§ 2.41 p.m.
§ Amendments reported (according to Order).
§ Clause 2:
§ The Iron and Steel Board
§ (2) The Board shall consist of a chairman and not less than nine nor more than fourteen other members.
LORD WILMOT OF SELMESTON moved to add to subsection (2):
of whom the Chairman and at least three other members shall be whole-time members.
§ The noble Lord said: My Lords, I have ventured to put down this Amendment despite the fact that your Lordships were good enough to listen to some arguments which I advanced upon the same lines during the Committee stage. I have done so for this reason—and here I am not quite sure if I shall keep within the Rules of Order. I venture to suggest that Amendment No. 14 which appears on the Marshalled List and stands in the names of the noble Lord, Lord Hawke, and others, alters the definition of a whole-time member and, if your Lordships were to agree to that Amendment, what I have suggested in my Amendment, which unfortunately comes first in point of time, would seem to be much easier of accomplishment than appeared to be the case when we were considering a similar Amendment on the Committee stage. In replying to what I said last time, the noble Lord, Lord Mancroft think it was) said that it might be difficult to tie the Government to having on the Board so many full-time members. He said, in effect, "We intend to have, if we can, some full-time members but we are not sure that we can find them. It is hard to find men of the right experience and the necessary status to give their whole time to this thing. We hope we shall find some, but we do not know how many."
§ The definition of "whole-time member" to be proposed later—which seems to me a most wise one—widens the definition of a full-time member. It provides that a man who has other duties and other responsibilities, if they do not take up all his time or become his 162 principal interest, qualifies as a whole-time member; and, in that case, it seems that the Government are let out of their dilemma and they might surely be able to find someone. Therefore, it seems to me that we ought to return to the point that the Board which is now being set up, with these very heavy responsibilities, ought to have a minimum number of full-time members. The Board may consist of nine, as the minimum, or up to fourteen members, and I suggest to the noble Lord, Lord Mancroft, that it is not too much to suggest that at least three members as well as the Chairman should be whole-time members—three out of probably fourteen—when the definition of "whole-time member" is widened, as it will be if Lord Hawke's Amendment is, as I hope, accepted. Therefore, at the beginning of this stage of the Bill I venture to hope that the noble Lord will be able to accept this Amendment arid let us get on our way. I beg to move.
Page 2, line 30, at end insert ("of whom the Chairman and at least three other members shall be whole-time members").—(Lord Wilmot of Selmeston.)
§ LORD SILKIN
My Lords, in support of my noble friend's Amendment I will just add that in the composition of a Board of this kind the ideal is to have a few people who are there a good deal of their time, and are able to devote themselves, their thoughts and the whole of their experience to the work of the Board, and to have as the majority of the Board men who are, so to speak, men of affairs, who have other interests and are giving a part of their time. The purpose of this Amendment is to ensure that this combination exists: that the bulk of the membership of the Board shall consist of part-tome people, but that there shall be a limited number of people (we say not less than three) who will be of the character that I have described. When we were discussing this in Committee the objection was raised that it might be difficult to obtain whole-time members of the quality that was necessary. That difficulty has been met by the Government themselves, in a later Amendment. If that Amendment is agreed to, men who have other interests will not be excluded. It will now be possible to get this ideal combination, 163 and we therefore hope that the Government will consider this present Amendment favourably and ensure that the Board has the most effective possible composition.
§ LORD WINSTER
My Lords, may I say a few words in support of the Amendment? I think it is not unreasonable that we should ask for some precise information about the number of part-time members there are to be. After all, this Board will be responsible for no fewer than 2,400 undertakings, which is quite a task. It will also be responsible for development in the industry, for prices and for the allocation of raw materials, and also for relations with the Iron and Steel Federation. In spite of these heavy responsibilities and duties, we do not yet know how many members of the Board are to be full-time members. Even the fact that the Chairman is to be a full-time member is not, so far as I know, stated in the Bill. The second point that I should like to make is this—I am speaking from memory and the noble Lord, Lord Mancroft, will, I know, acquit me if my memory is faulty. I do not want to put any words into his mouth but, if I recollect aright, when the noble Lord was replying to a former Amendment during the Committee stage he indicated that there were three particular interests which would call for full-time members on the Board. If that is so, it seems to me that there is really nothing between us and that this Amendment can be accepted. It appears to me, from his remarks on the earlier Amendment, that the noble Lord, Lord Mancroft, agreed that the Chairman and three other particular interests would have to be represented by full-time members. Therefore I think the noble Lord is in a position, without eating any of his words, to accept this Amendment.
§ EARL JOWITT
My Lords, we are in rather an embarrassing position here. I hope that I am not suggesting anything irregular, but to my mind it all depends on whether or not the Government are favourably disposed to the Amendment standing in the name of the noble Lord, Lord Hawke. That Amendment says, in effect, that where this Bill refers to a "whole-time member," what is meant is a "main-time member"—if there is 164 such a phrase. I see the point of that. I suppose that what the noble Lord and the Government have in mind is that they do not want to preclude a man from acting merely because he has some other employment Obviously, you enlarge the field of potential candidiates if you can get men who are going to devote the main part of their time to this matter but at the same time have other jobs of work to do other jobs which, incidentally, will keep them in touch with the opinion of commerce in general, which I quite realise is valuable. Therefore, without knowing the Government's attitude towards Lord Hawke's Amendment we are in rather a difficulty.
If, as I rather gather may be the case, the Government are favourably disposed towards Lord Hawke's Amendment, then we have to consider whether or not it is a reasonable proposition that the Chairman and at least three other members of this Board shall be men who will be mainly so employed. On that assumption, I very much hope that noble Lords on the other side of the House will give us some support on this Amendment. I appreciate the point of the Government's answer on the previous occasion, when of course there was no latitude as to what a whole-time member was, and when they said they might be in difficulty about finding suitable persons who would be prepared to give their whole time to the Steel Board. But now that the situation is different, I hope we shall have support in all quarters of the House for the principle that, if we are going to extend the definition of a whole-time member to include someone who can give the main part of his time without prejudice to other employment, it would then be reasonable that the Chairman and at least three members should devote a good part of their time to the functions, which are obviously important functions.
§ 2.50 p.m.
§ LORD MANCROFT
My Lords, perhaps it would be of some assistance to your Lordships if I stated straight away the Government's intentions with regard to Lord Hawke's Amendment, to which both noble Lords have referred. The Government feel that unless very powerful arguments are raised against what 165 appear to be the reasons behind Lord Hawke's Amendment, they would be disposed to accept it. Concerning Lord Wilmot's Amendment which is now before us, I must be equally direct and say that I am sorry that we cannot accept it. I am sorry for two reasons. The first is that it means we start off our afternoon's proceedings with less than that full amount of accord that we achieved so frequently on the Committee stage. Secondly, I am sorry because I must admit that there seems to me to be very little between us in this matter. In fact the object of noble Lords on both sides of the House with respect to this clause is clearly the same: we all desire to have as strong a Board as we possibly can. Without a strong Board, without a Board equipped with the best possible capabilities and brains, that respect and trust which we all hope will be placed in this body will be lacking. If that respect and that trust are lacking, the Board will not be fulfilling the one essential function which we say is part—in fact, almost the main part—of this Bill. We are all agreed on that. What we are not agreed on is whether or not the Minister, in appointing the Board, should be tied down to any specific number of any specific type of member. That is where we disagree.
I will not weary your Lordships by repeating all the arguments which I used on the Committee stage. Those arguments stand, whether the number is three or four. And I can assure Lord Winster that it is not necessary for me in any way to eat any words which I uttered on the Committee stage. I have glanced through those words again, and I see that I ventured to suggest what the Board might look like. I think the Board might very well look as I hazarded a guess that it would. The point I want to repeat is that it is essential that the Minister's hands should be free, so that, if it is not possible for him to recruit a Board of exactly the composition which we all have in mind, he can make variations as the circumstances dictate. May I repeat to your Lordships again the words which the right honourable gentleman, Mr. Strauss, who was in charge of the original Iron and Steel Bill in another place, used in Standing Com- 166 mittee on December 9, 1948. Mr. Strauss said:I ask the Committee not to limit the Minister in his make-up of the Corporation, to leave it flexible, to avoid rigidity at all costs. Only in that way will the Minister be able to adapt the Corporation in numbers, proportion and balance, according to the requirements of the situation. It may only he possible to see, after some experience of a year or two,"—and that applies equally to this Board as it applied to the Corporation—…what is the best proportion. It may be that after the Corporation has been working for some time the situation may be different and the proportion may have to be changed. I am sure it would be wrong to lay down here and now what the exact proportion should be, and I therefore hope the Committee will not ask the Government to do so.The Committee did not ask the Government to do so at that time, and I hope the House will not ask this Government to do so either. The reasons given by Mr. Strauss show that it was desirable to have the utmost flexibility, so that the proportions of full-time and part-time members could be varied as circumstances changed. The Government's hope and belief is that this Bill, when it becomes an Act, will provide a permanent settlement for the industry, and they would not want to forecast now what will be the right composition of the Board in, say, 1963. As I think I have stated more than once—and my noble Leader has also done so—it is the Government's intention, if possible, to appoint a firth time nucleus, but we regard the selection of first-class men as of even greater importance. It would be foolish to lay down a firm minimum for the full-time nucleus which applied not only to the first appointments to the Board but also for all future years. As I have said, I do not think there is a great deal between us on this matter. We hope to have the same sort of Board which noble Lords opposite have envisaged. We appreciate the arguments which have been put forward for the composition of the Board being as noble Lords opposite would like to have it, but we say that the, Board can best be constituted, at the moment it is required and for the purposes for which it is required, by leaving it in the Minister's hands to say what the ideal should be. I am sorry that I cannot meet the noble Lord on this point. It is, I think, a matter of principle, and 167 I must, with regret, ask the House not to allow the Amendment to go through.
§ LORD WILMOT OF SELMESTON
My Lords, I am sorry that the Government have taken this line, particularly as the flexibility which is asked for in the quotation which the noble Lord has just made has now been imported into the situation by Lord Hawke's Amendment, which the Government intend to accept. I am surprised that, in an affair of this magnitude and importance, the Government are not prepared to say that at least three members and the Chairman shall have this appointment as their main interest. It does not encourage us to take a very sanguine view as to the real intentions of the Government concerning the powers with which the Board is to be invested.
§ On Question, Amendment negatived.
§ Clause 3:
§ Supervision of Iron and Steel Industry by Board
§ 3.—(1) It shall be the duty of the Board to exercise a general supervision over the iron and steal industry, and to such extent as they may consider necessary the powers conferred on them by this Act, with a view to promoting the efficient, economic and adequate supply under competitive conditions of iron and steel products, and in particular to keep under review—
- (a) the productive capacity of iron and steel producers;
§ 2.57 p.m.
§ LORD SILKIN moved, in subsection (1), to leave out "under competitive conditions." The noble Lord said: My Lords, we have made rather a bad start in this stage of the Bill, but the Government now have an opportunity of retrieving the position with the Amendment which I am about to move. The noble Lord, Lord Mancroft, speaking on the first Amendment, said that there was very little between us. I think there is very little between us on this Amendment. The Amendment provides that the words "under competitive conditions" should be omitted from Clause 3, which sets out the functions of the Board. I think I can take the matter quite shortly, because we have argued this before. We on this side of the House do not object to competitive conditions in the iron and steel industry, and of course we do not object to the industry being conducted with effi- 168 ciency and economy, and with the object of securing an adequate supply. What we feel is wrong is to bring in these words "under competitive conditions" in this context, and for the very reason given for rejecting the last Amendment—in the interests of flexibility and elasticity.
§ In the majority of cases, competitive conditions will be possible and will be desirable, but there will be cases where they will be neither possible nor desirable. I think that was conceded when we discussed the question last time. There will inevitably be conditions of monopoly or quasi-monopoly in the iron and steel industry, and there will be cases whore it will be actually undesirable for the Board to encourage competitive conditions. It seems to me, therefore, that to have those words in, as indicating one of the functions of the Board and one of the conditions under which they would work, is misleading and, in certain cases, gives a false emphasis. If it is desired to remind the Board of the necessity of ensuring competitive conditions wherever possible and wherever circumstances make it desirable, then I see no reason why words should not have been put into the Bill to make that position clear: that where competitive conditions are desirable, the Board should encourage them; but not otherwise. It would not be beyond the wit of the Parliamentary draftsman, who I think can put anything in this world into words, to put something of that kind into the Bill and so make the intention perfectly clear. But, in my view, the words at present in the Bill are misleading, give a wrong emphasis and, if interpreted literally, may actually do harm to the iron and steel industry. Therefore, I am moving that they be deleted. If the Government make amends for their behaviour on the first Amendment, and the deletion is accepted, then there will be nothing to prevent the Government from inserting words somewhere else in the Bill to make it clear that not only are they not opposed to competition but that, in the proper place, they want to encourage it, and I should be happy to collaborate if required. But I suggest that these words should go in the right place and not here, where they will be interpreted as an absolute requirement and where they may have a hampering effect on the work of the Board. I beg to move.169
Page 4, line 10, leave out ("under competitive conditions").—(Lord silkin.)
§ LORD WILMOT OF SELMESTON
My Lords, there is one other argument would advance. These words are so vague in their application that they constitute an impediment to the proper working of what I am sure the Government have in mind. What do they mean? How is a Board which is not a political instrument but an administrative body to decide what is a proper degree of competitive conditions? By the very nature of the iron and steel industry, a great deal of competition is eliminated. The whole trend of modern technical processes is in the direction of integration. The integration of smelters and steel makers with rollers and fashioners is the natural trend of this industry—"Knock it about while it is hot"(to use colloquial words), and not pass it on from plant to plant to be heated up again, as it was in the old days.
The development of this technical trend will always, surely, lead to further amalgamations and integrations. I am glad to see that the noble Viscount, Lord Davidson, who knows much about this industry, agrees with me. Bigger units and larger accretions of capital are the natural trend of development in this industry. It becomes quasi-monopolistic. Politically, that may be something we want to talk about, but technically it may be an excellent thing. Then what are the Board to do with these irritating and meaningless words in this clause? Are they to stop the natural technical advances of the industry because they think it infringes this instruction to maintain competitive conditions? Competition with whom? Between one company and another? But that may be unimportant when we consider competition in a wider sense—the production of the British industry and the production of integrated foreign industries. I do not like these words in this connection and in this clause, because they tell the Board to do something which is vague, which may be harmful to the technical development of the industry. I wish the Minister would say that he will take them out; and if he wants to put in a little "something" for the benefit of those who say so much about private enterprise, let him put it in in a less damaging place.
§ LORD WINSTER
My Lords, if these words are retained in the Bill, it may well be said that they show a certain disregard of the public interest by insisting upon competition in all cases, without reference to questions of economy and efficiency. Economy and efficiency may well suffer if the Board are to be governed by considerations of competition in all cases. I cannot help feeling, without any wish to impute motives, that these words are in the Bill as a sop to the exponents of private enterprise in all circumstances, those people who think that the word "competition" is a magic word which can solve all difficulties and all problems. I cannot recollect, in what was said on the Amendment in Committee stage, any precise explanation of why these words are necessary or, if they are considered necessary, exactly what these words mean. I recollect the noble Marquess, Lord Salisbury, speaking on this Amendment. What he said really amounted to the words usedin 1066 and All That—that he thought competition was a good thing. But, clearly, considerations of public interest, which I think is neglected far too much in this Bill, can be overruled in the sacred name of competition. On that account I support the Amendment and hope that the Government will agree to delete the superfluous and unexplained words.
§ EARL JOWITT
My Lords, I understand that noble Lords are believers in the merits of competition and think that is the right way to secure that the industry is efficient. We cannot argue that now; let that be accepted. What we venture to think is that these words in the Bill mean nothing. A duty to promote an efficient supply is imposed on the Board, and if that is done, they roust have the means of carrying out that duty, otherwise the whole thing becomes meaningless. May I use an analogy to try to show what I mean. The day after to-morrow there is to be played in Wembley Stadium the Cup Final. The Wembley authorities are responsible for providing the arena, seeing that it is in good order, and for regulating the traffic and the crowds. But they are not responsible for providing the football teams, one of which is being provided by Blackpool and the other by Bolton. If the Wembley authorities were under an obligation to provide an efficient game of football, that would be all right, so long as they were responsible for 171 selecting and training the teams; but if we say that and give the Wembley authorities no power whatever to select the teams, it seems to me a meaningless phrase to say that they are to be responsible for an efficient game of football under competitive conditions. They cannot be.
The Government are trusting to the merits of competion to secure that the iron and steel industry is efficient—and from their point of view I entirely understand it. Very well. The people who are to carry out that competition are the various firms who are competing, and it cannot be the Board. The Board can exercise a sort of vague, fatherly control, and no doubt will be available to make suggestions from time to time. But let there be no mistake about it, the responsibility for the efficiency of this industry will rest on the various firms who are competing. I am sure that the noble Viscount, Lord Davidson, would agree with that. Therefore, I say, do not place on the Board the responsibility for making the industry efficient since, in the nature of things, they cannot be responsible for the efficiency of the industry, as we have to trust to the private competition of the various firms to do that. Our proposition is just this: we do not want to attack here the main theory about competition as a way of securing efficiency—let that be. But we say that, in this context, the words are meaningless and, therefore, are much better omitted. For that reason, I support this Amendment.
§ LORD MANCROFT
My Lords, it is very sad that the three innocent words, "under competitive conditions," should arouse such grave anxiety amongst noble Lords opposite. The noble Lord, Lord Wilmot, finds them irritating and meaningless; the noble Lord, Lord Winster, finds them superfluous. I am sorry to tell the noble Lord, Lord Wilmot, that I am hoping they will be irritating and mean nothing to him for some time to come, because I am going to ask the House to keep them in the Bill.
§ LORD MANCROFT
I doubt it. I appreciate the force of the argument that modern technical conditions may well demand larger and larger units, at least in 172 parts of the industry. That has always been appreciated. For that reason, the Government have made it clear that the Board are not to regard competition as an end in itself, but only as a desirable objective. That is the point which I believe divides us, and I wonder whether I cannot bring the House together on that. The noble Lord, Lord Winster, did not use the word "dogma" this time, but that word reared its ugly head on the Committee stage. There is no question of this being put in because of some political dogma. Let us be clear that competition is not intended to be the overall, overriding consideration. It has been made amply apparent, I should have thought, throughout the course of the Bill, that "under competitive conditions" takes second place to the national interest, and, indeed, to the well-being of the industry.
I would remind your Lordships, as an example, that on the Committee stage in another place the Government resisted Amendments from their own Back Bench to insert the words "under competitive conditions" as one of the criteria in the Board's consultations with the industry on the provision of production facilities (that is, Clause 5 (1)), on the grounds that it would indicate that the Board "had a duty to create competitors for the sake of competition." There was a risk that if such a criterion was inserted in that particular clause it might be regarded as requiring the Board to discourage the expansion of larger plants merely because such expansion might threaten the plant of existing competitors with extinction because their plant was not as efficient.
I am sorry to repeat the argument that I ventured to put to your Lordships on the Committee stage, but I think it is a simple and complete one. The Government regard these words as a general signpost to the Board, and not as a rule that must, in all circumstances, be obeyed. That, in a nutshell, is the Government's attitude to these words. The overriding factor must at all times be economic, efficient and adequate production, and it is only because the Government believe that in many fields, even within the iron and steel industry, this is best achieved under the spur of competition that the words have been inserted into the Bill. The Government attach considerable importance to the inclusion of these words, 173 particularly because they indicate that the Board will have an interest in the question of restrictive practices within the industry. That is a matter which we discussed at length on the Committee stage. Where such practices are considered undesirable—that is to say, where they unnecessarily stifle competition—then the Board will be expected to use their influence to secure their abandonment.
For reasons which are well known to your Lordships, the Government would regard some agreements for the regulation of trade as proper and in the interests of efficient, economic and adequate production. These the Board would clearly not wish to disturb, unless conditions changed so as to make them no longer necessary. To the argument, sometimes raised, that the Board have no powers, the best answer I can give your Lordships is that they have three ways in which they can make their influence felt: by the prestige they come to acquire in their normal consultations with the industry; by the publicity given in their annual report; and by the threat of reference to the Monopolies Commission. Those seem to me to be three powerful weapons. We regard the arguments for the inclusion of these words in the Bill as full and final. The words are not a concession to a political dogma; to us they are neither superfluous nor meaningless. They are, as I said just now—and I should like to repeat, because I feel it is important—a general signpost to the Board. Competitive conditions are not to take precedence over the nation's interests; they are not to take precedence over the welfare of the industry. I believe that these words should stay in this Bill, and that they will be of immense value to the Board, to the industry, rind thereby to the country.
§ LORD ARCHIBALD
My Lords, I feel sure that we have all been impressed by the point which the noble Lord, Lord Mancroft, has just made, that the intention is that these words should constitute only a signpost to the Board. But I venture to suggest to the noble Lord that, as framed, that is not what this particular clause does. It says specifically that it shall be the duty of the Board to do certain things "under competitive conditions." If the words were a signpost, surely the Bill would say, "under com- 174 petitive conditions where these are desirable and practicable." Surely it would qualify "under competitive conditions" in some way. There is no qualification; there is no indication of the words being a signpost; there is no indication that the Board may, in certain circumstances, disregard this provision. It is a "must"; it is the duty of the Board to do certain things "under competitive conditions." As I read it, on a strict interpretation, that must mean under competitive conditions at all times, whether in the public interest or not. That being so, one of two statements which have been made must be wrong. Either these words are put in for reasons of dogma, or they are a signpost. Both of those things cannot be true. If it is not dogma, and the words are put in as a signpost, then I suggest that the noble Lord should withdraw them, or alternatively, qualify them to make it clear that they are to apply only where it will be in the public interest, where it is desirable and practicable, and not in all circumstances.
§ 3.18 p.m.
§ THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON)
My Lords. I should like to answer the noble Lord on that point. There is really no dogma about this except in the sense that there is dogma, if you like to put it so, in the whole structure of this Bill. After all, the main issue of this Bill is whether you should have the whole of this industry owned by one single entity, or whether you should have a number of separate enterprises. You may call that dogma, if you like, just as I dare say somebody has called the other Bill dogma. We think that there should be the individual enterprises, because we genuinely believe that that is a more efficient way of doing business. I feel that, as there is the broad purpose of this Bill, it is right to have these words in, and it is right to have them in this place. The noble Lord argued that you must have competition everywhere, that the Board apparently have got to split up a jot of firms in order to have more competition. They would not have that power, of course. What is intended is to promote an efficient and economic supply. To promote that how, and under what conditions? To promote that efficient supply in what is broadly a 175 competitive system. It is reasonable and right to include these words of general description here, because, surely, if they were not included it might be argued that it was the duty of the Board to reproduce nationalisation by saying that it was in the public interest to amalgamate a large number of firms. That would not be the purpose. The whole essence is that the Board shall not interfere with the day-to-day management of firms. That is not its purpose. Its purpose, broadly, is to promote efficiency within the firms as they exist.
I think it is a false argument to say that because you have what is called integration—I would prefer to call it a continuous process; that is, instead of passing a thing from one works to another, you have a continuous process in which the metal comes out of the blast furnace, goes into the rolling mill and proceeds—you cannot have competition. The continuous process, of course, is quite right and is the natural development. It may well be that you have, as indeed you have to-day, fewer individual units in large-scale steel production than you had in the past. That way is the best way of promoting efficiency. But that does not mean the elimination of competition. Instead of having fifty firms, you may have ten or even five which are each engaged on a very large scale in the same sort of process. But the essence of the competitive system is that there shall be competition between those firms.
§ LORD WILMOT OF SELMESTON
May I ask the noble Viscount a question, because this is very important? In those circumstances, are the Board to conceive it to be part of their duty to interfere with the arrangements of the Iron and Steel Federation under which there would be one price for the product, whoever supplies it?
§ VISCOUNT SWINTON
Of course they are not. It is their business to look after prices and, where they think it right, to fix maximum prices.
§ VISCOUNT SWINTON
No, not to fix minimum prices at all. I do not conceive that to be their function. Anyone who has anything to do with this clause—
§ LORD WILMOT OF SELMESTON
I do not make my point clear. It is well known in the trade that there are conferences and arrangements made under the Iron and Steel Federation by which minimum prices are fixed and all must abide by them.
§ VISCOUNT SWINTON
On the contrary. The noble Lord is leaving out a very important provision. I am aware of that fact, and it was the practice under the nationalised industry. But observe the words in this Bill. The noble Lord has entirely forgotten Clause 27, which brings the whole of this industry within the purview of the Monopolies Commission. That is the difference. Even if the Board thought that it was not its business to interfere with some minimum price arrangement which had been fixed, it would still be possible to refer the matter to the Monopolies Commission. They would have a power to investigate that which they never had before, when the whole business was conducted by a monopoly. The noble Lord has drawn me, but I do not object to that. I was really answering the argument made by the noble Lord, Lord Archibald. But I am extremely glad that Lord Wilmot has drawn me on this, because I think it shows how important it is to have in the Bill these general words—what my noble friend has called, very reasonably, a "signpost." The Bill would be incomplete without them. They appear in the right place, and if the words were not there the Board might be left in very considerable doubt as to what their function was.
§ 3.25 p.m
§ LORD SILKIN
My Lords, I do not want to prolong this debate. I agree with much of what has been said by the noble Lord, Lord Mancroft, and by the noble Viscount, Lord Swinton, but I do not feel that their remarks constitute an answer to the case made for the Amendment. We accept the desirability of competition. I accept what the noble Viscount has said as to the reasons for this Bill—accept it, of course, for the purpose of this debate. I said at the outset that the difference between us was a relatively small one. But even accepting what noble Lords opposite say, these words go much further. They are much more than a signpost. They constitute on the Board a positive obligation which in 177 some circumstances they may not be able to carry out. Indeed, as my noble Leader, Lord Jowitt, said, they have no power to carry it out, because their functions are purely supervisory. They are certainly not in a position to impose competitive conditions yet you are putting that duty upon them. I should have no objection to there being a signpost if it were desirable to have one, and I made an offer to the noble Lord that I would even collaborate with him in providing an effective signpost. But a signpost is one thing and a positive obligation in conditions which may not be applicable is quite another, and for those reasons I must say that we on this side are not convinced by the arguments which have been put forward against this Amendment.
My Lords, it seems to me that this phrase has a practical meaning which may be of great use. Looking further on in the clause, one finds that one of the subjects which the Board have to keep under review in particular is the prices charged for iron and steel products. They will also have a good deal to say in the making of price arrangements for the raw materials used in making those products, and in order to secure really competitive conditions as between one firm and another, whether using imported or home produced ore and scrap. There are situations which can arise from the price-fixing mechanism and which may put one firm at a disadvantage in relation to another. If the Board have a duty to see that the supplies are adequate under competitive conditions, they will have the duty of seeing also that the conditions under which the different firms are operating are competitive. I think there is some virtue in these words which is not quite apparent in the ordinary sense.
§ On Question, Amendment negatived.
§ Clause 5:
§ Provision of production facilities
§ 5.—(1) The Board shall from time to time consult with such iron and steel producers and such other persons and such representative organisations as the Board consider appropriate, with a view to securing the provision and use—
- (b) of such production facilities outside Great Britain for or in connection with the quarrying or mining of iron ore for use in
178 the iron and steel industry as may be required for the purpose aforesaid, including facilities for the transport outside Great Britain or the importation into Great Britain of such iron ore.
§ 3.28 p.m.
§ LORD WILMOT OF SELMESTON moved, in subsection (1) (b), after "ore" to insert "or manganese ore." The noble Lord said: My Lords, this Amendment is another attempt to effect some improvement in this clause which lays upon the Board the duty of securing not only production facilities within the industry but also facilities in connection with the supply of raw material. As the clause stands, the raw material is limited to iron ore. As your Lordships know, you cannot make steel merely with iron ore. You need other ingredients for your smelt, and these ingredients, alloy metals, are just as much a part of the raw material of the steel industry as is iron ore. On the Committee stage I suggested that chrome, tungsten, molybdenum and other metals which are used in the manufacture of steel, and particularly of hard high-duty steels, were as essential as the iron ore itself. The Government, to my surprise and, as I have learned since, to the surprise of a number of people in the steel industry, resisted this Amendment, and resisted it on what I thought were quite inadequate grounds. They said: "We are not bringing in these metals because, although we agree that they are vitally essential in the manufacture of steel, and that sometimes they get into short supply, the iron and steel industry is not the sole user, although it is admitted to be the largest user of them." That seemed to me an inconclusive argument.
§ The noble Lord, Lord Mancroft, who was very helpful in the matter, supplied us with some valuable figures. He said that of all the tungsten which we import, 90 per cent. is used by the industry. Of manganese the proportion is higher. I think therefore, that the Government ought to include in this clause manganese ore, which is a metal alloy and of which the iron and steel industry uses almost all of the import. I have put this Amendment down in the hope that the Government may accept it. If they agree, as I think they must, there is no occasion for excluding at least molybdenum, of which the iron and steel industry uses, according to Lord Mancroft's 179 figures, 88 per cent. I hope the Government will see their way to accept this Amendment.
Page 6, line 23, after ("ore") insert ("or manganese ore").—(Lord Wilmot of Selmeston.)
§ 3.32 p.m.
§ LORD MANCROFT
My Lords, I think it may be for the convenience of the House if I say a word now. It is, I think, a word which will bring joy to the noble Lord, Lord Wilmot of Selmeston: it is that I am very pleased to accept the Amendment. I hope that the reason for accepting it may be thought a good one, even though it may be thought unusual: I was very convinced by the arguments which the noble Lord put forward on Committee stage. I thought that the case for the inclusion at least of manganese ore was much stronger than I had at first realised. I am glad the noble Lord did not go any further, because that would have been a mistake. There are good reasons why manganese ore should be covered; it is vital to all steel production and it is all imported from abroad. The other materials, such as tungsten, vanadium, cobalt and numerous others, are used to a great extent by industries outside iron and steel, and it would be inappropriate to place them within the purview of an Iron and Steel Board in an Iron and Steel Bill. There is another point. Whilst iron and manganese ore are the responsibility of the Ministry of Supply, all the other materials and alloying elements are within the sphere of the activities of the Minister of Materials. I think it would lead to confusion if we were to divide the responsibility for them between the Minister of Materials and the Minister of Supply.
The provision in the Bill covers a gap which is definitely not covered by existing powers, and places the power in the hands of the most appropriate Minister—namely, the Minister generally responsible for these two materials. A wider power is neither necessary nor desirable, and Lord Wilmot has not asked for it. Therefore I think that this Amendment, which is likely to help to improve the Bill, is one which I can confidently recommend the House to accept.
§ On Question, Amendment agreed to.180
Page 6, line 26, at end insert ("or manganese ore").—(Lord Wilmot of Selmeston.)
§ On Question, Amendment agreed to.
Page 7, line 9, after ("ore") insert ("or manganese ore").—(Lord Wilmot of Selmeston.)
§ On Question, Amendment agreed to.
LORD SILKIN moved, after subsection (4) to insert:
(5) Whenever under the preceding provisions of this section the Minister may acquire or take or lease any facilities, he may, if he thinks fit and with the approval of the Treasury, compulsorily acquire or compulsorily take on lease those facilities and in such a case the compensation or rent to be paid by the Minister shall in default of agreement be determined by arbitration.
The noble Lord said: My Lords, I beg to move the Amendment standing in my name. Clause 5 (4) provides that:
If it appears to the Minister…that any existing production facilities in Great Britain which would not otherwise be kept in use ought in the national interest to be kept in use, he may, with the approval of the Treasury, himself acquire or take on lease, and use, those facilities or make arrangements with any persons for securing the use of those facilities by those persons,…
§ This presupposes that it is in the national interest that certain production facilities should be kept in use, and that the only way in which they can be kept in use is for the Minister himself to use them or, if he fails to do so, to find someone else to do it, to avoid their being closed down. But I visualise the possibility that there may be difficulties in acquiring the necessary facilities, particularly premises and so on. Obviously, without acquiring those premises the Minister would not be in a position to carry on these facilities. Subsection (4) contemplates that he will always be able to do that by agreement. He has no power to acquire these premises compulsorily. My Amendment provides that, in the last resort, if all else fails and he is not able to acquire these premises by agreement, he shall 181 be in a position to acquire them compulsorily—having made up his mind that he wants to carry on the production facilities.
§ This is not an unusual provision and this is a reserve power which would be used by a Minister only if he had failed completely to acquire the premises he needed in order to make use of the existing production facilities. I think that on the Committee stage the noble Marquess dealt with this point. His view was that it would not be necessary, and he was reluctant to give the Minister these additional powers. I am sure, however, that on further consideration he would agree that there might be cases where it would be necessary. There would probably be very few cases where the Minister thought it necessary to carry on these facilities himself, and the number of cases in which if he did so he would find it necessary to acquire land or buildings would be still fewer. But, in the last resort, it is a useful weapon to have in one's hands. He ought to have these powers although he may not want to use them. For these reasons I beg to move this Amendment.
Page 7, line 19, at end insert the said subsection.—(Lord Silkin.)
§ 3.37 p.m.
§ LORD MANCROFT
My Lords, this is much the same Amendment and these are much the same arguments which were adduced on the Committee stage. I am afraid that there is nothing in the way of novelty that I can produce to counter the arguments which the noble Lord, Lord Silkin, has just advanced. It is against the philosophy of this Government to provide powers of compulsory acquisition unless the case is overwhelming; and the case here is not overwhelming. In the context of moribund works, I should say it is to be expected that the owners would be only too willing to sell as a going concern, rather than leave them to rot or sell the assets for what they would fetch; and there is no reason to suppose that because the Government attached importance to a particular plant the owners would demand an unreasonably high price.
On the Committee stage Lord Wilmot suggested (I hope I am not misinterpreting him) that apart from works going 182 out of use altogether, it was possible that the owners might "pass it on to some other user, who in some circumstances might not be a desirable purchaser." The Minister, he thought, should have power to deal with such a case. The answer, I think, is, first, that in practice it is extremely unlikely to arise. A steel works is such a very specialised type of works that it is impracticable, except at enormous expense, to convert it to some other use; in such circumstances I should have thought it would be much more economical to start from scratch on a virgin site. If, however, a case should arise where the owners had a lucrative offer for the site of a works, then, if the Minister wished to keep it going as steel works in the national interest, it is right that he should pay the market price and not use compulsory powers to acquire it on the cheap.
§ LORD WILMOT OF SELMESTON
What I was trying to explain was the case in which one firm would buy up another works in order to close it down. That would be the purpose of buying it.
§ LORD SILKIN
The use of compulsory powers would not enable the Minister to buy the thing on the cheap.
§ LORD MANCROFT
In that case, I am a little doubtful what the purpose of compulsory powers would be. Another argument which the noble Lord, Lord Silkin, advanced on Committee stage, was that, although there will be no difficulty in getting agreement "in the vast majority of cases," there might occasionally be an awkward customer who refused to sell; and he thought that compulsory powers should be provided to deal with such a case. That, I think, was the noble Lord's argument. All I can say is this: that the history of co-operation between the industry and the Government of the day over the last twenty years, and in particular its consciousness that it will shortly be on trial in the full glare of the political spotlight, would, I should have thought, make it extremely unlikely 183 that any owners would be so rash as to refuse to sell to the Minister.
To sum up, it is clear that the question of using compulsory powers could come up only "once in a blue moon," and it is neither desirable nor usual to attempt to cover in general legislation every possible contingency, however remote. I assure the House that, if a case arose where the national interest was in danger of being seriously prejudiced by unreasonable refusal of the owners of a moribund works to sell it to the Minister, then the Government would not hesitate to ask Parliament for the necessary powers. The Government do not, however, believe that this will ever occur, and they therefore regard it as unnecessary and undesirable to make provision in the Bill conferring on the Minister what could be a dangerously wide power, and a power that might be abused.
My Lords, this is rather like the case of the old-fashioned American gentleman's revolver. He always carried and did not expect to have to use it; but, if he had to use it, he wanted it very badly. In this particular case, these powers might never have to be used, but, if they were required, they would be wanted very badly. Why go through the delay of seeking special powers through Parliament? Why not have them in the Bill, even if they are never used?
§ LORD SILKIN
My Lords, the noble Lord, Lord Mancroft, referred to these as "very wide powers" They are not very wide powers, nor are they general powers. The terms of the Amendment make it quite clear that they could be used only in the particular circumstances referred to in subsection (4), that is, where it was necessary in the public interest for certain production facilities to be acquired, and where it was not possible or practicable for somebody else to carry on those facilities. It is only in those circumstances, and if the Minister is not able to acquire by agreement, that he could acquire compulsorily. I am sure the noble Lord, who is himself a lawyer, will on reflection admit that those are not very wide powers. On the contrary, they are, it seems to me, very narrow powers. Nevertheless, as my noble friend Lord Strabolgi has just said, if they should be wanted it ought to be 184 possible for the Minister to exercise them without having to come to Parliament on an individual case and ask for authority. That seems a rather far-fetched and abnormal procedure. I still hope that, on reflection, realising that this is to meet admittedly a rare case but one which, when it requires to be met, ought to be met promptly, the noble Lord will consider that this is a power which the Minister ought to have.
§ LORD WINSTER
My Lords, one short point occurs to me. The words in subsection (4) say…ought in the national interest to be kept in use…Surely, if it is in the national interest that the facilities should be kept in use, it is only right that the Government should take the widest and fullest possible powers to see that they are kept in use. Why leave a loophole in the Bill which may prevent the Minister from keeping facilities in use although it is in the national interest that they should be kept in use?
§ 3.46 p.m.
§ THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY)
My Lords, perhaps I should say one word about this Amendment. I wish that we could meet noble Lords opposite over it, because I fully appreciate, from what they have said, the reasons which they press. Indeed, when the House was discussing this matter on Committee stage, noble Lords opposite will remember that I suggested we should look at the matter further. We have, in fact, done this. We have consulted those whom we should have consulted, and we have given the matter very close consideration. If we are not able to do what noble Lords opposite would wish, it is for reasons which we consider valid ones. The noble Lord, Lord Silkin, himself, in the remarks that he has just addressed to us, referred to these powers as reserve powers. In fact, I believe he went a little further than that: he said that it was improbable that they would be needed. I think he used the words "last resort" in connection with the possible use of such powers. We shall agree with him that the possibility of their being necessary is a very remote one, and in such circumstances we really do not feel that powers of this kind, which involve an important principle like compulsory purchase, should be invoked. I 185 am sure the noble Lord will agree with me that powers of compulsory acquisition are abhorrent to people in this country and should, if possible, be avoided. We know that there are circumstances when such powers are absolutely necessary and cannot be helped, but none of us likes them.
§ LORD SILKIN
Would not the noble Marquess agree that it is the use of those powers which should be avoided; but that they should exist?
§ THE MARQUESS OF SALISBURY
Perhaps I may finish what I have to say because I think it may have a bearing on what the noble Lord has just said.
I think that what the noble Lord, Lord Wilmot, feared—and perhaps it is equally in the mind of the noble Lord, Lord Silkin—is that a firm might have to be closed down not so much because it was inefficient or uneconomic, but for some, perhaps, more ulterior purpose. Another larger business might buy up a works which was not doing very well, or was doing something which it did not like very much, and then close it down. I do not think that this Amendment would necessarily stop that. Suppose, for instance, that there was a business which was not doing very well. The Government might feel that they would like to acquire it, thinking that it was on its last legs. Then suppose that another firm also thought they would like to acquire it. In such an event that other firm and the Government would bid against each other. Maybe the Government would outbid the other firm; maybe the other firm would outbid the Government. If the other firm succeeded, having this sinister purpose, I think it would be very improbable that that would not be divulged until after purchase: Even then, under other provisions of this Bill, as at present drafted, as I understand it, unless I am reading the Bill incorrectly, it would be necessary for the purchasing firm to give as long notice as possible of the proposed closure. I rather hope that, perhaps before this stage is over, we may be able to define that yet a little more clearly. Therefore, in such circumstances there should be plenty of time, if a firm is doing a disreputable or reprehensible thing, for the whole power of Parliament and of public opinion to be mobilised. Though I appreciate the purity of the motives which inspired noble Lords, I 186 think the danger here is a very remote one. I do not think it is sufficiently important to justify the inclusion in the Bill of these very far-reaching powers. For that reason, and for that reason alone, I am afraid that we cannot accept this Amendment.
§ On Question, Amendment negatived.
§ Clause 15:
§ Furnishing of information to Board and Minster
§ (2) The Board shall so exercise their powers under the preceding subsection as to secure that, in such cases as may be defined by notice in writing, if any iron arid steel producer, one of Whose main activities forms part of the iron and steel industry, proposes to close down any works of substantial size used by him for the purpose of any activity forming part of the iron and steel industry, or any substantial group of production facilities in any such works as aforesaid, he shall inform the Board of the proposal as early as practicable.
§ (3) The Board or the Minister may by notice in writing require any iron and steel producer to furnish to the Boardor, as the case may be, to the Minister—
- (a) such information relating to the costs of production of any products to which section eight of this Act applies as may reasonably be required by the Board for the purposes of their functions under this Act or by the Minister for the purposes of his functions under this Act; or
- (b) such other information as may reasonably be required by the Board for the purposes of their functions under section eight of this Act or, as the case may be, by the Minister for the purposes of his functions under section ten of this Act,
§ 3.50 p.m.
LORD SILKIN moved, in subsection (2), to leave out "practicable" and insert:
possible and shall in any event, unless the circumstances of the case make this impracticable, inform the Board not less than three months before the proposed date of closure.
§ The noble Lord said: My Lords, on the Committee stage we moved a similar Amendment. We thought that the provision that notice should be given to the Board "as early as practicable" when it was proposed to close down certain production facilities was rather vague we considered that there should be three months' notice, and we moved an Amendment accordingly. It was pointed out, I think quite properly, that whereas three 187 months' notice would be reasonable where it was practicable, it would not in all cases be practicable, that sometimes a decision would have to be made rather more hurriedly, and that it was wrong that people should be in breach of this Act through no fault of their own. We were given to understand that if we could re-draft this Amendment in a form to meet that objection, it might receive favourable consideration. I suggested that the normal period of notice might be three months, but that where there were circumstances which prevented the giving of three months' notice, then obviously a lesser period should be acceptable. This Amendment seeks to put into words that conception. It provides that the period shall be three months unless the circumstances of the case make it impracticable, and it is in that form that I beg to move this Amendment, in the hope that it may be acceptable to the Government.
Page 16, line 13, leave out ("practicable") and insert the said new words.—(Lord Silkin.)
§ THE MARQUESS OF SALISBURY
My Lords, the noble Lord, Lord Silkin, is absolutely right in the description he gave of the attitude of the two Parties over this question on the Committee stage. There is no doubt that there was a wide measure of sympathy in every part of the House for the principle of the Amendment. I think I said that I thought, from the purely human point of view, it would be most desirable to give three months' notice if that was in any way possible, and I explained that I thought the only reason why the Minister had not made this concession in another place was because he did not consider it was always practicable. Then, if I remember rightly, the noble Lord, Lord Winster, made a suggestion that we should put in three months if that was in any way possible. That seemed to me quite an important modification, and one which was likely to make grounds for a settlement between us. At any rate, I said that I would think it over, and noble Lords opposite said that they would do the same. They have done so, and they have put down an Amendment which incorporates Lord Winster's idea. We have looked into this matter further, and I am glad to say that we shall be delighted to accept the 188 Amendment. We always should have liked to do so—there is no difference of intention over this—and we are happy to have found a solution which mentions the three months—which gives, as it were, a target to aim at—and also indicates that in certain exceptional circumstances (and I think they will be exceptional) it may be necessary to have a shorter period.
§ VISCOUNT HALL
My Lords, I should like to express the appreciation of my colleagues on this side of the House to the noble Marquess and the noble Lord for accepting this Amendment. It is, as the noble Marquess rightly said, a human question and one about which the employees in this industry feel very strongly. I am sure that the acceptance of this Amendment by the Government will give them great satisfaction.
§ On Question, Amendment agreed to.
§ LORD SILKIN moved, in subsection (3), to leave out all words after the end of paragraph (b) down to the end of the subsection: The noble Lord said: My Lords, in moving this Amendment I should like to discuss also the next. I hope that the House will forgive me for being responsible for, and personally moving, all these Amendments, but it is due to force of circumstance. Clause 15 provides for the Board being able to ask for information from iron and steel producers respecting their accounts, for a variety of different purposes. Subsection (1) enables them to ask for information about output and stocks, capacity to produce and so on. Subsection (3) enables the Board to seek information for the purposes of Clauses 6 or 8—that is, for the purpose of fixing maximum prices or capacity. Similarly, subsections (4), (5) and (6) all give power to the Board, or in some cases to the Minister, to seek information from iron and steel producers for the various purposes of this Act.
§ In the Amendment which we moved in Committee we thought that it should be possible, where the Board had reason to believe that the information being supplied might not be accurate, for them to inspect the works and to make their own investigations for the purpose of checking up on the information supplied. The Government were opposed to giving the Board powers of snooping—I do not know whether that word was actually 189 used here, but it certainly was used in another place: it was felt that the Board ought, broadly, to accept the information supplied to them by the iron and steel producers. That is a point of view which seems to me perfectly intelligible, and one hopes that one can always accept without question information that is supplied from iron and steel producers. But the Government themselves have taken the view that that is not always the case, because in subsection (3) they have themselves sought power to require that the information supplied by the iron and steel producers shall be certified as correct by the auditors of the undertaking. It seems to us, the Government having accepted the principle that the information ought, in certain circumstances, to be audited by the auditors of the company or undertaking, that there is no reason in principle why the other information should not also be certified as correct, if the Board desire it. This is not an absolute requirement in the terms of the Amendment. The Amendment states merely that if the Board consider, in certain cases, that the information supplied by the undertaking should be audited, they shall have the power in addition to the power already conferred on them in subsection (3), to ask for it under these various subsections that I have mentioned.
§ The noble Marquess made another objection to the Amendment as it was originally moved in Committee. I am afraid that it was drawn rather loosely, because it contemplated that the auditors might be required to certify forecasts, as well as information. Obviously, no auditor could be expected to certify a forecast of an undertaking, and that has been omitted from the present Amendment. All that is asked is that the auditors shall be required, where the Board think it necessary, to certify as correct the information supplied. I think that no objection can be taken to the form of this Amendment on that ground. It is logical—indeed, the noble Viscount, Lord Bridgeman, in answer to the arguments that had been put forward on this side, made the point that there was already power for the Board to ask that information supplied under this clause should be audited. The noble Viscount was apparently under the impression that what I am moving was actually in the Bill. And he did not seem to have any objection to it. Therefore, I am moving 190 something which it would seem the noble Viscount regarded as a reasonable provision. I hope, therefore, that the noble Marquess may see his way to accept this very reasonable and modest Amendment. I beg to move.
Page 16, leave out limes 28 and 29.—(Lord Silkin.)
§ 4.0 p.m.
§ EARL JOWITT
My Lords, I should like to speak in support of these Amendments, and as my noble friend Lord Silkin has explained them SO plainly, my words will be very brief. The real purpose of the Amendments is to delete the provision in the last two lines of subsection (3) and to extend it to the other subsections of the clause as specified. So far as I am aware, iron and steel magnates are always highly respectable people. I know very few, but those I do know are eminently respectable. But it may be that amongst the sheep there is an occasional goat. No doubt it was for that reason that the framers of this Bill stipulated that in a limited class ofcases—namely, cases relating to production facilities and cases relating to the facts on which maximum prices are based—it should be possible to ask for information to be certified by the auditors of the undertaking. Therefore, let it not be said that we are making any attack on the integrity of the iron and steel merchants, because we are not. But we do not understand why, if that provision is thought to be proper and useful in regard to those matters, it should not be extended to these various other matters, so long as it is confined to information. That is our feeling, and I very much hope that the Government will give us this Amendment.
We have worded the Amendment in such a way that we confine it plainly to information—that is to say, factual information—and we have extended the category of persons who shall certify so that it will include auditors, accountants or valuers—I take it that some valuers may be the proper people to do it. We mean by the Amendment that they shall do it only in such cases as it can be done. There may be instances in which a man can say only, "to the best of my knowledge and belief"—or perhaps not even that. That may be the best he can do. The object of the Amendments is to enable the Minister, if he were so 191 minded—and I should think he would seldom be so minded—to ask the appropriate servants or authorities of the company to certify information under any of these subsections, whereas at present the auditors can certify only under the particular headings in subsection (3). We do not see why the power to ask for a certificate should be limited to what is set out in subsection (3): we think that it should be extended as I have indicated.
§ THE MARQUESS OF SALISBURY
My Lords may I say that I am extremely grateful to noble Lords opposite for the trouble they have taken to try to meet us over this rather difficult technical point. Indeed, in one respect, on the question of inspection, they have certainly met us. Therefore, I am only the more sorry that, even in its amended form, the Amendment as a whole is not acceptable to us. As I think the House realises, this is not one of those matters as to the ultimate purpose of which there is any real difference of principle between the Government and noble Lords opposite. I think that our debate last week, when we were discussing to what extent there should be a power to verify information, showed that there was a large measure of agreement between us. Noble Lords opposite were at one with the Government, as I understood, in not wishing, to use the words of the noble Lord, Lord Wilmot, "to start up an atmosphere of impending snoopers." We were in agreement about that. They recognised that a power to inspect property might have just that effect. We, for our part, had already recognised in the Bill as drafted that, in certain circumstances, it was appropriate to provide some power to verify information, and, accordingly, the Bill as drafted provides that certain information, primarily of a financial character, can be verified by a certificate of the auditors of the company. The two lines containing that provision are the lines which noble Lords now propose to take out and replace by the following Amendment in the name of the noble Lord, Lord Silkin.
The Amendment, clearly, would extend this power of verification to all information obtainable by the Board or the Minister, and to verification not only by the auditors of the undertaking but, as the noble and learned Earl, Lord Jowitt, has said, by accountants and valuers. I 192 can assure the House that we have given very careful consideration to this proposal, and if we cannot accept it, it is not so much on the grounds of any deep difference of principle between the two sides, as for the very simple reason that we feel that the proposal is not practicable. Noble Lords will realise, I am sure, that the accountant of an undertaking will be an employee; and he may not, indeed, be a qualified accountant. He may be a person who does accounts in the firm and yet not a properly qualified accountant, in the strictest sense of the term. If information could properly be certified by him, I am sure noble Lords would agree that it could equally be certified by the auditor of the undertaking, and the corroboration by the auditor, with his independence and professional standing, would be a far more valuable form of verification.
And now a word about the valuer, who has also been put in. As I see it, there are two difficulties in giving a power to require certification by a valuer. The valuer's job, as I understand it, and as his name implies, is to put a financial value on assets. That is the job for which he is employed. But the information that is required by the Board, apart, of course, from financial information which the auditors could certify, might easily be information of a different character—information as to quantities of production, stocks and the like, on which no one would employ a valuer. It might not be the value on which they wished to have the information. Indeed, such information could be certified only by a person engaged in the works day by day. The other, and perhaps lesser, objection is that, unlike auditors, valuers are not regularly engaged by companies except for particular tasks. I am sure it is the intention of noble Lords opposite that the certificate should be given, not by a professional man appointed by the Board but by the company's own professional advisers. But if we provided that the certification might be by a valuer, either the Board or the company would have to engage a valuer for just that one job.
In my view, there is a valid distinction which we can draw between the type of information for which we have provided certification and the rest. As the noble Lord, Lord Wilmot, will know 193 —and I feel sure that other noble Lords also will know—financial information is capable of a wide variety of treatment, and it is the expert's job to see that the information required by a body like the Board is compiled in the form which that body requires. Perhaps I may give one illustration of what I have in mind. If the Board wanted, in connection with its price powers, to find out the average cost of production of a particular product, it would be essential that the information received from the various producers should be on the same basis. We feel that that would be best achieved by giving the auditors responsibility for certification. Moreover, although we do not believe for a moment that companies such as those with which this Bill will deal are likely to supply incorrect information (that was borne out by what was said by the noble and learned Earl, Lord Jowitt, just now), we realise that, because information on costs of production would have an effect on prices fixed by the Board, and therefore on the prosperity of an individual company, there are good reasons why a wise, but not necessarily over-suspicious, Government should provide a reasonable safeguard.
The general production information which the Board will require will generally be wanted to provide the statistics on which the Board frame their policy, but should not be information on which the Board are likely to take action in regard to any individual company. Thus, in any case, there will be no temptation, as I should have thought, to make false returns. And I am sure that the late Government appreciated this same point when, as I pointed out during Committee stage, they introduced the Statistics of Trade Act, 1947, which, like the present Bill, does not provide for any independent verification. As noble Lords will know, the powers of the Board in relation to individual companies have been limited, but where they have such powers—for example, in the consideration of large development schemes—theywill clearly, before they give their consent, be able to obtain such verification of information supplied in support of a company's case as they consider appropriate. Therefore, I am sure that the Bill as drafted gives the Board the power to verify information whenever it is likely to be wanted, and whilst I have a good deal of sym- 194 pathy with the objects behind this Amendment, I hope that what I have said will convince noble Lords opposite that it is unnecessary for the purpose which they have in mind.
§ On Question, Amendment negatived.
§ Amendment moved—
Page 17, line 18, at end insert—
("(7) A notice by the Board or the Minister under subsections (1), (3), (4), (5) and (6) of this section may require any information supplied in pursuance of such notice to be certified as correct by the auditors, accountants or valuers of the undertaking or person to whom such notice has been given.")—(Lord Silkin.)
§ On Question, Amendment negatived.
§ Clause 18:
§ Duty of Iron and Steel Holding and Realisation Agency to return iron sad steel undertakings to private ownership
§ 18.—(1) There shall be a body to be called the Iron and Steel Holding and Realisation Agency (hereafter in this Act referred to as "the Agency"), and it shall be the duty of the Agency to secure, by the exercise of their powers under this Act, the return to private ownership of the undertakings which on the appointed day are owned by subsidiaries of the Agency:
§ Provided that the Agency may discharge their duty under this section in such manner, and by such stages, and with such postponements of the sale of securities or other assets, as they may with the approval of the Treasury determine, and shall so discharge the said duty as to secure, without disregard to other relevant matters, that the consideration obtained from the disposal of assets is financially adequate, and pending the discharge of the said duty the Agency shall so exercise their powers as a holding company as to promote the efficient direction of their subsidiaries.
§ 4.12 p.m.
LORD SILKIN moved to add to subsection (1):
Provided also that no one sale or disposal of any securities or other assets by the Agency, the total consideration for which exceeds one million pounds, shall be valid until the Treasury shall bave signified their approval thereof in writing; and the Treasury shall as soon as practicable after such sale or disposal lay particulars thereof before each House of Parliament.
§ The noble Lord said: My Lords, this Amendment provides that where a transaction involves a total exceeding £1 million it shall not be valid until the Treasury have signified their approval, 195 and that as soon as practicable after the Treasury have signified their approval, both Houses of Parliament shall be informed. This is similar to an Amendment which was moved on Committee stage, but here again we have tried to meet the main objection that was put forward against that Amendment—namely, that this would hold up a sale, and might hold it up for a long time until Parliament had passed an Affirmative Resolution in each House, as was the requirement in the previous Amendment. That requirement has now been deleted. All that is necessary as a precondition of the sale becoming effective is that the Treasury shall signify their approval. The sale can proceed, while Parliament must be informed as soon as practicable.
§ In the disposal of these assets we think that Parliament ought to be notified as soon as possible, particularly about exceptionally large transactions. This is not going to impose a heavy burden on the Board, the Treasury or anybody else. I imagine that in the natural course of events, in the case of a transaction of the magnitude of £1 million, the Board, if they are as wise as we all hope they will be, will get in touch with the Treasury and obtain their approval. We hope that will be the normal practice, and nothing is lost by putting it specifically in the Bill that Treasury approval has to be obtained. If I am wrong in supposing that the Board will not be given a completely free hand, the sooner we get such a provision in the Bill the better. But if that is so, putting it in will do no harm, and it would give a feeling of confidence in the country that the assets were being disposed of on the most favourable terms and, in the case of very large transactions, under the supervision of the Treasury.
§ As to the requirement to notify Parliament, as I have said, Parliament are not required to approve, but I think it is desirable that Parliament should know at the earliest practicable moment what is the basis on which sales are effected. Supposing that Parliament took the view that the principle on which these large transactions were being effected was wrong, it would not be able to interfere in any particular transaction notified. 196 The sale would be effected before Parliament was notified and therefore Parliament would not be in a position to say that a particular transaction should not go through. But Parliament could say that it would like an explanation, and it could express its views about the principles on which the sale had been effected: it could say whether they were correct or not, or whether it would like the principles modified. In that sense we should get a certain measure of Parliamentary control over the specially large transactions, and I am sure that that is an object which will have agreement from all sides of the House.
§ This is a modest Amendment. I do not put it very high. But I think it is one which will give greater confidence to the country that supervision is taking place. The alternative is that the country should rely upon the Annual Report of the Board, which, as we know from experience, may not be made public until perhaps eighteen months after a certain transaction has taken place, far too late for anybody to make any effective or useful comment. This Amendment will ensure that comment can be made as soon as possible after the transaction has taken place. I beg to move.
Page 19, line 19, at end insert the said proviso.—(Lord Silkin.)
§ LORD MANCROFT
My Lords, there is nothing of importance between us on this point, and with many of the sentiments expressed by the noble Lord, Lord Silkin, we should cordially agree. Although I am not able to accept the Amendment on behalf of the Government, I am glad to say I am in a position to "encourage the sentiments which are behind it," as the noble Lord put it when withdrawing his Amendment to this clause on the Committee stage, and, indeed, to go a little further. We feel that it would not be desirable to try to distinguish in the Bill by a rigid criterion, such as that the total consideration should exceed £1 million, between those large operations for which some special treatment by way of notification to Parliament is required and others for which it is not required. We do not think the noble Lord's Amendment would be wholly satisfactory in the form in which it is drafted and we think it would 197 be preferable not to lay down a line of demarcation in the Bill.
But I am authorised by my right honourable friend the Chancellor of the Exchequer to give the House specific assurances which we believe will meet the noble Lord's objectives. The Treasury will require large and important disposal operations to be referred specifically to them for their consideration before approval is given under the terms of subsection (5) of Clause 19, and the Treasury will lay particulars of any such disposal operation before each House of Parliament in some convenient form, probably by way of a Treasury Minute, as soon as practicable. I must, of course, make it clear that this cannot be before the contractual obligation has been finally made between the Agency and other parties to the operation; for example, in the case of a public offer for sale it could not precede the publication of the terms of the offer. But this will, of course, secure what the noble Lord has in mind, which is that in the case of such of these important operations as might not of their nature be published, Parliament should not have to await the publication of the Annual Report of the Agency, or have to obtain information by the process of Question and Answer, but will be apprised of the arrangements made at the earliest stage consistent with the technical requirements for the effective negotiation of such operations. I hope that that specific assurance meets all the noble Lord's difficulties—I think it does—and that he will be prepared to accept it and withdraw his Amendment accordingly.
§ LORD SILKIN
My Lords, I think that, broadly speaking, the assurance does meet the points I have in mind. There is a good deal to be said for not adhering to a particular figure of £1 million. I put down £1 million in default of thinking of any other sum, and as a sum as good as any on which to base an argument. Probably the noble Lord's own words of "an important transaction" meet the case much better. Of course, I had not in mind that Parliament should be notified before the sale had been effected. All that is left between us, therefore, is whether this should be incorporated in the Bill, or whether one should be ready to accept 198 an undertaking. I have myself in the past given undertakings of this kind which have been accepted, and it would be ungracious of me not to accept the undertaking given on this occasion. Therefore, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 34 [Interpretation]:
§ LORD SILKIN
My Lords, I hope that I may move the next three Amendments formally, because I think they are consequential on what has been accepted in an earlier part of the proceedings. I beg to move.
Page 34, line 36, after ("Act") insert ("or for the quarrying or mining of manganese ore").—(Lord Silkin.)
§ On Question, Amendment agreed to.
Page 34, line 40, after ("Schedule") insert ("or in connection with the quarrying or miring of manganese ore").
Page 34, line 41, at end insert ("or manganese ore;").—(Lord Silkin.)
§ On Question, Amendments agreed to.
LORD HAWKE moved, in subsection (1) to insert:
'Whole-time member' means a member who is required by the terms of his appointment to devote himself exclusively or mainly to the performance of his duties as a member of the Board, and includes such a member notwithstanding that his appointment as a member of the Board may not be his only appointment.
§ The noble Lord said: My Lords, by seeking to put these words in the definition clause of the Bill the effect is, when taken in conjunction with Clause 2 (6), to make it clear that if the Minister were to appoint to the Board as a "whole-timer" a man who, in fact, retained some outside interest, then that outside interest must not be a substantial financial interest in the iron and steel industry. That is the first thing. Secondly, it recognises the possibility that a whole-time member of the Board may, in fact, hold some other appointment. Both of these principles, to my mind, are good; I think they will be acceptable to the Opposition and, I hope, to Her Majesty's Government. The Amendment would greatly enlarge the field of choice of the Minister in making appointments to these Boards. At the same time, it would enable the quasi 199 "whole-timer" to bring to the Board the same wider outlook which at the moment is only to be got from the "part-timer." It may be that this particular power is in the Bill as it stands, and that "whole-time" can be interpreted in this way, but there is no harm in putting it in to make quite sure. These words make certain that the outside interests of the quasi "whole-timer" shall not be a substantial financial interest in the iron and steel industry. I beg to move.
Page 35, line 22, at end insert the said words.—(Lord Hawke.)
§ LORD MANCROFT
My Lords, the clear exposition which has been given by my noble friend Lord Hawke, coupled with the fairly broad hint dropped a little while ago by the noble and learned Earl, Lord Jowitt, makes it quite unnecessary for me to do other than say that Her Majesty's Government are pleased to accept this Amendment.
My Lords, I hope your Lordships will feel that this is a suitable opportunity to congratulate the noble Lord, Lord Hawke, on obtaining immortality while still happily amongst us. I think this clause, which may become known in commerce and possibly in the law as the Hawke Clause, is very sensible and imaginative, and does fill, not in particular relation to this Bill but in general, a not-expressed but highly felt want in many ways of life. The noble Lord is to be congratulated, and I hope that the Hawke Clause will go down in history.
§ EARL JOWITT
My Lords, I should just like to add this. In obtaining immortality the noble Lord, Lord Hawke, is merely following the tradition of his family.
§ On Question, Amendment agreed to.
§ Third Schedule [Iron and Steel Activities]:
§ 4.26 p.m.
EARL JOWTTT moved, after paragraph 8, to insert:
9. Any such iron and steel products as the Minister on the advice of the Board may from time to time think it desirable to include.
The noble and learned Earl said: My Lords, I should like to move this Amendment on behalf of my noble friend Lord Wilmot, who unfortunately has had to
leave. I am at a disadvantage, because I have not his technical knowledge. The noble Lord suggested on the Committee stage that wire-making should be inserted in the Third Schedule as being one of the iron and steel activities. I believe he said then that there are a considerable number of wire manufacturers who desire that that should be done. Objections were raised on behalf of the Government, and that being so, we have now drafted the Amendment in a different way. We do not now ask that "wire" should be inserted, but merely that the Minister should have power to insert:
such iron and steel products as the Minister on the advice of the Board may from time to time think it desirable to include.
§ What we have in mind particularly is wire. All we seek is that if, by reason of circumstances hereafter arising, the Minister feels it desirable to include wire—as I understand many of the wire manufacturers wish—he has the power to do so. We do not, as on the last occasion, impose wire upon him by putting wire in the Schedule. I hope that your Lordships will agree that this is a reasonable way of dealing with the matter, and that the Government will be able to accept this Amendment. I beg to move.
Page 43, line 45, at end insert the said words.—(Earl Jowitt.)
§ LORD MANCROFT
My Lords, if the penultimate Amendment on this Marshalled List is going down in history as the Hawke Clause, then this one, I am afraid, will have to go down as the wire-pulling Amendment, but for a different reason. In any case, I am afraid it cannot be accepted. It is a matter of great grief to me that I should once again, as on the Committee stage, be forced to end up, after boring your Lordships with so much oratory, on a discordant note. The trouble about this Amendment is twofold. Both difficulties are really matters of drafting. The first is a minor one, but the second is major. As drafted, the Amendment would not fit in a Schedule of Iron and Steel Activities. That is a minor point and could be remedied by the insertion of "The production of." But the second drafting point, if I have done my homework correctly, is much more important, and leads to a fundamental objection. The phrase "iron and 201 steel products" used in the Amendment is defined in Clause 34 of the Bill as meaning:products of any of the activities included…in the Third Schedule.The Amendment, therefore, is completely circular, and is really meaningless. To avoid this, it is necessary to get away from the phrase iron and steel products," but any alternative phrase—such as "products of iron and steel"—would be almost unlimited in meaning, and would cover anything from pins to battle-ships.
There is thus a dilemma which faces us in this matter: either the Board's field must be defined in terms of a specific list of products or processes, or it must be almost unlimited. The latter is obviously undesirable and, I should have thought, dangerous. The only practical course, therefore, I should have thought, was the former, all due care being taken, of course, to see that the field was sufficiently widely drawn. This Her Majesty's Government have tried to do, and I think they have succeeded. They believe that the Third Schedule, as drafted, is right, and that it ought to be confined as at present to processes using steel-making raw materials and those which process iron and steel into forms required as raw materials by other industries. The already provides in Clause 3 (4) for newly developed processes falling within this field to be added, but any further power to add other processes would mean going beyond the boundaries which it is the Government's policy to set to the field of the Board's supervision.
During the Committee stage the noble Lord, Lord Wilmot, argued that the Government ought to consider a power to bring in later products such as wire, because wire users will lose the protection of the Board, the Minister or some regu- 202 lating body. But, as I ventured to point out on the Committee stage (OFFICIAL REPORT, Vol. 181 (No. 59), col. 1134):If the Bill had to cover every product where there were fears that adequate supplies might not be obtainable, then the Third Schedule would become very extensive indeed.The same argument applies to this particular Amendment, and I think the acceptance of it would lead to a very unsatisfactory state of affairs, quite apart from the drafting points which I put to the noble and learned Earl. I am sorry that the same policy as was put forward on the Committee stage with regard to these sentiments and this type of Amendment must prevail, aid that the Government cannot accept this Amendment.
§ EARL JOWITT
My Lords, I am sorry to hear that, but I am bound to say that the noble Lord and his noble Leader, the Leader of the House, have throughout addressed themselves to our Amendments. Although we are dissatisfied in some respects, we realise that they have taken a great deal of trouble in working these things out and have given us full and courteous answers, for which we are grateful. Although we have not got all we should have wished, and certainly not all we deserved, at any rate we conclude our Report stage without any feeling of bitterness or animosity.
§ On Question, Amendment negatived.