Clause 1. — (the National Steel Corporation.)

Bill Presented – in the House of Commons at 12:00 am on 23rd January 1967.

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3.42 p.m.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

I beg to move Amendment No. 131: In page 2, line 5, at the end to insert: (4) Any person appointed as a full-time member of the Corporation shall not engage in any other remunerated work. This Amendment is to ensure that persons appointed as full-time members of the Corporation shall be full-time members of the Corporation. It has now become a truism to demand of people a fair day's work for a fair day's pay. That applies to management as well as to men, to directors as well as to everybody else. It applies as much to a fair month's work and a fair year's work for a fair month's pay and fair year's pay.

We had a debate the other day in which we talked about the position of the Board and about whether there should be full-time members or part-time members. No one sought to define what we meant by "full-time" because the term does not seem to require any definition. If full-time means anything at all, it means that a man is devoting all his remunerated working time to the job. Whatever one may think about part-time members or not, it seems impossible for a man to be a full-time member of a board and to do some other part-time job as well.

The people who are to have the job of running this Corporation have a big task in front of them. The Organising Committee, from all that one has heard, is working extremely hard and has discovered a mass of problems which it will have to resolve, and resolve very quickly. A great deal of work has to be put in by this Corporation, certainly in the first two years. Things may be easier afterwards.

The other day the Minister moved an Amendment to raise the maximum size of the Corporation to 20. I dissented from that, and so did some other hon. Members, but my right hon. Friend got his point. The point he was making was that there was an awful lot of work to do and we would need the people who could do it. If there is an awful lot of work to do, it will not be done if some of those appointed as full-time directors, and paid as full-time directors, are doing other things for part of the time.

3.45 p.m.

There is an Amendment to come on shortly which I would be out of order to deal with in detail—Amendment No. 134: In page 2, line 14, at end insert: Provided that subsection (9) of the said section I shall have effect as if there were added thereto a further paragraph as follows:—'(c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less than those paid to or in respect of directors of comparable industrial enterprises'. I may perhaps be allowed to say in a sentence that when we come to that Amendment we shall be discussing levels of remuneration to be paid to full-time members of the Corporation. I would not dream of trying to anticipate what then will be said, but it is a reasonable guess that some at least will say that these men will need to he paid a lot of money if we are to get the best men.

Whatever one may think of the merits of that, if one asks that they shall be paid a lot of money to be full-time directors of the Corporation, they will not need to earn any money as part-time directors of some other corporation or as part-time employees in some other job. The point here is so self-evident that I think there is no need for me to labour it. If the Minister is not proposing to accept it I shall be more astonished than I have been—and I have been astonished many times in my Membership of this House—since I was elected in 1945.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

It is certainly the intention of my right hon. Friend that there should be full-time members of the Corporation. The intention of the Amendment is entirely unobjectionable. Certainly my right hon. Friend would accept that anyone appointed to the Corporation should devote his full time to its work.

However, the Amendment is not necessary because it does not add anything to the powers that the Minister already has under the Bill. Under Section 1(4) of the 1949 Act, which is being revived, members of the Corporation hold their posts under terms of appointment which the Minister lays down. The same sort of terms will apply as apply to the other nationalised industries. These, for example, require that no members of the boards shall, without the Minister's consent, engage in any trade or activity or become a director—[HON. MEMBERS: "Oh."]—yes, I entirely take this point; without the Minister's consent a member may not engage in any trade or activity or become a director or officer of any body corporate.

There is a difference here; the Minister's consent is discretionary. I think my hon. Friend the Member for Poplar (Mr. Mikardo) would agree, whatever he may feel about some particular appointments, that in general the possibility should exist for a member of one nationalised board to be a member of another nationalised board. For example, Sir Giles Guthrie, the Chairman of B.O.A.C., is a member of the board of B.E.A. and Sir Anthony Milward the Chairman of B.E.A., is a member of the board of B.O.A.C., since inevitably there are many questions in which the two airlines have a common boundary of interest.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

That is an excellent example, but is there any reason why the part-time job should be paid for when the member is a representative on the other board of his own corporation for which he is paid?

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

That is a point to which I am about to come. Where it is desirable that there should be cross-membership in this way my right hon. Friend would normally require that the remuneration received by the full-time member of the Corporation in respect of his outside appointment should be paid by him to the Corporation. So the Corporation would save by his being a member of another board, for if the Corporation had on it a part-time member from, say, the Electricity Council it would have to pay for that part-time member's services and the Electricity Council would have its fees reduced by a corresponding amount. There is, therefore, no net remuneration addition to the normal salary of a mem- ber of a Board on account of outside appointments of this character.

I hope that with this explanation my hon. Friend will recognise that the intention of the Amendment is taken, but that, because of the possible desirability in some cases of having members of the Corporation holding outside appointments to which remuneration may be attached, it would be undesirable to accept the Amendment.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

Does my hon. Friend think that it is sensible in present circumstances, with the Organising Committee at full stretch, as it is, that a full-time member of it, who is therefore putatively going to be a full-time member of the Corporation, has just been reappointed for three years as a part-time member of another Corporation which has nothing to do with steel? How can that make sense?

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

My hon. Friend has spoken of only one person. I know of no one other than Mr. Ron Smith who is in this position. I am sure that the experience gained from serving on the Board of B.O.A.C. has been valuable to Mr. Ron Smith in equipping him in such a way that he is well able to discharge the responsibilities which he has now acquired as a member of the Organising Committee and a member-elect of the National Steel Corporation. His services —and the advantages in widening his experience that he gains from membership of the Board of B.O.A.C.—will not abruptly come to an end now.

If my right hon. Friend the Minister had had any fears at all that Mr. Ron Smith would not be able to give all the time that is required to the management of the National Steel Corporation, accepting that this is effectively full-time work, and if my right hon. Friend was not satisfied that continuing membership of the Board of B.O.A.C. would be a positive advantage to Mr. Ron Smith in his membership of the National Steel Corporation, my right hon. Friend would not have agreed to Mr. Ron Smith's continuing as a member of that Board.

Hon. Members should recognise that the work of the National Steel Corporation, will, if we on this side are to have our way, be an activity which ranges far and wide over the whole field of British industry. We shall be discussing this point. Hon. Members opposite will tell us of the wide interests of many subsidiary activities of the Corporation. It is therefore highly advantageous that the Corporation should maintain links with other industrial activities. If this is so, the Corporation should maintain links with other nationalised industrial activities.

Although I appreciate my hon. Friend's concern that Mr. Ron Smith and all members of the Corporation and of its present Organising Committee should give their full-time to the work, I cannot agree that, in this case either, the Amendment would serve the Corporation's best interests.

Photo of Sir Spencer Summers Sir Spencer Summers , Aylesbury

I want to register an entirely different view from that expressed by the Parliamentary Secretary as to what it is appropriate to do with a salary received by a part-time member of the Board of the Corporation who happens simultaneously to be a full-time member of another Corporation.

The implication of the Minister's statement that the handing back of the salary would mean that the net expense was not increased is that two members of the Corporation, one of whom is responsible alone for his position on the Corporation, the other of whom has in addition outside responsibilities, should be paid an identical sum because presumably they are paid by the hour and, however many responsibilities a person may have, he cannot justify earning a greater sum than that prescribed, because of the number of hours in the day or the week, or the month, or whatever it may be.

It is wrong to argue that the additional responsibilities a person carries by being put on another Corporation—whether for good reasons or bad reasons is beside the point—do not warrant additional remuneration to him in view of the added responsibilities he carries and in view of the added risk to his reputation if things go wrong. It is not a question of how much a man's time per week is worth. I hope that, whatever may be the outcome of the Amendment, the point of view will be accepted that those with additional responsibilities should have them recognised, because of the risk to their reputation and the added responsibilities they carry.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I agree with the general tenor of the speech made by my hon. Friend the Parliamentary Secretary, but what worries me is that full-time members of a board might, because of the level of remuneration on that board, or for other reasons, seek to collect a pile of part-time or other directorships outside the steel industry. I hope that the Parliamentary Secretary will assure the House that the Minister would not consent to such a situation and would not allow a full-time member of the Corporation to be picking up part-time directorships elsewhere in industry.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

My hon. Friend the Parliamentary Secretary advanced two arguments against accepting the Amendment—first, that it is not necessary; and, secondly, that it might militate against one desirable possibility open to the Minister if the Act were left unamended. My hon. Friend's assertion that the Amendment is not necessary because members of the Corporation will work on terms and conditions prescribed by the Minister is an argument for saying that this is a matter to be decided, not by the House, but by the Minister. If we were talking about the first industry to be nationalised, this would be a good argument. However, we have considerable experience of nationalised industries and we have seen a considerable number of appointments to the boards of nationalised industries, both part-time and full time. We are therefore entitled to make a judgment as to what terms of appointment we want for full-time members of the Corporation.

To have a full-time member receiving remuneration for services in any other place would be against the interest of the nationalised industries. There are considerable problems attached to the running of this industry, problems which will almost certainly absorb a considerable amount of the time of those serving on the Board. This is not a point of argument between us. What is a point of argument is whether the Corporation's interests would be served by having some cross-membership of directors of firms, or even members of boards of nationalised industries.

Here the argument for the Amendment is strong because, although it is undeniable that there are cases where it might be desirable for a member of the Board of the Corporation to serve on other boards, it is of the utmost importance that when a member of the Corporation serves upon another Board he is seen to be, and is, there having as his first concern the interests of the Corporation.

4.0 p.m.

We have argued in Standing Committee and we have decided that it is desirable that the National Steel Corporation shall engage in other things than the narrow field of manufacturing steel, and I was one of those who were very much in support of this concept. It is inevitable, therefore, that people working on the Corporation will be concerned with matters other than the making of steel. They will be concerned, for instance, with how it is to be used in manufacturing certain steel products. Nevertheless, it is reasonable to say that if they are full-time members of the Corporation their first interest must be the Corporation. This must be seen to be the case, and this can only be determined by carrying this Amendment.

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

We are discussing a very narrow point and I shall be very brief. We have a good deal of work to get through and I hope that I shall set a good example.

I support the Joint Parliamentary Secretary in what he has said. I believe that this Amendment, moved no doubt with the best of good will, is in fact nonsense. What it would mean is that if any member of the Corporation wished, for example, to undertake a broadcast on a subject quite unconnected with steel and to receive payment for so doing, he would be unable to do so. The other day Lord Robens appeared on B.B.C. television and told us about his experience when he was in government. This Amendment would preclude any member of the Corporation from writing an article. If I may give one example, I understand that a member of the present Cabinet is at present actually writing a biography. He has not been prevented from doing that, and I understand that he is still drawing his salary. Therefore, I would go the whole way with the Parliamentary Secretary—

Photo of Mr John Peyton Mr John Peyton , Yeovil

My right hon. Friend's last two arguments make me very uncertain as to which side he is on.

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

I conclude by saying that if at the end of the day the Parliamentary Secretary finds himself in difficulty with his hon. Friends, I shall support him in the Lobby.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

With the permission of the House, the right hon. Gentleman has made an astonishing disclosure. As Financial Secretary to the Treasury he was apparently in the practice of accepting fees for broadcasting and for writing Press articles. [HON. MEMBERS: "No."] I stand corrected. There are certainly provisions for enabling freedom of speech to apply even to people who are not able to accept fees for their activities.

My hon. Friend the Member for Rotherham (Mr. O'Malley) was concerned that members of the National Steel Corporation should not have a multitude of directorships. I can assure him that my right hon. Friend has no intention of allowing this to happen.

My hon. Friend the Member for Barrow-in-Furness (Mr. Booth) made the interesting point that, wherever a member of the National Steel Corporation served, he should serve as a representative of the National Steel Corporation and not with any other end in view. This, however, conflicts with the requirement that on any board, including the Board of the National Steel Corporation itself, all members should be there with the sole purpose of securing the best interests of the National Steel Corporation. Therefore, if a member of the Steel Corporation is on some other board he is there to seek the interests of the organisation, but the only reason for putting him there is that the two should harmonise.

We cannot expect people to go from the National Steel Corporation to the board of B.O.A.C. or any other board simply as representatives of the National Steel Corporation. The point of putting them there is that in sharing that responsibility they gain experience which is of advantage to the National Steel Corporation but there is no conflict of interests. If there is a conflict of interest, no cross-membership should be allowed to exist.

I appreciate the offer of help from the right hon. Member for Altrincham and Sale (Mr. Barber). I think that possibly some of the considerations in his mind were different from ours. Nevertheless, I hope that my hon. Friend will not put us in the position of having to accept such unseemly offers.

Photo of Mr John Lee Mr John Lee , Reading

I am afraid that I find the Joint Parliamentary Secretary's explanation somewhat unsatisfactory. It may be that so far as he and the Minister are concerned the requisite conditions will be laid down under Section 149 of the previous Act, but he cannot give us any guarantee about the behaviour of any successive Ministers. We do not know whether a Minister who may take his place, who is not so concerned with the interests of the steel industry as he is, would be prepared to relax the rule and enable people to take up occupations which might be in conflict with their real job on the National Steel Corporation.

It is one thing to say that it is all right for a member of the board to serve on the board of another nationalised industry. One can see that this could be of value to both the organisations of which such a person was a member, as well as being of benefit to himself in enabling him to widen and enrich his experience. But the same thing cannot be said in the case in which he might be given permission to join the board of a private enterprise organisation. I recall that a prominent member of the board of B.O.A.C. was permitted some time ago to be a member of one of the charter companies. This brought the possiblity of conflict between his interests and his duty as a member of the statutory Corporation on the one hand, and his interests as a private business man on the other. I am not suggesting that the individual concerned behaved with impropriety, but obviously it was a continuing source of embarrassment to the man himself and to both the organisations of which he was a member.

My second argument is to repeat what my hon. Friend the Member for Poplar (Mr. Mikardo) said, namely that a full-time member is a full-time member. The Minister will have power to appoint part-time members, and if he really thinks it is desirable for interlocking membership, this should be restricted to those who are described as part-time members. The only other effect will be to create a very bad impression if people are allowed to collect part-time occupations and part-time remuneration.

I hope my hon. Friend will reconsider his attitude to the Amendment.

Amendment negatived.

Photo of Mr Reginald Freeson Mr Reginald Freeson , Willesden East

I beg to move Amendment No. 8, in page 2, line 8, at the end insert: '() As soon as possible after appointing a person to be a member of the Corporation the Minister shall lay before each House of Parliament a statement of the term for which he has been appointed.' This Amendment has the self-evident effect of requiring the Minister to lay before Parliament the terms of the appointment of members of the Corporation. It is already the case that the White Paper published each November contains a list of members of the public boards of a commercial character, but an undertaking was given in Committee by my right hon. Friend to put down an Amendment to meet a request made by the hon. Member for Bournemouth, West (Sir J. Eden) that publication of the terms of appointment of the Chairman should be explicitly required by the Bill. The Minister said that he would undertake to consider before Report the possibility of a Government Amendment making the publication of the period of office of the Chairman and other members of the Corporation a statutory requirement.

The present Amendment goes somewhat further than the Opposition request, in that there will be publication not only of the terms of office of the Chairman but of other members of the Corporation. I do not think I need labour the point any further. I am sure the Amendment will be supported.

Amendment agreed to.

Photo of Mr Reginald Freeson Mr Reginald Freeson , Willesden East

I beg to move Amendment No. 10, in page 2, line 14, at the end to insert: 'and the members thereof'. I hope to be as brief on this Amendment as I was on the last. This is a drafting Amendment. Subsection (5) of Clause 1 as drafted revives certain provisions of Section 1 of and Schedule 1 to the 1949 Act. It provides that it shall have effect with respect to the Corporation and the members thereof as they had effect with respect to the body established by that Act by the name of the Iron and Steel Corporation of Great Britain. If that applies to the new Corporation and the members thereof, it should also be stated to have applied to the 1949 Act Corporation and the members thereof.

Amendment agreed to.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I beg to move Amendment No. 134, in page 2, line 14, at the end to insert: Provided that subsection (9) of the said section 1 shall have effect as if there were added thereto a further paragraph as follows:—'(c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less than those paid to or in respect of directors of comparable industrial enterprises'.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

With Amendment No. 134 we are taking, as the House knows, Amendment No. 133 in Schedule 4, page 50, line 21, at the end to insert: (c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less those paid to or in respect of directors of comparable industrial enterprises.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Amendment No. 134 deals with the level of salaries for full board members. In view of the previous debate which the Parliamentary Secretary to the Ministry of Technology wound up with such impeccable capitalist sentiments, I emphasise that this Amendment applies to full-time board members only. Arrangements made for part-time members will be different, and will naturally follow.

This is a very important point and one to which we on this side of the House attach great significance. The salaries of the members of the Corporation should be comparable with those for similar jobs in private industry throughout the country, and, indeed, throughout the world, because competition for people of this calibre is international and not only national.

It is important that this should be so because the vital task—and here for a time I am trying to be non-political—which faces this country is to get the nationalised industries and private industry on all fours together, so that there is no discrimination, no difference in morale, no difference in outlook. If we must have nationalisation—and nobody should say that I am in favour of it—we must make it a professional enterprise which can compete, attract and be as efficient as any other in the country. We have talked about the financial disciplines necessary, the conditions of work, the toughness, and so on, but it is vital that salaries, all the way down the scale, should be the same as for comparable positions in order to take another step towards achieving this objective.

No one would suggest that the wages paid to men in the steel industry should be less than those paid to men in private industry. He would be a brave man indeed who suggested that salaries paid to junior management clerks and other middle staff should in any way differ from equivalent salaries paid to similar people in other private industry.

Photo of Mr John Lee Mr John Lee , Reading

Are not there two ways of doing this? One is to raise the salaries in nationalised industry so that those at the top executive level are comparable with their commercial counterparts; but is not the other to depress those of private enterprise down to the level of nationalised industry?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I will deal with that point at some length, because it is an important one and one which needs to be answered. I preface my answer by saying that it is the first of the arguments which the Minister relied upon in Committee when dealing with similar points.

The Minister used two arguments. First, he used what I call, for the sake of nomenclature, the hierarchical argument, and second, the argument that some of the salaries in private industry were "absurdly high".

To take the hierarchical argument first, he said that there was no evidence that the people in the A.E.A. and C.E.G.B. were not as good as their counterparts elsewhere and there was evidence that, despite having a rather low top ceiling for management in these two industries, they were able to recruit staff. It was contended on this side in Committee that if the top salaries were too low we would not be able to recruit staff because the differentials would not be there all the way down the scale.

The Minister's argument does not stand up very well. When we get to the income level of several thousand £s a year, an extra £1,000 a year would probably produce only about £100 a year in net earning power. The higher we go—and with the Steel Corporation we have to go right to the very top—the differentials are worth less as each slice of income is given. If we are discussing incomes below £2,000, a rise of £100 a year is worth not far short of £100 a year, but a rise of £100 a year on an income of £10,000 a year is probably worth only £10 or £20 to the recipient.

With our ridiculous and out-dated system of Surtax, we have to pay much greater differentials to achieve the sort of differences which we need. Secondly, I do not think that the A.E.A. and the C.E.G.B. are the only examples to which we should look. It cannot be said that in British Railways, the docks and the Coal Board the standard of technical salaries and managerial salaries at the top level are all that high. The Minister was making some special pleading when he instanced those two industries alone.

4.15 p.m.

In recent years we have had the brain drain. It would be out of order to go into this at any length, but we must design salaries throughout the Steel Corporation so that there will be no brain drain applying to the coming young men, the managers, and the coming technologists in that industry.

On the second argument, that some private industries pay "absurdly high" salaries—I quote from column 394 of the Minister's speech—the truth of the matter is that, be those salaries absurdly high or not, those are the salaries with which the Steel Corporation will have to compete. If it does not pay high salaries, it will lose those men to the "absurdly high" private industry salaries.

Further to that, as I said earlier, competition is really international. At the level of chairmen of Steel Corporations, Coal Boards or Air lines we could well find people being taken abroad by a better offer, and I would very much like to see this country occasionally attracting men of higher calibre from America or Europe by offering a better salary than they are offering. Let us pick some of their brains and reverse the brain drain.

For all these reasons, I am quote certain that the Minister's argument that the salaries are often absurdly high is one, whatever he may personally think, or whatever his personal prejudice may be, that we cannot hold.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

The point which the hon. Gentleman is now developing is of special interest. I have listened with great care to what I believe to be a reasoned argument, albeit that I cannot accept the conclusions at which the hon. Gentleman arrives. Will he now define the Amendment? I should like to know at some point what he means by "adequate". I fail to see—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Gentleman will have an opportunity to make a speech later. He must make his intervention brief at this stage.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

Can the hon. Gentleman tell us what he means by adequate? Bearing in mind his final remarks about the brain drain, is he thinking of varying the range of allowances on the market—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. This is becoming a speech. Interventions must be brief.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

The question is whether that intervention was adequately long. It seemed to me to ask so many questions that it would be preferable for me to proceed with what I have to say, and let the hon. Gentleman make his own speech if he is fortunate enough to catch your eye, Mr. Speaker.

In Committee, my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) pressed the Minister about what he, the Minister, thought would be the right bracket of salaries. He reminded him that in the steel industry at present the salary range for executive directors is between £10,000 and £25,000 a year, and he asked whether he would consider £25,000 a year as the sort of salary which the Chairman himself should receive. The Minister dodged this. He gave no answer which committed him but said that he would prefer to remain impartial at this stage. My hon. Friend then went on—this is in part an answer to the hon. Member for The Hartlepools (Mr. Leadbitter) who interrupted me, but is now not listening to what I have to say—

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

On a point of order, Mr. Speaker. I was listening with great care. I am surprised that the hon. Gentleman has not answered my question.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

If I may now proceed, my hon. Friend referred to the salaries known to be paid in private industry. If the Amendment means anything, it means that salaries comparable with those being paid in private industry are what we should pay here. For instance, the average remuneration of working directors of I.C.I. is £32,000 a year. In 27 out of 34 companies picked at random from the private and public sectors, the chairman receives £15,000 or more.

When we consider that in the nationalised industries salaries are in the range of £10,000 to £12,000 for chairmen and vice-chairmen, we see that, in round terms, the gross salaries would have to be doubled, or slightly more, to achieve comparability with private industry. That gives the hon. Gentleman his answer.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

The hon. Gentleman mentioned a number of chairmen of companies who were receiving £15,000 or more. Can he say how much more, and how many of them received how much more?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I do not want to prolong the argument. I cannot give every salary —I have not got them with me—but I have made the point that, if such people in industries of comparable size in the private sector are receiving anything between £15,000 and £30,000 a year, it seems that the nationalised industries pay about half that level to their equivalent people.

The Minister said that it would be the Government's intention to look at all these arguments in the field of fixing salaries."—[OFFICIAL REPORT,Standing Committee D, 10th November, 1966; c. 394.] and with that he passed on. We now know why. The Sunday Express told us yesterday why the right hon. Gentleman was disinclined to give us an answer on this vital question of what salaries would be paid. This is what it said: A bitter row is developing among Mr. Wilson's advisers over the future of the steel industry. I take it that the Minister is not one of Mr. Wilson's advisers and it is going on above his head. Should the salaries, asked the Sunday Express, be in the £18,000 to £30,000 range which such men are receiving now? But the Treasury, backed by Mr. Michael Stewart, the Economic Minister, is determined that there must be no pay packets in this £400-a-week range. They want to keep to the pattern established for the other nationalised industries, which means that full-time members of the Corporation would receive between £7,000 and £9,500. Then, worst of all, To arguments that such a low scale of pay would hold up recruitment to the Steel Corporation the Treasury has put forward the names of retired diplomats and overseas civil servants—some with industrial experience —who would willingly accept membership at this rate of pay. I bet they would. I have no doubt that that would be so. One wonders quite what the First Secretary of State's view is. The Sunday Express tells us: … there is also Mr. Stewart's view that men of ability should not put reward above everything else. If that is the view of the First Secretary of State, one is entitled to a little explanation as to why men of ability like the right hon. Member for Newton (Mr. Lee) and the right hon. Member for Middlesbrough, East (Mr. Bottomley) should continue to put reward above everything else when their positions are not quite so important.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The hon. Gentleman is spoiling a serious argument.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I thought that hon. Members would not like that. But, if we are to have arguments from that side that people should be paid less for the rate of the job, hon. Members might well remember that it can apply to members of Governments as well as to members of public corporations.

The noble Lord, Lord Melchett, receives £16,000 a year under his present agreement as chairman of the Organising Committee. No doubt, this is a serious drop for him from what he was earning before. I do not know, but I imagine that he has dropped to this level because he would like to accept the offer made by the Minister.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

The hon. Gentleman speaks of a serious drop. A little earlier he spoke about 2s. in the £ being left as true earnings after tax. He is now turning the argument pretty well upside down.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I accept that, and I am glad to have the hon. Gentleman point out that a drop of £10,000 at this level is probably worth not very much net. Nevertheless, it is a sacrifice in expectation. It is right that he should make it if he feels inclined. The noble Lord wants to help hon. and right hon. Members out in their dilemma as to what to do with this industry now they have got it, and I do not want to stand in his way. I only pay tribute to the willing way in which he has come to their aid when they have no clue as to what to do with the nationalised steel industry.

But the point is this. Why should Lord Melchett or anyone else have to take a drop? Why should anyone be asked to come into a great enterprise like the British steel industry and be told, "We understand you are willing to take a drop of £10,000 gross—£2,000 net, or whatever it may be—but we think that it is your duty to do so"? We shall not get the best people in every case, or in many cases, if we do that.

Photo of Sir Tatton Brinton Sir Tatton Brinton , Kidderminster

Perhaps my hon. Friend will add that gross salary has a far greater effect on final pension than it does on direct spendable income. A very high salary may carry with it a proportion of pension in the future which is well worth having.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

My hon. Friend is absolutely right. I did not wish to go into all the detail, which would, perhaps, be more suitable to a taxation debate.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

I was about to make the same point. I need trouble my hon. Friend no further.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

My hon. Friend reinforces the argument.

We have reached a stage now when United States executives who are sent over to run American subsidiaries in this country are paid their salaries in America and draw an allowance for living in this country. They will not come here and work at our high tax rates on the sort of salaries which they ought to draw because it is not worth their while. While hon. and right hon. Members opposite continue not only to support these high rates of tax but to cook up ways of making them higher—the child allowances are now in their minds—we shall not find people of the calibre to run this enormously complicated, important and large organisation. If the Amendment is not accepted, the whole of what the hon. Member for Penistone (Mr. Mendelson) calls this exciting adventure will be put at peril.

Hon. and right hon. Members opposite have put themselves in a dilemma in their desire to pull down the better off and their desire to make nationalisation work. In their appalling dilemma, they should support this Amendment. Thousands of people derive their living and prosperity from the steel industry. By pulling down salaries in some sort of discriminatory incomes policy against directors of nationalised industries, they will do nothing but harm to this vital industry. We are here trying to help.

4.30 p.m.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I am sorry that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) dealt with a serious subject in the way he did. He made a number of unnecessary party points, and the emphasis of his speech seemed to me to be to look at the interests of present directors and to say how terrible it is that people should have to jog along on £16,000 a year rather than a much larger sum.

However, this is a serious subject and both on Second Reading and in Committee I made it plain that I did not want to see some types of people on the Corporation, particularly those who were on the record over the years as being implacably opposed to the public ownership of the industry. I shall add another category of people whom I do not want to see running the industry: I certainly do not want to see retired diplomats and overseas civil servants appointed to a board of this kind. I should be amazed if my right hon. Friend the Minister did any such thing, because I have far too high a regard for his common sense and deep interest and care for the welfare of the industry to believe for a moment that he would do that kind of thing.

Some parts of what I have to say support some parts of the Amendment, although I could not accept and support it as a whole, particularly because of the last two lines, stating that salaries should be … in any event not less than those paid to or in respect of directors of comparable industrial enterprises". My right hon. Friend the Minister pointed out in Committee the enormous difficulties of estimating what comparable salaries are. I think that he mentioned, for example, that in the 14 steel companies the salary range was from £10,000 to 25,000. Does one take the top level or the bottom level, or hit a figure in between? Hon. Members opposite will recognise that there is a difficulty here.

At the same time I wish to comment on the intervention of my hon. Friend the Member for Reading (Mr. John Lee) who is no longer present. I agree with him—I think that there would be common agreement on this side of the House —that some directors and chairmen in British industry receive absurdly high salaries which are more than any one man is worth. But if he wants to get the depression of private enterprise salaries of which he talked, let us not have it at the cost of the efficiency of the steel industry, from which so many of our constituents make their living.

I believe that if we are to attract the best people to run the industry, to accept places on the National Steel Corporation, we must pay the rate for the job. The Minister must be able to offer enough money, so that his choice is not limited to the extent that he cannot get the best people for the job. That is not to say that I believe that in appointing members of the Corporation my right hon. Friend should be allowed to offer some of the absurdly high figures paid in British industry at the moment. But if he is put into a situation, for whatever reason, where he must go on to the market to try to get members of the Corporation and can offer only the rates of remuneration paid on the boards of existing nationalised industries, he will run into a great deal of trouble, and so will the British steel industry.

From the bottom to the top of the industry I want to see a ladder of promotion by which a man who goes in on the shop floor can reach the board within his working lifetime. There is the possibility of the industry being organised under the Corporation on a regional or product basis—I believe that a regional basis is the best way. We shall, perhaps, have four or five regions and shall need chairmen for them, men who are skilled in the knowledge of the production and sale of bulk steel.

Let us look at the existing salaries, not of the chairmen of companies but the managers of the large steel plants. I do not have a lot of information on the kind of salaries they receive at present, but I have a little, and no doubt my right hon. Friend has more. In view of the range of responsibilities of the person in charge of a region covering a large amount of steel production in a year, and bearing in mind the present level of salaries—not directors' fees, these could obviously be in the absurd position in which the director of a region could well receive twice as much money as the Corporation members.

I do not believe that that would encourage the best people in the industry to try to work their way up and to believe that there was a ladder from the region to the board. In the interests of a ladder of promotion and of salaries at the bottom rather than at the top, the Minister must be free to pay the rate for the job. I do not pretend to know what that rate should be, because I have not been able to get enough information. The Minister certainly should not, on moral grounds, offer salaries which are monstrously high. On the other hand, we shall not get the people we need, and be able to have the promotion ladder we need, if he is tied to the kind of salaries at present paid to the members of the boards of the existing nationalised industries. I hope that when he replies my right hon. Friend will say something about that.

A short time ago my hon. Friend the Member for Poplar (Mr. Mikardo) spoke on an Amendment which had the purpose of preventing full-time members of the Board from having remunerative work outside. I was particularly interested in the question of the number of directorships outside, and I supported the ideas underlying my hon. Friend's Amendment. If the Minister is able to offer members of the Corporation a salary adequate to attract them to become members, there will not be the pressures on him to allow them to take those outside directorships, which I do not want to see them taking.

If, as a result of nationalisation of a large sector of the steel industry the top salaries are to be paid on the level of those of existing nationalised boards, we shall probably have a large movement from the public into the private sector of the industry and into other parts of industry generally. Personally, there are some people in senior positions of the steel industry, on the boards of directors, whose departure I would welcome. I do not want anything to do with them. At the same time, there are people in senior managerial posts with great skill and energy and a high standard of efficiency and it is these who make the steel of this country and who I want to see kept within the public sector.

There are probably over 200 directors on the boards of companies which will be taken into public ownership. Although I wish to see high salary levels for members of the new board, I hope that the total bill for people at this level will be less than it is at the moment because we certainly do not need 200 to 250 directors. I envisage probably 20 members of the Corporation, including part-timers, with four regions, each having some kind of functional board. This would, I suggest, represent 60 or 70 directors, perhaps even fewer.

In looking at the total salary bill for people at this level, we should bear in mind that there will be a large reduction in the number of directors receiving money. I hope that there will be ruthless pruning so that only those remain in directorial positions who are doing a full-time functional job.

We must also consider the question of how paying the rate for the job in this case fits in with the Government's prices and incomes policy. I have heard it suggested that, if one does pay the rate for the job, this will transgress that policy. I do not accept that, and I speak as a supporter in principle of the policy. There are two reasons for suggesting that high salaries will not transgress the policy. First, these will be new jobs and, secondly, the total salary bill at this level will come down because the number of directors running the industry will be reduced.

I believe that some of the very high salaries that apparently are paid in the industry at the moment should no longer be paid. One does not want to be absurd about this. At the same time, it would be wrong and unhelpful to be reducing the kind of salaries one wants to pay. I do not want absurdly high salaries. I want to pay the rate for the job. This should not involve any decrease in the remuneration received by the type of man we wish to retain.

It may be argued that the difference, for example, between the salary of a managing director, perhaps £13,000 to £15,000 a year, and the incomes of some one working on the shop floor is too large. I cannot argue on that at the moment. It is another question. What we have to ensure is a salary structure for those doing a useful job and therefore we cannot suddenly tell a person receiving £10,000 a year in a managerial capacity, "Your salary has to be reduced drastically because the salary of full-time members of the board itself is £7,500". Such a course would not contravene the prices and incomes policy and we must face this problem.

I am prepared to go to my constituency and defend the statements I have made on Second Reading, in Standing Committee and again today on this issue. The Minister must pay the rate for the job and that rate does not happen to be a rate that is paid on the existing boards of nationalised industries. I hope that my right hon. Friend will be able to say something about the principle on which he is proposing to act even if he cannot tell us anything definite at the moment. More than one newspaper has suggested that a battle is going on between certain of the Government's advisers about the salaries that should be paid, and I hope that my right hon. Friend will go to the Treasury or whoever is concerned and say that, as ardent nationalisers of the steel industry, we believe that the jobs in it should go to the best men and that therefore we must pay the proper salaries to get them.

4.45 p.m.

Photo of Mr Claude Lancaster Mr Claude Lancaster , South Fylde

In seeking to take part in this debate one is conscious of the discussions which have been so effectively conducted by my right hon. and hon. Friends on this issue in Standing Committee, but I want to take part because, as a member of the Select Committee on Nationalised Industries, I have listened to evidence about every one of the nationalised corporations and in the process have had to have regard to their composition and, in some small way, to payment of members of the corporations. I have never been very happy about either composition or payment, which have resulted in all sorts of anomalies and created circumstances which have made the work of these industries more difficult.

One cannot discuss salaries without having regard both to the composition of these boards and, indeed, the numbers of men expected to act on them. When the hon. Member for Poplar (Mr. Mikardo) intervened the other evening, I found myself much in favour of what he was saying in asking for a smaller corporation. He argued against the advice being tendered, and he made a very sound case. This is relevant because, obviously, a smaller board means that one can have a lesser sum total of remuneration than in the case of a larger board. The right hon. Gentleman, who has left the Chamber at a rather inopportune moment, was arguing that it was necessary to have a board of 20 with all members, with the exception of one or two part timers, being "functional members".

I have never quite understood what "functional" means in this sense. I assume the right hon. Gentleman means someone representing his particular expertise in the industry as a member of the board. But it is right to point out that expertise can be obtained at board level—can be called for and listened to. The idea that someone who is a good functionary makes a good board member is very often absurd.

Quite a number of functional men are not anxious to come to London, or wherever the centre may be, to serve on the board. Thus, a man may either carry out a job for which he is not necessarily well fitted and is not particularly happy to occupy—with the industry losing in certain aspects through the loss of some of his production or managerial skill—or a rather less good functionary is put on the board, which means that the lesser man will have authority over the greater. So the idea of a functional membership is not necessarily a very sound one.

I mention this because it is the question of numbers with which I am concerned. I should like to see a smaller board, but well paid. I am not being dogmatic about what the payment should be. All I can say is that, reviewing the payment of members of the boards of nationalised industries, I have not considered that the chairmen of the boards or their members have been adequately paid, and this has had its effect on the lower levels in those industries, because there must be some differentiation, some demarcation, between the higher and the lower. I am not anxious to see very high remuneration. It has been rightly said that in practice it does not represent a great deal. I presume that it is a matter of prestige value. It may have some value in relation to the pensions of the people who receive those very high salaries. However, an adequate salary must be paid—say, for the chairman, £15,000 to £25,000, and the salaries of the other board members relative to that. That, I think, would be wise, but even those salaries will be sensible only if the sizes of the boards, either of the Corporation itself or at group level, are themselves not unreasonable.

Of course, one must recognise that the chairmen of these groups or regions—I do not know what they will be called—are going to be very important men. They are going to have responsibility for an undertaking valued, I presume, at the order of £200 million or £250 million, with all that that represents. They, rightly, of course, should have salaries which have regard to those paid to men similarly placed in other industries. Whether they are private enterprise industries or not is neither here nor there. They should have salaries of that level. Quite obviously, they cannot have higher salaries, presumably, than the men on the Corporation.

I was not quite clear from what the Minister said whether he was going to have those group chairmen on his Corporation. He was not very clear about that. I listened very attentively, but I could not make out his view on that. If he does not intend to have these four or five members on his Corporation board he will have to recognise that unless he pays his group chairmen adequately he will have a very peculiar situation; he may find that he has to pay those group chairmen more than his board members, which in itself is not a very sensible thing to do.

So generally what I am suggesting to the Parliamentary Secretary in the absence of his Minister is that I hope that the Minister will keep an open mind on this matter. I hope that he has not finally decided he is going to have bigger boards. I hope he will not be influenced by what has hitherto happened in the nationalised sector because, as I have said, I have never been happy about the salaries paid to the chairmen or, in many cases, to the other members of the boards. Nor, indeed, have I been happy about the composition of those boards. I think the only thing which merits a man being put on any board is his ability to take part in that board's work in such an effective way that he will improve the board's consideration and decisions and policy. The mere fact that a man is good at his job at a certain level does not make him into a board member; the mere fact that a man has served many years in an undertaking does not make him a good board member.

The important thing is that the Minister should have the best men he can obtain working on his board whether as part-time members, of whom, I think, there should be two or three, or as full-time members. He can obtain all the expertise he wants; if he wants it he can send for it. He should set out to get the best dozen or 15 men he can find, but not have regard to what has hitherto happened in the nationalised sector, for it has not been altogether healthy. Here he has an opportunity now to do something sensible in recruiting his board for this new nationalised undertaking by getting men of high quality, and he can do that only if he pays adequate salaries—not absurdly high salaries, but adequate salaries.

I think he must divorce himself from what has happened in the nationalised sector hitherto, and not pay too much regard to what has happened in the private sector. The other night somebody was making an analogy with what happened in Unilever, but the considerations which apply to the Unilever board do not necessarily apply to this board. Unilever deal with a great variety of products. Unilever could possibly need 24 members for its board, to deal with the variety of its products and interests. This Corporation, however, will be dealing with a standard article. The products may vary in size and in form and in quality, but it is substantially a standard article, and the Corporation needs only men expert in this standard article. If the Minister wants on his Board men of ability who can direct general policy effectively he must pay the right salaries.

I am glad to see the Minister back. I was saying that I hope he will forget what has happened in the nationalised sector hitherto, and I hope that he will not be too influenced by what has happened in the private sector either. I hope that he will bring a fresh view to this and set out to get high quality men for his public corporation, with a board—not the size of that of Unilever, but smaller—and with the best men he can obtain, paying them adequate salaries. If he does that he will have some chance of making a success of something which I do not think will be very successful.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

I have not participated in the previous discussions on this Bill, but I want to say a few things about this very important Amendment, because it sets out a significant problem which affects the entire public sector.

I think that, to begin with, one has to be very clear about what sort of people should serve on this Corporation. I want to set out three tests which make up the basis of a job specification, as it were, for membership of the Corporation. They are, firstly, a fundamental belief in public ownership and a determination to make it succeed, and this, I am bound to say, has not been everywhere evident in some of the appointments made to public corporations since 1945.

Secondly, the board member concerned should have a thorough knowledge of the industry and should also have a firm grasp of his particular functional responsibilities. Here I disagree with the hon. and gallant Member for South Fylde (Colonel Lancaster), who cast doubts as to the wisdom of giving board members a clear functional task. I think experience of management of the public sector in this country since the war has shown this is the right course to take.

Thirdly, I think that, obviously, the board member must have a high level of talent in terms of decision-making and in terms of the other qualities which go to make up executive responsibility. These three factors in the main meet what I hope the Minister will set out, if not this evening, then in due course—something approaching a pretty rigorous job specification for appointments of this nature. I am suggesting that the man to fill a position on a public corporation of this kind should be a very different type of individual, in terms of his approach to the job, in terms of his breadth of outlook, and so forth, from that, as I think is the case, with the average board member in the private sector.

I think there is very little evidence to support the view that the salaries being paid to board members on public corporations in this country are in any sense a serious determining factor in either raising the calibre of the boards or of lowering it vis-à-vis the private sector.

5.0 p.m.

In this Bill and in the other steps towards public ownership which we shall have to take in the later 1960s and throughout the 1970s, the public sector must accept the political initiative. It must not accept the standards of the private sector. Because people are highly paid in the private sector does not a priori mean that people in the more senior positions of the public sector should reflect this.

It cannot seriously be argued that there has been any deterioration in quality, for example, in the chairmanship of British Rail under Sir Stanley Raymond than we experienced under Lord Beeching between 1961 and 1965, and yet. Sir Stanley Raymond is getting, I think, only rather more than half the gross salary of Lord Beeching.

In the private sector, salaries are a chaotic mish-mash based on nepotism and on a variety of irrational pressures. Although the salaries are frequently indefensibly high, what is more important is the great range of "perks", including subsidised meals, free life insurance, non-accountable expenses, subsidised housing and all that. It is these factors which go to make up the real rewards in the private sector and not so much the gross salary. It would, therefore, be a great pity if, in setting up this new Corporation, we accept as our dictum the prevailing level of values in the private sector.

Photo of Sir Tatton Brinton Sir Tatton Brinton , Kidderminster

The hon. Member apparently has not read the last few Finance Acts concerning the expenses of directors and what is declarable and taxable. He might, however, have observed that recently certain Ministers of the Goverment have been provided with free accommodation. Does he approve of that?

Photo of Mr James Dickens Mr James Dickens , Lewisham West

I am well aware that the present Government have made an attack on tax avoidance. I am also aware that, despite the energies of the Treasury, tax avoidance is still a major industry.

It is important to note the differences in board members' salaries in the private sector and in the public sector with salaries in, say, middle management in the private sector as compared with the public sector. The hon. and gallant Member for South Fylde has long experience of the coal industry under private ownership. I do not think he would seriously question that under the National Coal Board the salaries of middle management showed a considerable increase over the salaries of equivalent people carrying out similar responsibilities under the former private coal owners, basically because there was a tremendous difference in the private sector between, on the one hand, these indefensibly high salaries at the top and, as I regard them, the rather less than adequate salaries which were paid then and are being paid in many private industries today to people in middle management, who are the people who do the work.

There was an interesting article in the Observer colour supplement yesterday on the Fairfield experiment on the Clyde. The illuminating point came out that when Fairfields were seeking to make appointments in middle management, they invited people from other Clyde shipyards to apply for vacancies. They were astonished at the very low level of salaries that were being paid in private Clyde shipyards to people who were carrying out important middle management jobs.

Fairfields made the appointment in question at three times the average salary of many of the applicants because they wanted not simply to pay what they thought was the market rate for the job, but to pay what they conceived to be the proper reward for the job. One has, therefore, to differentiate between the indefensibly high salaries of directors in the private sector and, in many cases, the inadequate level of reward in the middle.

In the public sector there are adequate rewards in the middle and at the top. Taking into account all the many responsibilities, I think that the present balance of salary level in the public corporations is just about right. I should be very much against paying substantially higher salaries to board members of the National Steel Corporation. There would be serious repercussions in the other publicly-owned corporations. Certainly, if I were chairman of the National Coal Board getting 12,500 per annum, I should take strong exception if I found my opposite number in the Steel Corporation getting double that figure. This would obviously create a serious ripple of discontent throughout the public sector. It would be entirely needless discontent, because I challenge the view that it is necessarily beneficial to the public sector to attract people from private enterprise into it.

I have instanced the case of Lord Beeching. There are many other examples of people who have been brought into the public sector to carry out a certain commercial job. My point this evening is the need to establish a level of social value for the work which is performed by board members in the public sector, which is altogether different from the private sector.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

The hon. Member seems to have fixed the top limit at £12,500.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

The words which the hon. Member has just used could mean only that. He has said that if the chairman of the National Coal Board, receiving £12,500 per annum, saw somebody else having more than that, as head of the Coal Board he would feel disgruntled. That can only mean that the hon. Member considers that the salary of the chairman of the National Coal Board should be increased if the quality of the Steel Corporation appointment calls for more money, or that the hon. Member is fixing the top limit at £12,500 Is that what he means? We are entitled to know.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

The hon. Member has raised an important point. I am not suggesting that the maximum should be £12,500, which is not the highest public corporation salary. I am saying that there should be an upper limit beyond which we should not go. I am not arguing that it should necessarily be £12,500. I am arguing against the case which is built on the premise that to attract people from outside to join the National Steel Corporation we should necessarily have to pay higher salaries. That is a fallacious argument.

We should adopt an altogether different approach. We should henceforth seek to build up a system of public corporation senior management which will be common to all public corporations. We should have central recruitment for the public corporations particularly of university graduates. We should certainly have a public corporation staff college, because the twin basic principles of approach to the national economy and of service to the community, are common to them all.

The level of management, which in my experience is very high, certainly in the National Coal Board, at middle management and generally, should be held at a consistently high pattern throughout all the public corporations. This we can do only by having a centralised recruitment and training scheme, and a public corporation staff college to get the benefit of advice and experience as between one public corporation and another. There should be plenty of movement within the public corporations, from the National Steel Corporation to the Coal Board, to the Airways Corporations, and so on. But this is an altogether different proposition from arguing that there should be a lot of movement from the private sector to the public sector. Both have different standards of value.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

I should like my hon. Friend to comment on one thing that I said. He was listening when I made my speech. I was not talking about attracting people from the private sector to the public steel sector. I was looking at the level of executive-type salaries within the steel industry, not directors' fees, and so on. I said that there was a problem if we kept the salary levels to those of the existing nationalised boards. What does my hon. Friend think about that?

Photo of Mr John Peyton Mr John Peyton , Yeovil

On a point of order. Would it not be more seemly if this argument between the hon. Gentleman and his hon. Friend were carried on upstairs? We are not very interested in the hon. Member for Rotherham (Mr. O'Malley), with his back to the rest of the House, discussing his point of view with his hon. Friend.

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

I was about to ask the hon. Member to address his remarks to the Chair.

Photo of Mr Claude Lancaster Mr Claude Lancaster , South Fylde

I thought that the hon. Member for Lewisham, West (Mr. Dickens) was saying that he was interested in a system of standardisation. He mentioned the middle area of management. When the coal industry was nationalised, between 48 and 51 area general managers were all paid the same salary. Is the hon. Gentleman suggesting that that was a very wise thing to do? He has been talking about standardisation. That was standardisation, if anything was. All 48 were paid the same salary. Does that make sense?

Photo of Mr James Dickens Mr James Dickens , Lewisham West

Perhaps I might reply first to the point made by my hon. Friend the Member for Rotherham. I do not think that there is very much of an argument about the upper salary levels of middle management, which are affected by the salary ceilings of board members. I know that the various professional associations in the public sector always try to argue this case, but if one compares middle management salaries in the public sector with the salaries of equivalent middle managements in the private sectors, one sees that there is not a great deal of difference. What difference there is is frequently in favour of the public corporations.

I think that the hon. and gallant Member for South Fylde (Colonel Lancaster) is wrong. He will find that the 48 area general managers were not paid the same salaries. They were paid within a salary band. I am not arguing against people being paid within salary ranges or scales. I am not arguing that those in senior positions in middle management should all be paid the same. I agree that senior people at that level should be paid within a salary range. That was the case, and is the case now.

I think that within the public sector we must build up a staff of well qualified and well experienced people, with ample scope for people being appointed to the most senior positions on the boards of all public corporations, from within.

I hope that we have come to the end of the time when we appoint to the boards of public corporations, or to regional boards, people from outside, from the private sector, from the diplomatic service, or from the Armed Forces, simply because they have some vague general administrative experience. Such appointments may be necessary initially. I do not quarrel with that, so long as they meet the job specifications for the appointment in question, but, having got the thing going, we should set about ensuring that we build up a career structure within the industry in question, and seek to extend this idea throughout the public sector.

5.15 p.m.

Photo of Sir Tatton Brinton Sir Tatton Brinton , Kidderminster

The hon. Member for Rotherham (Mr. O'Malley)—I am sorry that he has now left the Chamber—used the phrase "a salary movement any man is worth", yet during most of his speech he appeared to be arguing against himself, because he admitted that it was necessary for the nationalised industries to attract talent and to pay the market price for it.

I should like to draw the attention of the House to the real problem, one which is faced not only by the nationalised industries, but by private industry, too. To people receiving £2,000 or £3,000 a year by way of salary, £30,000 sounds a colossal sum, but part of the difficulty which all employers suffer is that in the remuneration of top-level brains there is a colossal incidence of direct taxation. I want, therefore, to underline the point which has already been made, that beyond a certain point it requires an enormous increase in gross salary to provide any appreciable increase in net salary.

Let us consider a married man, with no children, living on earned income from his appointment to middle management. Let us assume that he is in the modest level of middle management of the type referred to by the hon. Member for Lewisham, West (Mr. Dickens). If he is getting £3,000 a year, he is able to enjoy only about £2,220 of it. If he wants to treble that income, he must have an earned salary of £15,000 a year. He will then have a spendable income of £6,884. This sum has been spoken of as if it were riches beyond the dream of avarice. Although he would be getting about five times his previous salary in gross income, his net income would be a little over three times as much as before. This would still be a substantial increase, but once one gets beyond that point the tide rises very slowly in terms of net income. A man earning £25,000 a year, would get only £1,000 more net than the man earning £15,000 a year. For an increase of £10,000 in salary he would net £1,000 extra, and get £7,884. When we get to the top salary which has been mentioned during the debate, £30,000, which is regarded as an atrocious sum to pay any man, the net spendable income is £8,321. In other words, between £3,000 and £30,000 it is impossible to quadruple the spendable income, and this is the problem.

Some men work for the love of the game, for the glory and honour of occupying an important and responsible position in industry, be it nationalised or otherwise. Other men—and they would probably be regarded as selfish by hon. Gentlemen opposite, but I regard it as reasonable—are prone to look after their own interests and to see whether they can earn more money. When we talk, as we frequently do, about meritocracy, we are merely following the lines of the American-type industrial civilisation, where it is not only a question of how much money one has to spend on oneself, but a matter of prestige to earn a higher salary than the man next door. I do not advocate this as one of the criteria for the good life, but many people do, and it is stark foolishness to ignore the fact that brains have to be paid for in most cases.

It is unjust to suggest that men ought to work for less than they are worth in comparable jobs in outside industry. If the yardstick suggested by hon. Gentlemen opposite were to be applied to people on far lower salaries or wages, they would be the first to say that a man ought to get the rate for the job, and comparability between one industry and another is one of the stock arguments used to get an increase in wages during trade union bargaining. All right. I accept that. Why, then, do not we apply it to the most vital people in our civilisation—the great organisers, the great brains and the great technicians? If we do not do so we shall not get what we all want, namely, an increase in production and our standard of living, because these are the people who can give it to us.

I am not advocating this as the sole measure of civilisation but it is what both parties promised at the last Election, the previous one, and the one before that—an ever-rising standard of living. That is the carrot that has been dangled before our people. It may have been over-emphasised, but it has certainly been emphasised and it has become accepted. If we do not pay the best brains what they are worth we shall come a cropper.

To a considerable extent it has been possible to isolate this problem within the confines of this country, but we are already suffering from a brain drain of technicians—men who carry their capital inside their heads and are young enough to take it abroad. In the near future, if we get into the Common Market, with the constant spread of industrial civilisation over a number of countries in combination—perhaps through some kind of North Atlantic arrangement—the Corporation will not be competing with other British firms for the best brains in the country; it will be competing with the whole of Europe, and possibly North America. If we do not provide the rewards which other parts of the world can provide our best brains will be exported or will flee the country to places where they are better appreciated.

The last time I argued this matter was in the case of the increase in judges' pay. I was horrified at the extraordinary naïvety of some of the speeches made by hon. Members opposite, who simply do not seem capable of appreciating what a value a select few members of the community are to an industrialised society, and how highly such men are rewarded in other countries. Merely because we are paid by an extremely stingy public the sum of £3,250 a year, out of which we have to find a large sum in respect of expense which we have to pay ourselves, I beg hon. Members opposite not to imagine that we can successfully run a highly organised and sophisticated industrial society without paying the men at the top substantial salaries.

Photo of Mr David Marquand Mr David Marquand , Ashfield

I feel like a gate crasher in this debate, not having sat in through the Committee stage. For that reason I shall be brief. I am rather worried by the wording of the Amendment, which seems to imply the acceptance of the existing salary structure in the private sector of industry and of the forces which cause salaries in that sector to rise and fall as they do. This seems rather a doubtful and dangerous kind of acceptance.

There is much evidence to suggest that the structure of managements salaries in the private sector is now wildly illogical, arbitrary and irrational. If we carry out a really hard-headed inquiry into the ways in which private firms decide on the salaries of their executives we shall find that very few try to work out the total cost of their employees, taking into account not only the nominal salary but all the other fringe benefits and setting these against the net economic return to the firm.

In British industry we find a great range of practices used by the best firms —the largest and most progressive, who use the hard headed, economic approach —and the smaller and medium firms, including family firms, where there is a complete patchwork quilt of illogicality and arbitrariness. For that reason it is dangerous to accept the implied assumption of the Amendment that the practices in the private sector as a whole are satisfactory.

The other dangerous feature about the salary structure in the private sector is its effect on the Government's prices and incomes policy. If we look back over the way in which the incomes policy evolved in the first six months of 1966 we find clear evidence of a leakage from the private to the public sector which created intolerable pressures for the whole incomes policy. A case in point was the award to the higher civil servants made by the National Board for Prices and Incomes. The Board's report shows that the increase which it gave and which it thought was right was made necessary partly by the fact that the public service was falling behind private industry and there was a danger that good men—very scarce talent—would leave the public service for private industry. That has happened. It was therefore thought right to give a very large increase to well-paid civil servants.

It cannot be denied that that had the effect of undermining the acceptance of the incomes policy among lower-paid workers who saw people very much better-paid than they were receiving increases in many cases larger than their own gross take-home pay. This arbitrary, illogical, confused and irrational method of arriving at a salary structure in the private sector has undeniably had a damaging effect on the incomes policy, which must be accepted as an indispensable weapon of economic management for the foreseeable future, in one shape or another.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

What is the hon. Gentleman's authority for suggesting that the medium and small firms do not know what they are paying and whom they are paying it to and what value they are getting out of it? He stated categorically that small and medium firms fixed salaries without taking into account the purposes for which people were employed and the contribution which they make to their firm. That is a categorical statement, and if he has some experience to back it up he should tell the House. It should be on the record, however, that some of us, who have had many years of close contact with the sort of businesses to which the hon. Member is referring, find what he has said to be an absolute slander.

Photo of Mr David Marquand Mr David Marquand , Ashfield

I do not suggest that every small or medium firm has these tendencies, but I can give one example. It so happens that two days ago I was talking in this House, over lunch, to an employee of the largest manufacturing consultants firm in this country, whose responsibility it is to investigate precisely the total rewards given to management. That is his job, and he has told me that what I have stated has been the result of his investigation, not of every small firm but many small firms.

That is why I find it dangerous to accept the assumption of the Amendment that the salary structure in the private sector is fine and that the public sector should be brought up to its high level. On the other hand, I agree most strongly with what my hon. Friend the Member for Rotherham (Mr. O'Malley) said, that it would be crass folly to discriminate in this matter yet again against the public sector.

5.30 p.m.

One of the main troubles with the public service is precisely that it is so frequently discriminated against as compared with the private sector. Members of my own party may think that in some way it is non-Socialist to pay high salaries. I agree with that as a statement of general theoretical ideals, but to discriminate against the public sector is an even more non-Socialist thing to do. The effect of it would be, as my hon. Friend the Member for Rotherham said, to damage this new nationalised Corporation just at the point where we want to encourage it, and to make sure that it proceeds in the best possible way.

I do not accept the point made by my hon. Friend the Member for Lewisham, West (Mr. Dickens), that we do not want to attract people from the private sector management into public sector management. It is not true that we ought to erect a great wall of China between the public sector and the private sector, and that we ought to assume that the kind of people needed in the private sector are different from those needed in the public sector, that the sort of managerial, entrepreneurial philosophy in the public sector ought to be entirely distinct from that of the private sector. On the contrary what we need to develop is a concept of public ownership much closer to that which exists in the I.R.I. in Italy, where the basic philosophy is that there should be public ownership, but that the industries and companies should behave in a tough, ruthless, dynamic, entrepreneurial fashion, just like private industry. It is remarkable to see how effective and dynamic they are. They are judged by the most rigorous tests on the market, and I would like to see that sort of attitude applied to our publicly-owned Corporations as well.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

Will my hon. Friend accept that I am not at all against a movement of people from the private sector into the public sector at middle-management level? I am against it at director level. Will he also accept that many people at middle-management level in the public sector feel justifiably aggrieved when they see that board members are recruited from private industry over their heads and that some of those recruited have precious little knowledge of the industry.

Photo of Mr David Marquand Mr David Marquand , Ashfield

I appreciate this point, but we ought not to elevate into a general principle that it is wrong to have transferability between the two. I would say in answer to that that management running the public corporations would take account of this difficulty and would be very chary of promoting people over the heads of middle-management. Exactly the same thing would presumably apply to the private company thinking about whether to import someone from another private company into a senior position. There is no basic philosophical difference between the two problems.

In conclusion, the Government in the immediate future must make sure that they compete for the best brains and that they pay the market rate for them. It would be disastrous and suicidal to do anything else with the publicly-owned steel industry. On the other hand I urge my hon. Friend to tell us that the Government are ready to set up a thorough-going review of the whole question of the structure of management rewards, taking not just the salary and the fringe benefits into account, but all of the other emoluments. What ought to be done is that the whole question should be referred to the National Board for Prices and Incomes so that we can have an independent public body pronouncing on this vexed question. There is clearly room for disagreement, there are differences in the House, but we need an authoritative pronouncement upon them.

Photo of Sir Spencer Summers Sir Spencer Summers , Aylesbury

If anyone was concerned at the future of this industry under nationalisation, they would be quite appalled at the prospect if the hon. Gentleman the Member for Lewisham, West (Mr. Dickens) were to have his way over the manner in which it should be operated.

Both sides have referred to the proposition that people should be paid the rate for the job. The debate on this Amendment is whether the rate for the job shall be that which the people of the right calibre can command in another industrial position or whether it shall be that determined already by what is paid to the senior members of other nationalised boards.

I hope that enough has been said on this subject to make it quite clear that it would be disastrous and a grave handicap to the Minister's plans to make this a successful industry if he were to put a ceiling on the salaries to be paid to those whom he wishes to recruit because of the limited salaries already being paid in other nationalised industries. It has already been pointed out that we are not starting from scratch. We are to superimpose upon a number of companies who are to be formed into groups, a series of individuals with paramount authority over them and unless those already in the industry are to have their salaries lowered in keeping with the ceiling which some hon. Members opposite would wish to see imposed, the only alternative is that the salaries already being paid should be increased for those who will be put on top.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

Would the hon. Gentleman also bear in mind that there is an important problem here not only with regard to the full-time members of the Board but also the part-time members? If they are to be paid at £1,000 a year one may well find people who have other directorships, but there may be many trade union officials, prepared to take the job but who will not be able to do so at £1,000 a year, because they would have to pack up any other sources of income.

Photo of Sir Spencer Summers Sir Spencer Summers , Aylesbury

I am not quite sure that I have grasped what it is the hon. Gentleman is trying to say, but I am not here concerned with what should be paid to any part-time members of the Board. I cannot believe that that presents the Minister with any problem. The problem is what share shall be the salaries for the full-time members. No one has yet mentioned that, in deciding which of these two criteria shall be used to determine the level of salaries, the circumstances of the steel industry will differ in certain very marked respects from any other public enterprise that has yet been taken over.

In the first place, it is essentially concerned with manufacturing and is not a service industry. In itself this distinguishes it in a fundamental characteristic, and explains why some of the elements already existing in the industry are different from those existing in other industries. Secondly, it will be concerned with exports to a far greater degree than any other public enterprise that has been taken over.

There is no question, in the electricity industry, the gas industry or on the railways, of having to compete with other producers. This means that it is even more important to ensure that the best possible talent is available, so that we can compete in sales markets with overseas steel producers. We are also concerned with competition, not perhaps so great as that from overseas, from other materials. In all these respects it is essential that the Ministry should in no way be handicapped in trying to get the very best possible talent, if, unfortunately this industry is eventually nationalised.

There have been glib phrases about salaries and matters of that kind. It is not sufficiently appreciated that judgment of what it is proper or sensible to pay should be looked at as being in the nature of an investment. The argument is never brought up on social grounds when one is investing in a piece of machinery, some new idea or invention. But when it comes to individuals certain characteristics of an emotional content are brought in which completely distort the fundamental criteria, which under the capitalist system it is proper to bring to bear, upon what it is justified to invest in the employment of a particular individual with certain talents.

One of the reasons why it may be quite right to pay a very high salary to a certain person is because of the chance which will follow, of enormous success or crashing failure, if someone with such a high responsibility reaches the wrong decision. The pyramid of responsibility makes it inevitable that those at the top shall get a greater slice than those all the way down. It also follows that there is scope for mistakes or for great success. This applies in greater measure to the person who is highest in the pyramid because there is higher ability and greater decision. No one regrets the prospect of this industry being nationalised more than I, but if it is to come about I hope that nothing will prejudice the future success of it and I hope that the Minister will have enough sense to realise that he must not handicap himself by an artificial ceiling on salaries, brought about by reference to other nationalised industries.

Photo of Mr James Tinn Mr James Tinn , Cleveland

My hon. Friends the Member for Rotherham (Mr. O'Malley) and Ashfield (Mr. Marquand) expressed so ably my own point of view that it will not be necessary for me to detain the House long. I feel that it will be worthwhile to intervene as I believe that I am one of the few members who has worked as a trade unionist in the iron and steel industry.

5.45 p.m.

I agree with my hon. Friend the Member for Rotherham that the types of salaries which he envisaged being paid to members of the Corporation would not in any way breach the prices and incomes policy. Quite the contrary. If we could, as a result of nationalisation, so streamline the boards and reduce the number of directors in the way he suggested—from about 240 to double figures —it would be an exercise in productivity which my right hon. Friend the First Secretary would be glad to see repeated elsewhere.

I take issue with the hon. and gallant Member for South Fylde (Colonel Lancaster) who did not seem to grasp the extreme complexity of the industry. This complexity distinguishes it from the other publicly-owned industries, as does the fact that it interlocks so closely with other manufacturing concerns. It impinges upon and is interwoven with manufacturing industry to a degree unprecedented in the sphere of public ownership. This is particularly relevant to the Amendment, with which I have some sympathy, although many doubts.

As a trade unionist and as an hon. Member who represents an iron and steel constituency, my overriding obligation in this discussion is to ask the House to bear in mind the health and prosperity of the industry and to do all we can to ensure that it remains strong and develops. It is essential, therefore, that this matter should be settled in the most effective and constructive way. I recognise the difficulties of determining a just remuneration for a directorship and the difficulty of relating such appointments to workers who are on much lower rates of pay. This is also bound up with the whole range of directors' emoluments in industry generally. Bearing this in mind, it is vital that we should not in the Bill impose on the Minister a strait-jacket which would restrict him in the appointments that he thinks should be made.

The best way to proceed is for the Minister to be allowed to discover what needs to be paid to obtain the talent that is needed to do the job. I hope that in doing this my right hon. Friend will arrive at salaries which will benefit the industry rather than the Treasury. Thus, while I have sympathy with the purpose of the Amendment, I hope that it will be withdrawn so that my right hon. Friend may be free to determine the type of salary structure which he finds from experience to be necessary to obtain the leadership which will enable the industry to make the vital contribution to our economy which it has made in the past.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

The hon. Member for Cleveland (Mr. Tinn) made a constructive contribution to what is a difficult debate. In terms of the future prosperity of the Corporation, this is one of the most important subjects we have debated on Report so far. I am, therefore, disappointed that the Minister, who took such an active part in our Committee proceedings, has today flitted in and out of the Chamber and appears to be leaving it to the Parliamentary Secretary to answer the controversial and important points that have been raised.

The hon. Member for Rotherham (Mr. O'Malley) told me earlier that he would raise this matter and we discussed our proceedings in Standing Committee. After that conversation, I looked up the OFFICIAL REPORT of those proceedings. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), reminded the Committee of the salaries being paid by the nationalised industries. He said: Out of the total of 38—the 34 and the four nationalised corporations—11 below £15,000 include all four nationalised industries."—[OFFICIAL REPORT, Standing Committee D, 3rd November 1966; c. 300.] We again raised the matter on the Clause stand part and at that point my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) reminded us that from a salary of £24,000 a year, £17,000 went in tax while the recipient, with two children, retained only £7,000. I now raise this matter partly because of the conversation I had with the hon. Member for Rotherham and partly because the Minister stated in Committee: I am not detracting from my view and the Government's view that this question of fixing salaries, when it needs to be done, is an important job. While the right hon. Gentleman uttered those words, he is unfortunately not in his place now, particularly since he also said: People's positions will generally not be affected in the industry. We have not reached a decision on the level of salaries for the Corporation, but I have put forward some of the arguments to be taken into account in determining that."— OFFICIAL REPORT, Standing, Committee D, 10th November, 1966; c. 394–5.] We should now be given a more definite indication of what the Minister's ideas are on this subject. As I have complained before, and will go on complaining, far too much of the nationalising process is going on not in the House of Commons but in the deliberations of the Organising Committee.

The debate has shown that there is a rift among Government supporters. Perhaps "rift" is too strong a word. Certainly their remarks have shown egalitarianism and shades of bureaucratic approach, and the speech of the hon. Member for Ashfield (Mr. Marquand) showed that he had little appreciation of the problems involved in getting the best people in the international sense.

I have been faced, not only in this country but overseas, as have many of my hon. Friends, with the problem of picking the best men for the job. One of the greatest difficulties is that the best man for the job knows that he can command a high salary. As my hon. Friend the Member for Aylesbury (Sir S. Summers) said, when one has spent a large amount of money on plant and equipment and one is going to incur large losses unless one's factory is run properly, the salary one pays to a good man is immaterial compared with the losses that might be made.

Since this point has been raised on previous occasions, I will not reiterate it, except to ask the Parliamentary Secretary to ensure that his right hon. Friend bears these important issues in mind. The appointment of the right senior executives—which means the right salary structure—is the key to whether or not the Corporation will succeed. If the right decisions are not made, we will have a managerial brain drain from this country, as some of my hon. Friends have pointed out.

When I was in the Batello Institute at Columbia, Ohio, in the U.S.A. about three years ago I was talking about the brain drain of scientists and technologists, I discovered that the managerial differentiation between the United States and this country was somewhat greater than the differentiation which normally exists in the scientific sphere. Many observers will confirm that this is so.

This is an important issue, particularly in Sheffield, and it has been raised in the Sheffield Morning Telegraph more than once. That newspaper indicated that this matter will probably go against the prices and incomes policy. I suggest that to pay salaries that are already being paid would not be going against the prices and incomes policy; and I hope that the Parliamentary Secretary will confirm that this is so.

I recall a discussion I had with my right hon. Friend the Member for Wallasey (Mr. Marples) when he was Minister of Transport. That was at the time when Dr. Beeching was appointed. Since then we have appointed Lord Melchett at £16,000 a year—it might be £15,000; hon. Members do not seem certain of the figure, and I hope that the Parliamentary Secretary will make that clear as well—and this implies that those who are already obtaining salaries higher than that figure need to be worried about their future. Some remarks of hon. Gentlemen opposite suggest that, "If they are not worth it, they should not get it." But suppose they are worth it. Will existing service contracts apply? Some of these contracts run for five or even 10 years. Will these contracts be scrapped immediately the Corporation takes over? if so, I assure the Parliamentary Secretary that not only in Sheffield but elsewhere people may not be willing to show their expertise in the steel industry—not when they can look to others who may wish to employ their services—not only Europe and North America but to the new industries growing up in Africa and Australasia, and where their worth is more valued in the international bartering between companies who want the best brains. We have good managerial talent here and I hope that we will be allowed to keep it.

To sum up, I want to know just two things; what is the Government's policy on the question of the salary structure for the industry and whether salaries now paid to staff and executives which may be higher than that of the chairman of the Organising Committee, will continue to be maintained? Secondly will existing agreements and terms of employment remain valid after vesting day?

This is a difficult debate for the Parliamentary Secretary to answer. I am disappointed that the Minister is not here to reply to this important issue, and I suspect that the right hon. Gentleman and the Government are running away from the real issues and are not letting us know what their policy really is.

6.0 p.m.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

Contrary to my usual practice, I have no qualifications for taking part in this debate. I was neither a member of the Committee which did such a good job on this Bill, nor do I represent a steel constituency. The contribution I want to make may be all the better for not having either of those qualifications. I hope that someone on the Front Bench will pass on to my right hon. Friend the Minister of Social Security the impending hardship which seems to be envisaged among boards of directors in the steel industry. This, I am sure, would make a substantial contribution to the harmony which exists in certain quarters. This is a serious subject. I do not think it is one on which either side can afford to suggest that it has the right answer, or all the answers. It is certainly im- portant to us on this side of the House because of the effect it has on the thinking of the man on the shop floor. With all due respect to the talk about managerial brain drain, this policy seems slightly confused between management and duties and functions of a board. This requires a little study. Unless we can convince the man on the shop floor, working in the industry, that this is of vital concern and has something to do with changing the attitudes of people to work and to society generally, it does not matter how brilliant are people who are put at the head of the Corporation, it will not be successful.

That is the dilemma which is facing all of us—not only the Minister or hon. Members on this side of the House. It should be given a little more thought by hon. Members opposite, apart from representing only the professional or business interests of those who have put them there. They should sometimes challenge to a greater extent remunerations, rewards and fringe benefits paid at the moment in private enterprise. As a new Member who came here two years ago, I thought that one of the best Bills ever introduced in this place was that introduced by my hon. Friend the Member for Stepney (Mr. Shore). I hope that at the Department of Economic Affairs his influence can be used to do something about adjusting rewards in society.

We should not under-estimate this matter. We have heard of the dilemma of hon. Members opposite. It is argued that there is not much difference between £30,000 a year and £17,000 a year. We have heard the argument that if a man is paid £17,000 a year has only £7,000 a year to struggle on with after the tax. This is not vituperation from some class-biased Labour Member of Parliament. We are not "with it" if we do not understand that to the majority of people £17,000, leaving £140 per week after tax, is quite unnecessary. Surely there is a limit to the things on which one can spend money to bring happiness. It is all very well saying that this will not be a practical approach to those invited to serve on the Corporation. What about inviting volunteers? I am only joking and I say it in a kind of half-hearted way.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

Does the hon. Member recognise that for the Industrial Reorganisation Corporation Board that is exactly what the Government have got?

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

There may be something to be said for this. The Amendment says, "of proven ability". How can one prove the ability of someone without appointing him to a new position? There are one or two successes and failures in Government. How does one guarantee that a Minister of Power will be a success until one gives him the right to operate in the job and show that he can be a success? When we apply this outside, we find that we can never guarantee that a man appointed to a new position will be a success. The Amendment is therefore a little fatuous. Its only purpose—I think a useful one —has been to enable us to discuss some of the difficulties we face in society.

We should like the Minister to have a free hand to some extent to test the market. One result may be to find precisely the level of remuneration of outside directorships, whether they have penthouses or villas in Spain. Is it right that they should have them? If so, what about giving the members of nationalised industry boards something like this? Is this what builds up the prestige of the job?

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I read somewhere that the average remuneration of directors of I.C.I. is £26,000.—[An HON. MEMBER: "£32,000."] An hon. Member corrects me. That figure is found by taking the whole remuneration of the board of directors and dividing it by the number of directors.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I do not know for what that contribution was intended.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

Will the hon. Member accept that the difference is that while those in free enterprise may have penthouses either in Park Lane or in Spain, those in the nationalised industries are given peerages?

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

That interruption is not even worth replying to. I recognise that this is a very serious problem facing the Government and not only the Minister. It has wide implications. In the light of the wage freeze of course men and women are entitled to say, "This is an absurd salary to pay to someone when we are limited or have no expectation in our lifetime of reaching this dizzy height".

We have all to ask ourselves this question from time to time. We can overdo this looking for professional and technical know-how. Even though this is a complicated industry—I have no personal or close knowledge of it—with society developing as it is and becoming more complicated, technical and sophisticated, as soon as someone is lifted from his technical job and put on to a board or into a position of administration he ceases to have any great value as a professional technician. It becomes a new kind of science of administration. In nationalised industries we have such people as a doctor of medicine in the White Fish Authority. In case hon. Members think that that is a criticism, I should say that incidentally he is a very good member. We have all sorts of people with first-class administrative ability. We are looking for people with general knowledge of the needs of an industry and the situation in the world and with a fairness of mind to sort out conflicting pressures which can be put on a board from the various technical and professional interests within the organisation, whether it is a steel board or a private firm.

I am amazed at the arrogance of hon. Members opposite and all this pleading when we find that directors can be in companies which produce soft drinks on the one hand and shoes on the other. Apparently some can sort this out in their own minds, but in nationalised industries there has to be a closed shop. They have to be taken from the experts with "proven ability" in a chosen field because they are friends of the Conservative Party. Bearing in mind a disastrous appointment made from Stewart and Lloyds—I shall, not go further—it is high time we gave more thought to people who genuinely believe in the benefits of public ownership and more thought to morality in this sick society and sick world. Perhaps out of this discussion some of us may get enough information to produce a new Tory M.P.s' Left Book Club, which is badly needed.

Photo of Mr John Peyton Mr John Peyton , Yeovil

But for some of the last observations of the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) I would not have referred to his speech, but he referred specifically—and it could have been by name—to one appointment which has been made from Stewart and Lloyds. It seems very odd that among the qualifications which the hon. Member listed for appointment to the Corporation he did not mention knowledge of the steel industry, which I should have thought should come high on the list.

As to his disapproval of Mr. Macdiarmid's appointment, it seems grossly unfair. There is no great allegiance between him and the Conservative Party and I do not hold a brief for him, but it is utterly wrong and grossly unfair for hon. Members in the House of Commons to cast aspersions of that kind without having any ground for doing so except pure prejudice.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I am not casting any aspersions on either Mr. Macdiarmid's knowledge of the industry or his integrity. I am casting aspersions —rightly—on his known advocacy of anti-nationalisation.

Photo of Mr John Peyton Mr John Peyton , Yeovil

On a number of occasions in Committee I pointed out to hon. Members who support the Labour Party how very galling it must be for them that, when the Minister is confronted with the task and responsibility of finding appointees to the Corporation, he goes, first, to the City of London and, secondly, for a deputy chairman, to the industry which his party has castigated as being old-fashioned, out of date, and all the rest of it. Of course it is galling for them. The hon. Gentleman should not make the comments of the type he has just made.

If I may say this to the hon. Member for Cleveland (Mr. Tinn) without embarrassing him, his speech made me feel very sorry indeed that we did not hear more from him in Committee. That is not a sarcastic remark. It is made sincerely. His speech was easily the most sensible that we have listened to from the other side of the House. That, I am sorry to say, is not a very generous compliment.

We had from the hon. Member for Rotherharm (Mr. O'Malley) the willingness, apparently—I think on the whole he went through with it—to pay the rate for the job. It appeared at one point that he was not prepared to pay the top rate for the top job. We cannot isolate our industrial affairs from those of any other country. I care not a jot for the political beliefs of these people. If British industry is to be run properly, we must have the very best people. To suggest that such people will not be influenced by salaries is to deny them one of the weaknesses of human nature from which we all suffer. It is the greatest of hypocrisy on the part of Members of Parliament and Ministers, who have just given themselves a whacking big increase, to make some of the remarks which have been made today.

The hon. Member for Lewisham, West (Mr. Dickens) had to return to this old cry of nepotism. I wonder how many times he has been round a steel works. I wonder how many people he knows who work in the industry. I ask him to consider whether the last two Presidents of the British Iron and Steel Federation stand up to a charge of nepotism. I refer to Sir Julian Pode and Mr. Edward Judge. Are they people who climbed to such dizzy heights purely because of family privilege? The hon. Gentleman knows, or should know, that this is not the case.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

I make no comments on the two examples given, but I repeat my charge. Under private ownership our iron and steel industry was riddled with nepotism. This is one of the most serious defects in a management structure that is abysmal.

Photo of Mr John Peyton Mr John Peyton , Yeovil

The hon. Gentleman will believe anything. If he makes a tour of our iron and steel industry and goes round a number of plants which I have been round and looks for examples of nepotism, he will find it very hard to substantiate his allegation.

One hon. Member said that tax avoidance was a major industry. At the time he said it I muttered in an undertone that, if the present Government go on the way they are going on, it will probably be the only industry we have left.

I come to the real point which we are debating. At this stage I particularly invite the attention of the Parliamentary Secretary to the Ministry of Technology who, I understand, is to reply. On 10th November, some 10 weeks ago, the Minister used these words: We have not reached a decision on the level of salaries for the Corporation, but I have put forward some of the arguments to be taken into account in determining that."—[OFFICIAL REPORT, Standing Committee D; 10th November. 1966, c. 395.] I do not think that it was unreasonable for hon. Members who served on Standing Committee D to express disappointment at not being told during the passage of the Bill through Parliament about a matter of major importance. Hence, the length of this debate. It seems to us even more odd that apparently we are still to be none the wiser. The mere fact that the Minister of Power is not to answer this debate indicates to our now suspicious minds that no major announcement is to be made. Such things do not come from the Parliamentary Secretary to the Ministry of Technology. I believe this is a matter of considerable importance. It has a great effect upon all the other nationalised industries, however willing they may be to keep quiet during the period of severe restraint, or whatever we like to call it.

6.15 p.m.

Over the years the Treasury has been exceedingly tiresome on this subject. Naturally I have not discussed this point with the Minister, but I need no convincing that he probably wants to do the right thing here. I have no doubt whatever as to the pressures he is under and the reasons which are before him. He is prevented by two considerations—first, some of the more flabby comments made by some of his hon. Friends on this subject; and, secondly, the obstinacy of the Treasury, whose ideas of economy and saving are laughable. We all know the classic example of stopping a project half way through so that there is a building without a roof and which no one can use just in order to defer the expenditure a little. In view of the vast sums of money which are at stake in this industry, I cannot think that this pinching attitude which we have come to expect from the Treasury is appropriate

We cannot afford to have anyone except the very best people running this industry, particularly now at a time when the Government have foisted on the industry a whole lot of new problems because of a new organisation. In these circumstances it is shocking that we should be even going through the uncertainty that we are on this question and that it should have been necessary to table the Amend- ment. Though I do not mean this in any unkind way to the Parliamentary Secretary, I very much doubt whether he or half a dozen of his kind are likely to shift the Treasury from a position which it has occupied for very many years. However, it is high time that it was generally accepted in all parties and throughout the Civil Service that a policy of parsimony should not be pursued towards those who are responsible for these vast national assets.

It is odd that we, who have been accused so often of being vindictive, unkind and malicious in our attitude to the nationalised industries, should this afternoon be advocating a fair deal for those who will have the vast responsibility for their handling. I find the Government's attitude incredibly disappointing. I am prepared to acquit the Parliamentary Secretary of any responsibility, and even the Minister, though I am sorry he is not here. I would acquite the Minister of everything, except having denied Parliament this information during the passage of the Bill. That is the only charge I make against the Minister. For the rest, I have a certain sympathy for him in that he is subject to some fairly doubtful bad influences, only partially redeemed—because he is one among so many—by the hon. Member for Cleveland, and also because the Minister is up against the brick wall of Treasury opposition.

There have been references in the Press to the employment in these positions of retired people from elsewhere who can give the benefit of their general experience. This surely must be absolute nonsense. I am sure that the Minister cannot be contemplating anything so foolish. I very much hope that the Parliamentary Secretary will at least forward to the Treasury some of the comments which have been made this afternoon from this side of the House. We know that the Treasury is not addicted to taking too much notice of Parliament, but it would be nice to think that the Treasury was to be made aware of the fact that, in our view, one of the most foolish economies it could make would be to insist on depressing not only the level of reward but ultimately the standards of the men who serve and lead these nationalised industries. If in the years to come the other industries have to be brought up to the higher level now established, this will only be justice postponed.

I hope the Government will not bow to any of the foolish pressures from their own side but will accept that they will be guilty of a breach of trust in their initial handling of this industry on which they are laying their ugly hands if they do not find the best men to take charge.

Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley

I think I can go a certain distance with the hon. Member for Yeovil (Mr. Peyton), especially when he says that we want the best men for the job. Of course, we do. This nation is entitled to demand the best men in this industry. But even brilliant men do not always give of their best unless their hearts are in their jobs.

I do not want to level any criticisms against the major appointments in this industry, because it is obvious that these gentlemen whom we are discussing have taken over a very difficult task with the full intention of giving their best, not only to the industry but to the nation.

I get a little perturbed sometimes when I hear hon. Members opposite deploying arguments for higher salaries in the nationalised industries. I note that they usually speak on behalf of the managerial side, and especially the upper crust, rather than for the men on the shop floor. I would not give to the hon. Member for Yeovil any marks for being a good trade unionist because he is rather sectionalised in his views, as are many of his hon. Friends. It would be foolish to think that men can be attracted to an industry of any kind unless they are offered reasonable salaries, though I never lose hope that there are some men in this country who do not attach undue weight to the amount of money they receive for the job they do.

It has been said that when a man is receiving £10,000, £15,000 or £20,000 a year, another £2,000 does not mean too much. When that sort of argument is deployed I wish that hon. Members would appreciate that a man who applies for a job carrying a salary of £20,000 or £25,000 has certainly taken into account how much will be left as gross salary after deduction of Income Tax. So, obviously, has the employer. To argue about the gross figure and to talk about the deduction of tax is tantamount to saying that neither the employer nor the employee has taken into account the resultant salary. The argument about Income Tax, therefore, is not a good one. In addition, may I point out that when hon. Members mention such sums as £25,000 it gives to the public the impression that that is the salary which will be received. That is not so, and I suggest that we ought to talk about the realistic sum that will in fact be paid.

Hon. Members opposite who speak on behalf of the people who are to run this industry have not put their case too well. When they argue salary with salary they do not take into account some of the fringe benefits which men in private industry obtain, especially those with directorships. They get some advantage from bonus shares and rights issues. Therefore, if one compares a salary of £25,000 in a nationalised industry with £25,000 in a private industry, the man in private industry obviously will have a better salary. It is difficult to understand what hon. Members opposite have in their minds when they adopt this sort of argument. Do they want to make sure that certain gentlemen are appointed to a nationalised industry so that it can be denationalised at some time in the future? I hope this is not what is in their minds, for it would be betraying the nation. No matter what we think about nationalisation or private enterprise, it is essential that this industry becomes the most viable steel industry in the whole world.

Hon. Members opposite should realise that our steel industry is not the efficient industry that we want it to be. An article in the Observer on 8th August, 1965, said that in the Youngstown Sheet and Tube Company in the United States, 95 people are required to produce £1 million worth of steel, whereas in Stewarts and Lloyds it takes 259 people to produce the same amount. I said that in Standing Committee D on 3rd November last, and it is reported at c. 213 of the OFFICIAL REPORT.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

Since we are on the subject of Stewarts and Lloyds—Mr. Macdiarmid is chairman of that company—and if we are talking of efficiency, as the hon. Member for Yeovil (Mr. Peyton) was doing, may I ask him to bear in mind the poor exports of Stewarts and Lloyds and the failure of that company to provide the capacity that we need?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. We are wandering into detail. The hon. Member must come back to the Amendment, which is about the salaries paid to the members of the Corporation.

Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley

I should have liked to have followed what my hon. Friend the Member for Rotherham (Mr. O'Malley) said, but I shall have to conclude this part of my argument with my comments on the number of men required in this country to produce £1 million worth of steel.

On the subject of the limitation of salaries which has been suggested by some of my hon. Friends, I think they are right to a great extent. They consider the problem in a different way from hon. Members opposite. As I said earlier, salaries are not everything. If we have reached the stage where we accept that every man in industry is determined to get the utmost from industry in the way of salary and other benefits, then we accept the Tory philosophy of human nature. However, we on this side of the House do not accept that philosophy. We believe that a viable steel industry can be established in this country.

On the other hand, let me say this to my hon. Friends who are arguing about comparable salaries. This is, of course, an industry that is quite different. It is, as my hon. Friend the Member for Cleveland (Mr. Tinn) mentioned, a very complex industry. Furthermore, as a result of this Bill the industry will be more diversified than it was previously. That means that more and more we want intelligent and successful management. Do not let us forget that, in so far as this industry has not been allowed to increase at the same tempo as many other steel industries throughout the world, a good deal of capital will have to be poured into it. We want to make certain that that capital is used to the best advantage. There again, it is essential that we should have the best men that we can find to take charge, because it is not much use investing £100 million or £200 million in this industry, and then putting someone in charge who proves to be incapable of running the industry to the best advantage.

6.30 p.m.

Therefore, the Minister of Power must —and I am sure that he will do so—take note of what is being said in this discussion. I do not think that it is really worth while dividing the House over this Amendment. Nevertheless, it is essential that the Minister should take note of the points of view which have been expressed. I hope that the Parliamentary Secretary will pass on to the Minister what has been said. I hope he will bear in mind, when he is making these appointments, that the future is important and that the training of future management must play a vital part to ensure that the opportunity is there for men on the shop floor to work their way up and to take charge of this tremendous industry. If we can be assured that this sort of operation will take place, the industry will in future be of tremendous benefit to the economy of this country.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

I hope it will be noted, not necessarily by you, Mr. Speaker, but by hon. Members generally, that the longest speeches have come from the other side of the House, and, if we go very late, it will certainly not be due entirely to hon. Members on this side. I shall try to be as brief as I can. The only thing that can be said, arising out of our discussion and whatever reply we get from the Parliamentary Secretary, is that at least the members of the Corporation will receive a higher salary than the Minister receives. I hope that too much will not be made of this, as the Minister will probably recall that his salary was cut by the Prime Minister who, for political reasons, decided that he could not go as high as was suggested by the inquiring Committee.

The Minister has a number of options in fixing these salaries. It has been suggested by some of my hon. Friends that he should take into account the salaries that are paid in other nationalised industries, and this has been refuted by others on both sides of the House. Any suggestion of a pattern of salaries for nationalised industries generally was broken by my own party when in Government when we brought in Dr. Beeching to run the railways and paid him a salary which was in accordance with what he was getting before he joined British Railways.

There is no particular reason why the Minister should take into account salaries which have become a sort of norm generally in the nationalised industries.

He has, it seems to me, four options. He can pay the public service rate, the kind of rate that is paid in the nationalised industries or in the Civil Service. Secondly, he can pay a rate dictated by sheer politics. He can pay a rate that is an amalgam of those two, a public service rate somewhat pared down or put up slightly, as a result of comments of hon. Gentlemen opposite on the Left wing of his party. Finally, he can pay the market rate.

If he pays the public service rate in an industry of this kind, a manufacturing industry he will do a great disservice to the industry and he will act contrary to his declared intention throughout that it is his idea and aim that this nationalised Corporation should, as far as possible, at any rate, be run as a commercial concern. There is no room for paying so-called public service rates in a commercial concern.

If he decides to pay the rate of sheer politics, then, of course, he will take notice of speeches made by hon. Members opposite this afternoon who have suggested that people should serve in this industry both at the Corporation level and at the director level of the separate groups, and even further down, without regard to salary; that they should do it on the basis of the views of hon. Gentlemen opposite that, because the worker does not get a very high income, the directors, the executives and the managers should come down to the workshop level.

This may be a very good sentimental idea, but, of course, it is utterly impracticable. Indeed, in this industry, where there is really very little complaint about workers' rates, it makes nonsense, because this is one of the highest paid of all industries for the ordinary workers. There ate workers in this industry who are pulling out £40 a week, and there are executives whose salaries at present are running very close to what is being picked up by the workers themselves.

If we get down to this idea of using rates of pay within the nationalised industries as a sort of leveller, we are saying to the technicians, the executives, the managers, the people with brains in the industry, "You had better go out and buy yourselves a shop or set up your own little business, because you will make more money that way than you will in the iron and steel industry, whether it is nationalised or not". So the Minister had better disregard what has been said by some of his hon. Friends. Otherwise, he will finish up by losing the talent he already has in the industry, and he will not be able to recruit any new talent in the future.

This leaves us with the final option, the market rate for the job, the rate that is already being paid. Incidentally, one of my hon. Friends, in raising the question of present contracts, raised a question of considerable interest. We should like a reply from the Parliamentary Secretary on this because, if present contracts come to an end, they have to be bought out. If the Minister does not intend to pay the present rates fulfilling present contracts, presumably a "bowler hat" award will have to be given. A certain amount of this will be tax-free, and, if it is, it will probably cost the Corporation more to do it that way than if the Minister continued the present salaries.

The market rate for the job is the only rate to pay to put into this industry the incentive that is as necessary in a nationalised industry as it is in any other. It is the only rate to pay if we are to keep the right people. It is the only rate to pay if we are to get the best people.

Hon. Members opposite were a little upset when I countered the suggestion of penthouses for private industry with peerages for directors of nationalised industry. But there is a good deal in that. There is always a danger that a Minister will do a deal with the chairman or members of the board of a nationalised industry—I am not suggesting that it is likely to happen in this case—

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

The Minister has a chairman who happens to have a peerage, but there are other honours. It is possible for a Minister to say, "You must take a lower salary and, in return, I shall see in due course that you get the rewards which are normal in Civil Service and public appointments". I hope that he will do nothing of the kind.

I am very suspicious, nevertheless. The Minister is not to answer this debate. He does not want to commit himself. Unless he is prepared to say that the Parliamentary Secretary will give us the answer, I doubt that we shall have the answer from the hon. Gentleman I think that the Minister wants the House of Commons to finish the debate so that he then can quietly make up his own mind and have a shoddy compromise —not the market rate but a sort of twilight rate between what the nationalised industries at present pay, what the Treasury thinks would be appropriate, and the market rate. This will not do, and I hope that the right hon. Gentleman will not succumb to it.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

I intervene at this stage only to say that the hon. Gentleman must not read any great significance into the fact that I am not to reply to this debate. The only reason why I am not replying is that, for a large part of the afternoon, I have been meeting other people to discuss an entirely different subject, and I thought that, on an issue such as this about which both sides feel strongly, it would be wrong to come in with a prepared speech and wind up a debate which I had not heard.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

I hope that, in view of the long debate we have had and the interest taken in the subject, the Parliamentary Secretary will be instructed by the Minister to tell us what will be done and not burke the issue.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

We have had a long debate on this important matter, though I am sure that my hon. Friends will agree that there are many other important issues involved in the nationalisation of steel, some of them, perhaps, affecting a rather greater number of people working in the industry than are affected by this particular question, to which we should be giving our attention soon, and at an earlier rather than a later hour of the night.

We on this side appreciate the touching concern of hon. Members opposite that the nationalisation of steel should be a success. To be fair to hon. Members opposite, this is a real concern on their part, and I think that there is a good deal of substance in the point which many of them have made that it is relevant to consider the salaries to be paid to members of the Corporation. However, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) should not take the Sunday Express as necessarily conveying the milk of the gospel in terms of the truth about the situation. There is no possibility whatever of the National Steel Corporation being treated as a dumping ground for "worthy bemedalled ex-diplomats and generals". Perhaps the Sunday Express got confused with the list of members of the Carlton Club. Neither is there any possibility of it being treated as a dumping ground for anyone else. I flatly deny the rumour that the right hon. Members for Bexley (Mr. Heath) and for Streatham (Mr. Sandys) have been along to nominate one another for consideration for the Corporation.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Or the right hon. Member for Newton (Mr. Lee)?

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

Or my right hon. Friend the Member for Newton or the right hon. Member for Altrincham and Sale (Mr. Barber)—neither of them, no.

We must have first-class people on the Corporation just as we must have first-class people as members of the boards of other nationalised industries. The steel industry is a great industry with great responsibilities. However, the Amendment suggests a curious criterion—that in any event the salaries of members of the Corporation should not be lower than the level in comparable industrial enterprises. What are comparable industrial enterprises? Do we take the British Printing Corporation, with Mr. Harvey helping himself to £100,000 a year? Are we to go to the most preposterous level that any private company may choose to set for itself, with the very tenuous control exercised by shareholders over the salaries of directors? The criterion does not bear examination, and we certainly could not accept the Amendment.

6.45 p.m.

My hon. Friend the Member for Rotherham (Mr. O'Malley) said that in the steel industry we must pay what we need to pay to get the right people to do the job. This is a powerful argument. But so is the argument put by my hon. Friend the Member for Lewisham, West (Mr. Dickens), that we need to develop within the steel industry, and within nationalised industry generally, management which is capable of exercising the highest responsibilities. I welcome what my hon. Friend said about mobility within the nationalised industries, and I note that he was misinterpreted when he accepted the desirability of mobility with private enterprise below the top level. We all hope that this long-term process of increasing the supply of top management ability in the country will produce a market situation different from that which we have today. But this is a long-term consideration.

We accept that the steel industry is in some senses in a special position in that it is, for example, a manufacturing industry and it competes with overseas industries. But we cannot accept the implication which was, I think, at the back of the mind of the hon. Member for Aylesbury (Sir S. Summers), that in some sense the steel industry needs first-class management whereas, for example, the electricity supply industry—which has a far bigger investment load than any other industry in the country—can somehow do with less than first-class management at the top.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

The hon. Member for Aylesbury came near to saying it when he suggested that the steel industry, because it is a manufacturing industry and is in direct competition with overseas industries should somehow have a particularly high calibre of management.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I thought that what my hon. Friend was saying was perfectly clear.

Photo of Sir Spencer Summers Sir Spencer Summers , Aylesbury

Perhaps I had better make my own point. The Parliamentary Secretary is quite wrong in saying that anything I said suggested that the other nationalised industry hoards should make do with lower quality at the top. The point I brought out was that, because of the special situation of the steel industry, it could not afford to have anything less than the best.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

That is just as true for the members of the Electricity Council. They cannot have anything less than the best either. I am grateful to the hon. Gentleman for clearing up what I am sure he would not have wished to be taken as a reflection on the members of the boards or the activities of other nationalised industries.

We have been asked about the position of existing workers in the industry, some of them executive directors of companies, and what their position will be under nationalisation. I should make clear that the present working directors and staffs will, after vesting, while they remain in their existing jobs, continue to receive the salaries to which they are entitled under their contracts of employment.

Therefore, there will be no across-the-board reduction in the salaries of the men now working in the steel industry. Nor will men necessarily go on for ever holding the jobs they now have. Every industry, when it is reorganised, must move staff around and not all staff are able to retain the same levels of responsibility they held before. As my hon. Friend the Member for Rotherham (Mr. O'Malley) said, there are many directors on the vesting companies. But any staff who, as a result of the reorganisation of the industry, suffer a forced diminution in emolument will be entitled to compensation under regulations the Minister is required to make under Section 41 of the 1949 Act, revived, and these will be based on the same general principles as comparable regulations made under other nationalisation measures. There will, therefore, certainly be the justice which the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) was concerned should be evident.

Another factor in the Government's decision relating to the salaries of the Corporation is necessarily the effect on salaries in the middle ranges of management. With a vaguely technical background, I sometimes get very impatient when hon. Gentlemen opposite rest an argument for a salary increase to the top brass of industry on the brain drain of scientists and engineers. Top brass do not by and large have a ready demand for their services overseas, whereas more junior managers, scientists and engineers are in such high demand. That argument is tantamount to the one they sometimes use to persuade old-age pensioners to vote for a reduction in Income Tax because of the shilling tax they may put on their private superannuation scheme.

Photo of Mr John Peyton Mr John Peyton , Yeovil

That is one of the flabbiest arguments that I have yet heard from the Parliamentary Secretary.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

I hope that the hon. Member for Yeovil (Mr. Peyton) will elaborate his view of the brain drain on some future occasion, and not base it on any arguments about the top levels of industry. Clearing out some of the people who are at present holding £20,000 a year jobs in the private sector would probably be one of the most effective ways of stopping the brain drain. [Interruption.] The hon. Gentleman may like a private discussion on that in the Lobby later. I am sure that he could name as many people as I.

The salaries at the top will affect those in the middle levels of industry directly —and that will be an important consideration but it will indirectly have a much wider effect on the Government's incomes policy as a whole. That point was made by my hon. Friend the Member for Ashfield (Mr. Marquand).

An Amendment which simply puts one consideration, however relevant, and none of the others, relating to the structure of management below the top and the effect on the incomes policy, could not possibly be accepted. I agree that the question is not easy, and I hope that the House will give as close attention as this to other matters affecting the industry. We shall secure the services of a first-class Corporation but we cannot solve the problems of the whole national structure of salaries and incomes in the context of its salaries. The appointments which my right hon. Friend must make must be made in the light of all the considerations. They cannot be made under the one-sided provisoes of the Amendment.

I therefore hope that the House will reject it.

Photo of Mr Brian O'Malley Mr Brian O'Malley , Rotherham

Before my hon. Friend sits down I should like to ask him about what he said about the executive directors, in that while they kept their present jobs they would keep their present salaries. Would he not agree that if those salaries are substantially in excess of the salaries received by members of the board, as would be the case if they received similar salaries to those of members of the boards of the existing nationalised industries, an impossible situation would be created?

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

That is the kind of situation we should discuss when it arises.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

I entirely accept the right hon. Gentleman's reason for not seeing fit to reply to the debate himself. He told us that he had an important meeting which would have prevented him from hearing the arguments. At the same time, the debate has shown that there is great interest in the House, and comments in the Press have shown that the subject is of much wider public interest, and I believe that on this occasion the Minister should have put Parliament first. In the light of the reply of the Parliamentary Secretary to the Ministry of Technology, as a result of which we are none the wiser, the Minister was guilty—I do not say of discourtesy to the House—but perhaps of a misjudgment in not dealing with the matter himself.

The debate has been most interesting, because it is clear that the Amendment has touched the Labour Party on a sensitive and raw spot. We have seen in all its nakedness the schizophrenia which affects right hon. and hon. Gentlemen opposite when discussing issues of this sort. On the one hand, the hon. Members for Rotherham (Mr. O'Malley) and Cleveland (Mr. Tinn) and another hon. Member insisted that the right criterion was the rate for the job, and regarded the efficiency and prosperity of the steel industry as the over-riding criterion. They demanded that the Minister should pay the kind of salaries which would achieve that objective.

On the other hand, there were hon. Members like the hon. Member for Lewisham, West (Mr. Dickens) and Deanne Valley (Mr. Edwin Wainwright) and Glasgow, Provan (Mr. Hugh D. Brown) who utterly rejected that, and took the view that what was necessary was a fulfilment of the doctrines of Socialism, and human nature jolly well had to fit in. That was what the hon. Member for Dearne Valley was saying.

The fact is that the salary a man gets is a subject of absorbing interest, and it has always been the view in the public service that the public has a right to know what is being paid. It therefore follows that when we set up a new public corporation with new functions which are different from any that have gone before, the level of remuneration to be paid to its members must be regarded as a very important clue to the Minister's intentions as to how it is to be run. The House has obviously so regarded it. The nature of the job, the level of competence required, and, in this case, the fact that the Corporation must operate in the overseas as well as the home market, are all important factors. As is usual in these matters, the Bill is silent on this, and the Amendment was intended to dig out the Government's intentions in this important regard.

We all knew that Lord Melchett had been appointed Chairman of the Organising Committee with a salary of £16,000 a year; it was announced in a Written Answer. That salary was closely comparable with the salary being paid to Sir Giles Guthrie, Chairman of B.O.A.C. But that fact does not begin to answer the question of the level of remuneration of the members of the Corporation once it is in existence. The Minister refused to answer that question in Committee, and my hon. Friends and I felt it right to return to the attack on Report.

It has now become clear that in bringing forward the Bill and raising this dilemma the Minister and the whole Government have stirred up a veritable hornets' nest. The dilemma is obvious and has been pinpointed not only in the Sunday Express but in other responsible newspapers. Out of the full-time members of public boards at present being remunerated by the nation, only 13 are in the five-figure bracket, earning more than £10,000 a year. All the rest earn less. In the Civil Service the figures tend to be lower still. On the other hand, in private industry the salaries are very substantially higher.

A number of my hon. Friends referred to figures. The survey that I have drawn on for this purpose is one conducted by a very eminent management consultant who worked out the average full-time director's salary—not the chairman's salary, not the top salary—in a number of our leading companies. The figures will bear repetition in the context of this debate. I.C.I., £32,000; British Petroleum—in which the Government have at present 50 per cent. Shareholding— £30,000; British Oxygen, £26,000; Shell, £25,000; Bowaters, £22,000; British Insulated Callenders Cables, £20,000; Guest Keen and Nettlefolds, £19,000; Vickers, £18,000. One could go on.

7.0 p.m.

I take the hon. Gentleman's point that all this makes it difficult to determine what the standard is, but the purpose of the Amendment is clear. It is, of course, that salaries comparable with those I listed need to be paid to members of the Corporation. There is a yawning gap between the level of remuneration paid to top industrialists and the level paid in the public sector, yet we want top industrialists for the new Corporation.

The Government have had to face this problem before. When the last Government hired Lord Beeching, they paid him what was admittedly an exceptional salary in order to retain his service. They agreed to pay him what he got at I.C.I. —£24,000. But this was exceptional and was seen to be. His successor is getting just over half that figure.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

Is it being seriously argued that Sir Stanley Raymond, because he is getting £12,500 per annum, is in any sense an inferior chairman to Lord Beeching, who was getting almost double?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

I am not saying for one moment that Sir Stanley is doing worse than Lord Beeching did. My case is that these are the sort of considerations which young men take into account. They can see that the top man of British Railways is getting half or less than half of the salary of the top men in many of our major industrial concerns. That must have some effect on choice of career. Furthermore, in the case of the railways, I remind the hon. Member that, if a man wants to join the railways in Britain, there is but one employer. Such a situation will also nearly arise in steel.

I come to a more recent case where the Government have had to face the issue and where a thoroughly unsatisfactory situation has arisen. This is the employment of Mr. Wall as Director-General of the Post Office at a salary paid from public funds of £12,500, which is comparable with salaries paid in other nationalised industries. But his former employers—one of the main suppliers to the Post Office—are being left to make up the difference in his salary, which is of an unspecified amount. This is fudging the issue. It is complete nonsense and must be regarded as a totally unsatisfactory solution.

Now, with the new Corporation, the issue has to be faced. I am bound to tell the Joint Parliamentary Secretary to the Ministry of Technology that nothing he has told us has given us any clue as to how the Minister intends to deal with this case. Of course, the right hon. Gentleman is facing difficulties from his colleagues. Many Departments, including the Treasury and the D.E.A., and possibly civil servants and fulltime members of other corporations, are going to object if the right hon. Gentleman finds that he has to pay salaries substantially in excess of those paid to members of existing boards in building up the right career structure in the steel industry. That is what the political correspondent of The Times called a "political quandary". It is the position in which the Government find themselves.

We are now in almost the last stage of the Bill. We are still no nearer than we were on Second Reading to knowing what the Minister intends to do about this. Perhaps there are goods reasons for the Treasury's fears in this matter. Last Thursday The Guardian published an article on the subject of salaries in the public and private sectors, indicating that the right answer—and I recognise that this would be no comfort to the hon. Member for Lewisham, West (Mr. Dickens)—is that the Government must upgrade the level of salaries being paid to top level posts in the public sector if they are to compete for the best available talent.

It is time that this internal argument was finished. It began even before the Committee Stage of the Bill—even before the right hon. Gentleman appointed Lord Melchett to be Chairman of the Organising Committee. On 13th September, only five months ago, the industrial correspondent of the Financial Times wrote in an article: The search for a chairman from either inside or outside the industry has apparently not yet been finally concluded and yesterday's consultations"— between the Minister of Power and the Secretary of State for Economic Affairs— appeared to centre on the size of salary and conditions. In September, the right hon. Gentleman was arguing about this. In November he was pressed in Committee to tell us his position. Now, two months later, we have still had no answer.

We unequivocally take our stand that the Government must pay the market rate. Not only will this attract the right people at the outset but, far more important, it will establish a career structure from top to bottom which will ensure that the Corporation will get its share of the available talent coming from the universities, technical colleges and elsewhere.

When the Joint Parliamentary Secretary jibed at my hon. Friends about their reliance on the brain drain in argument, he was doing less than justice to his case, because it is these people who, if they want a career in steel, will compare opportunities here with those overseas. They will see that the level of remuneration of those at the top here, with the inevitable sandwiching of the structure, will not give them the opportunities they think their abilities entitle them to and they will go. That is a factor that the hon. Gentleman must bear in mind.

This is a difficult problem but the right hon. Gentleman owes it to Parliament to say what is in his mind. He has manifestly failed to do so despite opportunities in Committee and again today. For this reason, the reply of the hon. Gentleman was totally unsatisfactory and I advise my right hon. and hon Friends to vote in favour of the Amendment.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I agree with the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) that the answer given by the Joint Parliamentary Secretary to the Ministry of Technology told us absolutely nothing. For that reason alone, the Opposition would be justified in dividing on the Amendment. But, as the Minister of Power himself has been here for the last half hour and has listened carefully to what has been said in that time, he might do us the courtesy of saying a few words about what is in his mind before the debate concludes.

As the Joint Parliamentary Secretary said, we should get on to other Amendments covering greater numbers of people but although I agree in theory I must point out that, unless we get the right people on the Corporation, the jobs of all those who work in the industry will be less satisfactorily taken care of and so we are not only arguing about the salaries of the few men at the top but about the guidance they are to give the industry as a whole and about the importance that the industry will have to our economy.

From that point of view alone, the time we have spent on the Amendment is fully justified. It is clear that on both sides we agree that the best men should be appointed. The only dispute is on the level of remuneration required in order to get the best men. If a man is receiving £24,000 a year in private industry, it is unlikely that he will go to the Corporation for one-third of that sum. We have heard about the incidence of taxation, which means that, if a person gets a few thousand £s extra in this sort of range, it does not make a great deal of difference to his take-home pay. But there is a big enough difference between £8,000 and £24,000 to deter a person receiving the latter from going to the N.S.C. and receiving the former. The case of Dr. Beeching has been quoted several times. It was necessary to pay him the same remuneration he was receiving from I.C.I. to get him to take on the job—[HON. MEMBERS: "Less."] £2,000 less, I think. Nevertheless, it was substantially in excess of the salaries which were currently payable to chairmen of the nationalised industries.

I think myself that there is a case for a general review of the remuneration of the chairmen of all the nationalised industries. It would be out of order to discuss that on this occasion since we are talking about only the National Steel Corporation. I do not think there should be a norm, a sort of Civil Service level, of remuneration for the directors and chairmen of our nationalised industries, but that they should be paid what it is necessary to pay them in order to get the best men for the job whether for the Central Electricity Generating Board, the National Coal Board or the National Steel Corporation.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Easington

Could they not be paid by results? Take, for example, Dr. Beeching. What did he achieve? He only achieved for his £24,000 the closing down of branch lines. Anybody could have done that for less money. What has Lord Robens achieved for his £12,500 and, probably, perquisites? What has he achieved? He has closed down hundreds of pits and dispossessed thousands and thousands of miners. Anybody could do that for much less money.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I am sure, Mr. Speaker, you would not allow me to reply to that in detail. I would only say that Lord Robens has achieved a much higher rise in productivity in the coal industry than that in practically any other industry in the whole of this country. I do not think the right hon. Gentleman's remarks are very fair. Lord Robens has done a considerable amount to modernise the industry since he took over as Chairman of the Coal Board. There is a far higher proportion of coal produced by mechanical means, and automation is being introduced. Although, as the right hon. Gentleman says, there has been a reduction in the labour force in the industry, that would have been necessary under whoever was Chairman, whether Lord Robens or somebody else.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. Before the intervention, may I remind the House that we must keep to the Amendment.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I am sorry, Mr. Speaker, if I went too far in replying to that intervention by the right hon. Gentleman, but I think that the right hon. Gentleman might address himself to the question one of these days whether we pay the chairmen of our nationalised industries what they are worth. In the case of the National Steel Corporation, the job is of extreme importance to the national economy. I would suggest it would be of as great importance, at least, as that of the National Coal Board or the Central Electricity Generating Board, and I have already said that, in my opinion, the chairmen of those bodies are not getting the proper salary they should be paid.

The Minister has, in answer to a Question, given the salary which is being paid to Lord Melchett—and I think also that to Mr. Macdiarmid—as Chairman of the Organising Committee.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

May I just correct the hon. Gentleman? No salary is being paid to Mr. Macdiarmid.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

The salary being paid to Lord Melchett, as Chairman of the Organising Committee, is £16,000. I think it would be of great interest to the House if the Minister could say whether that is the salary he has in mind for the Chairman of the Corporation, when he has subsequently been appointed. I would have thought that the job of Chairman of the Organising Committee was not such a well-paid one as the job of the Chairman of the Corporation, when the Minister has appointed one, and I think that Lord Melchett may well expect a rise. If the Minister could tell us, it would be of great importance, as indicating the sort of range of salaries the directors of the Corporation are likely to be paid, whether they will be of the same order as those in other nationalised industries or whether, if the Chairman is getting more, the directors will be receiving more than they are.

I would suggest that the Minister, having listened for at least three-quarters of an hour to this discussion and to the

whole of the speech of the Parliamentary Secretary, might realise that there is some disquiet in the House on this subject, and that he might avoid a Division and get on with his Bill much faster if he would vouchsafe at least some information to the House of what is in his mind. If he would look at Section 1(9) of the Act of 1949, to which the Amendment refers, he will see that all that it tells us is that those persons will receive such remuneration…as the Minister may, with the approval of the Treasury, determine". That means that the whole thing is completely in the air. No one in this House will have the slightest idea what remuneration those directors will receive, and if that is to be the position at the end of this debate the Opposition are perfectly justified in dividing on this Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 212, Noes 257.

Division No. 240.]AYES[7.15 p.m.
Alison, Michael (Barkston Ash)Cunningham, Sir KnoxHeath, Rt. Hn. Edward
Allason, James (Hemel Hempstead)Currie, G. B. H.Heseltine, Michael
Astor, JohnDalkeith, Earl ofHiggins, Terence L.
Atkins, Humphrey (M't'n & M'd'n)Dance, JamesHill, J. E. B.
Awdry, Danield'Avigdor-Goldsmid, Sir HenryHirst, Geoffrey
Baker, W. H. K.Dean, Paul (Somerset, N.)Hobson, Rt. Hn. Sir John
Barber, Rt. Hn. AnthonyDeedes, Rt. Hn. W. F. (Ashford)Hogg, Rt. Hn. Quintin
Batsford, BrianDigby, Simon WingfieldHolland, Philip
Beamish, Col. Sir TuftonDoughty, CharlesHooson, Emlyn
Bell, RonaldDrayson, G. B.Hordern, Peter
Bennett, Dr. Reginald (Cos. & Fhm)du Cann, Rt. Hn. EdwardHornby, Richard
Berry, Hn. AnthonyEden, Sir JohnHowell, David (Guildford)
Bessell, PeterElliot, Capt. Walter (Carshalton)Hunt, John
Biffen, JohnElliott, R. W.(N'c'tIe-upon-Tyne, N.)Hutchison, Michael Clark
Biggs-Davison, JohnEyre, ReginaldIremonger, T. L.
Birch, Rt. Hn. NigelFarr, JohnIrvine, Bryant Godman (Rye)
Blaker, PeterFisher, NigelJenkin, Patrick (Woodford)
Body, RichardFletcher-Cooke, CharlesJohnson Smith, G. (E. Grinstead)
Bossom, Sir CliveForrest, GeorgeJones, Arthur (Northants, S.)
Boyd-Carpenter, Rt. Hn. JohnFortescue, TimJopling, Michael
Boyle, Rt. Hn. Sir EdwardFoster, Sir JohnJoseph, Rt. Hn. Sir Keith
Braine, BernardGalbraith, Hn. T. G.Kerby, Capt. Henry
Brinton, Sir TattonGiles, Rear-Adm. MorganKimball, Marcus
Brown, Sir Edward (Bath)Gilmour, Ian (Norfolk, C.)King, Evelyn (Dorset, S.)
Bruce-Gardyne, J.Gilmour, Sir John (Fife, E.)Kitson, Timothy
Bryan, PaulGlover, Sir DouglasKnight, Mrs. Jill
Buchanan-Smith, Alick (Angus, N&M)Glyn, Sir RichardLambton, Viscount
Bullus, Sir EricGodber, Rt. Hn. J. B.Lancaster, Col. C. G.
Burden, F. A.Goodhart, PhilipLangford-Holt, Sir John
Campbell, GordonGower, RaymondLegge-Bourke, Sir Harry
Carr, Rt. Hn. RobertGrant-Ferris, R.Lewis, Kenneth (Rutland)
Cary, Sir RobertGresham Cooke, R.Lloyd, Ian (P'tsm'th, Langstone)
Channon, H. P. G.Grieve, PercyLloyd, Rt. Hn. Selwyn (Wirral)
Chichester-Clark, R.Griffiths, Eldon (Bury St. Edmunds)Longden, Gilbert
Clark, HenryGurden, HaroldLoveys, W. H.
Clegg, WalterHall, John (Wycombe)Lubbock, Eric
Cooke, RobertHall-Davis, A. G. F.McAdden, Sir Stephen
Cooper-Key, Sir NeillHamilton, Michael (Salisbury)MacArthur, Ian
Cordle, JohnHarris, Frederic (Croydon, N. W.)Maclean, Sir Fitzroy
Costain, A. P.Harris, Reader (Heston)Macmillan, Maurice (Farnham)
Craddock, Sir Beresford (Spelthorne)Harrison, Col. Sir Harwood (Eye)Maddan, Martin
Crawley, AidanHastings, StephenMaginnis, John E.
Crouch, DavidHawkins, PaulMarples, Rt. Hn. Ernest
Crowder, F. P.Heald, Rt. Hn. Sir LionelMarten, Neil
Maude, AngusPercival, IanTeeling, Sir William
Maudling, Rt. Hn. ReginaldPeyton, JohnTemple, John M.
Mawby, RayPink, R. BonnerThatcher, Mrs. Margaret
Maxwell-Hyslop, R. J.Powell, Rt. Hn. J. EnochTilney, John
Mills, Peter (Torrington)Price, David (Eastleigh)Turton, Rt. Hn. R. H.
Mills, Stratton (Belfast, N.)Prior, J. M. L.van Straubenzee, W. R.
Miscampbell, NormanQuennell, Miss J. M.Vaughan-Morgan, Rt. Hn. Sir John
Mitchell, David (Basingstoke)Ramsden, Rt. Hn. JamesVickers, Dame Joan
Monro, HectorRawlinson, Rt. Hn. Sir PeterWalker, Peter (Worcester)
More, JasperRees-Davies, W. R.Walker-Smith, Rt. Hn. Sir Derek
Morgan, Geraint (Denbigh)Renton, Rt. Hn. Sir DavidWall, Patrick
Morrison, Charles (Devizes)Ridley, Hn. NicholasWalters, Dennis
Mott-Radclyffe, Sir CharlesRidsdale, JulianWard, Dame Irene
Munro-Lucas-Tooth, Sir HughRodgers, Sir John (Sevenoaks)Weatherill, Bernard
Murton, OscarRossi, Hugh (Hornsey)Wells, John (Maidstone)
Neave, AireyRoyle, AnthonyWhitelaw, Rt. Hn. William
Nicholls, Sir HarmarScott, NicholasWills, Sir Gerald (Bridgwater)
Noble, Rt. Hn. MichaelSharples, RichardWilson, Geoffrey (Truro)
Nott, JohnShaw, Michael (Sc'b'gh & Whitby)Wolrige-Gordon, Patrick
Onslow, CranleySinclair, Sir GeorgeWood, Rt. Hn. Richard
Orr, Capt. L. P. S.Smith, JohnWoodnutt, Mark
Orr-Ewing, Sir IanStainton, KeithWorsley, Marcus
Osborn, John (HallamSteel, David (Roxburgh)Wylie, N. R.
Osborne, Sir Cyril (Louth)Stodart, AnthonyYounger, Hn. George
Page, Graham (Crosby)Summers, Sir Spencer
Page, John (Harrow, W.)Taylor, Sir Charles (Eastbourne)TELLERS FOR THE AYES:
Pardoe, JohnTaylor, Edward M. (G'gow, Cathcart)Mr. Francis Pym and
Pearson, Sir Frank (Clitheroe)Taylor, Frank (Moss Side)Mr. Anthony Grant.
NOES
Abse, LeoDavies, G. Elfed (Rhondda, E.)Howell, Denis (Small Heath)
Albu, AustenDavies, Harold (Leek)Howie, W.
Allaun, Frank (Salford, E.)Davies, Ifor (Gower)Hughes, Rt. Hn. Cledwyn (Anglesey)
Alldritt, WalterDelargy, HughHughes, Hector (Aberdeen, N.)
Allen, ScholefieldDell, EdmundHughes, Roy (Newport)
Anderson, DonaldDewar, DonaldHunter, Adam
Archer, PeterDiamond, Rt. Hn. JohnHynd, John
Armstrong, ErnestDickens, JamesJackson, Peter M. (High Peak)
Atkins, Ronald (Preston, N.)Dobson, RayJenkins, Hugh (Putney)
Atkinson, Norman (Tottenham)Doig, PeterJenkins, Rt. Hn. Roy (Stechford)
Bagier, Gordon A. T.Driberg, TomJohnson, Carol (Lewisham, S.)
Barnett, JoelDunn, James A.Jones, Dan (Burnley)
Beaney, AlanDunnett, JackJones, J. Idwal (Wrexham)
Bellenger, Rt. Hn. F. J.Dunwoody, Mrs. Gwyneth (Exeter)Judd, Frank
Bence, CyrilDunwoody, Dr. John (F'th & C'b'e)Kelley, Richard
Benn, Rt. Hn. Anthony WedgwoodEadie, AlexKerr, Dr. David (W'worth, Central)
Bennett, James (G'gow, Bridgeton)Edwards, William (Merioneth)Lawson, George
Bidwell, SydneyEllis, JohnLeadbitter, Ted
Bishop, E. S.English, MichaelLee, Rt. Hn. Frederick (Newton)
Blackburn, F.Ennals, DavidLestor, Miss Joan
Boardman, H.Ensor, DavidLever, L. M. (Ardwick)
Booth, AlbertFernyhough, E.Lewis, Ron (Carlisle)
Boston, TerenceFinch, HaroldLomas, Kenneth
Bottomley, Rt. Hn. ArthurFletcher, Raymond (Ilkeston)Loughlin, Charles
Bowden, Rt. Hn. HerbertFletcher, Ted (Darlington)Luard, Evan
Boyden, JamesFoot, Michael (Ebbw Vale)Lyon, Alexander W. (York)
Braddock, Mrs. E. M.Ford, BenLyons, Edward (Bradford, E.)
Bradley, TomFraser, John (Norwood)McBride, Neil
Bray, Dr. JeremyFreeson, ReginaldMcCann, John
Brooks, EdwinGardner, TonyMacColl, James
Broughton, Dr. A. D. D.Garrett, W. E.MacDermot, Niall
Brown, Hugh D. (G'gow, Provan)Ginsburg, DavidMacdonald, A. H.
Brown, Bob (N'c'tle-upon-Tyne, W.)Gourlay, HarryMcKay, Mrs. Margaret
Buchan, NormanGray, Dr. Hugh (Yarmouth)Mackenzie, Gregor (Rutherglen)
Buchanan, Richard (G'gow, Sp'burn)Gregory, ArnoldMackie, John
Butler, Herbert (Hackney, C.)Griffiths, David (Rother Valley)Mackintosh, John P.
Carmichael, NeilGriffiths, Rt. Hn. James (Llanelly)Maclennan, Robert
Carter-Jones, LewisGriffiths, Will (Exchange)McMillan, Tom (Glasgow, C.)
Castle, Rt. Hn. BarbaraHale, Leslie (Oldham, W.)McNamara, J. Kevin
Coe, DenisHamilton, James (Bothwell)MacPherson, Malcolm
Coleman, DonaldHarper, JosephMahon, Peter (Preston, S.)
Concannon, J. D.Harrison, Walter (Wakefield)Mahon, Simon (Bootle)
Conlan, BernardHart, Mrs. JudithMallalieu, E. L. (Brigg)
Corbet, Mrs. FredaHaseldine, NormanMallalieu, J. P.W.(Huddersfield, E.)
Craddock, George (Bradford, S.)Hattersley, RoyManuel, Archie
Crawshaw, RichardHazell, BertMapp, Charles
Cronin, JohnHenig, StanleyMarquand, David
Crosland, Rt. Hn. AnthonyHerbison, Rt. Hn. MargaretMarsh, Rt. Hn. Richard
Crossman, Rt. Hn. RichardHobden, Dennis (Brighton, K'town)Mason, Roy
Cullen, Mrs. AliceHooley, FrankMayhew, Christopher
Dalyell, TamHorner, JohnMellish, Robert
Davidson, Arthur (Accrington)Houghton, Rt. Hn. DouglasMendelson, J. J.
Davies, Dr. Ernest (Stretford)Howarth, Harry (Wellingborough)Mikardo, Ian
Millan, BrucePrice, William (Rugby)Swingler, Stephen
Milne, Edward (Blyth)Pursey, Cmdr. HarrySymonds, J. B.
Mitchell, R. C. (S'th'pton, Test)Randall, HarryTaverne, Dick
Moonman, EricRankin, JohnThomas, George (Cardiff, W.)
Morris, Alfred (Wythenshawe)Redhead, EdwardThornton, Ernest
Morris, Charles R. (Openshaw)Roberts, Albert (Normanton)Tinn, James
Morris, John (Aberavon)Roberts, Goronwy (Caernarvon)Tomney, Frank
Moyle, RolandRoberts, Gwilym (Bedfordshire, S.)Urwin, T. W.
Murray, AlbertRobertson, John (Paisley)Varley, Eric C.
Newens, StanRobinson, Rt. Hn. Kenneth (St. P'c'as)Wainwright, Edwin (Dearne Valley)
Norwood, ChristopherRobinson, W. O. J. (Walth'stow, E.)Wallace, George
Oakes, GordonRodgers, William (Stockton)Watkins, David (Consett)
Ogden, EricRoebuck, RoyWeitzman, David
O'Malley, BrianRogers, George (Kensington, N.)Wellbeloved, James
Oram, Albert E.Rose, PaulWells, William (Walsall, N.)
Orbach, MauriceRoss, Rt. Hn. WilliamWhitaker, Ben
Orme, StanleyRowland, Christopher (Meriden)White, Mrs. Eirene
Oswald, ThomasRyan, JohnWhitlock, William
Owen, Dr. David (Plymouth, S'tn)Shaw, Arnold (Ilford, S.)Willey, Rt. Hn. Frederick
Owen, Will (Morpeth)Sheldon, RobertWilliams, Alan (Swansea, W.)
Paget, R. T.Shinwell, Rt. Hn. E.Williams, Alan Lee (Hornchurch)
Palmer, ArthurShort, Rt. Hn. Edward (N'c'stle-u-Tyne)Williams, Clifford (Abertillery)
Pannell, Rt. Hn. CharlesShort, Mrs. Renée (W'hampton, N. E.)Williams, Mrs. Shirley (Hitchin)
Park, TrevorSilkin, Rt. Hn. John (Deptford)Willis, George (Edinburgh, E.)
Parker, John (Dagenham)Silverman, Julius (Aston)Wilson, William (Coventry, S.)
Parkyn, Brian (Bedford)Silverman, Sydney (Nelson)Winnick, David
Pavitt, LaurenceSkeffington, ArthurWoodburn, Rt. Hn. A.
Pearson, Arthur (Pontypridd)Slater, JosephWoof, Robert
Peart, Rt. Hn. FredSmall, WilliamYates, Victor
Pentland, NormanSnow, JulianZilliacus, K.
Perry, Ernest G. (Battersea, S.)Spriggs, Leslie
Perry, George H. (Nottingham, S.)Steele, Thomas (Dunbartonshire, W.)TELLERS FOR THE NOES:
Price, Christopher (Perry Barr)Storehouse, JohnMr. Charles Grey
Price, Thomas (Westhoughton)Strauss, Rt. Hn. G. R.and Mr. Ioan L. Evans.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I beg to move Amendment No. 11, in page 2, line 15, to leave out subsection (6).

I can say at the outset that there would probably be no Division on this Amendment if I were able to guarantee the conduct of either Parliamentary Secretary, but as both of them are inclined to lead with their chins I cannot give any guarantee that we will not have to divide after all.

The purpose of the Amendment—and for the life of me I cannot understand why I did not raise the matter in Standing Committee—is to make a mild inquiry about what the "special circumstances" are likely to be. Secondly, is this a normal provision in an Act of Parliament? Thirdly, even if it is a normal provision, is it a proper one?

I do not like the idea of people who are removed from office by some force or other being thereafter paid compensation in accordance with a Minister's inclination subject to the fiat of the Treasury. This seems to me to be an unusual state of affairs. It may be that the Parliamentary Secretary can inform me that it applies in every comparable Act of Parliament. I hasten to say, however, that that would not increase my respect for it, but the argument of precedent is a tough one to have to meet.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

No chins, and I hope that the hon. Member will be able shortly to go for his dinner—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I was not aware that the hon. Member for Yeovil (Mr. Peyton) had finished his speech.

Photo of Mr John Peyton Mr John Peyton , Yeovil

No, Mr. Speaker. I was under the impression that the Parliamentary Secretary sought to interrupt me. I have asked him those three questions and I am not in the least anxious to go for my dinner. The hon. Gentleman is an absolute master of the inelegant phrase. His tact is that which could be attributed to a rhinoceros, only with the fear that one might somehow offend the rhinoceros.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I hope that there will be no interventions while the hon. Member is trying to get back into order.

Photo of Mr John Peyton Mr John Peyton , Yeovil

My earliest warning was justified when I said that in normal circumstances a Division on this issue was beyond contemplation. However, the Parliamentary Secretary is teetering on the edge of one more miracle.

I come straight back to the Amendment. My three questions to the hon. Gentleman are whether this is a normal provision; secondly, if it is normal, whether it is proper; and thirdly, what are the special circumstances envisaged and what sort of sums of money the Minister has in mind to pay.

7.30 p.m.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Middlesbrough West

No rhinoceroses either!

The hon. Gentleman asked three questions: first, when would this provision he used? There may be circumstances in which the Minister would decide that it would be in the interests of the Corporation—for example in order to provide for some reconstruction of the organisation of the Corporation itself at a later stage—that a member should resign although he was fit to continue in his function. In these circumstances, according to the terms of his appointment, it might not be possible for the Minister to terminate it. On the other hand, if the member simply resigned, without the provisions of this subsection it might not be possible to pay him compensation for resigning. It is, therefore, wholly proper that this provision should exist, and, indeed, it is necessary for the smooth working of the Corporation in future.

The hon. Gentleman then asked whether this was usual, and whether there were precedents for it. There are precedents; this has been a standard provision in recent legislation. It appears, for example, in such Acts passed by the previous Conservative Administration as the Transport Act, 1962, and the Electricity and Gas Act, 1963, and, as far as we can see, there is no reason why the Corporation should be treated differently in this respect.

Amendment negatived.