I beg to move, "That the Bill be now read a Second time."
We have had in the discussion which has just been concluded references of a critical nature to the fact that Scotland was not included in the purview of that Bill. In this case, however, it is Scotland exclusively whose fate and gas undertakings we are to consider. It is usual in Private Members' Bills to introduce something of a non-controversial nature, and then the House settles down to an amiable discussion such as we have had this morning. In other words, the lion lies down with the lamb and a useful Measure comes out as the product.
My own Bill is in rather a different category. It is necessarily controversial, but I assure the House that this is no mere legislative frolic. I have brought this Bill forward for two important reasons: first, because I believe it to be right for any Member of Parliament to use such opportunities as are presented to him to give effect to that dislike of unnecessary nationalisation which we have never hidden on this side of the House; secondly, to do what is possible to remove that distaste which is felt in Scotland towards distant Whitehall control and which has boiled up in recent years into an acute political and national issue.
We, on this side of the House, have always stated frankly and continually during the discussions on the nationalisation Measures which have gone through since the war that we did not believe the proposals of the Government to be the best in the interests of the nation, in the direction of trying to solve problems which had become, let us admit it, more or less acute. In the case of gas, the nationalisation Bill was preceded by a Report known as the Haworth Report, the discussions in Parliament were steamrollered through during 1948, and on 1st May, 1949, 1,047 gas undertakings, of which 300 were municipally owned, passed under state control and ownership.
What were the benefits that were claimed would flow from this action at the time it was taken? First and foremost, it was put forward that we should have a more efficient industry and a cheaper product. In the pamphlet "Let us Face the Future." there were written these words:
Amalgamations under public ownership will modernise production methods and lower charges"—
Note, "lower charges"—
prevent competitive waste … other industries will benefit.
Those were bold words, unwise words, and, as it turned out, untrue words, because one of the very earliest actions taken by the Gas Council was to raise gas prices over-all throughout the country. It was claimed at that time, to be fair, that this rise was necessitated by the increased price for coal which they were having to pay, but it is noteworthy that in the Scottish accounts, at least, the extra income produced by these raised charges more than covered the extra price which had to be paid for the coal.
Let us now turn our eyes on whether the industry has become more efficient— the second of the main claims which was made in regard to nationalisation. If we look at the first Report by the Minister of Fuel and Power for the period ending March, 1950, and which made its blushing debut only in February, 1951—in unhappy contrast with the fact that the accounts of statutory gas undertakings were charged with making their appearance three months after the end of their financial year—we find just how pathetically negligible were the results which have been obtained. These are quotations from that Report:
No [capital investment] programmes had been submitted by the Area Boards for formal approval by the Minister.
No representations were made by the Gas Consultative Councils to the Minister.
General notifications for gas examiners are being revised.
The Gas Council had not been able to submit to the Minister the co-ordinated programme for training and education.
In January, 1950, stockholders' representatives referred three classes of securities for determination of values. The hearing had not taken place at 31st March, 1950.
Nor do we today know whether any progress has been made in any of these matters, for under nationalisation the Minister coyly goes into purdah and any knock at the door of his seraglio to try to get an answer meets with no response at all. If this category of doing nothing which I have read out is efficiency, it is clothed in a very curious garb.
What next? In the pamphlet "Labour Believes in Britain," in a temporary outburst of sympathy for the consumer—no doubt with an eye on getting his vote— it was written:
The voice of the consumer must ring out with strength and emphasis.
And so, to allow this voice to "ring out with strength and emphasis," there were set up gas consultative councils. They were set up, be it noted, by the Minister. They have no executive powers; they can at any moment be withdrawn by the Minister, and in the Scottish Report this particular gas consultative council states that
no complaint of a major character were received and it has been possible to deal administratively with those which were received.
Has such deep contentment settled upon the 1,196,000 consumers of gas in Scotland? Is it not curious that in that period no representations whatever were made in the whole of Great Britain through consultative councils to the Minister, or can it be that the consumer realises that this is a mere waste of time, or even that if he becomes too vociferous in his complaints he may ultimately suffer from victimisation at the hands of the single supplier of the commodity he needs?
The hon. and gallant Member has made the point that whereas under the Act there are gas consultative councils, the people of Scotland appear to have accepted everything with acquiescence. But the machinery is there. Perhaps the hon. and gallant Member will tell us of any private monopoly that gives comparable machinery for consumer expression.
If the hon. Member will allow me I will develop that very theme, because this accessibility of local authorities is one of the main arguments we put forward for the change that it is proposed to make. What is certain is that, whether the reasons I have given or the suspicions which I have are right or wrong, the voice of the consumer is certainly not ringing out "with strength and emphasis."
What else was claimed for nationalisation?
said by the right hon. Gentleman who is now Foreign Secretary in 1946—
can give vitality to industry by providing new and fine incentives born of public spirit.
What are the facts? An industry with happy labour relations, which had run for many years completely free of strikes, suddenly finds itself plunged into a strike in London which ended in the indictment of some of the strike leaders; and the Scottish Gas Board in their Report say that there was an 18 weeks' strike of gas fitters in Glasgow. At the annual conference of the National Union of General and Municipal Workers, one of the delegates said, with no doubt a great deal of truth:
A sense of frustration permeated the workers in the gas industry.
What now of the senior officers in this important industry? Sir R. Burrows, in his report on the coal industry, wrote these words—they apply, perhaps, not quite so forcibly to gas but at any rate they apply:
Perhaps the worst feature of this form of organisation is its effect on the responsible officials in the divisions. Deprived of the opportunity to show initiative and constantly at the beck and call of headquarters, they tend to become depressed and to lose drive.
Is it surprising that they lose their initiative, when I tell the House that a senior official, responsible for a turn-over of £300,000 a year in gas, is allowed an expenditure on his own authority of only £50? If he wants to spend more than that, he has to go to the head of the
group, who in turn is allowed to spend £200. If something more important than that is required, the matter has to go to the Board. That same individual, formerly in charge of the same responsibilities, was allowed to spend all that was needed on the maintenance and repair of his undertaking, for which, of course, he was accountable, and only had to get prior consent when it was a question of any capital expenditure.
Nationalisation is slowly but surely creating a race of discomfited, frustrated, obedient, unthinking "yes" men, concerned only with how they are to procure their immediate boss's smile, for on that their job ultimately depends.
The hon. and gallant Member has told us that before nationalisation there was never a strike in Scotland. Now, he tries to tell the House that nationalisation is producing a breed of "yes" men. Surely, there is a great contradiction in these two statements.
The hon. Lady will have noticed that I am now dealing with the category of senior officials, men who, if the thing is to be successful, should be enabled to take decisions, to develop their initiative, and to be enterprising; and it is they whom I characterise as being discomfited and frustrated.
The hon. and gallant Member earlier implied—and, indeed, said expressly—that since the nationalisation of this industry there had been at least one strike, and he implied that before nationalisation there were no strikes in the gas industry. Surely, that is not his argument, for is it not quite inaccurate and not in accordance with the facts?
It is not inaccurate; it was an industry notoriously free from labour troubles but immediately nationalisation came in, whether it be coincidence or not I will not argue, we had two strikes, one in London and one in Glasgow. With this stockpile of shortcomings, is it really surprising that we in Scotland seek to make some sort of change? Look at the Scottish position for the moment. All controls chafe; distant controls chafe severely, and there can be few people now in this country who are unaware of the deep-seated discontent stirring Scottish thought at present. It takes a variety of forms, from resolutions at the Church Assembly to the disreputable removal of the Stone of Destiny. I am not concerned about the Stone, but I am very concerned about Scotland's destiny.
Let us look at the First Report of the Scottish Gas Board, which, as I said, made its debut in February, 1951, for the period ended March, 1950. It says that Scotland is one of the 12 administrative areas into which the country was divided with 194 undertakings. Sixty-four of these were already administered by local authorities but they produced, let it be noted, 83 per cent. of the gas. These areas were sub-divided into five divisions and further into 11 groups. The areas of these organisations only partly followed country boundaries. Scotland produced in that year 44,629 million cubic feet of gas of which 3,192 million cubic feet was coke oven gas, and this was supplied to 1,196,507 consumers.
We will not hide the fact that we have always recognised on this side of the House that some form of reorganisation was needed, but we have never agreed that the solution, at any rate as far as Scotland is concerned, is the concentration of the whole unwieldy affair in London. When industrial organisations reach a certain size they start to lose efficiency and not to gain it. Local control slackens, supervision is relaxed, competition tends to disappear and the spur of efficiency is blunted. Nationalisation comes in with its long-range control and tries to take over what has already been destroyed and clamps the whole of the organisation in the rigidity of an iron jacket operated from a long distance away. That is why the Hayworth Report said that:
complete centralisation can therefore safely be rejected.
But it is complete centralisation which has in fact been imposed.
No, but the buildup is in Whitehall and one has only to study the Act to see that. It sticks out a mile. The balance sheet says that in Scotland we are dealing with assets of somewhere in the neighbourhood of £19 million. In the first 11 months there was a loss of £283,000 made by the Scottish Gas Board but I am prepared to agree straight away that the new prices were not effective throughout the whole of that period. They did not completely come into operation, and it should also be noted that the cost of administration of the Board was £419,000 and that a tribute was paid to the Central Gas Board, I should like hon. Members to note, of £30,000. Hon. Members cannot at the same time say that there is no control. Gas, however, is not the biggest sinner.
There is nevertheless evidence of central control very obviously present. Meetings are held in Edinburgh, meetings are held in the divisions with Board liaison officers present. The Board liaison officer is given the right to come to decisions within the limits of his delegated authority. What is his delegated authority? There have been 27 meetings of the Board in Edinburgh in 11 months. Now they are held twice monthly and the executive committee meets weekly and visits are paid by the liaison officer. The governess complex is very obvious there. I do not think they are to be blamed because I do not think it would be fair to set up any organisation like this and not expect it to be anxious about its responsibilities and to probe its duties. It is one of the inevitable effects of the nationalisation system.
How do we propose to temper this discontent sweeping through Scotland? If hon. Members look at the Preamble to the Bill, they will see that sufficient expenses are to be provided and, in the subsequent Clauses, we explain the manner by which that is to be carried out. The first Clause sets up a Scottish Gas Council.
Before the hon. and gallant Gentleman leaves the Preamble, may I point out that it states
to reorganise the gas industry in Scotland.
Could he give an idea of why he wants reorganisation? I take it that neither organisation nor reorganisation are good things in themselves, but the Preamble might have given an indication of the purpose of reorganisation.
I hope I may be allowed to answer one point at a time. I thought I had spent the best part of a quarter of an hour or 20 minutes cataloguing why we thought reorganisation was necessary.
That will suit equally well. I am glad that the hon. and learned Gentleman has succeeded in getting to the place at last. The first Clause sets up a Scottish Gas Council charged in the main with advising and continuing to advise the Secretary of State for Scotland on gas problems. It is charged
To promote and assist the development and) maintenance of an efficient … supply.
It will no doubt have its eye on the efficiency of the concerns as they run, and no doubt consider standards that shall be set as to pressure and quality, and no doubt it will turn its attention to coordinated research, which is so important a feature in all these matters. It will no doubt also act for the Secretary of State for Scotland in negotiations with other national bodies such as the National Coal Board and the Iron and Steel Corporation.
The hon. and gallant Gentleman mentioned the Secretary of State for Scotland. Is it contemplated in this Bill that the new Gas Council shall be responsible to the Secretary of State for Scotland and is the Secretary of State for Scotland to be responsible and to answer Questions in this House about it?
They are set up, as the Bill says, to advise the Secretary of State for Scotland. They are appointed by him and in that measure are responsible to him. As regards answering questions in the House of Commons, that will be one of the problems, as hon. Members will see, that they are charged with examining and about which they will no doubt make recommendations. I believe that it is another of the grievous defects of nationalisation that there is so little information obtainable from Ministers in the House of Commons by way of question and answer. So far as I have any part to play in the matter, that would be alleviated and improved.
Once the Council is appointed—and be it noted that the Council would consist of a chairman, deputy-chairman and four to eight members—all the details such as quorums, remuneration, etc., are already laid down in the main Gas Act, and we would leave that aspect undisturbed. We are not dogmatic in our desire to wipe the slate clean.
Turning to Clause 3 of the Bill, we find there the pith and substance of the whole matter, because this Scottish Gas Council is charged with bringing forward a scheme, within two years of the commencment of the Act, and presenting it to the Secretary of State. In the meantime, of course, the status quo is maintained. The scheme would divide Scotland into what the Council considers to be the most suitable viable units. They will not be all of the same size. Geographical considerations and availability of supply will guide the Council's consideration, and the units will not necessarily follow the county boundaries, though it is desirable that as far as possible that should be done because we envisage in the main, if not entirely, that the supply of gas will be in the hands of local authorities.
Why are we so anxious to use local authorities? Not merely because they did it previously, but because gas is so preeminently a local supply question. Gas does not travel far, there is no question of a national grid, and it is a most suitable activity for local authorities to look after and managed. Their management is cheap, they are democratically elected bodies, accessible, tangible and their members can be pestered by their constituents, in complete contrast with the ghostly bodies which guide our destiny behind closed doors in London. There would then be no need for pusillanimous consumers' councils because access to those who are responsible for the local gas supply would be there all the time.
We hope that there would be a combination of local authorities. The scheme which the Scottish Gas Council would put forward would, I imagine, at any rate provide for that. If local authorities in combination or singly do not want to take back their gas undertaking, power is given in the Bill for a scheme to be made which will include the setting up of public utility concerns or even, if it is thought that by such a scheme the public interest would be best served, contracts with industrial concerns. In each case provisions and safeguards would be introduced on matters of quantity, quality and price. Those details can be varied by the Secretary of State in consultation with the Council in the light of later experience.
The hon. and gallant Member said that safeguards would be introduced to see that the quantity, quality and price of the commodity produced would be right. Could he be a little more specific? The Scottish Gas Board, in their First Report, referred to the difficulty of maintaining sales of export breeze to Scandinavia. In what way would this Bill help to produce breeze coke required for Scandinavia?
I am talking about the gas itself, not breeze coke. It is reasonable that before this responsibility is handed over to local authorities arrangements as to quantity, quality and price which would not hold the public up to ransom should be set out. I will not go into more detail of how that will be done. There are price sliding scale methods and so on. It would be one of the main tasks of the Council to consider that and make recommendations as to which method was the most suitable.
As I say, these conditions and particular boundaries can be varied in the light of experience. We have no desire to run baldheaded into so big a reorganisation and development as this. We prefer the probing approach which would have stood this country in much better stead had it been applied to the nationalisation of industries when that was brought about.
It is not for me to anticipate, as hon. Members have been seeking to make me do, what the Scottish Gas Council would report. But it would only be a form of elementary justice if they recommended that the local authorities in Scotland should get back their undertakings for the pittance at which they were taken away under the nationalisation Act, when the authorities were compensated only by being relieved not only of their assets but of their outstanding loans. To give an example, Paisley had an undertaking worth £600,000, a reserve fund of £70,000 and outstanding loans of £136,000, and so was paid £66,000 for assets valued at £600,000. Whether the undertaking would be returned on that basis or not, I leave to the Scottish Gas Council to make their recommendations.
I imagine that there will be power for the appointment by the Minister of nominees to local authority boards or joint boards if things are not going satisfactorily. Again, trying to anticipate what the Gas Council will recommend, I imagine there will be power to change from local authority to public utility if any of the units in their scheme fails and does not give the results expected of it.
I do not think I can. I have already given way to other hon. Members. I am no more frightened of the hon. and learned Member than of any one else, but there is a time limit on this debate which hon. Members opposite seem to seek to have shortened.
The final subsection empowers the Scottish Gas Council to make recommendations on consequential matters. What they might be I should not like to outline. They might include profit-sharing schemes that were abandoned, they would certainly include safeguards against unfair discrimination and provide for future finance, and if necessary Government guarantees or loans. They would provide, no doubt, for centralisation of research along with research organisations in England, training schemes, grid expansion schemes and so on. The annual report of the Scottish Gas Council's activities would be produced and made available to Parliament.
Other matters will no doubt occur to hon. Members on both sides of the House as they turn over this project in their minds, but these will be the Council's responsibility and not mine. The scheme would therefore be produced, could be modified by the Secretary of State and ultimately, as I have said, would be presented to Parliament for its consideration. I have considerable sympathy with the Secretary of State for Scotland. He has duties which are varied and manifold—too varied and too manifold—and he may be anxious about having yet a further burden thrust upon his drooping shoulders. I beg him not to be too anxious. We give him a good Man Friday in the shape of a Minister of State of Cabinet rank to help him in these other matters. That is not in this Bill but in a proposal which emanates from this side of the House. He need not droop too much before the prospect of this further burden.
That is the outline of this little Bill. It is not a grandiose affair but certain things will be done; and it will remove the grip of Whitehall from one Scottish industry. It is a move towards our conception of a property-owning democracy; for the ratepayers, large and small, will be able to have a voice in the running of their own property, and be able to heckle and pester their own representatives. If it does not completely restore direct competition, it does introduce a measure of rivalry, and from rivalry progress is born. It brings us back to more manageable units away from the unwieldy uneconomic concerns to which theory, not thought, has brought us and dogma has, land not logic.
I submit this Bill to the House with confidence that sense will triumph over prejudice, that Scottish common sense will triumph, and that in gas at least Scotland will get back her own.
I beg to second the Motion.
My hon. and gallant Friend has explained, with extreme moderation and reasoned logic, the case on a subject which we on this side really believe to be of great importance to the best interests of Scotland that of efficient gas production and also a wider interest which I will come to as I develop my speech. We are extremely indebted to him for the hard work which it is obvious has gone into the preparation of his case; for his thorough understanding of what he has set out to achieve and his exposition, which I think that on the whole, hon. Members will agree was certainly not provocative and was entirely constructive. [Laughter.] There was nothing but construction in it [Laughter] the laughter is noted and will be reported in HANSARD.
I wish to look at the whole problem from a slightly different angle and to ask why in the first instance was the gas industry nationalised by the Labour Party? I may say that many of us have been puzzled as to what they considered the real merits of nationalisation. Was it to improve efficiency? If it could be argued by anyone that nationalisation, either in this country or in any other country has improved efficiency there might be a case.
Let me come to my second point. Was the purpose to achieve more effective democracy? If it could be shown that nationalisation in this country or in any other country has achieved more effective democracy and better human relations then there would be a strong argument to consider.
I just wanted to know if the hon. Member had considered the Heyworth Report, which recommended nationalisation and integration in the interests of efficiency. That was a very able and expert report.
The Heyworth Committee, as my hon. and gallant Friend has said, were satisfied that there was a need for some reconstruction of the whole gas industry. The report was an excellent document which it has always been claimed recommended nationalisation. But we have not accepted that. It was one flaw in an otherwise admirable survey of the situation, in that nationalisation was too easy a way out, bearing in mind that there was no evidence that nationalisation solved any problems. In any case, the Heyworth Report was drafted before there was experience of nationalisation in this country on any big scale. Now, alas. we have had six years experience. We have learned a good deal and I think the people of the country have learned a good deal too.
Let us look at the structure from the point of view of efficiency. I shall have to cover a certain amount of ground covered by my hon. and gallant Friend. Let us consider the size of the undertaking. Surely we all realise that there is a point at which an undertaking becomes too big. The undertaking covers the whole of Scotland, the Orkneys and Shetland, the outer Isles and down to the Border, 30,400 square miles with a population of five million and 1,196,507 consumers if hon. Members require the exact figure. That is a huge unit.
I was coming to that point in my next remark. I accept that it is possible for a policy body to have a reasonable supervising interest and control even over a big area, but not for an executive body. There is a tremendous difference as the Coal Board has been learning painfully and slowly. The structure, although the hon. Member for Kilmarnock (Mr. Ross) stated earlier it is decentralised, from all the implications is it not. There is the Gas Council in London—forget that for a moment if we can, though not for long there is the Scottish Gas Board with five divisions and 11 groups. Here is an extract from a Report:
Officers, who, with one exception, are managers of an undertaking in the particular
division or group have been appointed as divisional controllers or group managers and as such exercise general supervision over the undertakings within their territory. They advise on any matters submitted to them by the district managers, have a limited power to incur expenditure beyond that fixed for the district managers and are responsible for the execution of the Board's policy.
Every sensible person has over the past 20 years considered the possibility of State ownership solving certain problems. I know from bitter experience that this question of ultimate financial responsibility is where State ownership must always break down. When I say that I learned by bitter experience perhaps the House will forgive me if I quote from personal experience.
For four years I worked as a temporary civil servant. I was brought into a Ministry at a time in the war when there was chaos in shipping, due to the over running of Scandinavia, along with others who had been in shipping but not as civil servants. For a short time we acted in the same way as we acted in our own offices. We made decisions on the telephone and moved as fast as we could. That was right and necessary because there was considerable chaos.
When the chaos began to settle a bit I began to learn the bitter lesson which convinced me finally that State ownership could not work above all because of this question of financial control. On one occasion I made a decision over the telephone about a ship. So far as that ship was concerned it was a correct decision, but it involved the expenditure of a considerable amount of money.
A colleague whose office was along the passage was dealing with another ship in the same port and unfortunately he made a different decision. In his case his decision was equally correct, but we had different views on it. Either could have been right. The whole point was that my bill was large and his was small and the accountant general said, "No matter how right your decision was these two amounts cannot stand together. You must check with your colleagues before you incur expenditure like this."
I am sorry to develop this so fully, but it is the whole heart of my argument. The lesson I learned was that where even a comparatively small sum of money was involved, because I knew my Minister might be attacked on the Floor of the House or in the case of a nationalised industry the executive might be attacked, I became cautious. I help up decisions I might have made on the telephone in order to walk down the passage to talk to my colleague and ask "What are you doing about it?" If he was out at a meeting I would come back and write it out on a piece of paper.
I can tell hon. Members opposite that permanent civil servants were far quicker at getting these things done than we amateurs who came in and learnt the hard way, that in an undertaking of any great size one cannot make one's own decisions involving fairly heavy capital expenditure without checking it through the machine. That is where inefficiency starts and sooner or later initiative goes.
The hon. Gentleman has put forward a singularly strong argument for what hon. Gentlemen opposite usually call bureaucracy. He gave evidence of one decision involving a very large expenditure of public money and another decision on the same issue involving a very small expenditure of public money. Surely, that argument leads clearly to the conclusion that this degree of bureaucracy would lead to a large saving of public money?
The hon. Gentleman has missed the whole point of my argument. I shall have to deal with what he said. The whole point is that shipping, gas or anything else is not suited to handling on this large scale. I pointed out that both decisions could perfectly well have been right, but they could not stand together in the same machine.
I used the illustration because occasionally one is allowed to quote from personal experience in this House. I was giving a fundamental reason why I believe that State ownership will fail. That is my own philosophy, my own approach to the matter.
We may or may not agree that the Heyworth Report recommended nationalisation, but we cannot but agree that the Report recommended that one of the area boards should cover the whole of Scotland.
The Heyworth Report is not gospel. We believe that it has already become obvious that the area is far too big. We believe that the work can be far more efficiently done. I am still on the point about efficiency. There is a bigger point to come, and I had better get on to it.
I am always willing to answer interruptions from hon. Gentlemen opposite, but probably it would be in the interest of all concerned if I went on with my speech.
We do not believe that the present system is efficient. I admit that the failure of gas nationalisation so far is not quite so spectacular as some of the other failures. But it has not yet shown either improved quality, improved relative price or, I submit with some firmness, any evidence of improved human relations or the achievement of that incentive urge which we heard so much about in "Let us Face the Future."
I should like to quote some fairly good evidence to support my statement from someone who may be acceptable to hon. Members opposite. I should like to quote no less a man than Professor G. D. H. Cole, who wrote in "Labour's Second Term":
It would be foolish to shut our eyes to the fact that there is serious discontent in the nationalised industries and services and little sign as yet that the new incentives on which the success of Socialism must finally depend are being brought into play.
That is what Professor Cole wrote. Hon. Members opposite have a
terrific responsibility. For 50 years past they have led people to believe that there was some mysterious magic in Socialism. They have let their people down. I quoted Professor Cole at a recent meeting in the county. There was one fierce opponent in the audience who got up and told me flatly that I was a liar. I had to get the article from a newspaper and show it to this man to let him see that the leaders of Socialism thought today had now recognised what we have been saying as hard as we could in our warnings to people for years.
Hon. Members opposite have a terrible responsibility. They have an opportunity, by accepting this Bill—as I feel certain that they will, when they have heard the rest of the arguments. They can begin to bring wisdom back and re-establish the position that people should have a proper place in democracy. From the democratic point of view, it would be enough as an argument for nationalisation if hon. Gentleman opposite could show that there was democracy in it. What in fact happens? There are no Questions allowed in the House on matters of detail; no elections to the boards of management or the gas consultative councils. Is that democracy? It really is not.
Let us turn to another good authority, Beatrice and Sidney Webb who, long ago, said that there were:
…obvious reasons why many industries and services have to be municipalised rather than nationalised.
I come to the question of what was the real motive of nationalisation. Some people, including the hon. Lady the Member for Gorbals (Mrs. Cullen), think that it was efficiency. Some may think that it was more effective democracy; but I do not think that in either case they can make a sound argument. What was the motive? The motive was part of this wretched, miserable theory of centralisation under the central Government.
Our object in presenting this Bill is two-fold. First, we believe that by the schemes which would be possible under the Bill we should get greater efficiency, better prices and better satisfied consumers. Secondly, we believe that one of the most important elements in democracy will be strengthened if we give back to the local authorities certain powers which have been taken away from them. That really could become effective democracy. One must repeat what has happened to these local authorities recently. They have lost their powers to deal with gas, electricity, hospitals, municipal airfields and valuation for rating, and street transport is going by stages.
The hon. Gentleman knows my views on that. I felt very strongly on that subject. Unfortunately, I was unable to be present to register my vote, for reasons beyond my control. But I feel strongly that these powers have gone. What is left? Hon. Members opposite will say that the local authorities are complaining that they are overworked. Of course, they are. What has happened is that they have been given a mass of duties in which they are not free to act without authority from somewhere else. They are loaded down with restrictions and references back to Edinburgh or London. They are very hard worked; but they have singularly few powers left.
They have also lost their trading services which a really efficient local authority could handle in such a way as to make them into revenue earners, to the great benefit of the local ratepayers. We want all that restored in some form or another. I sincerely hope that this Bill will be given a Second Reading, the reason being that we believe that we can achieve greater efficiency, better gas, better human relations and, at the same time, strengthen the foundation of British democracy which I am convinced is local government.
Both the hon. and gallant Member for Scotstoun (Colonel J. R. H. Hutchison) and the hon. Member for Renfrew, West (Mr. Maclay) presented a very poor case. The hon. and gallant Member for Scotstoun did little to recommend the Bill. I do not think that he will have persuaded this House that it is a good Bill; nor will he have persuaded the people outside—certainly not the intelligent people of Scotland. I propose to show that this is a bad Bill. I do not intend to follow the hon. and gallant Gentleman by using a number of adjectives: I am prepared to use arguments.
This Bill attempts to dilute nationalisation, to water it down, with a view to the ultimate abolition of the nationalisation of the gas industry. I oppose this Bill because it is contrary to the best interests of the people of Scotland. It would bring chaos into the gas industry in Scotland; it would increase production costs, damage labour conditions and increase capital charges. It would also intensify distribution problems, interfere with sales policy, injure the development of rural areas and would prejudice the extension and the general utility as an industry of the production and distribution of gas. [Laughter.]
It is all very well for hon. Members to laugh when I present them with these arguments, but I hope to satisfy even them before I sit down that they have no case, and that this Bill should never have been brought forward. This scheme is contrary to the well-tried maxim that unity is strength, because it would divide Scotland for purposes of gas production and distribution, would break it up into a number of districts, and would undermine its integrity as an economic unit.
The two questions which I venture to say the House has to consider today are these. Is the present structure in Scotland sound, and, secondly, should Scotland be carved up, or remain for this purpose a unit, as it is now? There are many other objections to this Bill. It is unnecessary, because the industry has been already fully nationalised. It is too late, because it essays to deal with the task in a petty way, whereas it is already being dealt with in a big way. It is inept, because the re-organisation which it en-visages would damage Scotland's national economy.
The Bill would set up a Gas Council, when there is already existing a Gas Council. The Bill would give the Gas Council functions which are already being performed efficiently and well under the Gas Act of 1948. The Bill would redraw areas of supply, which are already well settled. The Bill would transfer gas undertakings which have already been transferred, and it would re-organise—and there is no peculiar virtue in the word re-organise—for the sake of re-organisation, because it would re-organise an industry which is already fully and efficiently organised.
This Bill attempts a work of supererogation. It is even worse than that. It is a wanton misuse of time and effort, because the Gas Act, 1948, was passed after expert, diligent and exhaustive inquiry into the needs of the situation, the result of which was embodied in a comprehensive Statute of 77 Sections and six Schedules, while this petty Bill attempts in six Clauses to undo the work of that very useful Act of 1948. It attempts to undo it without any adequate inquiry such as was undertaken before the Bill of 1948 was introduced.
In these circumstances, it is necessary to look at what has been done, and compare it with what this unnecessary Bill seeks to do. The Act of 1948 was not undertaken without full and expert inquiry, and it was not a Labour Government which set up that inquiry. It was a former Government in 1944 during the Second World War which set it up. The Heyworth Committee of Inquiry, a skilled and expert body, was set up with these terms of reference:
To review the structure and organisation of the Gas Industry, to advise what changes have now become necessary in order to develop and cheapen gas supplies to all types of consumers, and to make recommendations.
They did make recommendations, and they did their work very well, as I shall show.
On 1st November, 1945, that committee of inquiry presented its Report, an elaborate and extensive Report of 294 paragraphs of detailed and comprehensive character. It presented that Report to Parliament. Its Summary of Recommendations included 16 paragraphs adumbrating a complete regional board plan. I shall not trouble the House with those 16 paragraphs, but shall refer to only three. The first recommends:
Compulsory purchase of all existing undertakings. Independent machinery to be set up to determine fair compensation.
Division of the country into ten Regions in general accordance with the map attached.
The third says:
Regional Boards to be set up to take over all undertakings in their Regions
The map referred to showed 10 regions, one for Scotland. as was right and proper,
Scotland being treated as one unit, unlike the scheme which hon. Members opposite now put forward to divide, break up and disunite Scotland for this purpose. England and Wales were divided into nine units.
The Report strongly and repeatedly expressed its faith in large units, and that is the keystone of the discussion today. This Bill, without adequate inquiry, contradicts the careful findings of the Hey worth Report. It would destroy Scotland as a unit, it would divide Scotland into separate units, and, without logic and without advantage, it would probably cause extra expense.
Could the hon. and learned Gentleman tell us if there is any real connection between Aberdeen and Dundee as far as gas is concerned? Is there a pipe running between the two places, or not?
I should like to tell the hon. and gallant Gentleman that I am dealing with this matter in a national way, and not in the petty parochial way which his question indicates or in the petty parochial way in which this Bill seems to be introduced. That is a wrong approach, and I want to tell the hon. and gallant Gentleman that it is contrary to the expressed view of the Heyworth Report, which emphasises the value of large units as against the disuniting of Scotland by breaking it up into small units. I would refer the hon. and gallant Gentleman to paragraph 230 of the Report, which says this:
The direction of the required change is clearly marked, namely, towards groupings into larger units. This is preponderantly the view of the industry itself. It is in no sense a revolutionary Idea; it is entirely consistent with past history, which shows a steadily accelerating trend towards integration.
That is the paragraph which is so strongly against the philosophy or the policy which is behind the Bill presented to us here today.
The Report proceeds to give in detail the reasons for recommending the plan in favour of larger units. The Report says:
The main objects which grouping into larger units can be expected to promote are"—
There follows a list of eight, but I will only refer briefly to four. The first looks forward to some reduction of production costs, and goes on to give further reasons
for that particular proposition in these words:
The overall scope for improvement in these directions is relatively limited and will arise through reduction in number of production units and a general raising of technical efficiency in undertakings which are at present too small to provide adequate scientific control.
Yet hon. Members opposite—
Has the hon. and learned Gentleman also read paragraph 242 of the Heyworth Report, which says:
Complete centralisation can therefore safely be rejected as inappropriate?
Quite. This is not a case of complete centralisation by any means. The Heyworth Report recommended the division of this country into 10 units, and the Minister, satisfied with the reasoning of the Heyworth Report, which he called conclusive, divided the country, not into 10 units, but into 12 units—
The point that I am making is that the Heyworth Report, a thoroughly expert and respected Report, emphasised the value of large units. The Minister divided the country into large units. Yet now this petty Bill which is proposed today is designed to divide the country into small units. Now I have dealt with the first argument which was put forward by the Heyworth Report.
The second is this. It made the recommendation because it thought it would
lead to improvements in labour conditions, and it made it in these words:
One aspect of this arises in small units it which the necessary mechanisation to reduce the amount of manual physical effort cannot be justified on cost considerations alone, or which do not possess the necessary capital resources.
That, in my submission, is sound reasoning, and it shows how unsatisfactory small units may be from the point of view of the workers in the industry.
I have given way several times, I must proceed with my argument. The third reason put forward by the Heyworth Report was this. It said that it would result in further economy in capital charges, and it gave the reasons in these words:
This can reasonably be expected to flow from the better use of production and distribution plant made possible by treating large areas as one. One aspect of this general question is already demanding attention, viz., where a highly developed but relatively restricted urban area is losing population through slum clearance, thus bringing about redundant production capacity.
Hon. Members will see that each of the three heads to which I have referred in the Heyworth Report emphasises the value of large units and criticises the dangers of small units. Yet this Bill which is proposed today seeks to divide Scotland into small units and to negative the very benefits which were adumbrated by the Heyworth Report.
The fourth point put forward by the Heyworth Report on this matter is this. It expects very intensive study of distribution problems, which, of course, hon. Members will agree, is necessary for the future of the industry. Indeed, the Heyworth Report makes that point in these compelling words:
Large groupings would permit a higher level of technical skill, facilitating the planning of development on the best possible long term projections of future demand.
I must proceed with my argument. I have given way several times, and other hon. Members wish to speak. The other four points made by the Heyworth Report I shall not elaborate. I shall just mention them. They are, concentration of sales policy, easier and better distribution of "fringe" and rural areas, extension of the coke grading and selling effort, expansion of research and its applications.
The sound and compelling plan adumbrated in that Report was adopted in the Gas Act, 1948, is the plan on which an attack is made here today, and that reasoning was adopted by the Minister of Fuel and Power, who described it as absolutely conclusive. The Minister's judgment has been proved correct. The Act received the Royal Assent on 30th July, 1948, and, ever since, the new organisation has worked smoothly, efficiently and well. Hon. Members opposite have referred to the official reports. I shall refer to the official reports, and they will show that there is no reason whatsoever for this tinkering attempt to spoil the great plan of that Act of 1948 or to negative its operation by dividing up Scotland into small units.
Let me refer to what has happened. The new statute started operating in May, 1949–1st May, 1949. That was the date appointed by the Minister of Fuel and Power as vesting date. On that date the gas industry passed into national ownership, and 1,037 undertakings were vested in the Gas Boards of the 12 areas into which Britain was divided, 11 for England and Wales and one for Scotland. Today the relevant point is, Has this worked well? The reports to which I shall refer briefly show that it has worked smoothly, effectively and well. Someone has referred to the Report of the Gas Council.
I think that it was on 7th February, 1951, that the first Report of the Gas Council was presented for the period from 30th July, 1948, to 31st March, 1951. That Report proves that the structure is sound and is working well. I quote one paragraph from it which states:
The new structure of the gas industry— the third of the fuel industries to pass into national ownership— differs from that of the other two in the degree of decentralisation explicit in the Act creating it. Here the emphasis is on the Twelve Area Boards. They are severally responsible to the Minister for
the conduct of their business and are therefore given the powers necessary for that purpose.
So much for the structure.
The Report is a comprehensive one, and in its Conclusion it says this:
But it has been a year of solid achievement in many directions. The change-over was effected smoothly. … As will be seen from the reports of the Boards, savings have already been made in a number of their activities— bulk buying and transport, for example— which, if individually small are cumulatively far from negligible. What is more important, improvements in supplies and services have been secured in a number of places where they were badly needed.
That is the first Report of the Gas Council.
Let me now turn more particularly to Scotland, and refer to the first Report of the Scottish Gas Board. That was presented on the 14th February, 1951, for the period from 1st January, 1949, to 31st March, 1950, and there has not been time for a further report since. This proves that in Scotland the structure is sound and working well. It also proves, and says, in so many words— I will quote three observations from it, because it is a comprehensive report of many paragraphs—
The first year of the new system has been one of both difficulty and encouragement.
Again it says:
Co-operation in many directions has gone far to meet the situation and to offer promise for the future.
It also says:
The public have shown understanding and sympathy and an increasing recognition of the fact that the industry belongs to them and is devoted to their service.
I submit that the history and administrative experience to which I have referred, and to which these reports refer, show that the Act of 1948 was framed upon the right lines; that this structure was sound and its operation has been satisfactory. These quotations show also that there is no justification for the present Bill. I hope that it will be defeated, because it is contrary to the best interests of Scotland.
I would say one further word. Private Members' time during which this Bill was introduced is a valuable institution and procedure in this House, and should be used well for constructive and not destructive purposes. Here and now I submit that it has been used solely to alter a Statute very recently passed, so as to destroy its purpose and effect. Hon. Members opposite are entitled to attempt to do that, but I submit that in this particular case there are three valid reasons why they have taken a wrong course.
The first is that the Statute was very recently passed by this House; the second that it was passed by an enormous majority after full examination and debate in this House and in Committee; and the third, that it was passed so recently that the organisation which was set up under it has had no adequate opportunity of showing its utility. Notwithstanding that, the reports to which I have referred show that even in the short time it has been in operation, it has proved its utility, and this Bill which attempts to impair that utility should be rejected by this House. I hope mat it will be.
Is the House to understand that the hon. and learned Gentleman is representing the views of his constituents in North Aberdeen by what he has said to the House?
The hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) seems to have started with some strange premises. He told the House that gas in Scotland was already fully and efficiently organised. At other times, he was telling us that we have to give the nationalisation of gas time to run. I do not know to which argument he wishes to attach himself. He has referred freely to the First Report and Statement of Accounts of the Scottish Gas Board. They say on that subject:
The broad picture of possible economic integration schemes has not yet been filled in.
They say in their conclusions on page 20 of the Report, dealing with the results of the war, which have, of course, held up to a very large extent the provisions of maintenance and new equipment:
Some steps have been taken to remedy the situation but it will take time to complete the plans.
Whatever else may be said, it is quite clear that whether or not the gas industry under nationalisation will ever be fully organised in Scotland, it certainly is not at the moment.
Then the hon. and learned Gentleman seemed to consider that because the Act nationalising gas had been passed in this House and by a tremendous majority, it should be regarded as one of the laws of the Medes and Persians which changes not, at least unless it suits the Medes and Persians. That surely cannot be sustained. I should like to refer to some correspondence which has been in "The Times" recently about Labour policy.
If the hon. Gentleman is making a point against me that I said that the Gas Statute which was passed should be sacrosanct and never criticised in this House, I can tell him that I said nothing of the kind. I said that it was passed so recently that the organisation set up under it had not a fair opportunity of being tested but, notwithstanding the short time that it has been working, the Report shows that it has worked smoothly and satisfactory and with utility to the country.
Certainly prices have been put up. Let us consider the particular point I was making. What is it that Labour policy apparently seems to be concerned about? We hope that we shall have Members on the other side, if not all of them some of them at any rate. with us in this matter. The hon. Member for Edge Hill (Mr. Irvine) wrote:
As to national ownership, it is conceded that we must envisage the problem of decentralising power and of encouraging greater participation by the workers and management.
He also says:
To aim at greater decentralisation of power in industries already taken over.…
He says some other things and concludes:
Such is the policy for the future that would be acceptable to a united Labour Party.
If there is such a thing.
That was replied to by Lord Winster. who said:
The problem of decentralising power in the nationalised industries certainly requires investigation.
That is the reason the hon. and learned Member for Scotstoun (Colonel J. R. H. Hutchison) has done such a great service in raising the matter in this House today. He gives us an opportunity of investigating it. Lord Winster went on:
I would prefer to call it delegation of executive authority.
The Bill we are discussing contemplates, of course, two suggestions; in the first place, the establishment of a Gas Council in Scotland, thus detaching Scotland from the rest of the United Kingdom so far as gas is concerned, and secondly it contemplates that the Gas Council, in conjunction with the Secretary of State, should get out plans for decentralising their authority and making workable units.
The hon. and learned Member for Aberdeen, North, made great play with the fact that larger units were recommended in the Heyworth Report. No one disputes that. and indeed that is part of the object of this Bill. It does not contemplate the handing back to each of the 200 separate installations that existed in Scotland before. It says quite specifically that decentralisation will be to a very large local authority or otherwise a combination of local authorities as we have for many services already, such as the Fire Service and the Police.
There is one point that is worrying me. The suggestion is that the gas undertakings will be handed back possibly to the big municipal authorities. There was a large number that were not owned by the local authorities. Are we to force the local authorities to take those over?
Not at all. I have read the Bill thoroughly, and there is not one thing in it to say what type of body will take over those undertakings which local authorities may not want.
The hon. Lady must not go on interrupting. She has made her point quite plain. Her point is that in this Clause we do not specifically say that it is the local authority that will in every case take over. Well, local authorities are not the only possible form of organisation. Do let us bear in mind that in Scotland there was far less justification for the nationalisation of the gas industry than in any other part of the United Kingdom, because in Scotland the local authorities were already responsible for 83 per cent. of the annual gas output before the taking over.
We must also consider how the thing is working out in terms of what the objectives were. There was an argument for taking over the electricity industry, because there was already the grid, and already a degree of standardisation imposed, in the nature of the case, throughout the Kingdom. But that in no way applied to gas, and could not apply to gas. There was no such standardisation. It is interesting to note that, speaking for Scotland, no such standardisation is contemplated now. On page 12 of the Report the standardisation of tariffs is referred to, but that tariff standardisation is limited to the adoption of
sound principles… in the fixing of prices as between the various classes of consumers.
The Report says quite clearly that they do not contemplate fixing the same price throughout Scotland; different prices will apply in different districts. In their conclusion they say that there was a great variety of conditions applying to gas throughout Scotland. Nor, indeed, do they seem to have any intention of standardisation of plant, because they say on page 8, where they refer to additions being made to gas making plant, that there are 13 vertical retort extensions, six horizontal retort extensions, seven carburetted water gas plants, and five other gasmaking plants.
What can be the purpose of having a single over-all board running an industry of that description? It may be said that it gives a certain over-all financial control. But the financial control is really one of the vital controls; it is with financial control that responsibility really goes. Our argument is that if the financial responsibility is decentralised—not just the imprest accounts that at present exist, but the financial responsibility, so that the localities themselves can plan and take decisions in the best interests of those localities— we shall get the best results for gas in the Kingdom as a whole.
It is not a matter of providing an overall plan. It cannot be that, in the nature of the case. Gas has to be conveyed in pipes. Gas distribution is limited by physical circumstances in a manner that does not apply to electricity. Of all things, gas is essentially a local undertaking, and it can therefore best be run as a local undertaking.
What does the hon. Member mean by financial control? In the Gas Act the area boards are the important bodies. They approximate more nearly to national boards in other regards, and I believe that national boards are made up of the chairmen and vice-chairmen of the area boards. Financial policy is only relevant so far as it affects the Government loans generally and over-all capital policy.
The hon. Gentleman is quite right, and for that purpose Scotland is itself at present an area. What we say is that it is too big a unit. We know that within the gas industry there is already more decentralisation than in the other nationalised industries, but our case is that there is not nearly enough.
I do not want to detain the House any longer. This is something which has to be seriously considered by the House. We maintain that the very nature of the distribution of gas makes it completely unsuitable for nationalisation, and it is essentially a local authority, or at any rate a local, concern. We believe that the future democracy in this country must continue to be founded upon localities, upon local patriotism and local interest, and built up from that. It is for that reason that we recommend this Bill to the House.
Before the hon. Gentleman concludes, will he explain one thing? He talked much about local authorities, and once mentioned the "joint board of local authorities," but he has said nothing about "such other undertaking." Would he like to explain that?
I am very glad indeed that this Bill has been brought forward, because it gives us a chance to deal with much of the criticism that has come from the Opposition in Scotland, not only of our nationalised gas industry but of all our nationalised undertakings in Scotland. The hon. and gallant Member for Scotstoun (Colonel Hutchison) suggested that we had made a claim that nationalisation would lead to greater efficiency and to lower prices, and I shall deal with those points.
First let me deal with the question of lower charges. It is true that in some districts in Scotland the price of gas has increased since nationalisation. It increased only in those districts where the price was not covering the costs. The hon. and gallant Gentleman said, giving figures, that what was charged more than covered the increased cost of coal. In running the gas industry one has to take into account more than the rise in the price of coal. We had to take into account the reconstructions, developments and repairs that were necessary to certain of our gas undertakings.
There is another point that I want to make very forcibly. Do the Opposition suggest that gas should be the only thing in Scotland or in Britain that should have gone down in price? One hon. Gentleman interjected, "What about wool"? What about any commodity provided by private enterprise today? If we compare the 1948 price with the price today we shall get a proper picture of what has happened to charges in the gas industry.
Would the hon. Lady not agree that private enterprise has not guaranteed that if a certain course is adopted there will be reductions in price, whereas one of the basic features of nationalisation was the promise that there would be reductions?
The hon. and gallant Member cannot have followed my argument. The logic of it is that if we still had our gas industry under private enterprise our people might have to pay a higher price today for their gas than they are paying. The fact is that the price of gas per thousand cubic feet, where it was very high, has been reduced since the nationalisation of the industry.
I explained why, but the hon. and gallant Gentleman was not here.
The present structure is the one which was recommended by Sir Geoffrey Heyworth in the Report. He suggested that we should have units where we could have greater efficiency, and one of those units was to cover the whole of Scotland. That has taken place, under nationalisation.
The suggestion had been made today that the unit is too big and that under the Bill we would give back those undertakings to local authorities or to combinations of local authorities. Just as rivers pay no attention to local authority boundaries so, we find, is the case with gas undertakings. We have had quite a number of reorganisations already. There is our plan of linking grid schemes. Many of them go beyond local authority boundaries, or from one into another, and it may be almost impossible to do what has been suggested and yet have the chance of the efficiency that we expect, and indeed are certain will come, in our gas undertakings for the provision of gas to our people. [Interruption.]
An hon. Member asks "When?" I will give him some examples of what has already been done in this matter of greater efficiency. About 24 schemes for interlinking of works have taken place. It has meant that three gas works have been closed down. If we had not had our present scheme those works would have had to get new machinery and it would have been almost impossible for some of them to do that as private concerns. Our linking schemes have made it possible to provide our people with gas, and to do so more efficiently. We have under construction at the present time about another 30 schemes of linking by attaching certain districts to the grid. That is made possible because Scotland is regarded as a unit, and it would be impossible if we were to follow the schemes suggested here.
The hon. Member skated beautifully over the question I asked him. I suggest that there is not one hon. Member on either side of the House who has any idea, to judge from their speeches, what would happen to the undertakings if local authorities do not want them. Who will control them and be responsible for them?
The hon. Lady puts those questions; but the argument ought to be put on the other side. What would happen if the local authorities were left with the least profitable undertakings? The hon. Lady asked what is going to happen to undertakings in which the local authorities are not interested. I assure her that they will be properly taken care of.
I have always understood that the person presenting a Bill and asking for support has to make perfectly clear what is meant by the provisions of the Bill. We are satisfied that Scotland should be regarded as a unit, and it is for the Opposition to make out their own case, but so far they certainly have not made their case out on that point.
No, I am sorry, 1 cannot give way when there are many people on both sides of the House who want to speak. What I have said deals with the question of efficiency. I now want to go on to remote control. I have read what the hon. and gallant Member for Scotstoun (Colonel J. R. H. Hutchison) has said about it in an article in the "Glasgow Herald." This continual harping on "remote control from Whitehall" shows clearly the ignorance I use the word in its proper sense of the hon. and gallant Member and those who are supporting him on the present occasion.
Whitehall control, I take it, means that we have control from London by the Gas Council. The controlling power of the Minister under the Act is to give directions of a general character only. Under the Gas Act all area boards are virtually autonomous. What is the composition of this bogey man, the Gas Council, which has its office in London? It is composed simply of all the chairmen of the area boards, the Scottish chairman and the chairmen of the other boards—
The hon. Lady says that the Gas Council has very slight control, but is she aware that for that very slight control the Scottish Area Board pays £30,000 a year in contribution and another £12,700 in financing its expenses, so either they are being done because they are paying for things they are not getting or they are getting more than the hon. Lady thinks?
It has important co ordinating functions on matters of common interest to the gas boards, but it cannot exercise power over any board in the whole of Britain—[An HON. MEMBER: "Financial."] Not even financial powers. It cannot exercise any power over the policy of the boards. Indeed, it is not empowered in any way to give directions. In a sense, I would say that the Gas Council acts in a federal capacity.
The powers of the Council really leave the boards free to follow their own policy. They are independent of the Council as regards finance, and the Council is used as a co-ordinating body between the boards in connection, for example, with the raising of capital or of capital investment. The staff of the Council is relatively small, financed by the various area boards. It does to a great extent what the British Gas Council did when the industry was privately or municipally owned, and the work it does is very important.
I apologise for interrupting the hon. Lady and I do not want to interfere with her speech, but this is fundamental to the whole conception. Section 2 of the Gas Act says that it shall be the duty of the Council to promote and assist the efficient exercise and performance by area boards of their functions. That is a very wide power.
Indeed it does not say so. The private industry, the municipally owned industry, felt there was need of a co-ordinating body. The Gas Council is, in the main, doing the work of that co-ordinating body. I take it that one of the main reasons for bringing forward this Bill is to transfer ministerial responsibility from the Minister of Fuel and Power to the Secretary of State for Scotland—
The Minister of Fuel and Power at the present time consults the Secretary of State for Scotland on all important matters concerning Scotland. Take, for example, a really important matter: the appointment of members to the Scottish Gas Board; that has been done in full consultation with the Secretary of State. We have also found, since the industry was nationalised, that the Scottish Board has always shown the greatest readiness to co-operate and to enter into discussions with the Departments of the Secretary of State.
No suggestion has been put forward by any of the hon. Members who have spoken from the Opposition side to show how Scottish interests have suffered because the Minister responsible for the industry is the Minister of Fuel and Power. Far from there being remote control in the industry, I am glad to have this opportunity to make it clear to our Scottish people that there is no truth whatever in that contention, which has always been made.
I am sorry, I cannot give way. There are a number of hon. Members who wish to speak and many points have been raised with which I must deal.
Now, we come to the claim for decentralisation. It has been suggested that not only the gas industry in Britain, but the Scottish gas industry, is over -centralised; that the provisions in the Bill would break down these over-large organisations and would put them into manageable units. Those who make that claim are certainly completely out of touch with the facts. The Scottish Gas Board is free under the Gas Act to set up whatever form of organisation is most suited to the needs of its area; it is not bound in any way. Just as it has been suggested that the super-Gas Council that the Bill proposes will set about making a scheme, the Gas Board in Scotland already has the authority under the Act to set up whatever organisation it thinks will best suit the needs of Scotland.
The policy of decentralisation was, indeed, one of the fundamental features of the Gas Act. Hon. Members opposite may be able to say that that was not a central feature of the Coal Act, or that it was not, perhaps, so much an essential feature of the Electricity Act, but decentralisation is certainly a fundamental feature of the Gas Act, and that is the Act with which we are dealing today.
I know. The hon. Lady must remember that the whole argument put forward was that the gas units were too small and that centralisation was necessary. That was what the present Chancellor of the Exchequer constantly said upstairs. Has he changed his mind? The hon. Lady should read his speeches.
I do not have to read his speeches. Unfortunately, I was one of the hon. Members on the Gas Committee, and one of those who listened to half an hour being taken up by the Opposition on how to spell "nationalisation." There is scarcely a thing in that Act about which I do not know. The right hon. Member has certainly not been following my argument.
There is a difference between what we call decentralisation and the claim of the Opposition about what is in the Act. I emphasise again that decentralisation is certainly a fundamental function of the Act. The Scottish Gas Board has established a number of groups: I expect most hon. Members know them, and so I will not weary the House with details. The divisions that have been set up by the Scottish Gas Board are, indeed, the economic units to which the hon. and gallant Member for Scotstoun referred in his article in the "Glasgow Herald."
Now, we come to the role of the local authorities. We have not heard a great deal said about this, but I am taking this excellent opportunity to deal with a great deal of criticism that has been made about the industry and the criticism that the Bill is supposed to clear up. There is, I suggest, some doubt on the degree of independence which should be left to the local authorities and to the other nebulous bodies that are proposed in the Bill. In addition to supervising, promoting and assisting— these are the words of the hon. and gallant Member— the pro posed Gas Council would retain the power to vary the areas, which would seem to imply power to compel local authorities to combine for gas purposes. That is one important point.
The local authorities might look a little askance at the intention to provide for a nominee of the proposed council to attend local authority boards when things were not going satisfactorily. That again has been the suggestion of the hon. and gallant Member, in the article headed "Unionists' Gas Industry Plan." Their proposal that the new council would evolve a price regulating system would not be recognised in Scotland as restoring responsibility to private enterprise, or to local authorities.
I come now to the final point. The hon. and gallant Member said today that if we were to carry out the provisions of this Bill we would return to profit sharing schemes. We have been dealing with the gas industry in Scotland—
I expect the hon. and gallant Gentleman wants to get support from the people in Scotland for this Bill. I expect when this letter, or article, was written to the "Glasgow Herald" he was wanting to get the support of the people in general and of the gas workers in particular. Here are his own words from that article:
But they might well turn their attention to"—
not considering, but—
reconsidering, the profit sharing schemes which existed so satisfactorily before nationalisation.
There is nothing at all wrong, except the inference that in Scotland there were already profit sharing schemes before nationalisation when there was not a single profit sharing scheme in the whole of the gas industry of Scotland. That is what is important about it.
Now we come to the consumers' interests. The Scottish Gas Consultative Council was just pooh-poohed; it was not important because it was said in their Report that they had had no serious complaints. They did not say they had had no complaints at all, but the complaints they did have, they said they were able to deal with administratively. Is that a bad thing? Is that a good thing? The hon. and gallant Member suggested that our people in Scotland were muzzled and were afraid to go forward with these complaints, but if we set up this new Gas Council they would have someone to whom they could go. Let us look at this Gas Consultative Council. There are 24 members on it. These are nominated and their names put forward by the Scottish local authorities' associations.
Yes, of course, finally appointed by the Minister, but their nominations come from the local authorities and trade union interests in the main. This Consultative Council has appointed five district committees. These correspond with the divisions under the area boards. The representatives on these five district committees to look after consumers' interests again are drawn from nominations by the local authorities' associations, the Trade Union Council and similar bodies. I think the hon. and gallant Member suggested that if the Minister of Fuel and Power decided to do so he could wipe out this Gas Consultative Council. The Act would completely prevent that from happening. Only if a new area were formed would that be possible.
Were the Gas Consultative Councils— so nicely described by the hon. Lady— consulted before the price of gas was raised in Scotland, as I am informed they were not?
Again the right hon. Gentleman is quite wrong. Before any change is made in gas prices or in tariffs the matter in every instance is taken to the Gas Consultative Council in Scotland. At all of those meetings at which those prices have been discussed the Press has been there and has been able to report on the discussions.
But consultation was carried out with the Consultative Committee, and if they had any point to put forward it would be considered— the Minister is not responsible— by the area board. [Interruption.] I wish to make this point perfectly clear. I have had so much experience of the right hon. Gentleman's rudeness, not towards myself, but in Committees; I wish to tell him that on his own side of the House the Scottish Members at least want to know these things, and I suggest that he should let me get on with the case I am making. The Minister has no power in price fixing. That decision is taken by the area boards.
I come to the question of compensation, which was referred to in the "Glasgow Herald" article, and it was again referred to by the hon. and gallant Gentleman today. In the article in the "Glasgow Herald" it was stated:
When nationalisation came along the assets of the local authorities were taken away from them and they were at the same time grossly underpaid.
The fact is that local authorities were not paid for the gas undertakings. I wish to make that perfectly clear. I suggest that no question of payment could arise where under nationalisation there was a change whereby one public authority took control from another public authority. The local authority undertakings were built up largely by the, consumers, who are still the consumers of gas in Scotland, whether they be in Glasgow or Edinburgh. The cost of any payment to the local authorities for those undertakings would have fallen on those very consumers, and the only people who might have benefited in any way— in Glasgow, Edinburgh and the other places— from such a transaction would have been the people who did not use gas in their homes. That to me would have seemed very wrong indeed.
Local authorities were, however, compensated in one respect— in respect of the severance of their gas undertakings from the rest of their activities. A sum of £2½ million was provided for this purpose for the whole of Britain, and Scotland received a little over £500,000 of that sum. Any liabilities local authorities had in respect of their gas undertakings, including outstanding debts on capital account were of course taken over by the Board—
In some instances they were, but the deficits were also taken over. The whole undertaking was taken over and no local authority was left with any liability.
I have dealt with most of the points that have been raised by those who have spoken. I am still not at all clear what the Opposition expect to get for Scotland out of this Bill. I am absolutely clear that they do hope to get some kudos from certain people in propaganda. But there are just one or two general observations that I wish to make. There are serious drafting defects in the Bill, and one of them is that there is left out what are the principal objectives to be worked out in the scheme. They talk airily about setting up this council, but they do not give even adequate guidance, far less details, for the proposed scheme. We have had much criticism on this side about delegated legislation. This is one of the biggest pieces of delegated legislation which I have seen since 1945. The Bill as it stands makes no provision for co-operation between the gas industry in Scotland and the industry in the rest of the country on such matters. There are important matters about which we should have consultation, and I propose to mention one or two of them.
There are such matters as conditions of employment. What will the workers in the gas industry say about this proposal? I meet many of them in my constituency and they will certainly want to know what their conditions of employment are to be. What about training and welfare facilities for workers, what I might term the uneconomic units? Will there be the same chance for workers and operators in the industry regarding training and welfare? And what about what is to me the most important thing, co-ordination in research? Gas is made from coal. That may be a truism, but coal is the most hardly won raw material in this country—
I would be quite willing to discuss with the hon. and gallant Member what has happened under nationalisation. Coal is the most dearly won raw material, and I want to see that raw material used to the greatest advantage. To do so we must have research. We are having difficulty in attracting young men to the coal industry. That is not to be wondered at. We hear of our Knock skinniness and our Easing tons, but those of us who come from mining districts, and who live among miners, know That it is not only the big disasters that catch the imagination and sympathy of the people, but what is happening every day in the mining industry.
I see our pneumoconiosis suffering from having worked in this industry and some at the present time denied compensation from the private owners of insurance. The Coal Board has honored all of these. I see miners with broken backs going about in chairs. We have no right to set up in Scotland little uneconomic units—and the Bill does not show anything else—which will not give a proper chance for co-ordinates research.
These to me are some of the most serious defects. They are matters of great importance for the welfare of many people and for the most economic use of the dearly won raw material. Co-operation in these and other matters would obviously be less effective if the industry were fragmented into a large number of undertakings, as is suggested by this Bill. It would be difficult to ensure that individual undertakings, particularly the small ones that I know of, even in our industrial areas in Scotland, were able to benefit properly from the pooling of ideas and resources. For all those reasons we hope that the Bill will be rejected.
The hon. Lady wound up her speech by a strong appeal to allow this Bill to go to Committee where the various points she mentioned can properly be thrashed out—or at any rate that was the effect of her concluding remarks. It is quite true that there are a number of points to be cleared up and that is what the Committee stage of a Bill exists for. We shall be very pleased to join with the hon. Lady in thrashing out such points as are obscure and indeed in remedying such defects as she may find if, as I have no doubt she will, she joins with us in allowing this Bill to have a Second Reading and to go to the Scottish Grand Committee, where it can more properly be discussed. She seems to shake her head. Perhaps it may be because of the lack of time available to explain what is in the Bill.
We have suffered a great deal in this discussion from the deliberate obstruction carried on earlier, notably by the hon. Member for Kilmarnock (Mr. Ross) who did his utmost to prevent Scotland's needs from being discussed here, by unnecessary verbosity upon a previous question. [Interruption.] I have not indulged in unnecessary verbosity as much as the hon. Member, and I trust that I shall not before I come to the end of my remarks. Although we are limited here on the Floor of the House, we have ample time in the Scottish Grand Committee to which this Bill should properly go. Therefore, let it go there. I look to the co-operation of all hon. Members on all sides of the House to see that it should go there. If they refuse it, we shall tell Scotland who has refused it and why.
I can assure the right hon. and gallant Gentleman that we are not in the least worried. We have made our case perfectly plain today. We want nothing whatever to do with this Bill.
The hon. Lady does herself less than justice. She may think that she has made the position perfectly clear, but if she looks over her remarks I think that she will find that she singularly failed to do so. She discussed a number of points that it is not difficult to disprove from the very Report that she quoted. She made a great point at the end about research, for which we all have the very highest regard. We all regard research as extremely necessary. She cast some unwarranted suspicion on those who previously had charge of this industry and, incidentally, made a damaging attack upon the great local authorities of Scotland who controlled 83 per cent. of the industry.
I draw her attention to the proposals of the Gas Council to which she attaches so much importance on the question of research. They say:
The Council has therefore continued to support the Gas Research Board, and the areas boards have continued the work started by their predecessors.
The right hon. and gallant Gentleman would be less than fair if he did not say that this Report was published 11 months afterwards, and if he were to read the whole of the comments on research he would see that these are interim measures in order to use what is available at present.
Before she enters into this argument, she should read the account in the Report of the admirable research work that has been done, including the changeover from the raw flame to the heating mantle to which the Report pays striking tribute, and the introduction of the pre-payment meter which it characterises as:
a stroke of psychological as well as of Mechanical genius,
I think that the position is pretty clear. Indeed, we all know that in fact the gas industry, and the great gas corporations, private as well as public, were outstanding in the field of research and application. As the hon. Member for Kilmarnock knows very well, the great Corporation of Glasgow, the great Corporation of Aberdeen, and the great Corporation of Edinburgh yield to none in their devotion to research and their anxiety to make the best use of the scarce raw materials that are at their disposal.
The Minister spent most of her time in two singularly difficult and, it seems to me, impossible tasks. She tried to disapprove the existence of the Minister of Fuel and Power, and to pretend that taking control away from Aberdeen, Edinburgh, Dundee, and Glasgow and concentrating it under the Ministry was to be regarded in some way as decentralisation. These were her major contentions.
First, as to the existence of the Minister of Fuel and Power, it is quite true that he tends to be a very changing figure. He appears and disappears so rapidly that it is a little difficult for us to know who he is, but, at the moment of his existence, he certainly is a very live character. The hon. Lady said that the Gas Council cannot do very much, that it is really so shadowy that we should not worry about it, because the Gas Council cannot have anything to do, and cannot interfere in Scotland. As for the Scottish £30,000, it is given for fun; it is one of the amusements which the Scottish people have in contributing £30,000 to a Council which really has no power of dealing with them at all. It is not like the British Gas Council before the war, because I do not think that a contribution of that amount was made to the British Gas Council before the war.
Here is the Scottish Gas Board's First Report and Statement of Accounts. Let the hon. Lady take it and look at it, and let her see, on the very first page of that Report:
… I have the honor to send you the First Report and Statement of Accounts of the Scottish Gas Board.
That is what the Chairman says. From where does it come? From 6, Randolph Crescent, Edinburgh. To whom does it go? To the Minister of Fuel and Power, 7, Milbank, London, S.W.I. He is the man who gets the Statement of Accounts, and believe me, we know very well, when we get the Statement of Accounts, where the authority lies.
Who are the people who are mentioned in it? Who are the various Committees? By whom are they appointed? By the Minister of Fuel and Power. The hon. Lady says, "Well, after all, the Minister of Fuel and Power does talk to the Secretary of State for Scotland." It would be a very odd thing if he did not. Are we to suppose that the two Ministers are not on speaking terms? Surely, they talk to each other and have some intercourse? But by whom are these people appointed? By the Minister of Fuel and Power. To whom are the accounts rendered? To the Minister of Fuel and Power.
The members of the Consultative Council are appointed by him, those of the Area Board are appointed by him, and yet the hon. Lady tries to pretend that the Minister is, after all, a negligible figure. She says that the Consultative Council consider the matter before prices are raised. Well, let her look at the reference to the raising of prices in the Report of the Consultative Committee, to which she attaches so much importance. She will find, on page 23, that the information is supplied by the Board:
…the Council did not consider at that time that they were in a position to express views on the suggested increases in individual districts.
What they did say was that the proposals were taken to them before the increases were made, and the Report goes on to say that the Council, while recognizing that the additional cost which the Board were required to meet rendered unavoidable increase in prices, did not consider that it was in a position to express views on suggested increases in individual districts.
If that had happened in the case of the Glasgow Corporation, the electors of Glasgow would have considered that the Corporation was in a position to express views on the increase in price in individual districts, and when the Minister raised the price of gas 7d. in Glasgow, without anybody knowing by whose authority, and, when the Consultative Council says it cannot give any opinion whether the price should be raised in any individual district or not, does the hon. Lady not think that it is removing power from the democratically-elected representatives of the people? Of course, it is. What about Edinburgh?
Well, the hon. Lady may tell that to the Marines. Really, the suggestion that the Cabinet of this country has nothing to do with the price of gas in a nationalised industry is not the sort of thing that she can get away with on the Floor of the House of Commons. The graven of our charge is that she has to— perhaps, I should not say has to— make embarrassed apologies for a Minister who does not deign to come down to the House when this matter is raised. The hon. Lady has done her best to say that this is a great challenge to the whole principle of nationalisation.
The hon. and learned Gentleman the Member for Aberdeen, North (Mr. Hector Hughes), who has been singularly absent from our councils for a considerable time since he contributed his quota to the discussion, said that this was a challenge to the whole great Act of 77 Sections and four Schedules. I should have thought that the Minister might at least have deigned to have looked in while all that was under discussion, but he has taken no part, at any rate, in the discussion, and it has been left entirely to the hon. Lady, struggling gallantly against adversity, to make her case and to try to explain away his existence.
Well, when a humble Sassenach has taken away control of our own affairs we think it is very reasonable— when he has taken from us that power— that he should at least come forward himself to justify his actions. These are the acts of the Government. They are under the seal and authority of the Minister of Fuel and Power, and we say that these acts should be reversed and that that authority should be withdrawn.
The hon. Lady and those who spoke on her side say, "Oh, but it is impossible. This is a fragmentation of Scotland, cutting it up into small units." How, then, does the hon. Lady explain the action in the case of electricity? What magic is there in this, that an old lady in Aberdeen lights her gas fire by permission of the Minister of Fuel and Power in Whitehall, but that if she switches on her electric fire she does so on the authority of the Secretary of State for Scotland working through the North of Scotland Hydro-Electric Board?
I listened with great alarm to the hon. Lady's argument. Every single line of it was devoted to proving by implication that the North of Scotland Hydro-Electric Board should also be abolished, and that control of that should be taken away and placed here under the control of the Ministry of Fuel and Power. Every single word of her argument led directly to the conclusion that it was a mistake to have any authority in Scotland at all, and that it would be best if it were passed down here into England, where this co-ordination could be carried out, where research could be carried out which could not otherwise be done through a Scottish authority, and where the interests of the employees could be looked after, as though that could not be done at all in Scotland.
She did not explain why the 13 weeks' strike of gas workers in Glasgow broke out as soon as nationalisation took place, although they had worked happily under the Glasgow Corporation for many years. It may or it may not have been remote control but it looked like remote control to the gas fitters in Glasgow, who could not get an answer one way or another to their questions. The hon. Lady will remember the Scots story of the little boy who said to his mother in the tram: "See the wee dug, miter," to which his mother replied, "It's no a wee dug, it's a little dog." The child replied, still unconvinced," Wheel, it's awful' like a wee dug."
I cannot go specifically into the reason for one unofficial strike in the gas industry, but there has been during this debate a criticism made of dissatisfaction and the strikes in many other nationalised industries. I want to put forward one point of view, and I am not putting it forward as applying to this particular strike, because I do not know the details of it. In the coal industry, which I know best. There are categories of workers who have threatened to strike and some of who have come out on strike, but they did not do it under private ownership because they were afraid of losing their jobs. That applies in many cases, and I could give chapter and verse. If I had the time.
I will leave the hon. Lady to settle with the Glasgow Corporation this suggestion of victimisation being carried out against the Corporation's employees, by a Council which was Socialist for some 20 years.
I only say that clearly a case for further discussion of this Bill in Committee stage has been made out, with universal agreement on both sides of the House that it is an interesting proposal, as we can see by the vehemence with which the arguments and counter-arguments have been discussed. Let this matter be discussed in the Scottish Grand Committee by Scottish Members in their own surroundings where we are not trespassing on the time of the House. If it is threshed out there, there will be no doubt what the verdict of the Scottish Members will be.
The right hon. and gallant Member for Kelvin grove (Lieut. Colonel Elliot) has skated round quite merrily for 20 minutes without answering effectively any of the arguments that were put forward by my hon. Friend on the Front Bench. The hon. and gallant Member who opened the debate gave the game away at the outset when he said that the Bill was inspired by a violent hatred of nationalisation and centralisation. We know that. and we respect the view of hon. Members opposite; we do not agree with it, but we feel that they are entitled to it. But they must, before they tamper with any nationalised industry, prove that it has failed, and that the alternative structure which they propose will succeed.
Let me deal for a few minutes with the point which the mover of the Motion made. He said that the industry did not in fact deliver the goods and had not produced the results that we, the supporters of nationalisation, said it would produce. I believe that may be true, for the simple reason that in two years we cannot tell in the reorganisation of any industry whether that reorganised structure will succeed or not.
The gas industry is on trial at the moment. What we can say is that the structure before nationalisation certainly did not deliver the goods, and it was that industry which had the support of right hon. and hon. Members opposite. When they talk about the nationalised structure being far too big an organisation, which, I think, was the main theme of the speech of the hon. Member for Renfrew, East (Major Lloyd), who is one of those who support structures like the I.C.I and Unilever—
I meant the hon. Member for Renfrew, West (Mr. Maclay). I beg the hon. and gallant Gentleman's pardon.
So far, not one hon. Member has spoken from practical experience of the gas industry. I do not myself pretend to have any technical experience, but I have done the next best thing and obtained opinions from people who have that technical experience of the Scottish gas industry. I have here a letter from a district manager of the Scottish gas industry. He is not a Labour Party supporter. In fact, in a recent local election he ran his car for a Conservative candidate. I have met the gentleman only once, and I did not know what his attitude towards the nationalisation structure was, but I sent him a copy of the Bill and asked him for his comments. I will not read his comments at length, but he says—
I am not giving the gentleman's name. Commenting on the Bill, he says:
Why redraw the areas of supply when the present areas selected by the Board have shown so little cause for revision.
There are three minutes yet. He goes on:
Only where it has been proved that economy in costs can be made or and higher efficiency given to the consumer has the Board transferred an undertaking from one group to a neighboring one, and as a matter of fact the changes were made only a few weeks ago, so you can understand that serious thought was given to the matter.
Then, referring to the proposed transfer of gas undertakings to local authorities, this technician in the gas industry says:
What special qualifications have Scottish Town Councilors to run a gas undertaking?
This is his answer to his own question, underlined:
This is a Tory. He also says:
Divisional and group supervision"—
which is allowed for under the present set-up—
would be impossible"—
under the set-up proposed by hon. and right hon. Gentlemen opposite—
and believe me, this high level supervision and planning has proved to be one of the most valuable products of national ownership.
That is a Tory speaking. Then he poses a question:
Re-organise the gas industry in Scotland? Tell them to take their minds back to [May] 1949 and ask them what the"—
The next word is an "h" with a stroke after it. Hon. Members can guess what the word is—
ask them what the h— you have been doing but re-organise the industry since then.
Not only did I get that letter, but I also got a letter from a workman, again in a local gas undertaking in my area. He talks as a workman producing gas, and says,
I think nationalisation has improved the industry, especially in rural areas, because prior to nationalisation those undertakings lacked financial backing. As a typical example, take Strathmiglo, the gas supply was very poor. However, under nationalisation larger mains have been installed and there is now a great improvement in the supply to consumers in this village.
I could quote other extremely—