherson, N. (Dumfries)Thorp, Brigadier R. A. F.
Elliot, Lieut.-Col. Rt. Hon. WalterMaitland, Comdr. J. W.Touche, G. C.
Erroll, F. J.Manningham-Buller, R. E.Turton, R. H.
Fleming, Sqn.-Ldr. E. LMarlowe, A. A. H.Tweedsmuir, Lady
Fletcher, W. (Bury)Marples, A. E.Vane, W. M. F
Foster, J. G. (Northwich)Marsden, Capt. A.Wadsworth, G.
Fox, Sir G.Marshall, D. (Bodmin)Wakefield, Sir W. W
Fraser, H. C. P. (Stone)Marshall, S. H. (Sutton)Walker-Smith, D.
Fraser, Sir I. (Lonsdale)Maude, J. C.Ward, Hon. G. R.
Fyfe, Rt. Hon. Sir D. P. M.Medlicott, Brigadier FWatt, Sir G. S. Harvie
Gage, C.Mellor, Sir J.Webbe, Sir H. (Abbey)
Galbraith, Cmdr. T. DMolson, A. H. E.Wheatley, Colonel M. J. (Dorset, E.)
Gammans, L. D.Moore, Lt.-Col. Sir T.White, Sir D. (Fareham)
Gates, Maj. E. EMorris, Hopkin (Carmarthen)White, J. B. (Canterbury)
George, Maj. Rt. Hn. G. Lloyd (P'ke)Morris-Jones, Sir H.Williams, C. (Torquay)
George, Lady M. Lloyd (Anglesey)Morrison, Maj. J. G. (Salisbury)Williams, Gerald (Tonbridge)
Glyn, Sir R.Morrison, Rt. Hn. W. S. (Cirencester)Willoughby de Eresby, Lord
Granville, E. (Eye)Mott-Radclyffe, C. E.York, C.
Gridley, Sir A.Mullan, Lt. C. H.Young, Sir A. S. L. (Partick)
Grimston, R. V.Neill, W. F. (Belfast, N.)
Gruffydd, Prof. W. J.Neven-Spence, Sir B.TELLERS FOR THE AYES:
Hannon, Sir P. (Moseley)Nicholson, G.Mr. Buchan-Hepburn and Mr. Drewe.
Acland, Sir RichardAllen, Scholefield (Crowe)Austin, H. Lewis
Adams, Richard (Balham)Alpass, J. H.Awbery, S. S.
Adams, W. T. (Hammersmith, South)Anderson, A. (Motherwell)Ayles, W. H.
Albu, A. H.Anderson, F. (Whitehaven)Ayrton Gould, Mrs. B
Alexander, Rt. Hon A. V.Attewell, H. C.Bacon, Miss A.
Allen, A. C. (Bosworth)Attlee, Rt. Hon. C. R.Baird, J.
Balfour, A.Field, Capt. W. J.Levy, B. W.
Barnes, Rt. Hon. A. JFletcher, E. G. M. (Islington, E.)Lewis, A. W. J. (Upton)
Barstow, P. G.Follick, M.Lewis, J. (Bolton)
Bartlett, V.Foot, M. M.Lewis, T. (Southampton)
Barton, C.Forman, J. C.Lindgren, G. S.
Battley, J. R.Fraser, T. (Hamilton)Lipton, Lt.-Col. M
Bechervaise, A. E.Freeman, J. (Watford)Logan, D. G
Bellenger, Rt. Hon. F. J.Freeman, Peter (Newport)Longden, F.
Benson, G.Gaitskell, Rt. Hon. H. T. N.Lyne, A. W.
Berry, HGallacher, W.McAdam, W
Beswick, F.Ganley, Mrs. C. SMcAllister, G.
Bevan, Rt. Hon. A. (Ebbw Vale)Gibbins, J.McEntee, V. La T
Binns, JGibson, C. WMcGhee, H. G.
Blackburn, A. R.Gilzean, A.McGovern, J.
Blyton, W. R.Glanville, J. E. (Consett)Mack, J. D.
Boardman, H.Goodrich, H. E.McKay, J. (Wallsend)
Bottomley, A, G.Gordon-Walker, P. C.Mackay, R. W. G. (Hull, N. W.)
Bowden, Fig. Offr. H. W.Greenwood, A. W. J. (Heywood)Maclean, N. (Govan)
Braddock, Mrs. E. M (L'pl. Exch'ge)Grenfell, D. R.McLeavy, F.
Braddock, T. (Mitcham)Grey, C. F.MacMillan, M. K. (Western Isles)
Bramall, E. A.Grierson, E.MacPherson, M. (Stirling)
Brook, D (Halifax)Griffiths, D. (Rother Valley)Macpherson, T. (Romford)
Brooks, T. J. (Rothwell)Griffiths, Rt. Hon. J. (Llanelly)Mainwaring, W. H.
Brown, George (Belper)Griffiths, W. D. (Moss Side)Mallalieu, E. L. (Brigg)
Brown, T. J. (Ince)Guest. Dr. L. HadenMallalieu, J. P. W. (Huddersfield)
Bruce, Maj. D. W. T.Gunter, R. JMann, Mrs. J.
Burden, T. W.Guy, W. H.Manning, C. (Camberwell, N.)
Burke, W. A.Haire, John E (Wycombe)Manning, Mrs. L. (Epping)
Butler, H. W. (Hackney, S.)Hale, LeslieMarquand, H. A.
Callaghan, JamesHall, Rt. Hon. GlenvilMarshall, F. (Brightside)
Carmichael, JamesHamilton, Lieut.-Col. R.Mayhew, C. P.
Castle, Mrs. B. A.Hannan, W. (Maryhill)Medland, H. M
Chamberlain, R. AHardy, E. A.Mellish, R. J.
Champion, A. J.Harrison, J.Messer, F.
Chetwynd, G. R.Hastings, Dr. SomervilleMiddleton, Mrs. L.
Cobb, F. AHaworth, J.Mikardo, Ian
Cocks, F. S.Henderson, Rt. Hn. A. (Kingswinford)Millington, Wing-Comdr. E. R
Coldrick, W.Henderson, Joseph (Ardwick)Mitchison, G. R
Collick, P.Herbison, Miss M.Monslow, W.
Collindridge, F.Hewitson, Capt. MMorgan, Dr. H. B.
Collins, V. J.Hicks, G.Morley, R.
Colman, Miss G. M.Hobson, C. R.Morris, Lt.-Col. H. (Sheffield, C.)
Comyns, Dr. L.Holman, P.Morris, P. (Swansea, W.)
Cook, T. FHolmes, H. E. (Hemsworth)Morrison, Rt. Hon. H (Lewisham, E.)
Cooper, Wing-Comdr. G.Horabin, T. LMort, D. L.
Corbet, Mrs. F. K. (Camb'well, N. W.)House, G.Moyle, A.
Corlett, Dr. J.Hoy, J.Mulvey, A.
Cove, W. G.Hubbard, T.Murray, J. D.
Cripps, Rt. Hon. Sir SHudson, J. H. (Ealing, W.)Nally, W.
Crossman, R. H. S.Hughes, Emrys (S. Ayr)Naylor, T. E.
Cullen, Mrs. A.Hughes, Hector (Aberdeen, N.)Neal, H. (Claycross)
Daggar, G.Hughes, H. D. (W'lverh'pton, W.)Nichol, Mrs. M. E. (Bradford, N.)
Daines, P.Hutchinson, H. L. (Rusholme)Nicholls, H. R. (Stratford)
Dalton, Rt. Hon. H.Hynd, H. (Hackney, C.)Noel-Baker, Capt. F. E. (Brentford)
Davies, Edward (Burslem)Hynd, J. B. (Attercliffe)Noel-Baker, Rt. Hon. P. J. (Derby)
Davies, Ernest (Enfield)Irvine, A. J. (Liverpool)O'Brien, T.
Davies, Harold (Leek)Irving, W. J. (Tottenham, N.)Oldfield, W. H.
Davies, Haydn (St. Pancras, S. W.)Isaacs, Rt. Hon. G. A.Oliver, G. H.
Davies, R. J. (Westhoughton)Janner, B.Orbach, M.
Davies, S. O. (Merthyr)Jay, D. P. T.Paget, R. T.
Deer, G.Jeger, G. (Winchester)Paling, Rt. Hon. Wilfred (Wentworth)
de Freitas, GeoffreyJeger, Dr. S. W. (St. Pancras, S. E.)Paling, Will T. (Dewsbury)
Delargy, H. JJenkins, R. H.Palmer, A. M. F
Diamond, JJohn, W.Pargiter, G. A
Dobbie, W.Johnston, DouglasParker, J.
Dodds, N. NJones, D. T. (Hartlepool)Parkin, B. T.
Donovan, TJones, Elwyn (Plaistow)Paton, Mrs. F. (Rushcliffe)
Driberg, T. E. N.Jones, J. H. (Bolton)Paton, J. (Norwich)
Dugdale, J. (W. Bromwich)Jones, P. Asterley (Hitchin)Pearson, A.
Dumpleton, C. WKeenan, W.Peart, T. F.
Dye, S.Kenyon, C.Perrins, W.
Ede, Rt Hon. J. CKey, Rt. Hon. C. W.Piratin, P.
Edelman, M.King, E. M.Platts-Mills, J. F. F.
Edwards, Rt. Hon. Sir C. (Bedwellty)Kinghorn, Sqn.-Ldr EPoole, Cecil (Lichfield)
Edwards, John (Blackburn)Kinley, J.Porter, E. (Warrington)
Edwards, Rt. Hon. N. (Caerphilly)Kirby, B. V.Porter, G. (Leeds)
Edwards, W. J. (Whitechapel)Kirkwood, Rt Hon DPritt, D. N.
Evans, Albert (Islington, W.)Lang, G.Proctor, W. T.
Evans, E. (Lowestoft)Lavers, S.Pursey, Comdr. H
Evans. John (Ogmore)Lawson, Rt. Hon. J. JRandall, H. E.
Evans, S. N. (Wednesbury)Lee, F. (Hulme)Ranger, J.
Ewart, R.Lee, Miss J. (Cannock)Rankin, J.
Fairhurst, F.Leonard, W.Rees-williams, D. R
Farthing, W. JLeslie, J. R.Reeves, J.
Fernyhough, ELever, N. HReid, T. (Swindon)
Rhodes, H.Stewart, Michael (Fulham, E.)Warbey, W. N
Richards, R.Stokes, R. R.Watkins, T. E
Ridealgh, Mrs. MStrachey, Rt. Hon. J.Watson, W. M
Robens, A.Strauss, Rt. Hon G. R. (Lambeth)Webb, M, (Bradford, C.)
Stross, Dr. B.Weitzman, D.
Roberts, Goronwy (Caernarvonshire)Stubbs, A. E.Wells, W. T. (Walsall)
Robertson, J. J. (Berwick)Summerskill, Dr EdithWest, D. G.
Rogers, G. H. R.Swingler, S.Wheatley, Rt. Hn. John (Edinb'gh, E.)
Ross, William (Kilmarnock)Sylvester, G. DWhite, H. (Derbyshire, N. E.)
Royle, C.Symonds, A. LWhiteley, Rt. Hon W.
Sargood, RTaylor, H. B. (Mansfield)Wilcock, Group-Capt. C. A. B
Scollan, T.Taylor, R. J. (Morpeth)Wilkes, L.
Scott-Elliot, W.Taylor, Dr. S. (Barnet)Wilkins, W. A.
Segal, Dr. S.Thomas, D. E. (Aberdare)Willey, F. T. (Sunderland)
Shackleton, E. A. AThomas, George (Cardiff)Willey, O. G. (Cleveland)
Sharp, GranvilleThomas, I. O. (Wrekin)Williams, D. J (Neath)
Shawcross, Rt. Hon. Sir H. (St. Helens)Thomas, John R. (Dover)Williams, J. L. (Kelvingrove)
Shurmer, P.Thorneycroft, Harry (Clayton)Williams, R. W. (Wigan)
Silkin, Rt. Hon. L.Thurtle, ErnestWilliams, W. R. (Heston)
Silverman, J. (Erdington)Tiffany, S.Willis, E.
Simmons, C. J.Timmons, J.Wills, Mrs. E. A
Skeffington, A. MTitterington, M. FWilson, Rt. Hon. J. H.
Skeffington-Lodge, T. CTolley, L.Wise, Major F. J.
Skinnard, F. W.Tomlinson, Rt. Hon. GWoodburn, Rt Hon. A
Smith, C. (Colchester)Turner-Samuels, M.Woods, G. S
Smith, Ellis (Stoke)Ungoed-Thomas, LWyatt, W.
Smith, H. N. (Nottingham, S.)Usborne, HenryYates, V. F.
Smith, S. H. (Hull, S. W.)Vernon, Maj. W. FYoung, Sir R. (Newton)
Snow, J. W.Viant, S. P.Younger, Hon. Kenneth
Solley, L. J.Walkden, E.
Sparks, J. AWalker, G. H.TELLERS FOR THE NOES:
Steele, TWallace, H. W (Walthamstow, E)Mr. Popplewell and Mr. G. Wallace.

Bill committed to a Standing Committee.