Clause 5. — (Subsidy in Respect of Imported Materials.)

– in the House of Commons at 12:00 am on 28th April 1949.

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3.43 p.m.

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

I beg to move, in page 6, line 22, to leave out Clause 5.

The object of this Amendment is to delete from the Bill the statutory provision for the payment or employment of iron and steel subsidies. We on this side of the House think that it is dangerous in principle to incorporate in the Bill an undertaking that the general taxpayer shall make himself responsible for subsidies. Especially do we feel this in the light of Clause 29—or Clause 29 as we used to know it: I think it is now Clause 31—which says that, taking one year with another, the Corporation has to make its income and expenditure account balance. The Minister during the Committee stage conceded the point to which we attach great importance that if there are subsidies paid they are to extend over the whole iron and steel industry. That is a valuable point.

However, since the time when this Bill was under discussion in Committee has come the decision that iron and steel subsidies are to be ended; and I think that the principle that the right hon. Gentleman apparently concedes by that decision ought to be maintained in the Bill, and that if losses are to be incurred they should not, ab initio,be concealed by subsidies, and that the general taxpayer should not be required to make the Minister's conglomeration of steel companies profitable by rights given to him in the Bill. We also consider it undesirable that bad buying should also be concealed until, perhaps, the annual Debate takes place on this matter.

I should be very glad to hear from the Minister why he considers it necessary to maintain this statutory power. I quite agree that there may be times when some help in buying scrap abroad, or in the importation of iron ore, may be necessary for the nationalised undertakings; but the Corporation has got to pay its way, and I think it is better to deal with this matter in the most realistic manner, and to delete this Clause from the Bill, and oblige the Minister to come back to Parliament if he requires any extensive system of subsidy.

Photo of Mr George Strauss Mr George Strauss , Lambeth North

I do not think it would really be wise to omit this Clause. The right hon. Gentleman admits that it may be necessary—we cannot tell—to provide a Government subsidy to level external prices and internal prices, and to prevent a quite unreasonable burden from being put upon the steel consumers. That has been done up to now with, I think, the general agreement of all sides of the House. Although most of the subsidies are now withdrawn, the House must appreciate that some subsidies still remain. There remain the subsidy on imported finished steel and the repayment of import duty on pig-iron and steel. We hope that those subsidies may be abolished before long; but we cannot tell: they may have to continue. We see no point in abandoning this Clause which is solely permissive. We see no point in putting the Government and the House to the inconvenience, if on some future occasion it is decided that it is necessary either to continue the present subsidies or to give new ones, of bringing in a Bill for that specific purpose. We can see no purpose in doing that. This Clause is permissive. If the Government were to embark on a subsidy policy, they would report it to the House, and the House would be aware of it. It seems a more straightforward method to allow this permissive Clause to remain in the Bill.

Photo of Mr William Shepherd Mr William Shepherd , Bucklow

The Minister has said that this Clause is purely permissive, and has made a case in relation to finished steel. I think most hon. Members will be prepared to agree that there will be some materials imported in respect of which there will be a case for preferential price, if not some form of subsidy; but although we may concede that some sort of subsidy is necessary in certain cases in existing circumstances, because of the difference in the price of imported and home products, there is, surely, no reason for continuing in this Clause subsidies on so wide a range of materials. Surely, we are not for an indefinite period to go on paying subsidies on such materials. Surely it is possible, through the establishment of a Corporation like the B.I.S.C., to even out the effect of those disparities in price without resort to subsidies. In a Bill which is a major Measure, and which, but for the imminence of the next General Election, would, perhaps, have had a long passage, we should not write in something which we have no intention of pursuing permanently. Surely, the Minister is not telling the House that for an indefinite period of time he is going to pay useless, unnecessary subsidies on raw materials. Although a case may exist for subsidies in respect of finished steel—and I think there is a case there, and I do not see any answer to not maintaining subsidies at the present time—there is no case really for them for raw materials. If the Minister cannot agree to the abolition of this Clause, I think he ought to see that, in another place, this reference to raw materials is eliminated.

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

I fully appreciate that this Clause, as the Minister has said, gives him permissive powers only. On the other hand, it does seem rather curious that such permissive powers should be given to the Minister at the very time when the bulk of the payments or subsidies in respect of the iron and steel industry are being withdrawn. It is surely a remarkable change in policy that, at the same time as the subsidies are being largely withdrawn, we should be writing into the Bill permissive power to continue them indefinitely. This applies not only to the type of subsidies which have been paid in the past—during the war and the immediate post-war period—but, according to this Clause, to subsidies which can be paid in respect of any imported materials such as alloying elements or other materials. Therefore, the Clause gives the Minister very wide permissive powers—far wider than anything he has hitherto seen fit to exercise.

In addition to that, the presence of this Clause in the Bill gives the impression that the Minister contemplates at some time in the future a long continued subsidy, and not just a subsidy to cover one particular year, or two particular years. If that is what the Minister has in mind he would surely use a simpler method—a Supplementary Estimate or a Clause in the Finance Bill of the particular year— to achieve his object. If only temporary subsidies to cover particular temporary difficulties are envisaged, there is clearly no need for this Clause in the Bill, as there are other methods of paying the Corporation out of moneys provided by Parliament. In any case, the amount to be paid would have to be specified in a Supplementary Estimate or by some other method, so the Clause for occasional payment is unnecessary. If regular payments over a period of years are envisaged, the House is entitled to have a more exact indication of the way in which the Minister intends to use these powers.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Holderness

Here again, we are up against a question of principle rather than the intentions of the right hon. Gentleman or the interpretation which can be placed upon the wording of this Clause. It is common ground—and has been during the whole of this Parliament—that the various experiments under nationalisation and public control would be judged by results. What better method is there of judging the success or failure of these various experiments—and this one in particular—than to be confronted with the actual figures of profit and loss and thereby focusing the whole situation in the public eye?

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) made an important point when he referred to the question of concealed losses. It is a great temptation to those operating any undertaking under a system of this kind to know that standing behind them all the time is the Government. The whole mental approach of those operating the Corporation must undoubtedly be governed by the possibility that their losses can be concealed, or camouflaged, by the method of subsidy. I cannot agree with the right hon. Gentleman's plea just now that it would be a bad thing or a disadvantage if he had to come to the House and introduce a new Bill.

He tried to dissuade us from pressing this Amendment because it might mean, at a future stage, the introduction of a new Bill to deal with some situation which may arise. I believe that would be an excellent and healthy thing because Parliament is then confronted with the actual cold facts of the situation. After all, we are still here as guardians of the money of the public who elect us, and a public which is staggering under a crushing burden of taxation. If it is to be loaded once more with the losses of an industry of this kind, surely the greatest publicity possible is the healthiest thing. The officials of the Corporation would know that if they lose money and go down hill they are going to put their Minister through the ordeal of the introduction of a new Bill and explaining the situation to justify those losses—

Photo of Mr George Strauss Mr George Strauss , Lambeth North

I interrupt because I want to help the hon. and gallant Gentleman. I do not think that he can have read the Clause. It is not a question of repaying losses made by the Corporation. The Clause merely deals with the situation in which the prices of products in this country are cheaper than the prices of those products abroad, and the more expensive products from abroad have to be imported. We cannot under this Clause repay losses in the way that the right hon. Gentleman has argued.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Holderness

I am glad that the right hon. Gentleman made that intervention because it is completely in accord with the arguments made by this side about the iron and steel industry in general. I think that I am right in saying that the right hon. Gentleman said, "Do not put me to the trouble of having in future to introduce a separate Bill." That was one of the reasons which he advanced for retaining this Clause. I am sure that in saying that I am not doing him an injustice. I think that it would be a very excellent thing if he had to do that, because it would bring the matter into the full glare of publicity. It is, of course, possible for losses to be concealed by this method.

I admit being at the disadvantage of not having been on the Standing Committee. That is not my fault but the fault of the Leader of the House who took the matter away from us and it is, therefore, a little difficult to follow all the lengthy proceedings upstairs when one has not been there. But the simple point that I am making is—and here surely the right hon. Gentleman will not quarrel too seriously with me—that if this scheme is to be justified as an experiment, let it operate in the full glare of publicity and with the fullest possible discussion in Parliament. If amending Bills have to come later, so much the better because it will keep the matter before us.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

I am shocked by what we have just heard from the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite). If he has looked at the Clauses of the Bill dealing with the accounts of the Corporation, he will have seen that they have to conform with the best commercial standards, and yet, according to the hon. and gallant Gentleman, it would be possible under the best commercial standards to conceal in some mysterious way losses made by the Corporation under the cloak of these subsidies. This I find very shocking. That may be his idea of the best commercial standards; I confess that it is hardly mine. I had hoped that they were better than that. Are we to understand that the best commercial standards allow iron and steel companies at present to conceal any losses that may inadvertently be made under the cloak of subsidies that they have already been receiving? I should have thought that that suggestion was not only contrary to the best commercial practice but insulting to the honourable profession who prepare and audit the accounts of these companies.

Photo of Mr Ivor Thomas Mr Ivor Thomas , Keighley

This Clause is permissive only, but it provides a temptation for the Corporation; and a temptation from which, I think, the Corporation ought to be protected. The document "Labour Believes in Britain" has said that there must be no feather beds for those who fail the nation. It is true that the extensive use of feather beds has been provided in the National Coal Board and similar bodies, and I trust that there is now to be a change of heart on the part of the Government. This provision is in fact a feather bed. The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) hit the nail on the head when he said just now that this Clause will mean an entirely different mental approach from that which would obtain if there were no such Clause. That, I believe, to be the heart of this matter. When the Corporation realise that they have to make both ends meet, they are more likely to do so than if they find a Clause of this character. It is common experience that when provision is made to milk public funds, public funds are in fact milked. That is human nature. For that reason, it would be an excellent thing not to have this Clause in the Bill. The hon. Member for Bucklow (Mr. Shepherd) has given good reasons why it should not apply to imported materials. He was willing to accept finished steel but even in the case of finished steel, I think that there is no case for having this Clause in the Bill.

Let us consider what the position will be. This Bill cannot become effective—even if the General Election were to go in a different direction from that in which we on this side of the House expect it to go—until some time in the summer or autumn of next year. Steel production is rising steadily. The world demand for steel is at its peak at the present time, owing to the wartime ravages, and steel production in Germany is being allowed to increase. It ought not to be the case that we shall need to import finished steel very much longer, in which case the need for a subsidy on imported steel will not arise. I feel, therefore, that the motive behind this Clause is thoroughly bad; the Clause provides a temptation for which the Corporation is almost certainly bound to fall, and I trust the Minister will even yet delete the Clause.

4.0 p.m.

Photo of Mr Hugh Fraser Mr Hugh Fraser , Stone

One cannot but be amused by the fact that a few months ago the Government benches were deriding the British steel industry for the reason that it was gaining a large Government subsidy, while today we find them here as the exponents of, and the demanders for, the continuation of those subsidies. I wish to add but a few words to what has already been said.

First, if the industry is subsidised it naturally loses its sense of acuteness and the intense need for competition. We have recently had a very good example of that in the scrap shipments from Germany. Everyone in the steel industry knew that they were being subsidised; the cost of the scrap was agreed by the outside Government Department with the Americans, and it was a very high price indeed. If they had been people who were earnestly concerned whether their profit or the profitability of their firm depended on the price at which they could acquire scrap from abroad, undoubtedly they would have worked very much harder for a lower price for Ger- man scrap. I think that we may yet see the German scrap price fall, because we shall be much keener to get it down.

The same thing will, I believe, apply throughout the steel industry on the question of subsidy. As my hon. Friend the Member for Keighley (Mr. Ivor Thomas) said, with the subsidy there is a feather bed which the individual publicly-owned company and the Corporation can fall back on, knowing that behind them they have the Minister and an unlimited public purse. We really feel that this Clause should be deleted from the Bill. If need be, if a serious situation should arise, the Minister should come to this House and ask for the re-allotment of such subsidy. It is again a question of Parliamentary control. We believe that the efficiency of the industry will be greater if those subsidies are deleted from the Bill.

Photo of Sir Kenneth Pickthorn Sir Kenneth Pickthorn , Cambridge University

Surely the guardians of the public interest on the Treasury Bench must feel that this Clause places upon them a much heavier weight of proof than they have yet here discharged. Upon the face of the Clause, it rings almost all the alarm bells. It purports—it is true only permissively—to give future Governments the right, without specific recourse to the House, to spend entirely unlimited sums; there is no ceiling limit at all. That alone puts a very heavy onus of proof upon the Government.

Secondly, it does this for an occasion which admittedly cannot arise at a date which can now be predicted, not within the lifetime of this Parliament. Although no doubt it was properly meant for a gracious courtesy, it is really a kind of contemptuous impertinence for a Minister to say that he wishes to save the Government and the House the trouble of dealing with these things. The trouble of dealing with these things is what the House is for, and without it government becomes not government at all but, as the good Bishop of Hippo said long ago, merely thievery on a greater scale than would otherwise be possible. That is what Parliament is for, so that when sums of money are needed from the public purse the Government should have to come and explain how and why before taking the money, and not merely to announce afterwards how it has happened and to invite inquiry then.

I am rather sorry that there is not a Law Officer on the Government Front Bench, because I wish to ask a rather technical question. This Clause is really technical, and if the right hon. Gentleman will bear with me perhaps he will try to follow the exact words I am going to quote, because otherwise the rest of my argument will become meaningless; I do not guarantee that it will not anyway. I wish to refer to line 27, beginning at "the total cost." The occasion which arises when the Minister or his successor is to be permitted to pay a subsidy is when the total cost of imported materials exceeds the price at which such things are sold in Great Britain. Now, I do not think that the draftsman has succeeded in meaning what he meant to mean. I speak with great diffidence, because I know that the draftsmen are much better at these things than I am. It seems to me that the words as placed are trying to compare two incommensurable things—the cost and the price; because what is really wanted is the cost of buying and the total receipts for selling, which is a different thing from the price of sale. I think that there is a drafting difficulty there.

There is a more important one, I think, in the words, and I do ask the Minister to consider whether this does not want looking at again. As I read the words, hot being a lawyer but taking them as an ordinary, more or less intelligent person who understands English in the literary sense, he is not permitted to start paying his subsidies except when, taking the running account from I do not know what beginning date, all the transactions add up so that the total cost is greater than the total receipts. I do not know if the right hon. Gentleman follows what I mean, but I think that is what the wording means. If the total costs are x and the total receipts are x minus q, then he may pay a subsidy. A year later he has still got to take all those figures into account, merely adding on the pluses or minuses that have happened during the intervening years. That seems to me to be the effect of these words, and I really think we ought to have them explained to us by a lawyer.

At any rate, the Minister ought to be able to tell us this. All I have said may be nonsense. I do not think it is wholly nonsense; but certainly I may be mistaken, and the upshot of what I have said may be mistaken. I fully understand that. But I do not think the right hon. Gentleman or other hon. Members opposite would say, unless they were merely trying to be facetious, that there was no sense or reason in what I have said. The question to which I think the right hon. Gentleman must know the answer without the help of a Law Officer is this: How could that be tested? Suppose the case I have just put for the interpretation of these words. Who is there to test it? As far as I can see, nobody. There is nobody to test whether what I have just said is the right meaning of the words. I will not go into the possible alternative, which is I think obvious. As far as I can see, there would be no way of getting the right meaning of the words.

I always dislike very much these things which are to be done with the consent of the Treasury. There is a curious modern habit in legislation of trying to argue that it is unconstitutional to say that one Minister must consult another. Over and over again I have had that argument used against me by all Governments, but particularly by this one, on the ground that Ministers must be presumed to be of one mind—the doctrine of Cabinet responsibility, and all that. Simultaneously there is this growing habit of saying that' His Majesty's Ministers, His Majesty's Secretary of State or His Majesty's Minister of Supply, or whatever it may be, may or may not do this with the consent of the Treasury. As far as I can see, the sole authority to interpret the meaning of these words is the Treasury and no other, and I think that that multiplies by two or three the burden of proof which the Minister already has upon him when he is asking the House to authorise him or his successors to pay sums of money of an amount wholly unlimited, not now predictable, in circumstances which cannot possibly arise at any time within the calculable future.

Photo of Mr Osbert Peake Mr Osbert Peake , Leeds North

I think that we have had a very inadequate explanation from the right hon. Gentleman of the presence of this Clause in the Bill. After all, the presence of this Clause in the Bill raises two perfectly distinct issues. The first is on the question of policy. Should a State-owned iron and steel industry be in receipt of subsidies from the taxpayer? There is another and to my mind more important question, and that is the question of financial practice and financial procedure. I am astonished that when we are discussing a Clause for the payment of subsidies in a Bill of this character there should be no representative of the Treasury upon the Government Front Bench to defend this subsidy Clause. We have until half-past five upon this batch of clauses, and I seriously suggest that the Minister should get in touch with the Financial Secretary to the Treasury and invite him to attend the House in order to defend the presence of this Clause in the Bill.

I will explain why I say that. The financial practice and procedure which has grown up in regard to clauses of this character is that Government expenditure requires statutory authority only if it is to be both substantial and continuous; that is to say, that it is to continue from year to year. All of us who have been in the House' for any length of time have seen innumerable instances of expenditure of money by Governments upon particular objects without statutory authority; that is to say, by the procedure of bringing in a Supplementary Estimate, and with the ex post facto approval of the Appropriation Act at the end of the Session. That has been done by Ministers in my day to provide subsidies for, let us say, the Covent Garden Opera, fireworks for VE-Day, and all sorts of matters of that kind. It is still the fact that even the expenses of the National Savings committees, which have been proceeding since 1917, have as yet got no statutory authority, because when they were first introduced it was not intended that they should in fact be continuous.

Therefore, the presence of this Clause, giving statutory authority for the payment of subsidies to the State-owned iron and steel industry, indicates to the House that these subsidies are, it is apprehended and expected, to be both substantial on the one hand and continuous from year to year upon the other. I say that we should have had here some representative of the Treasury, and I am very much obliged that we now have the presence of the Financial Secretary. For his benefit I will again explain shortly the point I have been making, which is that the presence of Clause 5—that is the power to subsidise the State-owned Iron and Steel Corporation, giving statutory authority for this expenditure out of the Exchequer—indicates that it is the intention of the Government that expenditure on these subsidies should be both substantial on the one hand, and should continue from year to year on the other.

4.15 p.m.

I have pointed out that if it is merely a matter of getting the Iron and Steel Corporation out of a temporary hole, perhaps one year out of three or five, it would be perfectly proper for the Government to bring in a Supplementary Estimate for that particular year and for that particular limited purpose. They could secure statutory authority from the House after that by means of the Appropriation Act. That is a course which is taken in innumerable cases of Government expenditure for particular objects when that expenditure is not expected to recur year after year.

Apart from the question of policy, which is of the greatest importance, it seems astonishing that hon. and right hon. Gentlemen opposite should require statutory power to subsidise this nationalised industry which is going to be so much more efficient and productive than it has ever been before in private hands. That is surprising enough, but it is more surprising to me that they should include in the Bill a Clause which can only be intended to give them power to subsidise the Iron and Steel Corporation year by year to a substantial amount. I therefore suggest that we should have from the Government an explanation why they will not accept our Amendment to leave out the Clause, and then, if the Iron and Steel Corporation requires, as the Minister indicated that it might require in special circumstances and from time to time, a sum of money from the Exchequer to tide it over a particular difficulty in regard, say, to the price of imported scrap or something of that character, the Government could come to the House and obtain, by way of a Supplementary Estimate, statutory authority in a way which is perfectly normal.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Once again I find myself drawn into this discussion by my interest in the arguments presented by the hon. Member for Keighley (Mr. Ivor Thomas). The last two speakers raised, not objections to the payment of the subsidy at all, but one, objections to the drafting of the Clause, and the other, questions of policy that might be inferred from the presence in the Bill of a Clause of this kind. I did not understand either of the last two speakers to object to the payment of subsidies. The hon. Member for Cambridge University (Mr. Pickthorn) wanted an explanation of the legal circumstances in which the payment might arise, while the right hon. Member for North Leeds (Mr. Peake) very properly raised a point whether there is an inference as to the amount and the permanence of the subsidy to be drawn from the following of this procedure rather than another. Both those speakers contemplate that a payment may have to be made in appropriate circumstances.

Not so the hon. Member for Keighley. He is against it altogether. He does not want the Clause or the subsidy. He is against it on broad public grounds. He says that wherever a subsidy is payable people are under a temptation. In saying that, he says something that I should not have expected him to say, of all Members; he says that where there is a temptation nobody resists it. [An HON. MEMBER: "He could not."] That is the argument which he puts forward. In his opinion advantage would be taken of the opportunity, and that is why he does not want the opportunity to be there. I am not so cynical myself. I do not think that everybody who is entitled to a subsidy always cheats.

Let us assume, nevertheless, that the hon. Gentleman is right and that therefore there ought to be no subsidy. Then, of course, what we have to do is to examine whether the position is better under the Bill or better without it. Subsidies were paid without it. Subsidies are being paid now. [An HON. MEMBER: "No"] Certainly, The hon. Member for Keighley says that subsidies should never be paid because the temptation to cheat is, in his opinion, irresistible. Surely the position may be just a little better and not a little worse if we take that irresistible temptation out of the hands of private companies and private individuals who make a personal, individual profit out of it, and if we limit the temptation to a public corporation which, by statute, makes no profit at all.

Therefore the hon. Gentleman, so far from quarrelling with his Friends and crossing the Floor of the House, bitterly attacking, even vituperating, them in all the speeches which he makes, and joining another party on the ground that they are doing what they are doing, transferring an irresistible temptation to make private profit from the particular individuals who make it to a public corporation, subject to controls by this House—

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

I think the hon. Member for Nelson and Colne (Mr. Silverman), carried away by his own eloquence, has committed one error which I do not think he intended. He said I think that the corporation and its subsidiaries were going to make no profits. I do not understand that at all from the Bill.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am very grateful for the correction. I suppose I am revealing no secret when I say that I am not an expert about steel or about the Bill. If it be the case, and for the purposes of this argument I am prepared to accept it, that the right hon. Gentleman is right—I am not quite sure about it, but let us suppose that he is right—and that the Bill does contemplate that the Iron and Steel Corporation might make a profit, I think he will agree that it will not be a private profit and that nobody will put it into his pocket. The right hon. Gentleman will say that whether the profit be private or not, one in fact will be made, and so we come to the same thing in the end. Suppose it were permissible to make a profit and that a profit were made. That profit will remain in the hands of a public corporation, and the administration and the use of it will be controlled, at whatever remove, by this House. The hon. Member for Keighley does not want that. He wants this irresistible temptation to make a private profit to remain. That is why he left the Labour Party and joined the Tory Party.

Photo of Mr Ivor Thomas Mr Ivor Thomas , Keighley

The hon. Member should not show more ignorance about our Debates on steel than is necessary. He must be aware that we on this side of the House ask for the ending of subsidies upon the steel industry and that the Minister has now obliged us, except in the case of subsidies upon imported materials. [Interruption.]

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am really very grateful to the hon. Member for Keighley for the information he has given me, although I understand that everybody else in the House denies its accuracy. Suppose he were right. Do I understand that all those gentlemen and institutions propose to hand back to the Treasury all the subsidies that they have had so far?

Photo of Mr James Hutchison Mr James Hutchison , Glasgow Central

I agree with the views that have been expressed from this side of the House as to the undesirability of subsidies in general. They are, in fact, the antithesis of free enterprise, and they have never been used in the past, so far as I can remember, except in exceptional circumstances and to combat a particular and temporary evil.

There is another aspect of the subsidy question to which I do not think attention has hitherto been drawn. It will be noted that the articles to which a subsidy may be applied under the Clause are: any imported materials for the purpose of the carrying on … of any of the activities specified in … the Second Schedule to this Act. The materials used in any of the activities under the Second Schedule are very many indeed. If one takes a census of all the stuff that goes into the production of rolled sections of steel, or pig-iron, or activities under the Second Schedule, one would cover a very wide field indeed. I can think of limestone, coke, alloys and so on, and fuel oil. The field over which we are ranging to which subsidy can be applied is therefore very great. I should like the right hon. Gentleman to tell me whether I am in a fallacy in the second part of my argument. I do not believe that I am.

The second part of my argument is this: Let us assume a rather exaggerated state of affairs for the purposes of this argument. Coke was in very short supply for a very long time. Raw coke is expanding production. It might very well come about that imported coke is brought into this country for the purpose of manufacturing pig-iron and that the price of the imported coke is higher than that of the home-produced coke. Surely there would be a very great incentive to the Treasury and to the National Coal Board to arrange that home coke prices should rise. Then the subsidy would disappear. The Minister look s disgusted at that suggestion. If he does not want to take coke as an example, let him take any other material which comes into Second Schedule activities.

There is another danger, apart from the straightforward subsidy danger. It is the tendency for home prices to rise, perhaps artificially, in order to limit or even to eliminate the subsidy on imported goods. In addition to the argument which has been adduced against the desirability of the subsidy and for its elimination, there is that further argument to be taken into account.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

The Minister said correctly that this Clause was permissive. He seemed to indicate that there is something rather wrong in passing a Clause merely because it is permissive. What is this Clause really intended to permit? My fear and that of many hon. Gentlemen on this side of the House is of the continuation of the subsidy over a long period continuously. If this is a permissive Clause, it acts as a sort of smokescreen. The Minister has appeared before us as the great champion of flexibility in the working of the Clause, but flexibility can become pliancy and pliancy weakness, right back to the boneless wonder.

I feel that there is great danger in having a permissive Clause. It is likely to affect the outlook of the Minister and his advisers when they come at a particular point of time to decide: "Shall we come out into the cold wind of competition by stopping the subsidy or shall we continue the subsidy under the permissive Clause? It might make things a great deal easier for us." It is a sort of gadget Clause, like one of those electric toasters which is always popping up an extra piece of toast which one eats when one ought not to.

4.30 p.m.

I cannot help feeling, that the arguments of the Minister and his colleagues are not directed to the protection of the public purse. There is no doubt that the moment of decision as to whether to take off or to continue a subsidy is likely to be prolonged in the direction of continuing it unnecessarily as long as a Clause of this nature is present in the Bill and the Minister does not have to come forward and justify before the House the subsidy which might have been taken off.

Photo of Mr William Hall Mr William Hall , Colne Valley

We have had some complaint, I understand, about the fact that the time allotted for the discussion of this Bill on the Report stage is insufficient. It has occurred to me that, as I imagine the Opposition are labouring under a misconception, if I intervene now it may shorten the discussion on this point. My right hon. Friend the Minister has, in fact, said all that can be said in reply to the criticisms that have been made.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

How does the right hon. Gentleman know?

Photo of Mr William Hall Mr William Hall , Colne Valley

It seems quite obvious to me in listening to the Debate since I have returned to the Chamber that what he said has failed, not for the first time, to sink in opposite.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

The right hon. Gentleman was not here. He does not know what the Minister said.

Photo of Mr William Hall Mr William Hall , Colne Valley

The plain question I would put to the Opposition is whether they want the remaining subsidies to come off now or to continue until such time as it seems desirable, owing to the reduction in the price of imported finished steel, that that would be a good thing to do. The Opposition seem to forget that in their view the Bill will never be implemented even if it becomes an Act; in other words, that in 1950 they themselves will be where we now are. It would be very unfortunate if in that unlikely event they found themselves in the situation where it was highly desirable in the national interest that these limited subsidies should continue for a temporary period and they would not be able to put that into operation.

Therefore, it seems to me that, from their point of view, the pressure they are now bringing is short-sighted, and it appears to us that it would be absurd from the national point of view, whatever Governemnt were in office, to take the Clause out of the Bill. As the Minister pointed out, it is permissive. It is obvious that for a period yet it will be essential for these reduced subsidies to be paid. That being so, we cannot for a moment agree to their deletion from the Bill.

I want to make a final point which my right hon. Friend did not make but which he would desire me to make. The purpose of Clause 5 is to avoid the unsound method of using the Appropriation Act. These subsidies are a new expenditure and up to now they have not received statutory authority. They should receive such authority and we should not use the Appropriation Act for this expenditure. The right hon. Member for North Leeds (Mr. Peake), who once occupied the position I now occupy, will agree that it is highly desirable that statutory authority should be sought and obtained for an expenditure of this kind and that we should not year after year use the device of the Appropriation Act only, for an expenditure of this magnitude and kind. I hope the Opposition will realise that what we are doing here is reasonable, that the provision is permissive and that at the moment it is essential and no one on either side of the House can say when the time will arrive when we can dispense with these subsidies.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

The right hon. Gentleman has been a little disingenuous in the observations he has addressed to the House on this matter. He first of all told us what the Minister said, but as he was not present I do not see that he has any method of knowing what the Minister had said, unless it be that the doctrine of common responsibility must be extended to the doctrine of the common brief. I understood the right hon. Gentleman to say that another Government might be returned which would require, in the national interest, to pay subsidies of this kind for special reasons, and that if Clause 5 were omitted that would not be possible. Surely he knows that without this Bill and without Clause 5 the subsidies have been paid year after year.

Therefore, the whole of that part of his argument—I am coming to the latter part of his argument—can only have been intended to deceive the House of Commons because it was absolutely fallacious or based upon a lack of knowledge. These subsidies have been paid year after year, and similar subsidies have been paid, and it is not true to say that if this Bill fell to the ground, or if for some reason vesting date never took place, or if there was a change of Government the new Government, whatever its complexion, whether of the right hon. Gentleman's hon. Friends or of my hon. Friends or of all of us together—[HON. MEMBERS: "Oh."]—might not be able to do so. I am simply stating the logic of the facts; that any Government can perfectly easily do this.

The right hon. Gentleman went on in the second part of his speech—it absolutely contradicted the first part—to say that the Government could easily do this and has been doing this through the device of the Supplementary Estimate and the Appropriation Act.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading

Surely the right hon. Gentleman, whom we all know to be a man of the highest honour, is not saying that he would support the action of any future Governmnet of which he was a Member in applying subsidies after having today voted against the application of subsidies in this Bill?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I am grateful to the tribute to my honour but this is a matter partly of honour and partly of just common sense. The Clause does not make the smallest difference to the power of the Government to make or not to make a subsidy. The right hon. Gentleman did not attend the first part of the Debate and did not hear the argument of my right hon. Friend the Member for North Leeds (Mr. Peake). We have had during the war on the coal subsidies and in the case of a great number of things which come to us in Supplementary Estimates—

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

The right hon. Member for North Leeds (Mr. Peake) argued that where we had a subsidy so large and permanent. we ought not to use the Supplementary Estimates, but ought to have a Clause in the Bill. The right hon. Gentleman has himself argued that the subsidy is, in the sense used at any rate, large and permanent. Why then is he opposing the Clause?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I am just coming to that. I am very glad that the hon. Member has helped so much with my speech, as he so often does in the interruptions which he makes. They are always the making of my speeches. I look to his presence before I even dare to rise, so helpful is he.

I was explaining that it was not true to say that in the event of some sudden emergency, special need or national requirement which was commonly accepted in all parts of the House or by the Government of the day, the deletion of this Clause would make it impossible to pay the subsidies. I was merely pointing out that the obvious argument that that was true was that they have been paid without the Bill having been introduced at all. The Financial Secretary's argument was that we could not have the subsidy until we had the Bill. We all know that we have had the subsidy and we have not yet got the Bill.

Photo of Mr William Hall Mr William Hall , Colne Valley

This is really a tiny point. I am sorry to interrupt the right hon. Gentleman, but what I think I said and what I desired to convey to the House was that although it is true that subsidies have been paid in this way it is much better—I know the Opposition prefer this—that it should be regularised in a Bill of this kind as we happen to be passing it.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

This is a completely new argument. We just happen to be passing a Bill about iron and steel—we are walking down the street and happen to be passing—and so we slip in a Clause of this kind. Again, the right hon. Gentleman does not do justice even to his own speech. In the second part of it he stated a quite different argument. In the first part of his speech he tried to say—it was quite untruthful and was a pure piece of partisanship—that if the Clause were rejected, it would not be possible for a Government of any complexion, should national circumstances require it in a particular year, to pay a subsidy for the importation of finished steel or any other of the articles which enter into the manufacture of steel. That was false and he knows it to be false and he now repudiates it.

I quite agree with the second part of his speech. That was much more effective because it was directed to the special subject we are discussing. It is, as he said, something of a technical point. In the second part of his speech he said it was a doctrine—one might call it an orthodox doctrine—that where the subsidies had to be paid year after year and they became almost continuous and an accepted part of the system, it was desirable not to use the procedure of the Supplementary Estimate and the subsequent Appropriation Act but to accept the subsidies as something built into the whole structure and take statutory power.

It is on that point that we feel this is a dangerous implication. We know that in the period of the war and the period immediately following the war, and in the confused state of European production—which we hope, as things develop, will become more regularised and better organised—it has been necessary to have these special subsidies, but we believe it to be desirable for that period to pass away and we believe it to be desirable that the economy of Europe should be so organised as to make this kind of arrangement unnecessary.

For five days I have been sitting with a large number of very distinguished European economists in discussions from the point of view of the basic industries and their organisation so as to avoid this national use of the subsidy to support the economy of one country without regard to the economy of another. I recognise the need for subsidies on occasions, in some years, but I regret that at this very moment, when, from the point of view of the whole of European economy, those interested in it are hoping to avoid this kind of national measure, we should include it in a Statute.

I emphasise this particularly from the general point of view of the undesirability of this method of subsidy between one country and another and the desirability of returning to a much better-balanced economy. This is a kind of symbol. So long as we have to do these things and the Minister comes each year to the House of Commons to say that, owing to the war or the results of the war or to the dislocation he must ask for this—then at any rate it is a definite action on the part of the Government, coming to the House and giving the reasons thus making it an abnormal and special action.

But if we use this power in the Bill, I fear we are appearing to give—I do not put it higher than that—some kind of regularisation to a system which most of us hope will gradually disappear from our economy and will no longer be necessary. For those reasons, among others, we have opened this discussion. It is quite untrue to say that the omission of this Clause would make it impossible to pay a subsidy, as indeed the Financial Secretary stated in the latter part of his speech. Upon those general grounds, I think, on the whole, we have been wise to raise this matter.

4.45 p.m.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

I believe the Opposition have failed to understand the difference between, on the one hand, the State undertaking something which belongs to the people as a whole and on the other hand a private industry. I formed my point of view not only from what I have heard this afternoon but also from what I heard during those Sittings of the Standing Committee. If I may I should like to say to the Opposition that although they are attempting, so they say, to improve the Bill, I have very grave doubts whether that is the real purpose with which they are discussing this Clause this afternoon. I feel they are trying to make it almost impossible for the steel industry of this country to work in the efficient manner in which it should work.

We are bound to recognise that subsidies have been in existence for many years in this country. Private industry had to come to the Government of the day pointing out that fluctuation in the price of steel on the world market, with keen competition from overseas countries, was such that it had an effect upon the commodities they were producing and that unless they could be given assistance by the Government, they would be compelled to unite with foreign competitors in the form of cartels.

I maintain that a State enterprise running the steel industry must have this Clause. We must bear in mind, so far as the Second Schedule is concerned, that it is those materials—iron ore and so on—which form the basis for the subsequent operations, right down to our machinery and even to our household utensils. The return to the manufacturer is not in the winning of the iron ore and the making of the pig iron so much as in the making of steel articles and of the steel production which follows in later processes.

I suspect that some of the objections, or at least one of them, of the Opposition this afternoon is the fact that many industries will be outside the scope of this Bill. They will be receiving certain of the raw materials. If that is so, we are bound to consider the question of scrap, certain semi-finished steel and certain materials which are necessary in order to make a special kind of steel—stainless steel, for instance. Some of those commodities are in short supply in the world market, and therefore when this country buys those materials it is at the mercy of the world markets. If we are to keep the price of steel steady in this country we have to remember that it is quite possible that at a given time of the year a higher price must be paid for the raw materials. If the higher prices for the raw materials which we purchased from abroad were immediately communicated to the articles being produced, that would mean that our exporters of machinery and that sort of thing would be placed outside the world markets.

In Committee the Opposition attempted to move an Amendment—if my memory is correct—which proposed that the steel industry should balance its books one year with another.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

The hon. Member will remember the discussions which took place. If we had to balance our books one year with the next, we should find that we were bound to increase the price of steel. I suggest that not only is it right in the change-over that the subsidy should be in the Bill but that it must be retained by a State undertaking in order that we may use—

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

If I may correct the hon. Member, it is stated in the Bill that the steel industry must balance its accounts "taking one year with another." It was the Opposition who drew attention to the absurdity of that conception.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

I am grateful for the hon. Member's correction. I was doubtful whether the Amendment was accepted. Probably the hon. Member will remember that I asked for an interpretation of the phrase "taking one year with another" and that I made a contribution with the object of proving that the words meant nothing when we got into a court of law.

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

Then the hon. Member was on our side.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

The point I am trying to establish is this: having said that we must balance our books "one year with another" we must realise what is the situation. If the price of the commodities which we want from overseas is extremely high, we are bound, according to the Bill, to increase the price of steel to those who are manufacturing the articles in that year, or at least in the next year. I say, therefore, that we must, as a State undertaking and in the main a State monopoly, retain the power within the orbit of the steel industry so to adjust the finances that the price of steel can be kept level in order that we may compete with overseas competitors and thus bring the full benefit of a State steel undertaking to the people of this country.

Photo of Mr Charles Williams Mr Charles Williams , Torquay

I have listened with care to the whole of this argument and to the speech of the hon. Member for Harborough (Mr. Attewell). I hope he will excuse me and not think me discourteous if I do not go into the very complicated points of the steel subsidy. I rise for two purposes. First, it is only fair in a matter of this sort that some representative of the South-West of England should put the point of view of the taxpayers. [Interruption.] Well, I think I can fairly claim to represent part of that area and. probably, a larger number of electors than most people in this House. It is only fair that the point of view of those people should be put. We are not necessarily for or against subsidies, but we say very clearly—and this is why I dislike the Clause—that the Clause is vague and indefinite and that, if anything, it gives too much power to the Minister and too little to Parliament.

I have followed the various points very closely indeed and am convinced there is only one way in which a new subsidy should be granted. The subsidy may not be a very big one. As I understand the Clause from the Minister's explanation, it is a subsidy for goods coming into this country which are at too high a price for the steel industry here to be able to work economically. I say quite frankly that if those goods are to be subsidised, there can be only one possible justification for it; that is, if the Minister will come to Parliament and get the leave of the House of Commons to do it directly. That must be the right position in a matter of this kind.

I am wondering however—perhaps the Minister or somebody else will explain this—what exactly will be the position if the prices of the foreign goods are put up very high and are built up by a subsidy from a foreign country. I realise that there are very many complications in these matters and I do not necessarily expect the Minister to answer such a complicated question; a simple one such as might be put by my hon. Friend the Member for Cambridge University (Mr. Pickthorn) would be an easier matter. In dealing with subsidies, I agree very much with my right hon. Friend the Member for Bromley (Mr. H. Macmillan) that, taking the wider view—and this is another reason for rejecting the Clause—we should think of the international situation. I am convinced, as an ordinary representative and taxpayer, that we have no justification in supporting a Clause of this kind, which gives subsidies where it would be very difficult for the ordinary Member to know what is happening. It is far better that the Minister should have to come directly to the House of Commons on this matter.

My second point is this. In the House of Commons there has always been a considerable feeling, sometimes for, and sometimes against, subsidies; sometimes one party has believed in a subsidy, sometimes it has been another party; but one thing has always been certain about subsidies, and that is that the official Liberal Party would be against them. Every one of us today must feel very sad that we have no official help from the official Liberal Party. In the old days, when there was any mention of subsidies, they would all be here. Today they have been absent with a ghastly unanimity, which so often attends their affairs in the House. I hope that the hon. Member who is now the leading Member of the great Liberal Party will have a few words to say on this matter of subsidy. I am, of course, bound to put the Liberal point of view as well as my own, for the very simple reason that in my constituency and in many other parts of the West I have very great support from Liberals. [Interruption.] Oh, yes. Over a period of years I have had very great support from them, as any Member of one of the Plymouth Divisions could tell hon. Gentlemen opposite.

In those circumstances, unless there is an overwhelming case for a subsidy, remembering that Liberal opinion officially must be against it, and knowing that the ordinary man in the street does not want to pay a subsidy unless it is certain to be a great national advantage, I am bound to vote against the Clause, especially in view of what the Minister has just said, and still more in view of what was said by the Financial Secretary, who always contrives to be so very helpful to the Opposition and so very harmful to the Government. It is quite obvious that the Government intend to use the Clause to camouflage subsidies whenever they have a possible chance to do so.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading

I join with the hon. Member for Torquay (Mr. C. Williams) in deploring the absence of the Liberal Party from our discussions, and I enjoy very much the rare experience of agreeing with him about anything at all. I wish to direct my observations, however, principally to two points made by the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan). He suggested, and did so very strongly, with that maidenly air of injured innocence which he sometimes affects, that the Financial Secretary to the Treasury had been deliberately misleading the House. I suggest that he himself, perhaps not deliberately, used what was actually a most misleading argument.

He referred to the international implications of the subsidisation of the industry under this Clause. What he appeared to quote the European economists, with whom he has been having discussions, as suggesting was that this was something that interfered with the free flow of international trade. I am sure the right hon. Gentleman will agree that what many people are worrying about today are such things as tariff barriers and import quotas, which do interfere with the free flow of trade in that way. If he will think for a moment he will realise that the payment by subsidy of the difference between higher import and lower home prices not only does not interfere with, but actually facilitates, the free flow of trade, because it makes it possible for countries to import from other countries commodities which they would not otherwise be able to import.

The burden of the right hon. Gentleman's argument was that although the subsidies were all right, perhaps, during and immediately after the war, just at present, when we are trying to get Western Europe working more closely economically than ever before, it would be wrong to interfere with the flow of trade between Western European countries. That argument falls completely to the ground. If one accepts, as I am trying to do, that, far from doing that, the subsidies would have the opposite effect, I am wondering how the right hon. Gentleman will square it with his conscience that he believed in these subsidies when they were paid to private owners in order to help them pay dividends to their shareholders but does not believe in them when they are being paid in the national interest as a whole.

That brings me to another part of the right hon. Gentleman's argument. He pointed out with great force—although, if I may say so, a little repetitively—that of course, even if the Clause were not in the Bill, it would be possible for a future Government of which he was a Member, or any other future Government, to continue the practice, or to restart the practice, of paying subsidies. That would, of course, be possible, but, as I tried to infer in an intervention whilst the right hon. Gentleman was speaking, as far as he is concerned it would be most immoral of any Government of which he was a Member so to do with his support, after he had voted against the inclusion of Clause 5 in the Bill.

5.0 p.m.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

The hon. Member should not misrepresent what I said. The argument is not whether in a particular year there should or should not be a subsidy. The argument is whether this Clause should be introduced using a statutory authority rather than the procedure of the Supplementary Estimate and the Appropriation Act. If the hon. Gentleman misrepresents what I said he is doing so deliberately.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading

I am not doing anything of the sort. The right hon. Gentleman is now introducing quite a fresh point. He cannot get away from the fact that he suggested that some possible Govern- ment in the future of which he might be a member—as he said, a Government composed of his friends or perhaps a Coalition Government—might want to pay a subsidy. The right hon. Gentleman must already be at odds with any conscience he has by opposing this Clause after he has supported subsidies in the past. Suppose he were a member of some other Government in 1950, and that Government, with his support, then proceeded to reinstate the sort of subsidy which this Clause permits; what sort of answer would he give to any questioner who put to him the point that he supported this subsidy when it was paid to private owners, that he opposed it when it was proposed to be paid to a public corporation, and that he is once again proposing, hypothetically in 1950, to pay it to private owners?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I can only give the answer; I cannot give the hon. Gentleman the understanding to know what it means. The answer is very simple. I said that we were opposing this machinery—which he perfectly well understands, although he is purposely misrepresenting it—giving a statutory authority, and it would be within the conscience of myself or my colleagues or any other person to say that in a particular year the Government of the day should use the machinery which is open to them, of the Supplementary Estimate followed by the Appropriation Act, to make legal the subsidy that they proposed, and justify it in the year in which it is proposed before the House of Commons.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading

I can only imagine that I get my understanding of the English language from sources higher than those of the right hon. Gentleman. At any rate, I followed very closely what he was trying to say. I can see quite clearly that he is now shifting his ground completely from the ground which he took in the main burden of his speech. In exactly the same way as he accused, wrongly, I think, the Financial Secretary of misleading the House, he himself, whether deliberately or otherwise, used arguments which most certainly were misleading.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , Dorset Southern

I doubt very much whether the hon. Member for Reading (Mr. Mikardo), if he took specific examples, could prove that subsidies were of continuing assistance to international trade. During a time of war when we need to get things quickly, it is possible to stimulate the flow of trade over a short period by means of subsidies, but if the subsidies are retained for any length of time all that happens is that the international costing and pricing structure is altered and trade becomes fixed on the same level.

If the hon Gentleman went into specific examples I do not think he could possibly prove that continuously throughout the payment of a subsidy international trade was stimulated. On the contrary, it is a weapon of protection and of nationalism. It is inconsistent with a friendly international trading society such as that to which my right hon. Friend the Member for Bromley (Mr. H. Macmillan) had in mind when making his speech. We welcome the Government's decision to reduce iron and steel subsidies. In response to the invitation of the Financial Secretary to the Treasury, I say for myself that I should like to see subsidies taken off altogether. They are not the right device to use at this stage of our development when we are seeking to get an ever closer relationship with other countries.

I really rose to press a rather more narrow point on the right hon. Gentleman in case there is an opportunity of a further Government reply. I see the Parliamentary Secretary to the Ministry of Supply is present; he helped us yesterday, but so far he has not done so today. I hope that we shall be able to draw him into action. What is the use of giving to the Iron and Steel Corporation a continuing power to ask the Government for subsidies? Under Clause 31 the Iron and Steel Corporation has to make ends meet "one year with another"; it must make neither an excessive loss nor an excessive profit. Fundamentally, that is quite right for a State monopoly, although we have points of criticism on Clause 31. The effect of Clause 5, however, is to undermine Clause 31 in enabling the Iron and Steel Corporation to recoup itself out of Government funds every time it fears that it will not be able to meet the obligations imposed by Clause 31.

I should like the right hon. Gentleman to give some attention to that point. If it were not for Clause 5, Clause 31 could be carried out, but Clause 5 is a standing invitation to the Iron and Steel Corporation to come to the Government year after year for the payment of subsidies in respect of its trading, and it is also a standing invitation to it to fail to carry out—

Photo of Mr George Strauss Mr George Strauss , Lambeth North

Perhaps I may interrupt the noble Lord because he is completely misleading the House. It is quite impossible under Clause 5 for any subsidy to be paid in respect of any loss made by the Corporation. All it enables the Corporation to receive is a subsidy in respect of any steel or semi-finished steel which it has to import and sell to consumers in this country and which it has brought above the home price of steel. The Corporation cannot possibly recoup itself from the Treasury for any loss which it may make.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , Dorset Southern

I know that Clause 5 deals with the import of iron and steel. If the Corporation can go annually to the Government and say "Pay us a subsidy in respect of a loss we are making on overseas trading," that is a means whereby it can recoup itself and avoid fulfilling the prime duty laid upon it by Clause 31. It would be much better to have a Government company such as Iron and Steel Disposals Limited, B.I.S.C. or a company to be formed specifically by the Corporation, and let it make a loss which can be seen; then either through Supplementary Estimates or otherwise, Parliament can make up the loss annually. For the Corporation, a part of whose business may be internal, to have this power to be recouped annually by the Government on one specific aspect of its trading is entirely wrong.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

Would the noble Lord be kind enough to visualise this situation: If the Corporation purchase finished steel from overseas markets and then sell that steel to firms not within the Third Schedule—for instance, some of the firms in Sheffield who require special steel for the special articles they manufacture—what is there to prevent the Corporation from charging the price which they pay on the foreign markets plus an additional price in respect of profit, and thereby showing no loss whatsoever? As the Corporation has the monoply, there can be no loss by the Corporation in respect of overseas steel. The only loss that can arise is on home-produced steel.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , Dorset Southern

I am not sure that I fully follow the implications of the hon. Member's point. If he really wants an answer, perhaps he will get it from me on another occasion. The Corporation has not got a monopoly on importations. It will be perfectly proper for a private company or for a Government company to by-pass the Corporation.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

I understood the hon. Member for Harborough (Mr. Attewell) to make the suggestion that special steel which could not be made in Sheffield was obtained from abroad. That is entirely wrong. Any special steel that is needed in Sheffield can be made in Sheffield.

Photo of Mr Humphrey Attewell Mr Humphrey Attewell , Harborough

The hon. Member has misunderstood what I said. I did not make any such suggestion.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

I understood him to make a suggestion that steel which could not be made in Sheffield had to be obtained from abroad.

I should like to revert to the question of subsidies. This is the first time in any nationalisation Measure that the question of a subsidy for a nationalised undertaking has been introduced. I think that the father of nationalisation, the present Secretary of State for War, who paved the way for these Measures, would disapprove of subsidies on principle, because the whole essence of nationalisation is that the Government take power in the national interest to deal with the finances of the industry.

With regard to what was said by the hon. Member for Reading (Mr. Mikardo), I would point out that there is a distinction between a subsidy to a private enterprise undertaking and a subsidy to a nationalised undertaking. The reason for that is that the Government have complete control over the nationalised industry, which they have not got in the case of a private enterprise industry. Their only method of imposing the national interest on a privately controlled interest is through a subsidy, which is not the case with a nationalised industry. It seems quite unnecessary, with the powers the Minister has under this Bill, for him to ask for a subsidy of this kind. The powers of the Minister, contained in the rather curious phrase, "the public interest," give him all that he needs.

The Joint Parliamentary Secretary, in one of those rays of light which came into the Committee stage, gave the answer to this problem. He said that the reason why subsidies were paid during the war and have been continued was bound up with the wage structure of the industry. I think that he was correct when he made that remark. The House should realise that the wage structure was bound up at that time with the price of steel, and the Government of the day introduced the subsidy so as not to alter the wage structure agreement in the industry. That is a purely artificial arrangement, and there is no reason why it should continue in times of peace. If the subsidies have been built up on that artificial arrangement, there is no reason why the Minister should make it a permanent feature by introducing it into a nationalisation Measure.

I am inclined to agree with my hon. Friend the Member for South Dorset (Viscount Hinchingbrooke), that behind

this is a desire to cover losses. Not only are we dealing with importations of steel, but also of coke. I would remind Members opposite who come from mining areas that there is a danger under this Clause for the Steel Board to import coke at prices which under-cut the prices in this country, which is very dangerous. I suggest that the real reason for this is the knowledge of the losses of the Coal Board, the knowledge of the losses of the nationalised railways, and the possible losses as a result of gas nationalisation.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

Will the hon. Member allow me?

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

The Guillotine falls in a quarter of an hour, and if the hon. and learned Member wishes to make a speech I now give him the opportunity to do so.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 300; Noes, 149.

Division No. 111.]AYES[5.16 p. m.
Acland, Sir RichardCocks, F. S.Gordon-Walker, P. C.
Albu, A. H.Collindridge, FGreenwood, Rt. Hon. A. (Wakefield)
Allen, A. C. (Bosworth)Collins, V. JGreenwood, A. W J. (Heywood)
Allen, Scholefield (Crewe)Colman, Miss G. MGrey, C. F.
Alpass, J. H.Cook, T. F.Grierson, E.
Anderson, A. (Motherwell)Corbel, Mrs. F. K. (Camb'well, N.W.)Griffiths, D. (Rother Valley)
Attewell, H. C.Cove, W. G.Griffiths, Rt. Hon. J. (Llanelly)
Austin, H. LewisGrossman, R. H SGriffiths, W. D. (Moss Side)
Awbery, S. SCullen, Mrs.Guest, Dr. L. Hader
Ayles, W. H.Daggar, GGunter, R. J
Ayrton Gould, Mrs BDaines, P.Gey W. H
Bacon, Miss ADavies, Edward (Burslem)Haire, John E. (Wycombe)
Balfour, A.Davies, Haydn (St. Pancras, S.W.)Hale, Leslie
Barnes, Rt. Hon. A. JDavies, R. J. (Westhoughton)Hall, Rt. Hon. Glenvil
Barstow. P. G.Davies, S. O. (Merthyr)Hamilton, Lieut.-Col. R
Barton, C.Deer, G.Hannan, W. (Maryhill)
Battley, J. R.de Freitas, GeoffreyHardman, D. R.
Bechervaise, A. EBobbie, W.Hardy, E. A
Benson, G.Dodds, N. NHarrison, J
Beswick, FDriberg, T E. N.Hastings. Dr Somerville
Bing, G. H. CDugdale, J. (W. Bromwich)Haworth, J
Binns, J.Dumpleton, C. W.Henderson, Rt. Hon. A (Kingswinford)
Blackburn, A. RDye, S.Henderson, Joseph (Ardwick)
Blenkinsop, AEdelman, M.Herbison, Miss M
Blyton, W. R.Edwards, John (Blackburn)Hicks, G.
Boardman, H.Edwards, W. J. (Whitechapel)Hobson, C. R
Bowden, Flg. Offr. H. W.Evans, Albert (Islington, W.)Holman, P
Braddock, Mrs. E. M (L'pl Exch'ge)Evans, E. (Lowestoft)Holmes, H. E (Hemsworth)
Braddock, T. (Mitcham)Evans, John (Ogmore)Horabin, T L
Braman, E. A.Evans, S. N. (Wednesbury)Houghton, A. L. N. D. (Sowerby)
Brook, D. (Halifax)Ewart, RHoy, J.
Brooks, T. J. (Rothwell)Fairhurst, F.Hubbard, T.
Broughton, Dr. A. D. D.Farthing, W. JHudson, J. H (Ealing, W.)
Brown, George (Belper)Fernyhough, E.Hughes, Emrys (S. Ayr)
Brown, T. J, (Ince)Field, Capt. W JHughes, H. D. (Wolverhampton, W.)
Burden, T. W.Follick, M.Hynd, H. (Hackney, C.)
Burke, W. A.Forman, J. C.Hynd, J. B. (Attercliffe)
Callaghan, JamesFraser, T. [...]amilton)Irving, W. J. (Tottenham, N.)
Castle, Mrs. B. A.Freeman, J (Watford)Isaacs, Rt. Hon. G. A
Chamberlain, R. AGanley, Mrs. C SJanner, B
Chafer, D.Gibbins, JJay, D. P. T.
Chetwynd, G. R.Gilzean, AJeger, Dr. S. W (St. Pancras, S.E)
Cluse, W. SGlanville, J E (Consett)Jenkins, R. H.
Cobb, F. A.Gooch, E. G.Jones, D. T. (Hartlepool)
Jones, Elwyn (Plaistow)Murray, J. DSolley, L. J.
Jones, Jack (Bolton)Nally, W.Sorensen, R. W.
Jones, P. Asterley (Hitchin)Naylor, T E.Soskice, Rt. Hon. Sir Frank
Keenan, W.Neal, H. (Claycross)Sparks, J. A.
Kenyon, C.Nichol, Mrs. M. E. (Bradford, N.)Steele, T.
Key, Rt. Hon. C. W.Nicholls, H. R. (Stratford)Stewart, Michael (Fulham, E.)
King, E. M.Noel-Baker, Capt. F. E. (Brentford)Strauss, Rt. Hon. G. R. (Lambeth)
Kinghorn, Sqn.-Ldr. ENoel-Baker, Rt. Hon. P. J. (Derby)Swingler, S.
Kinley, J.O1dfield, W. HSylvester, G. O.
Kirkwood Rt. Hon. D.Oliver, G. H.Symonds, A. L.
Lang, G.Orbach, M.Taylor, H. B. (Mansfield)
Lavers, S.Paling, Will T. (Dewsbury)Taylor, R. J. (Morpeth)
Lawson, Rt. Hon. J. J.Palmer, A. M. F.Taylor, Dr. S. (Barnet)
Lee, Miss J. (Cannock)Pargiter, G. A.Thomas, D. E. (Aberdare)
Leonard, W.Parker, J.Thomas, George (Cardiff)
Leslie, J. R.Parkin, B. T.Thomas, I. O. (Wrekin)
Levy, B. W.Paton, Mrs. F. (Rushcliffe)Thurtle, Ernest
Lewis, A. W. J. (Upton)Paton, J. (Norwich)Timmons, J.
Lewis, J. (Balton)Pearl, T. F.Titterington, M. F.
Lewis, T. (Southampton)Perrins, W.Tolley, L.
Lindgren, G. S.Piratin, P.Tomlinson, Rt. Hon. G
Lipton, Lt.-Col. M.Popplewell, E.Turner-Samuels, M.
Logan, D. GPorter, E. (Warrington)Vernon, Maj. W F.
Lyne, A. W.Porter, G. (Leeds)Walkden, E.
McAdam, W.Price, M. PhilipsWalker, G. H.
McAllister, G.Pritt, D. N.Wallace, G. D. (Chislehurst)
McEntee, V. La T.Proctor, W. T.Wallace, H. W. (Walthamstow, E.)
McGhee, H. GPryde, D. J.Warbey, W. N.
Mack, J. D.Pursey, Comdr HWatkins, T. E.
McKay, J. (Wallsend)Randall, H. E.Watson, W M
Maclean, N. (Govan)Ranger, J.Webb, M. (Bradford, C.)
McLeavy, F.Rankin, J.Weitzman, D.
MacPherson, Malcolm (Stirring)Rees-Williams, D. R.Wells, P. L. (Faversham)
Macpherson, T. (Romford)Raid, T. (Swindon)Wells, W. T. (Walsall)
Mainwaring, W. H.Rhodes, H.West, D. G.
Mallalieu, E. L. (Brigg)Ridealgh, Mrs. M.Wheatley, Rt. HP. J. T. (Edinb'gh, E.)
Mallalieu, J. P. W. (Huddersfield)Roberts, Goronwy (Caernarvonshire)White, H. (Derbyshire, N.E.)
Mann, Mrs. J.Robinson, K. (St. Pancras)Whiteley, Rt. Hon. W.
Manning, C. (Camberwell, N.)Rogers, G. H. R.Wilkins, W. A.
Manning, Mrs. L. (Epping)Ross, William (Kilmarnock)Willey, E. T. (Sunderland)
Marquand, Rt. Hon. H. A.Scollan, T.Willey, O. G. (Cleveland)
Mathers. Rt. Hon. GeorgeScott-Elliot, WWilliams, D. J. (Neath)
Mayhew, C. P.Shackleton, E. A. A.Williams, J. L. (Kelvingrove)
Mellish R. J.Sharp, GranvilleWilliams, Ronald (Wigan)
Messer, F.Shawcross, Rt. Hn. Sir H. (St. Helens)Williams, Rt. Hon. T. (Dan Valley)
Middleton, Mrs. L.Shinwell, Rt. Hon. E.Williams, W. T. (Hammersmith, S.)
Mikardo, IanSilverman, J. (Erdington)Willis, E.
Millington, Wing-Comdr. E. R.Silverman, S. S. (Nelson)Wills, Mrs. E. A.
Mitchison, G. R.Simmons, C. J.Woodburn, Rt. Hon. A.
Monslow, W.Skeffington, A. M.Woods, G. S.
Morgan, Dr. H. B.Skeffington-Lodge, T. C.Wyatt, W.
Morley, R.Skinnard, F. W.Yates, V. F.
Morris, Lt.-Col. H. (Sheffield, C.)Smith, C. (Colchester)Young, Sir R. (Newton)
Morris, P. (Swansea, W.)Smith, Ellis (Stoke)Younger, Hon. Kenneth
Morrison, Rt. Hn. H. (Lewisham, E.)Smith, H. N. (Nottingham, S.)
Mort, D. L.Smith, S. H. (Hull, S.W.)TELLERS FOR THE AYES:
Moyle, A.Snow, J. W.Mr. Richards and Mr. Richard Adams.
NOES
Agnew, Cmdr. P. G.De la Bere, R.Harvey, Air-Comdre, A V
Amory, D. HeathcoatDigby, Simon WingfieldHaughton, S. G
Assheton., Rt. Hon. R.Dodds-Parker, A. D.Head, Brig. A. H
Astor, Hon. M.Dower, Col. A. V. G. (Penrith)Headlam, Lieut.-Col. Rt. Hon. Sir C
Baldwin, A. EDrayson, G. BHenderson, John (Cathcart)
Barlow, Sir J.Drewe, C.Hinchingbrooke, Viscount
Beamish, Maj. T. V. HDugdate, Maj. Sir T. (Richmond)Hollis, M. C
Beecnman, N. ADuthie, W. S.Holmes, Sir J. Stanley (Harwich)
Birch, NigelEccles, D. M.Hope, Lord J.
Bossom, A. C.Eden, Rt. Hon. A.Howard, Hon. A.
Bower, N.Erroll, F. J.Hudson, Rt. Hon. R S. (Southport)
Boyd-Carpenter, J. A.Fletcher, W. (Bury)Hulbert, Wing-Cdr. N. J.
Braithwaite, Lt.-Comdr, J. G.Fraser, H. C. P (Stone)Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Bromley-Davenport, Lt.-Col. W.Fyfe, Rt. Hon. Sir D. P. M.Hutchison, Col. J. R. (Glasgow. C.)
Brown, W. J. (Rugby)Galbraith, Cmdr. T. D. (Pollok)Jeffreys, General Sir G
Buchan-Hepburn, P. C. T.Galbraith, T. G. D. (Hillhead)Kerr, Sir J. Graham
Bullock Capt. M.Gammans, L. D.Lambert, Hon. G.
Butcher, H. W.Gates, Maj. E. E.Lancaster, Col. C. G
Carson, EGeorge, Maj. Rt. Hn. G. Lloyd (P'ke)Law, Rt. Hon. R. K.
Challen, C.Gomme-Duncan, Col. A.Legge-Bourke, Maj. E. A. H.
Clarke, Col. R. S.Gridley, Sir A.Lennox-Boyd, A. T.
Clifton-Brown, Lt.-Col. G.Harden, J. R. E.Lindsay, M. (Solihull)
Crookshank, Capt. Rt. Hon. H. F C.Hare, Hon. J. H. (Woodbridge)Linstead, H. N.
Cuthbert, W. N.Harris, H. Wilson (Cambridge Univ.)Lipson, D. L.
Lloyd, Selwyn (Wirral)Neill, Sir William (Belfast, N.)Sutcliffe, H.
Low, A. R. W.Neven-Spence, Sir B.Taylor, C. S. (Eastbourne)
Lucas, Major Sir J.Nicholson, G.Taylor, Vice-Adm. E. A (P'dd'rn, S)
Lucas-Tooth, S. H.Nield, B. (Chester)Teeling, William
Lyttelton, Rt. Hon. O.Noble, Comdr. A. H. P.Thomas, Ivor (Keighley)
MacAndrew, Col. Sir C.Odey, G. W.Thorneycroft, G. E. P. (Monmoutn)
McCallum, Maj. D.O'Neill, Rt. Hon. Sir HThornton-Kemsley, C. N.
McCorquodale, Rt. Hon. M. S.Orr-Ewing, I. L.Thorp, Brigadier R A. F
MacDonald, Sir M. (Inverness)Peake, Rt. Hon. O.Touche, G. C.
McFarlane, C. S.Peto, Brig. C. H. MTurton, R. H.
M.ackeson, Brig. H. R.Pickthorn, K.Tweedsmuir, Lady
McKie, J. H. (Galloway)Ponsonby, Col. C. E.Vane, W. M. F
Maclay, Hon. J. S.Ramsay, Maj. S.Ward, Hon. G. R
MacLeod, J.Reed, Sir S. (Aylesbury)Webbe, Sir H. (Abbey)
Macmillan, Rt. Hon. Harold (Bromley)Roberts, P. G. (Ecclosall)Wheatley, Colonel M. J. (Dorset. E.)
Macpherson, N. (Dumfries)Robertson, Sir D. (Streatham)While, Sir D. (Fareham)
Maitland, Comdr. J. WRobinson, Roland (Blackpool, S.)White, J. B. (Canterbury)
Marlowe, A. A. H.Ropner, Col. L.Williams, C. (Torquay)
Marples, A. E.Scott, Lord W.Williams, Gerald (Tonbrilge)
Marshall, D. (Bodmin)Shephard, S. (Newark)Willoughby de Eresby, Lord
Mellor, Sir J.Shepherd, W. S. (Bucklow)Winterton, Rt. Hon. Earl
Molson, A. H. E.Smith, E. P. (Ashford)York, G.
Moore, Lt.-Col. Sir T.Smithers, Sir W.Young, Sir A. S. L. (Partick)
Morris, Hopkin (Carmarthen)Snadden, W. M.
Morris-Jones, Sir H.Spearman, A. C. M.TELLERS FOR THE NOES:
Morrison, Maj. J. G. (Salisbury)Stoddart-Scott, Col. M.Mr. Studholme and Major Conant
Mott-Radclyffe, C. E.Strauss, Henry (English Universities)