Orders of the Day — Iron and Steel Bill

Part of the debate – in the House of Commons at 12:00 am on 26th January 1967.

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Photo of Mr John Mendelson Mr John Mendelson , Penistone 12:00 am, 26th January 1967

The hon. Member for Scarborough and Whitby (Mr. Michael Shaw), like myself, was a Member of the Standing Committee which went through the Bill with great care and improved it in some respects. Towards the end of his speech he said that he detested the Bill, and this, with variations, has been the theme song of the Opposition throughout the Committee stage and during the debate today.

Hon. Gentlemen opposite have not done themselves very much good by repeating this theme song, because it means that they are completely out of touch with people in the industry, who, at all levels, have accepted the decision of Parliament. As I told the Standing Committee, people at all levels in the steel industry have said to me, "Get on with the job. The main decision has been taken. We want you to do the job properly, but we want you to get on with it."

There is no sympathy at any level in the steel industry today, be they senior managers, or junior executives, or technicians, or senior craftsmen, or senior steel producers, for anybody who merely strikes an attitude and says that he detests the Bill, but this theme song is linked with some of the statements made by the right hon. Member for Altrincham and Sale (Mr. Barber), who leads for the Opposition in this matter.

The right hon. Gentleman used to be the Member for a constituency not far from mine, in Doncaster, and in an area where there are many steel workers and engineering workers. In spite of what he said this afternoon about the attitude of the electorate to this legislation his own experience is conclusive proof of the view that the electorate is taking. In several General Elections he carried on propaganda against the public ownership of the steel industry, in his constituency, next door to mine, while I was putting forward my own programme and that of the Labour Party.

The result was that we increased our majority substantially, while the right hon. Gentleman, on an anti-steel nationalisation platform, was defeated in Doncaster and had to find a seat elsewhere. I have had a good deal of experience in this matter because I fought my first by-election in June, 1949, in a constituency where, in Stocksbridge, I have one of the main steel works, belonging to United Steel Company. One morning a correspondent of The Times came to the constituency during the election campaign and wrote that because the Labour candidate, from the first day, had put the public ownership of the steel industry in the centre of his programme and had argued that it was essential, for the good of the British economy as a whole, that this vital industry should be under public ownership, that Labour candidate would lose several thousand votes from his majority. This theme was taken up by other newspapers which had not sent special correspondents to the constituency.

What happened? A few other special correspondents came down the next day, including Mr. Travers, the special correspondent of the Daily Telegraph. He interviewed me and said, "Can I come with you to the works?" I said, "Certainly, you can come to the works." We took another five correspondents along with us. I mounted my little platform in front of the steel works and made my speech as people were streaming out for lunch. Soon a youngish man came along and said, "May I have a word with you?" I said, "Certainly."

He was going to take me aside, but I said, "Do not take me aside, we have Mr Travers here, of the Daily Telegraph, and these other correspondents. The fate of the steel industry is a matter of great public importance, not to whisper about. Tell me what you have to say in front of these gentlemen—unless it is personal". He said, "No, it is not personal". The correspondents crowded round. He said, "We know you. You spent some time in the works four or five years ago. About 400 or 500 people in the works know you personally. I have a message from the people who work there." I said, "What is it?" He said, "We are all behind you but the next time you nationalise the industry we want you to do the job right. We do not want you to be half-hearted about it. We want you to organise the industry in such a way that there is full understanding and full participation in the industry after nationalisation between the people running it and the people working in it." I turned to Mr. Travers and deliberately mentioned his name, because it is much better to give the name of a correspondent by one's side. Mr. Travers nodded, and a few different stories appeared the next day.

We had the majority of 11,000 in the preceding General Election and we had a majority of about 11,000 in that by-election, in spite of the prediction of The Times special correspondent. In the following General Election I put my programme forward in the same way and we slightly increased our majority, and in the next General Election I again urged as essential, among other policies, the public ownership of the steel industry, and we added another 2,000 to our majority. At the last General Election I did the same thing and we added another 3,500 to our majority. At all my meetings, steel workers and representatives of steel trade unions were on my platform, either providing the chairman or surrounding me and making supporting speeches. Other representatives of steel constituencies can tell similar tales.

The experience of my right hon. Friend the Member for Flint, East (Mrs. White)—who is now a member of the Government—is more remarkable. In the three years preceding the General Election of 1964 the directors of a major steel works spent many thousands of pounds in propaganda directed against her. I laughed when the hon. Member for Holland with Boston (Mr. Body) and the hon. Member for Scarborough and Whitby referred to taking politics into the steel industry. This theme ran throughout our Committee proceedings. I had to laugh. Here were the directors of a company using thousands of pounds of shareholders' money in a vicious political campaign against my right hon. Friend in order to defeat her, without any accounting to their shareholders or to the electorate of the way in which they were using their money. In spite of spending these thousands of pounds they saw my right hon. Friend increase her majority by 3,500 votes in the subsequent election.

I am sorry that the hon. Member for Aylesbury (Sir S. Summers) is not here. He has intervened in our debates—not as a member of the Committee—and he normally prefaces his remarks, quite properly, by saying that he is in steel and has great experience of the industry. But he does not stand as a candidate in his steel area, or anywhere near it, so that the people in the industry can decide whether or not to send him to Parliament. He stands for Aylesbury. There are not many steel works in Aylesbury. It is famous for ducks, fowl and other things, but not steel.

There was another point, which was characteristic of the speeches made by the right hon. Member for Altrincham and Sale. He said the same thing many times in Committee, as did the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). Having been defeated several times by the British electorate when the issue of public ownership of the industry had been clearly put to it, and knowing full well that they would be defeated if they ever dared to put the issue again to the electorate, they seek to escape by threatening the Government, and saying, "If you believe that this is going to be the kind of policy that is acceptable in New York, Rome or Paris you make a very great mistake".

The right hon. Gentleman quoted a snippet from the new evening journal published in New York. I recognised it because I was in New York when it appeared. He quoted the snippet—it is the only one he seems to have, because he quoted it in Committee, and we are familiar with it—as if it were the Holy Writ. Even if in a New York evening newspaper in one of its first issues, as a new paper that saw the light of day on 12th July last year, a report appeared saying that we should not proceed with the nationalisation of the steel industry, what is the relevance of such an opinion?

Are we to be governed by articles in the New York boulevard Press? Is this a new tradition developing in the Conservative Party? Hon. Gentlemen opposite are, of course, the inheritors of the Disraeli tradition. Now they are saying that, having received a mandate from the British electorate, we must throw it away because somebody has written in a New York evening paper that we should do so. I urge my hon. Friends to remember this event for the next General Election.

This is no trivial point, remembering who originated it. The right hon. Member for Altrincham and Sale is not an insignificant back bencher whose views might be considered irresponsible and whose remarks can be hidden away. He is a former senior Member of a previous Conservative Government, and if the day dawns, of which there is little likelihood, of the Conservative Party coming to power again, the right hon. Gentleman will probably be a senior member of that Cabinet. With all his responsibility, he is prepared to use the strange argument that we must throw aside the views of the British electorate because someone has stated in a New York evening newspaper that we should do so.

There is a slightly more sophisticated version of this happening. Hon. Gentlemen opposite are threatening the Government that what they describe as the "dire consequences" of this Government's policies may affect our relations with Europe and may eventually make it impossible for us to negotiate entering the Common Market. Time and again hon. Gentlemen opposite have said, "You will not be allowed to have a nationally-owned and organised steel industry if you want to join Europe".

I invite the House to examine this argument and its basis. It has nothing to do with the attitude which any hon. Member might hold about our policy to enter the Community, although from time to time hon. Gentlemen opposite have tried to smuggle in a slight attack either on the basic attitude of my right hon. Friend the Minister of Power or on some back benchers on this side of the House. What some of my hon. Friends and I may think about our approach to the Community is wholly irrelevant to this argument.

It has been decided by the British public that Britain's steel industry should, in the national interest, be taken into public ownership. That is a fact of life which hon. Gentlemen opposite must accept. The Government have a clear mandate to proceed and for hon. Gentlemen opposite to tell us to ignore our mandate and duty simply because it might be contradicting some of the provisions of the Iron and Steel Community is sheer nonsense.

Having said that, we must consider the argument because it is a novel doctrine. It is, of course, the abandonment of one's national sovereignty well ahead of even becoming a member of a supranational authority. It is turning the whole thing upside down. Arguments are going on about our approach to the Six, but the Government's policy is clear. The Prime Minister and Foreign Secretary are engaged in discussions, at the end of which they will make their decision on whether serious negotiations can be officially started. Despite this, the Opposition are arguing that at this stage we must say, "We cannot proceed with our domestic legislation we must ignore the views of the British electorate and surrender all our policies because if we continue with them we might be prejudicing our chances of joining the Community".

From the narrowest point of view—even from the simple diplomatic point of view—this is an irresponsible attitude to adopt. It means throwing away all our policies in advance, so that, in the end, we will not have anything about which to negotiate. It is a doctrine of nonsense and it reveals the quality of thinking which hon. Gentlemen opposite have been adopting on a matter as serious as this. It is not surprising that my right hon. Friend the Minister and other Government spokesmen in Committee found little difficulty in answering the policy points made by hon. Gentlemen opposite.

I turn to two aspects of the future of the steel industry which are more serious than the shadow boxing in which the Opposition have indulged throughout the debates on this Measure. At a recent function in my constituency the matter I wish to raise was forcefully brought home to me. Practically all the speeches made by the various people representing the industry at that function emphasised the importance of this issue. As I go about my constituency, I find that it is a matter of major concern. I lead into the subject with such emphasis because no speech made at this stage of the Bill would be significant unless this matter is tackled.

We are facing a shortfall in production and we are aware that the steel industry is not isolated but is, in many ways, a function of other industries and is greatly affected by the general economic situation. It is the general deflationary aspects of the present situation which have contributed greatly to the steel industry's difficulties.

My first plea must be to the Government as a whole and to my right hon. Friend in particular, because he is a member of the Cabinet. There is urgent need to hasten an end to the deflationary policy now being adopted and to begin the reflationary process by various means, of which a cut in Bank Rate should be the first. Neither initial allowances nor other incentives can do the trick. The problem which industrialists are facing is that they must be reasonably certain that, at the end of a productive process, they will be able to sell their goods at a reasonable profit, so giving them the incentive to make greater strides forward. Initial allowances provide an incentive only once the decision is taken to invest or reinvest. A tax allowance is merely an additional incentive, but it does not, by itself, lead to new investment.

While many people are urging the Government to start the process of reflation, I wish to draw attention, from the point of view of the steel industry, to a particularly important matter which I raised in Standing Committee. My hon. Friend the Member for Rotherham (Mr. O'Malley) referred to it earlier. In Committee I moved an Amendment which urged the Government to have a new and more positive policy towards the stocking of steel. The argument is linked with one of the points made by an hon. Member on the benches opposite earlier this afternoon when he referred to the fluctuations in the demand for steel. The fluctuations in the demand for steel are something that we must look at carefully at all times and not only at a time of economic difficulty.

The suggestion, however, that was made by the hon. Member was wholly futile. He suggested that all that had to he done was to ensure that we have a steady demand, that we keep fulfilling the orders as part of that steady demand and that we should not have any additional capacity but that if suddenly a good deal more is needed, steel should be imported from abroad. That seems to me to be a policy of despair and a wholly unnecessary policy.

What we have to do is to have a policy which allows us to deal with fluctuations in demand by having a certain amount of capacity and steel in stock. While we are still in the middle of an international balance of payments crisis, from which we hope to emerge this year or next year, we certainly could not advocate deliberately in such a situation a policy of paying in foreign currency for imports of steel. To do so would be the height of folly. That folly was shown up many years ago when the Spectator conducted an inquiry into the steel industry and showed conclusively that it was both inefficient from the viewpoint of the industry and, at the same time, very bad from the point of view of the country to spend foreign currency on importing steel.

Therefore, we must not be pessimistic about the capacity that we have. What we need is a policy of forward planning. I refer my right hon. Friend the Minister to what he said in Standing Committee when he said that he could not quite accept my Amendment but, on the other hand, he did not accept the case that was made in other quarters that a policy of stocking was impossible and impracticable.

I therefore invite my right hon. Friend at this point, when capacity working in the steel industry is not as high as it should be, actively to reconsider a policy of limited stocking at the present time and in the near future and to encourage the Corporation and the companies to stock a limited amount of steel—this need not be too expensive—so that there should be no further short-time working, until there is an upturn in trade and the demand for steel again increases. I do not believe that if my right hon. Friend were to pursue such a policy he would see much opposition in the industry. Although many people are in favour of such a policy, there are a number who are gravely doubtful about it and their case has to be met.

I turn to the financial position of the industry. My right hon. Friend the Chief Secretary, who has just returned to the Chamber, missed one of the speeches in which a good deal was said about this. I will safely leave it to him to answer that whole complex of questions and I would not presume or attempt to try to do it for him, for reasons which are well known to all hon. Members. I want, however, to comment on the speeches which have been made today on compensation and on the innumerable speeches on this subject that were made in Committee.

For some hon. Members opposite, the whole debate came to life and was aflame when we were talking about money, the terms of compensation and the like. During those lively occasions and again today, a case has been made for more money to be paid in compensation or in many different ways to those who own shares in steel. For my part, I have repeated again and again in my constituency the words of my right hon. Friend the Chief Secretary, which cover the situation admirably, when he said in Committee and on other occasions that the Government had decided to offer fair-to-generous compensation. That is, he said, what a responsible Government should do, and that is the policy that the Government are pursuing.

What matters here, however, is that the view taken by those who have to deal in the stocks and shares of the steel industry has been consistently optimistic. They have not regarded the compensation terms as disastrous or bad. They regard them as good. All the articles which have appeared by people who have assessed these matters, in the Financial Times and elsewhere, since the end of the Standing Committee proceedings have been in that direction. They have said that the compensation terms are encouraging and they have encouraged people to buy the shares. There could not be a better test than this.

All those who make these big demands are asking for more money contributed by taxpayers, rich and poor, in many positions in life, where tax is a difficult matter for those who have to pay it. What those who are advancing these demands are asking for, however, is that more of the taxpayer's money should be handed to one section of the community.

This is not money that the Government privately possess. It is not a matter for my right hon. Friend the Chief Secretary to go to his safe deposit and take out a few million £s and hand it over. He does not have the money. Even if he did, I still would not advise him to do it. But this is not the Government's money. It is the taxpayer's money.

The whole logic is that if more money in compensation is to be given to certain individuals, more must be taken from all sorts of people who have to contribute as taxpayers. Those taxpayers include many people in my constituency—elderly people, for example, who do a little part-time work or some overtime hours and who have to pay Income Tax if they fall within the relevant category. It would be a transfer of some of that money to those who have been represented so volubly and, in some cases, so violently by certain hon. Members on the benches opposite.

Those debates and discusions have been all to the good. I commend the Government on having allowed the debate to flow freely. Their decision was right. The future of this industry and of those who work in it and the economy of the country as a whole is a very grave, serious and important matter. It is right for the Government to have allowed the freest possible debate. I have always supported them in that view during the long and sometimes dreary hours in Committee. I hope that, at the end of the day, those in the industry will have their attitude accepted by all hon. Members of this House. The decision has been made; let us get on with the job.