House of Commons
Thursday, June 10, 1948
The House met at Half past Two o'Clock
Prayers
[Mr. SPEAKER in the Chair ]
Private Business
Church of Scotland Trust (Amendment) Order Confirmation Bill
MINISTRY OF HEALTH PROVISIONAL ORDER (BRISTOL) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (EXETER) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (HUDDERSFIELD) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (MACCLESFIELD) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (NORTHAMPTON) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (SHEFFIELD) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (STOCKTON-ON-TEES) BILL
WILLIAM BROWN NIMMO CHARITABLE TRUST (AMENDMENT) ORDER CONFIRMATION BILL
Read the Third time, and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (GLOUCESTER) BILL
MINISTRY OF HEALTH PROVISIONAL ORDER (SHREWSBURY) BILL
As amended, considered; to be read the Third time Tomorrow.
Oral Answers to Questions
Trade and Commerce
Handkerchiefs
asked the President of the Board of Trade what are the stocks of linen, cotton and silk handkerchiefs at the latest possible date, compared with 12 months ago.
I have no information of the stocks of handkerchiefs held by retailers or wholesalers, but the stocks held by manufacturers on the 30th April, 1947, were 15,304,000, and on 30th April, 1948, 18,085,000. Separate figures for linen, cotton and silk handkerchiefs are not recorded.
Is the President of the Board of Trade aware that the shops are becoming cluttered up with these articles, and will he take them off the ration?
No, Sir. This is one of those items of which there is a falling production in the home market.
Furniture
asked the President of the Board of Trade whether he is aware that British manufacturers of utility furniture are still tied down to designs fixed by his Department, with the result that foreign utility furniture, which is all of varied design though often of inferior quality, is preferred by purchasers; and whether he will, in the interests of the British trade, allow our manufacturers greater originality of design, together with an approved standard of production.
I cannot accept the assertions and implications in the hon. and gallant Member's Question. As regards its last part, however, my Department have been discussing with representatives of the furniture industry a number of questions affecting production of utility furniture including design and standards of production; an announcement will be made as soon as these discussions are completed.
If there is anything incorrect in the first part of the Question, is it not a fact that any latitude which may have been given has only been very recently given—within the last week or so, in fact? Is there any reason why in future there should be any restraint as regards manufacturers' designs?
We must have some minimum standards of quality, and we must also avoid waste in this material which is in very short supply. Subject to that, we are hoping to loosen up very considerably in the matter of individual design.
Who is the authority which says whether a design is good or bad?
Is the right hon. Gentleman thinking of introducing period furniture at this time?
In reply to the hon. Member for Maidstone (Mr. Bossom), we have the advice of the best people in the trade on this matter. In addition, we have in the Board of Trade a department of furniture design which has the full confidence of the people in the trade.
asked the President of the Board of Trade whether his attention has been drawn to the case of the Gosford Furnishing Company versus Mrs. Marie Bennet; whether the fixing of the price of bedroom suites manufactured mainly from sugar boxes at £118 8s. is due to the regulations of his Department; what is the cost of producing this article; what is the margin of profit allowed; and whether he will take action to fix a lower price forthwith.
asked the President of the Board of Trade whether he proposes to inquire into the case of Messrs. Gosford Furnishing Company, trading as Jays, in which furniture constructed from sugar boxes have been sold at exorbitant prices under hire-purchase system.
asked the President of the Board of Trade if he is aware that shoddy furniture made from disused orange and sugar box wood is being sold at exorbitant prices by hire purchase firms; and what steps he proposes to take to stop this exploitation of the public.
asked the President of the Board of Trade whether he proposes to take any action concerning the prices charged for furniture by a firm at Eastbourne whose use of Tate and Lyle sugar boxes in the making of a bedroom suite priced at £118 was censured by the judge.
asked the President of the Board of Trade if his attention has been called to the case in which the Gosford Furnishing Company, trading as Jay's obtained the return of a bedroom suite, priced at £118 8s. made largely of old sugar boxes, and to the Judge's comments in that case; to what extent this charge was in accordance with the regulations issued by his Department; and what steps he is taking to prevent such exploitation of the public.
I am having inquiries made into the whole case, including the legality of the charges, but the furniture was purchased some five years ago, and it may now be difficult to establish the facts. This suite was manufactured before the introduction of the utility scheme, which has done much to raise the-standard of furniture in this country. Moreover, it was bought at a time when prices of furniture apart from the new utility supplies then coming into production, were controlled under the Prices of Goods Act, 1939, which limited them to their pre-war prices plus actual increases in denned costs. The utility scheme was introduced at the beginning of 1943 to ensure as far as possible that purchasers would get value for money, and, of course, the furniture is fully price-controlled under the Goods and Services (Price Control) Acts, 1939–45. I would like, however, to make one thing clear on which misleading statements have been made. The price charged for this furniture was not fixed by the Board of Trade. All prices prescribed by the Board of Trade under the Goods and Services (Price Control) Acts are maximum prices, and, therefore, there is nothing to prevent a trader selling at less than these prices, especially where considerations of quality arise.
Does not my right hon. Friend agree that the criticism implied in these Questions applies to only a comparatively small number of small firms and in fact does not apply to big firms like the Co-operative Wholesale Society?
I am not going to distinguish between small firms and big firms in this matter. The particular criticism, implied here is the result of some furniture made before the utility scheme came into existence, but it is a fact, and I have in my possession a copy of the contract of purchase, that this furniture was sold as being of imperfect quality and the purchasers signed a note to that effect. At the same time, as I said, price control now in existence relates to maximum prices and there is no reason at all why sub-standard furniture should be charged at anything like the maximum price.
In any case, are not these Questions an indication of the value of a free Press, which these hon. Members have obviously consulted?
Yes, Sir, but I have already said there have been some very misleading statements made, suggesting that this price was fixed by the Board of Trade, which is quite incorrect.
As the judge had before him the contract regarding the sale and described the whole proceedings as a "disgusting outrage," would not my right hon. Friend consider that there is some very special action needed against a large firm which has its tentacles in many other towns?
I have said we are examining the position to see whether any special action is necessary. Since, however, the purchase took place over five years ago it is difficult to get hold of all the facts.
asked the President of the Board of Trade if he is satisfied that he has sufficient inspectors in the furniture industry to prevent the manufacture of furniture of low quality and poor material.
No, Sir. To be certain of preventing the manufacture of furniture of low quality and poor material by any of the 4,000 firms making furniture would require a greater number of enforcement officers than could reasonably be justified. Twenty-six production officers are attached to the regional offices of my Department, whose job it is to help manufacturers with their production problems, to give general guidance on the quality of utility furniture production, and to inquire into cases of complaint. While I cannot say that no furniture of low quality or poor material is made, I have no evidence that there is any appreciable quantity of it, and I think the best results may be achieved by relying on the good sense of furniture manufacturers and of the public in buying furniture. The further definition of standards which can be satisfactorily applied to furniture manufacture is at present the subject of discussion between my Department and the industry.
Will my right hon. Friend ask his inspectors, at least, to be sufficiently vigilant as to prevent a recurrence of such a case as that of the Gosford Furnishing Company, about which there has been so much feeling in the House? Will he ask them, for example, occasionally to call at retail shops as well as at warehouses and factories?
I do not know if my hon. Friend was here when I gave a full answer on that case. I mentioned that that happened five years ago, before the utility furniture scheme was in existence. As regards the latter part of his supplementary question, I have said that my 26 officers are already fully occupied, and that I should not feel justified in extending the number of appointments.
Does the right hon. Gentleman realise that a great deal of this trouble is due, not only to the restrictions imposed by his Department and others, but also to the very high Purchase Tax that has to be paid on furniture?
I do not know whether the first part or the second part of the right hon. Gentleman's question the more clearly reveals his ignorance of the situation. In the first place, the restrictions are designed to secure, and are securing, a great improvement in the quality of furniture. In the second place, there is no Purchase Tax paid on utility furniture.
I am fully aware of what the right hon. Gentleman has said in the second part of his answer, but the tax is having a great effect on the cost of all other furniture.
Could not my right hon. Friend bring all these matters of design and quality before the regional organisations for the industry, in preference to having enforcement through enforcement officers, which increases the power of the bureaucracy at the expense of the democracy?
As I have said, we are in very full consultation with the trade in this matter. I hope to be making an announcement about design and ranges in the near future.
Is the right hon. Gentleman aware that the very much stronger feeling that prevails in the House is about the shoddy coal being sold to the public at very high prices?
asked the President of the Board of Trade if he is now in a position to state his future plans for the furniture trade.
In my statement on furniture which I made after Questions on 6th May, I said that if the supplies of utility furniture increased in relation to the demand from the priority classes, I would make a proportion of it available to all. I am now satisfied that it is possible to throw supplies open to the general public. From 23rd June, therefore, the sale of utility furniture will no longer be confined to holders of units. Although the priority classes will still have first claim on supplies of utility furniture to the extent of units issued to them, I am arranging that any trader who has utility furniture available may supply it to anyone without demanding units. I shall, of course, continue to keep the position under close review, particularly in order to see that unit holders are given effective priority. My Department have also been discussing with representatives of the furniture industry other questions affecting the production of utility furniture, including design, standards of construction and methods of timber allocation. These discussions are still in progress and, as my hon. Friend will appreciate, I cannot go into details until they have been concluded.
While thanking my right hon. Friend for the very considerable concession he has made, may I ask if he would be good enough to explain one or two points—whether, for instance, the present priority class will still be required to apply for units, and whether that means that they will be guaranteed 60 units' worth of additional furniture?
If they choose to apply for units they will be the more certain of getting supplies, because I have said that their needs must be met first, before whatever remaining supplies that are available are thrown open to the general public. If they choose to take their chance with the general public they need not apply.
How can the needs of these people first be met? Will the right hon. Gentleman explain that? What is the procedure by which tradesmen will know they should supply those with dockets first? Is there to be a period of time fixed?
No, Sir. It is perfectly possible to work this scheme. The Ministry of Works had experience of a similar scheme—and a very successful scheme—in co-operation with the builders' merchants in the matter of the W.B.A. priority arrangements. We are in full discussion with the furniture industry, and the details will shortly be announced. I can assure the House that the industry and trade are satisfied that it is possible to guarantee this.
Is this not likely to create confusion? My previous experience has been that a large number of people with dockets have had to wait a very long time before being able to get utility furniture. If it is now going to be taken off dockets it will mean that the furniture will go to places where there are people with less need of it, and that supplies will be cut down to places where people are urgently waiting for it.
My hon. Friend is quite right in saying that for a long period of time supplies were not adequate to meet all the docket demands, but, as I announced on 6th May, supplies have increased considerably, and demand is falling on the part of the docket holders. At that time I validated a number of dockets. I have been satisfied since then that the supply position is adequate to meet the needs of the docket holders and to provide a generous amount for the general public as well.
How is my right hon. Friend to overcome the anomaly that non-utility and utility furniture will be on sale together, both of similar quality, the former bearing Purchase Tax at 66⅔ per cent.?
The supplies of very high quality utility furniture will be available in sufficient measure to meet the needs of the public.
asked the President of the Board of Trade what steps he is taking or will take to secure that inferior articles of furniture should be sold at a lower price than the controlled prices for utility furniture.
No direct comparison can be made between the qualities and prices of utility and non-utility furniture because there are no such detailed regulations governing the quality of non-utility furniture, and Purchase Tax is only chargeable on non-utility. Non-utility furniture is subject to price control and if my hon. Friend considers that an excessive charge has been made in any case, he should report it to the local price regulation committee, who will make investigation.
Will my right hon. Friend consider making it compulsory to designate these prices as "maximum permissible prices" as the term "controlled price" affords an excuse to many dealers to say that they are only catering for inferior articles at prices laid down by the Board of Trade?
I think that what I have said in my previous replies should bring this matter to the attention of all traders and of the general public. I think that in any statement that we put out we say "maximum permissible price," but I shall be glad to look into that matter.
Which furniture is considered more useful—utility or non-utility?
It depends, of course, what the hon. and learned Gentleman means by "useful" and by "utility," respectively. It is certainly a fact that utility furniture does satisfy the needs of the greatest proportion of the furniture buying public, and does guarantee a quality and standard of production which we have never had before in this country.
Pottery Supplies, West Riding (Pint Pots)
asked the President of the Board of Trade whether he will now arrange for pottery manufacturers to supply the pint pot needs of the West Riding of Yorkshire where tea-cups are not always accepted substitutes; and whether pint pots with a colourful design may now be manufactured.
I know full well that pint pots are very much in demand in Yorkshire and other industrial areas. A number of manufacturers have been asked to try to produce more. Export needs, however, must of course come first, and as pottery drinking vessels of all sorts are scarce everywhere at home I am afraid that with great regret I cannot promise any special treatment for the West Riding. In reply to the second part of his Question, I would refer my hon. Friend to the answer given to my hon. Friend the Member for Hey wood and Radcliffe (Mr. Anthony Greenwood) on 1st June.
Can the Minister say whether pint pots are being exported?
I should want notice of that question. I do not think they are exported, but the general shortage of pottery owing to exports has affected the supply of pint pots, among other things.
Is the Minister under any misapprehension about pint pots, as in Yorkshire they are used in a very general way for the consumption of tea?
No, Sir. Having been born in Yorkshire not two miles from the hon. Member's former constituency, I well know what pint pots are used for, and in no part of my answer did I suggest I was under any misapprehension. The pots are used principally for the consumption of tea, cocoa and other liquids.
If this is something which is used in a very general way, it may be used for other things besides tea.
Leathercraft (Disabled ex-Service Men)
asked the President of the Board of Trade whether he is aware that, after a disabled ex-Service man has received training in leathercraft, he is only allowed a licence to purchase 25 square feet of leather per quarter, whereas the amount required is 40 square feet per week in order to make a reasonable living; and whether he will consider abolishing this control altogether in the case of disabled men.
Severely disabled persons, whose only means of livelihood is leather work at home, have been granted licences on the advice of the Ministry of Labour, the amount allowed being 250 square feet of leather per quarter. In addition persons undergoing medical treatment, including occupational therapy, for which leather is required, have been allowed to purchase 25 square feet of leather per quarter. I am afraid that the general shortage of leather makes it impossible for me to abolish these restrictions at present. I am, however, considering whether some additional amount of sheepskin leather can be allocated next quarter.
Has the Minister received a letter I have sent him giving more details about this subject; and could he assure the House he will go into it very much further indeed? The question of the shortage of leather does not arise with regard to these small amounts required in these cases.
I have received the hon. Member's letter and I shall be replying in the course of the next day or two.
Polar Bears (Permits)
asked the President of the Board of Trade why import licences were granted for 12 polar bears landed at Glasgow from Belgium last month.
I assume that my hon. Friend is referring to 12 polar bears from Sweden which were landed at Hull on the 30th April. No import licence was granted. The animals and their trainer and equipment were landed under a Customs concession allowing the entry of artists and their equipment for entertainment purposes, where, as in this case, such entry is covered by a Ministry of Labour permit and no payment is to be made.
Will my hon. Friend say, whether it was Glasgow or Hull if it is a good thing in his opinion that this kind of traffic should be allowed to continue?
These polar bears will became part of the general equipment of the entertainment and are not being imported under any open general licence allowing the import of polar bears. They are coming as part of the entertainment team and, therefore, I would not consider myself justified in interfering in this matter.
Can the Minister assure us that these animals have not arrived here as a result of some misleading information about our climate given by the meteorological office?
No, Sir. I understand they came purely to assist the artists under their own volition.
Are these polar bears destined for the London Zoo? Why should they arrive via Belgium on the way from the Arctic to this country?
So far as I know they are not destined for any zoo. They are destined for circus performances and I was not aware that they were imported from Belgium, but if the hon. Member puts a question down about the transportation of polar bears I shall be glad to investigate.
Is the Minister willing to give the full story behind this situation, because a whole lot of the story has not come out so far?
I have nothing to conceal in this matter. If there are any aspects of the matter to which the hon. Member desires to draw attention by means of a Question, I shall be very happy to give the House all the information at my disposal.
U.S.A. Manufactures (Imports)
asked the President of the Board of Trade if, in view of the need to conserve our dollar resources, he would arrange for a list and description of manufactured articles being purchased from the United States to be drawn up; and samples to be made available for inspection to enable British manufacturers to see if it would be possible for some of these items to be manufactured in this country.
While I do not think my hon. Friend's suggestion would achieve the object he has in mind, I can assure him that His Majesty's Government have constantly before them the possibility of manufacturing in this country goods which were previously imported, and that a number of specific proposals to this end have already been adopted.
While I thank the President of the Board of Trade for his reply, may I ask him if he realises that at present departmental officials sit in judgment in this matter, whereas if adequate lists and descriptions were published of the items which are being imported from America it would enable a manufacturer to see if he can use his existing plant, technical experience and factory space in order to make these items instead of importing them from dollar areas?
In most cases we are in close touch with the traders concerned, and in many cases dollar saving production has already been started up.
Does the President of the Board of Trade realise that it is because manufacturers are not getting this information that these complaints have been put as Questions on the Order Paper?
Government Surplus Boots
asked the President of the Board of Trade if he is aware that a firm in Lincoln are offering by public advertisement, particulars of which have been sent him, the sale of ex-officers' brand new boots at 69s. a pair coupon free; and if he will make a statement explaining why this is being permitted.
Government surplus clothing and footwear, bearing identifying marks, is coupon-free. I have asked the local price regulation committee to inquire into the price at which these boots are being sold, and I will inform my hon. Friend when I have their report.
Tobacco and Cigarettes, West Cumberland
asked the President of the Board of Trade the reasons for the shortage of tobacco and cigarettes in West Cumberland as compared with other areas; and what steps will he take to remedy the position.
The shortage of tobacco and cigarettes is due to restriction in supplies of leaf. I am satisfied that the position in West Cumberland is no worse than in most parts of the country.
Is my right hon. Friend aware that in West Cumberland we feel that distribution is based on prewar sales when West Cumberland was a distressed area? As West Cumberland is no longer a distressed area, will my right hon. Friend pay attention to increased needs due to better employment and purchasing power?
I know there are three times as many people employed in West Cumberland as there were before the war, but it was not my information that supplies were based on prewar allocations, and I shall be glad to look into that and to see upon what supplies are based.
Will the Minister tell us whether there is any immediate possibility of an increased supply of leaf tobacco?
No, Sir; I do not think I have anything to add to previous statements.
Pottery Industry (Equipment)
asked the President of the Board of Trade whether he is aware of the difficulty facing manufacturers of pottery who wish to modernise production by firing the ware in continuous ovens or kilns; and whether he will assist them by reducing the number of units for these ovens and kilns that are exported at present.
I fully realise that scarcity of steel and building capacity are a handicap in the way of manufacturers wishing to re-equip their works with continuous ovens, and I am doing all I can to help them in this respect. My right hon. Friend the Minister of Supply informs me that only some 10 per cent. of the output of the pottery equipment industry is being exported, and that this small percentage covers the maintenance needs of equipment already installed abroad. The position is being watched very closely.
Whilst thanking my right hon. Friend for his reply, may I ask him whether he is aware that the average length of time a manufacturer must wait is now two years, and, if that is so, whether he can in any way encourage the manufacture of the units described, in order that the export drive may benefit?
The long delivery period to which my hon. Friend refers is due to the fact that there is much more necessity now to put in these more modern forms of equipment, and also to the fact that the industry which makes this equipment was severely limited by prewar conditions. However, 84 of these types of equipment have been installed in the last three years.
Utility Goods (Statistics)
asked the President of the Board of Trade what percentage of the total manufacture of boots and shoes and woollen and cotton garments are of the utility type.
The proportion of utility goods to total manufacture for the home market represents the following percentages: boots and shoes, 60 per cent.; woven wool garments, 75 per cent.; woven cotton garments, 79 per cent.; knitted garments of wool or cotton, 85 per cent.
May we have an assurance from my right hon. Friend that, in view of the accepted value of the good design of nearly all these articles, these percentages will not be allowed to fall in the future?
Yes, Sir, in view of the considerations to which my hon. Friend referred it is certainly our intention to maintain the utility scheme as fully as possible.
Clothing Coupons (Special Allocations)
asked the President of the Board of Trade how many Lancashire mayors have applied to his Department for a special allocation of clothing coupons; and in how many cases his officials have exercised their discretion in favour of such applications.
Of the Lancashire lord mayors and mayors elected to office for the current year, 37 have applied for and received a special allocation of clothing coupons.
Does not the small number of applications show that these mayors are, in fact, acting with a full sense of responsibility? Does my right hon. Friend see any reason to suppose that the chairmen of urban district councils would not show a similar sense of their responsibility?
That is a different question, but I can assure my hon. Friend that I am looking into this matter again.
Do Scottish provosts get extra coupons? If not, why not?
This Question relates only to mayors in the Duchy of Lancaster, but I can assure the hon. and gallant Gentleman that Scottish provosts are in the same position as English mayors.
Anglo-Soviet Trade
asked the President of the Board of Trade in view of the pro posed discussions to extend the Anglo-Soviet trade agreement, whether clarification has now been reached with the Administrator of the European Recovery Programme as to the possible effect on Anglo-Soviet trade of the obligation resting, upon him to refuse delivery to countries-participating in the Marshall Plan of any commodities which go into production for re-delivery to any non-participating country.
Not yet, Sir.
In view of the fact that the operation of this provision of the Economic Co-operation Act to which the Question refers can cripple not only Anglo-Soviet trade, but great sections of the rest of our trade, will the President of the Board of Trade tell us what stands in the way of our getting clarification from the Administrator, and will he consider pressing his colleagues in the Cabinet to see that no bilateral agreement is signed by America which reserves to the Administrator any right to direct our trade?
I do not accept at all that any crippling of our trade, whether with the Soviet Union or other countries of Eastern Europe, is involved in this matter. It is in the course of clarification at the present time, and I would ask the hon. Member to wait until an announcement can be made.
Films (Quota Requirements)
asked the President of the Board of Trade whether the films made under the agreements recently concluded between Sir Alexander Korda and Mr. David Selznick and Metro-Goldwyn-Mayer, respectively, will count towards fulfilment of British quota requirements.
To count as British for quota purposes, a film must satisfy the requirements of Section 25 (1) of the Cinematograph Films Act, 1938. In particular, its British labour costs must amount to not less than the requisite proportion of the total labour costs, British and foreign. These amounts cannot be determined until the film has been completed.
Industries, Barrow-in-Furness
asked the President of the Board of Trade if he has any proposals to attract additional diverse industries to Barrow-in-Furness.
My Department is fully aware of the needs of Barrow-in-Furness, and as my hon. Friend knows, I received a deputation from the local authorities in the Furness area on this matter last week. New projects to provide eventual employment for approximately 800 men and 500 women have already been approved and others are under consideration.
I am satisfied with the Minister's reply.
Exports to Sweden
asked the President of the Board of Trade if he is now able to make a statement regarding the difficulties experienced by British exporters to obtain import licences in Sweden and the discussions that were to have been held in Stockholm on this subject.
It was found necessary to postpone completion of the discussions in Stockholm pending a detailed study of the import licences already issued for United Kingdom goods. This is now proceeding and I expect the talks to be resumed in London in the early part of July.
Will the Minister bear in mind that orders are piling up, particularly for British hosiery, and that it is important that some decision should be reached quickly?
I am well aware of this, and we have pressed this matter in discussions with the Swedish Government, but there are technical difficulties on their side, which are taking a little time.
Will the President of the Board of Trade make sure that no granite is imported into this country from Sweden, since we are perfectly able to produce granite from the quarries in this country?
The Question relates to the difficulties experienced by British exporters and not British importers. Without notice, I cannot give the categorical assurance for which the hon. and learned Member asks. If my memory is correct, I think that we have already told the Swedish Government that there is no question of our importing granite.
Grenfell Factories
asked the President of the Board of Trade, what were the factors leading to the recent closing of the Grenfell Factory at Llwnynypia; whether those factors were known prior to the allocation of the factory; and if there is now a possibility of an early resumption of work with adequate supply of materials.
The Grenfell factory at Llwnynypia has been temporarily closed on account of the firm's inability to obtain deliveries of spring wires, supplies of which are very short. The situation was aggravated by a breakdown of the mill on which the drawers of special wire used in upholstery spring manufacture are dependent. My right hon. Friend the Minister of Supply has, however, made arrangements for the firm to obtain further supplies of wire from stocks held by the wire drawers until this mill is working again. As regards the second part of the Question it was known at the end of 1946, when the firm were negotiating with my Department for factory space in South Wales, that it was not easy to obtain additional supplies of wire but it was hoped that the situation would have improved by the time the factory was occupied.
Is it not astounding that many thousands of pounds of public money should be expended on the construction of a factory which is kept idle, when it is supposed to provide work for a sorely inflicted section of the mining community in South Wales?
This money was not spent with the idea of keeping the factory idle. Its temporary closing was due to the breakdown of a mill producing this wire, and my right hon. Friend the Minister of Supply has taken steps to see that supplies are made available.
In view of the considerable disappointment in South Wales over the closing of this factory, and in view of the assurance given by my right hon. Friend this afternoon, can he say how long it will be before the raw material will be available, so that work can be restarted at this factory?
I should want notice to say exactly when the special supplies will be available, but my understanding is that they will be available very quickly.
Having regard to the statement which has just been made by the President of the Board of Trade, that it was known in 1946 that in all probability there would be a shortage of material, why is it that his Department and other Departments of the Government allocated this factory to a body who are likely to keep it idle?
It is not a question of allocating it to a body likely to keep it idle. It was known that wire supplies might prove difficult, but it was not known, and could not be foreseen, that this mill would break down for three or four weeks.
That is planning?
Of course, if the capacity of wire production, as with the rest of the steel industry, was anything like adequate to meet the needs of this country under full employment, this would not have happened.
asked the President of the Board of Trade how many of the Grenfell factories, due for completion this year, have been allocated; and will he give the names of the firms and the nature of the business in each case.
Applications for five of the ten Grenfell factories have now been accepted. The names of the firms and their products are as follow: Bamford Springs, Ltd., Spring interior mattresses; A. J. Tyler and Co., Rainwater goods; Craton, Ltd., Carton and dairy machinery; Cyc Arc, Ltd., Industrial studs and welding; Philip Owen, Ltd., Textile printing.
Is my right hon. Friend satisfied that in the case of the Grenfell factories which will be opened this year the work provided is not such as to cause the same experience as in the case of the factory at Llwnynypia?
A relatively small number of firms have applied to take over the Grenfell factories, and these factories have been chosen in relation to the expected supplies of raw material.
Is not the Minister aware that the hon. Member for Gower (Mr. Grenfell) has already had good cause to regret the association of his name with this scheme?
No, Sir. I think that is an extreme view. The point is that there never has been any attempt made before in the history of this country to build factories for silicotics. The fact that one factory closed down for two or three weeks as a result of a breakdown at the mill supplying the raw material, should not lead to an excessive statement of that kind.
"Soviet Weekly" (Paper Allocation)
asked the President of the Board of Trade what quantity of newsprint is allocated for the production of the periodical "Soviet Weekly," and to whom this allocation is made.
The total amount of paper which may be used for the "Soviet Weekly" is fixed by Central Office of Information in accordance with the permitted number and size of copies which may be produced each week; the consumption does not exceed 10 tons a month. I understand the publishers are the "Soviet Weekly," at 630, Grand Buildings, Trafalgar Square.
Would the right hon. Gentleman request the Soviet Embassy not to send Members of Parliament duplicate copies?
I am not responsible for the distribution of this paper. I am sure that the House will realise that the small quantity of paper allocated for this purpose is balanced by similar supplies being made available in the Soviet Union for the publication of the British Journal, "Britansky Soyuznik."
Fuel and Power
Oil (Home Production)
asked the Minister of Fuel and Power what is the present level of home produced oil; and how its cost compares with the imported product.
The output of liquid products from home produced crude petroleum and shale oil during the 12 months ending 31st March, 1948, was 35.3 million gallons, which represents 1 per cent, of our consumption. Information is not available as to the cost of producing and refining indigenous oils.
Can the Minister say why the information is not available; whether production in the past year has declined; and what are the prospects for production in future?
I should have thought the hon. Member would be aware that private firms are not in the habit of disclosing their production costs. If he will put down a Question on the second part of his supplementary question I will endeavour to give him an answer.
Supplementary Petrol Allowances
asked the Minister of Fuel and Power if, in view of representations received from local authorities, he is arranging for an allocation of petrol above the standard ration to enable members of local authorities to attend meetings in connection with public duties, without sacrificing their right as ordinary motorists to use some petrol for pleasure driving this summer.
asked the Minister of Fuel and Power if he will sympathetically consider applications for petrol made by rural district councillors to enable them to carry out their duties in addition to attendance at definite meetings of their Councils:
All applications from members of local authorities for supplementary allowances to carry out their public duties are considered on their merits, but I cannot agree to modify in their favour the rule that the amount of the standard ration must be deducted from all issues of supplementary allowances made by the Regional Petroleum Office.
Does the Minister really consider it fair that those who give their time in voluntary service to the community should thereby be penalised?
I cannot agree that they are penalised. As I have said on more than one occasion in the past, I fully agree that motorists are differently affected by this. Nevertheless, I am quite satisfied that all of them can combine a good deal of convenience and pleasure with their business.
Can the right hon. Gentleman say when he proposes to review the working of the standard ration with a view to making a concession to those who have supplementary rations only, to enable them also to enjoy the recent concession made?
It is far too early for any such review.
asked the Minister of Fuel and Power whether he is aware that supplementary petrol, granted for essential purposes, is used to attend race meetings, provided some short agricultural demonstration or auction sale forms a small part of the proceedings; and what action he has taken to stop such use of petrol.
As long as the petrol issued against supplementary allowances is used for purposes for which the allowance was granted, no offence is committed. I have no desire to stop motorists combining business with pleasure.
asked the Minister of Fuel and Power whether, in rural areas where no public transport is available, he will grant a small allowance of petrol to village cricket clubs where they could obtain the use of private cars or other vehicles for the transport of the team to play away matches for the rest of this season.
I would refer my hon. Friend to the reply I gave to the hon. Member for Cheltenham (Mr. Lipson) on 15th April.
Is my right hon. Friend aware that this is one of the occasions when they cannot very easily combine business with pleasure; does he not think that those who work very hard in agricultural areas ought to be able to take recreation with their neighbours, which at the moment they cannot do because of the transport difficulty; and will he look into this matter again?
We always like to encourage village cricket, but I must ask hon. Members to encourage their constituents to use the standard ration for that purpose.
Hire-Car Licence (Application)
asked the Minister of Fuel and Power whether, in cases where an application to open a new hire-car business in a given area is refused as a result of advice obtained from the police, he will permit the unsuccessful applicant to see a copy of the police report and to bring forward rebutting evidence of the local needs for more hire-cars.
The information contained in the reports from the police, which the Regional Petroleum Officer considers when making his decision, is given in confidence and cannot be disclosed. Full consideration is of course given as well to any evidence of local need put forward to the Regional Petroleum Officer by the applicant.
If a man has the courage and initiative to set up a new business at his own risk, is not the only test whether it is wanted or not whether he makes a profit?
I should have thought that even the hon. Member was aware that there was a very great shortage of petrol.
Can the Minister say why it is that when a person requires a licence for a taxi it can be granted by the local urban council, whereas if somebody wants a private hire-car licence it has to be done through the Ministry and the police? Why cannot the local district council give permission?
This is a question not of giving a licence, but of allowing petrol. Petrol is granted in both cases by the Regional Petroleum Officer, who naturally takes into account the attitude of local authorities when considering taxicabs.
Is it not the case that there has been a vast increase in the number of these private hire-car firms and the petrol consumed by them, which is causing very great annoyance to private motorists, who see petrol supplies going in these directions at very high cost to the public?
It is true that there has been an increase in the number of private hire-cars, and certainly adverse views are expressed on it from time to time.
Can my right hon. Friend say whether preference is given to applicants who are disabled ex-Service men; and if not, will he give that favourable consideration?
Yes, Sir, preference is already given. Special consideration is given to cases where the Ministry of Labour recommend that it is the most suitable form of employment for a disabled person.
Standard Petrol Issue (Form)
asked the Minister of Fuel and Power whether Form R.P.O. 1309, Annex 3, issued by his officers, is to be taken to indicate that a double deduction in respect of the issue of standard petrol is to be made from supplementary grants during the period November, 1948, to April, 1949; and what is the meaning of paragraph 2 of the above-mentioned form.
This form was sent by the regional petroleum officers to motorists receiving supplementary allowances for the period 1st. May to 31st October, 1948, and therefore before 1st June when the standard ration became available. Consequently these motorists received their supplementary allowances in full for the period June to October in addition to the standard ration distributed through the Post Offices. It will therefore be necessary to deduct the amount of their standard ration for the period June to October next time supplementary allowances are issued to them, i.e. for the period November, 1948, to April, 1949. The amount of the standard ration for November, 1948, to April, 1949, must, of course, also then be deducted.
Will the right hon. Gentleman bear in mind that this double reduction in respect of the standard ration will, in a great many cases, cause very great hardship, and will he instruct his officials to be somewhat flexible in the application of this rule to individual cases?
I cannot agree that any hardship is involved, but it was precisely because there might be some misunderstanding on this point that the leaflet in question was issued by the regional petroleum officers.
Coal Industry
Imports (Poland and U.S.A.)
asked the Minister of Fuel and Power how much coal has been imported from Poland and the U.S.A., respectively, during the past 18 months.
During the 18 months ended 30th April, 1948, 163,500 tons of coal were imported from Poland and 607,400 from the United States.
Would the Minister agree that the coal imported from Poland is of very inferior quality, some of which was actually sent to Newcastle; and could he give an assurance that we shall not import any more coal from Poland?
Last year we were very strongly pressed by the Opposition to import as much coal as possible. I am not aware that the quality of the coal from Poland was inferior; but, of course, these imports ceased some months ago.
Can the Minister say what were the respective prices paid for the coal from the U.S.A. and from Poland?
That information has been given in the past, but if the hon. Member will put down a Question I will give him an answer.
Is not my right hon. Friend delighted to receive from the Opposition this blessing on British coal produced by British miners?
Mining Subsidence
asked the Minister of Fuel and Power if he is aware that the problem of subsidence damage to property in the mining areas is now most acute; and when he anticipates being in a position to publish the Report of the Committee under the Chairmanship of Mr. T. F. Turner, K.C., appointed by his predecessor in 1946 to examine the whole question of mining subsidence, in the light of the nationalisation of the coal industry.
Yes, Sir. I would refer my hon. Friend to the answer which I gave to my hon. Friend, the Member for Ilkeston (Mr. Oliver), on 29th January. Since then further meetings have been held and witnesses examined, and the committee have visited the South Yorkshire coalfield. It is expected that the hearing of evidence will be completed by the end of June. It is not yet possible to state when the Committee will be able to present their Report.
While I recognise the legal complexity of the situation, I must ask whether my right hon. Friend will bear in mind that as time goes on the distressing conditions under which these people live in subsidence areas becomes more aggravated, and, in the circumstances, will he impress upon the committee the necessity of making their Report at the first possible moment?
I quite agree with my hon. Friend about the distressing nature of this problem, and I am sure the committee are fully aware of its urgency.
Do the terms of reference include the problem of disused mines, which are not easily detected, but are of danger to life and limb; and will the terms of reference include the tin mining areas as well as coal mining areas?
I should prefer to see that question on the Order Paper before answering it.
Consumers' Council
asked the Minister of Fuel and Power what allowances are being paid to the members of the Industrial Coal Consumers' Council; and what is the total of remuneration and allowances fixed for the staff.
The only allowances payable to members of the Industrial Coal Consumers' Council are for travelling and subsistence at normal rates fixed by the Treasury. The secretarial and other work of the Council is carried out by officers of the Ministry who combine it with other duties. No separate remuneration or allowances are, therefore, involved.
Could the Minister say whether it is proposed to make available to the public any of the protests or complaints of this Council about the quality of coal, and other matters?
The question of publicity for the Council's proceedings is, of course, for the Council themselves. The hon. and gallant Member may have noticed that the Chairman of the Council recently held a Press conference, and gave out a good deal of information.
Collieries, Ayrshire (Production)
asked the Minister of Fuel and Power how many collieries in Ayrshire continue to operate outwith the National Coal Board; and if he is satisfied with production figures of these collieries.
There are nine small mines producing coal in Ayrshire which are not operated by the National Coal Board. As far as I can judge, the output is satisfactory.
Is the Minister aware that his satisfaction is not shared by the miners in Ayrshire; that if full development of these mines is undertaken many miners who are at present unemployed in the area, and feel very strongly about it, could find employment?
I cannot see that taking over the mines would necessarily increase the amount of employment in them.
Is the Minister not aware that if he searched the files left by his predecessor he might find information to show that possibly development is not being carried out in these collieries.
Is the Minister aware that it is nearly 12 months since the Ayrshire miners made these representations to his predecessor, and will he look into the matter again now?
It is not a matter for me. The Coal Board license these small mines, and it is up to them whether or not to continue the licence.
Colliery Companies (Compensation)
asked the Minister of Fuel and Power what are the plans of the colliery companies for covering the period from the end of this year, when their interim income comes to an end, until the terms of compensation are finally settled.
Their plans are, of course, a matter for the colliery companies themselves. I would, however, draw attention to the replies I gave to the hon. Member for Cambridge University (Mr. Wilson Harris) and to the hon. and gallant Member for Totnes (Brigadier Rayner) on 27th May and 3rd June on this matter.
National Coal Board (Members' Resignation)
asked the Minister of Fuel and Power what actions he took between 14th May and 3rd June, 1948, in pursuance of the powers vested in him by Section 3 (1) of the Coal Industry Nationalisation Act, 1946; and what information he obtained under Section 3 (4) of the same Act during the same period.
I would refer the hon. Member to the statements made by my predecessor in reply to Questions by the hon. Member for Sutton Coldfield (Sir J. Mellor) on 9th June, 1947, in which he explained that statistical and other periodic returns are regularly supplied by the National Coal Board to my Department. No occasion arose in the period mentioned in the Question to invoke the provisions of Section 3 (1) or Section 3 (4) of the Coal Nationalisation Act.
Are we to assume that the resignation of Sir Charles Reid which "The Times" described as "distressing," whose criticisms "The Times" described as "firmly based" and whose demand for an impartial inquiry was described as "firmly founded" has not caused the Minister to issue any instructions or to ask for any special information following upon that event?
I have nothing to add to the earlier statements I have made on this subject.
asked the Minister of Fuel and Power how many days' notice Sir Charles Reid gave him on retiring from the Coal Board.
Sir Charles' letter to me was dated 10th May, 1948, and his resignation took effect from 15th May, 1948. He has already made plain that he proposed to me, on 18th March, 1948, that he should resign.
In view of the action taken against unofficial strikers and absentees, will the Minister tell us whether any action is to be taken against this gentleman?
I deprecate these attacks in regard to a person who is not a Member of this House and cannot, therefore, be present.
The point goes much further than that. In view of the fact that Parliamentary Privilege has been used to make an attack on a distinguished civil servant will the Minister make it clear that everything he did was in accord with his contract, and that it is not likely to lead to a strike as is the case with miners for whom the hon. Member for South Ayrshire (Mr. Emrys Hughes) speaks. I give the right hon. Gentleman notice that I will raise the matter on the Adjournment.
rose —
As notice has been given that the matter is to be raised on the Adjournment no further Questions can be asked.
National Service (Release Application)
asked the Minister of Labour why he has refused the application for the earlier release of Craftsman T. P. Clark, 19141534, to enable him to enter the Polytechnic, who have accepted him as a student, on 1st November, 1948.
No application has been received for the early release of Craftsman Clark to start his studies. He is not, however, eligible for such release as he was called up after the end of 1946.
Is the Minister aware that an application must have been made because the Polytechnic accepted him? Is he further aware that by the time he enters the Polytechnic he will have served 18 months of the two years, and cannot he have this opportunity of higher education in accordance with the spirit of what the Minister said in this House in February?
I do not know whether the Regent Street Polytechnic accepted him, but they inform me that they did not apply for his release. He must serve his term the same as the others.
National Finance
Purchase Tax
asked the Financial Secretary to the Treasury on what grounds the Commissioners of Customs and Excise were permitted to intervene in refusing to allow a concession of Purchase Tax on cutlery being ordered by the American Embassy for use in the Embassy in this country and other American Embassies in Europe, contrary to the earlier decision to supply free from duty, in view of the fact that payment was to be made in dollars, the result of which refusal has been the cancellation of the order.
The facts of this case are that tenders were invited for cutlery for use in the American Embassy canteen in London. The goods are liable to Purchase Tax under the law, and the Commissioners of Customs and Excise quite correctly stated that there was no authority under which it could be waived. Had the goods been for export overseas, no tax would, of course, have been payable.
Is not the result of this decision to prevent an order being obtained by the firm concerned for export purposes, and is it not right and proper that a Department should do all they can to stimulate the country's trade instead of adversely affecting it?
The order was not for export. These items were for use here and are very properly liable for Purchase Tax.
Bulletin (Cost)
asked the Economic Secretary to the Treasury what is the cost in salaries and material of the preparation of the bulletin, "Target," now being circulated in factories; and what numbers of staff are engaged therein.
The cost of "Target" in salaries, material and over-heads is about £800 per issue. The number of staff engaged on it is four.
Production (Propaganda Posters)
asked the Economic Secretary to the Treasury whether he has seen the Government appeal for "More and More Production," on a poster the main feature of which is a factory chimney belching black smoke; whether he is aware that black smoke represents unconsumed fuel; and whether he will withdraw the poster and substitute another emphasising that the prevention of smoke, rather than its emission, assists production.
Yes, Sir. I have certainly seen this poster, which has now been on hoardings for 14 weeks and will shortly be replaced. A smoking chimney is generally associated with the idea of full production, but we certainly do not wish to run counter to the movement for smoke abatement, with whose aims the Government is in entire sympathy.
Will the Economic Secretary at least consider having a new poster, on the lines suggested at the end of the Question, in the North of England where the present Government poster is giving great encouragement to the old slogan, "Where there's muck there's money? "
I think that there is another slogan, "Where there's smoke there's fire."
Civil Service (Transfer Applications)
asked the Secretary to the Treasury how many civil servants since the beginning of the year have asked for a transfer to other Departments on the grounds that they have insufficient work in their present posts.
I have no information centrally about this. Every civil servant has recently been asked to let his branch know if he has insufficient work or knows any way in which its efficiency can be increased. The more that come forward the better.
Electricity Supply
Consultative Councils
asked the Minister of Fuel and Power what steps have been taken to establish consultative councils as provided in Section 7 of the Electricity Act, 1947.
The necessary regulations were laid on the 28th April and came into operation on 3rd May. I have consulted all the organisations which I am required to consult under the Act but have not yet received final replies in all cases.
Does the Minister recollect that quite recently he thought that the appointment of the electricity consultative councils would take place shortly after the vesting date? Can he give a further statement now as to when these councils are likely to be set up?
It does not, as I understand it, entirely depend on me but on how soon the various organisations give me their suggestions.
Breakdowns
asked the Minister of Fuel and Power if he will make a statement regarding the breakdown of the electricity service on Sunday, 23rd May.
56 and 57.
asked the Minister of Fuel and Power (1) whether he proposes to make any regulations under Section 60 (1) of the Electricity Act, 1947, so that in the event of a repetition of the general breakdown of the supply of electricity, as happened on 23rd May last, there will be available before Parliament, as soon as possible, a full report;
(2) if he will make a statement on the widespread breakdown of the supply of electricity which happened on 23rd May last.
asked the Minister of Fuel and Power what actions he took between 23rd May and 3rd June, 1948, in pursuance of the powers vested in him by Section 5 (1) of the Electricity Act, 1947; and what information he obtained under Section 5 (5) of the same Act during the same period.
Regulation 21 ( c ) of the Electricity Supply Regulations, 1937, is sufficient to ensure that reports in such breakdowns in supply are submitted to me by the electricity boards. There was, therefore, no occasion for me to ask for information under Section 5 (5) of the Electricity Act, 1947. The Chairman of the British Electricity Authority made a very full statement on Monday, 24th May, and, as I have not yet received the reports under the Regulation 21 ( c ), I have nothing to add to his statement.
Does not Section 5 (5) empower the Minister to issue directions to the British Electricity Authority, and can it possibly be that, following upon an electricity breakdown which stretched from the East Coast to Bristol and Plymouth and affected all stages of life, the Minister took no steps to instruct them at all?
It would obviously be extremely foolish to issue directions before one had received a report on the whole affair.
Can the Minister say whether the reports we have read in the Press of the reasons for the breakdown are correct, because the Lord President of the Council has told us on so many occasions that we must not believe the things we read in the Press?
I think that the causes are fairly clear—shortage of plant and an excessively bad spell of cool weather, combined with two breakdowns on the line.
Can we have an agreement between the Minister and the Lord President of the Council that we should postpone all discussion on the Gas Bill until the Minister receives the report on the breakdown of electricity, as nationalisation is obviously not working?
Is the Minister aware that the cause of this breakdown was purely technical and that a similar breakdown occurred in 1934?
That is perfectly correct.
Business of the House
May I ask the Leader of the House to tell us the Business for next week?
Yes, Sir. The Business for next week will be as follows:
Monday and Tuesday, 14th and 15th June—Report stage of the Representation of the People Bill.
Wednesday, 16th June—Conclusion of the Report stage and Third Reading of the Gas Bill. Motion to approve the Draft National Assistance (Determination of Need) Regulations.
Thursday, 17th June—Supply (17th Allotted Day), Committee. A Debate will take place on the Price of Raw Cotton until about 7.30 p.m. Afterwards there will be a Debate on the Agreement with the American Film Industry.
Friday, 18th June—Report and Third Reading of the White Fish and Herring Industries Bill. Second Reading of the Public Works Loans Bill and Committee stage of the necessary Money Resolution. Consideration of the Lords Amendments to the Industrial Assurance and Friendly Societies Bill. Committee and remaining stages of the Companies Bill [ Lords ], and, if there is time, consideration of the Lords Amendments to the Education (Miscellaneous Provisions) Bill.
I think I ought to say to the Leader of the House that I am glad that he has found it possible to give a little more time to the Gas Bill. I cannot help thinking that it will be to the general and national advantage.
It is as a result of discussions, and there is an agreement that the rest of the Report stage and the Third Reading will conclude at a reasonable hour on Wednesday.
With reference to a matter which I raised on Business last week will the Lord President say if he has had time to study the statements made by the Chancellor of the Exchequer with regard to the import and export gap; and whether, in view of the serious position which has been confirmed by the President of the Board of Trade, he will give time for a discussion in the near future on this really critical situation?
I am afraid I cannot give time in view of the pressure on the programme. If the matter should commend itself to the Opposition it could be debated on a Supply Day.
In view of the great deterioration of the situation in Malaya, where there are strikes, unrest and murder, and according to the High Commissioner, a great deal of Communist activity, can the Government in their time afford facilities for a Debate in view of their responsibilities, and so carry out the promise given last year by the Secretary of State for the Colonies that we should have a Debate on the matter.
I have never been able to confirm that promise. This would be appropriate business on the Colonial Office Vote which may come up.
Was no consideration given to the allocation of time next week for a discussion on the very serious statement made by the Foreign Secretary yesterday about the setting up of a capitalist State in Western Germany under the direction of America?
I have no recollection of such a statement. Therefore, the question does not arise.
Would the Lord President bear in mind that early this week in the early hours of the morning very important decisions affecting the employment of tens of thousands of workers were taken during Debates at a time when hon. Members could not possibly have been at their best? In those circumstances will my right hon. Friend reconsider the procedure in respect of the Finance Bill and see whether it is not possible to have it sent upstairs so that it can be considered in more detail at more reasonable times?
It would be a novel departure, that if matters have been discussed in the circumstances to which my hon. Friend refers, then we had better talk it over again. I think it would be too troublesome.
Will my right hon. Friend consider allowing time at an early date for a Debate on the whole question of Commonwealth relations, a most important subject which has not been debated for a long time in this House?
I am afraid I cannot respond to the numerous requests to find time for particular Debates. Time is going to be fairly fully occupied.
Is the right hon. Gentleman aware that one of the difficulties that arose over the Finance Bill was that there was no Report stage on the Budget Resolutions, and that if there had been such a stage many of these difficulties would have been avoided?
I do not agree at all. A Report stage of the Budget Resolution would have added still more time to the very lengthy proceedings which have taken place on the Budget.
In view of the fact that the Chancellor's statement with regard to the gap between our exports and imports affects the whole economic well-being of this nation, will my right hon. Friend not find time to have the whole matter discussed in the House? The majority of the people who understand this matter are of the opinion that we are going into pawn to the United States and the matter should be cleared up.
Capital Punishment (Royal Prerogative)
Some doubt having arisen following the statement which I made to the House on 16th April in regard to the advice which I should tender to His Majesty on the exercise of the Royal Prerogative of Mercy, I think it may be convenient if I now restate the position in the light of existing circumstances, and I am grateful to you, Sir, and the House for the opportunity to do so.
His Majesty's Prerogative completely to pardon an offender or, by a condition pardon, to mitigate the full penalty imposed by law only arises after the sentence of the court dealing with the offence to which the pardon relates and is exercised only after a submission on each occasion of the relevant facts and considerations. Thus, His Majesty's discretion is exercised in the light of the circumstances existing in each particular case, but it is exercised on advice and it is my duty, in advising His Majesty, to guide myself in accordance with consistent principles as far as may be practicable.
Moreover, I am bound in each case to have regard to all relevant considerations including, for instance, amongst other considerations, the reaction which a particular course might be expected to produce in the minds of the public. This consideration has special weight if the law relating to the irrevocable penalty of death may be in process of alteration by Parliament.
At the time of my original statement it seemed not unlikely that within the course of the present session of Parliament, the death penalty for murder might be suspended for at least five years. That, at all events, was the decision of this House accepted by His Majesty's Government. On that assumption, whilst it would clearly have been intolerable merely to respite sentences and to leave in doubt the fate of persons under sentence of death until the Criminal Justice Bill had finally been passed into law, it seemed to me manifestly undesirable that, during the interim period, while the legislation was under consideration, the execution of the death penalty in a particular case should depend on the stage which happened to have been reached in the Parliamentary process.
Accordingly, I came to the conclusion that it would be my duty in considering capital cases during the interim period, to treat the prospect of an early change in the law as a compelling reason for advising the commutation of such sentences. If without making any public statement I had done what I have done in each of the five recent capital cases, namely recommended a reprieve mainly or solely on the ground that there was a prospect of an early change in the law and that the carrying out of the death sentence in these circumstances would be abhorrent to public opinion, no question about the constitutional propriety of my action would have arisen.
My action has been called in question not because I recommended these five reprieves, but because I stated beforehand the course which I proposed to follow. It is said that by so doing and thus indicating that all persons convicted of murder during the interim period would have their sentences commuted, I converted what would otherwise have been a legitimate procedure into a misuse of the Royal Prerogative for the purpose of dispensing with the law.
On this abtruse issue different views appear to be held by lawyers, but the broad issue appears to me to be as follows: If the public had been left in ignorance of the reason for reprieves in cases which presented no mitigating features, the resulting bewilderment as to the principles guiding the exercise of the Prerogative would have been most unfortunate. I, therefore, felt it right in the most exceptional circumstances to state the general lines of policy that I should follow.
For these reasons I made the statement on the 16th April. That statement was not questioned, and I had every reason to believe that it commanded general assent until nearly seven weeks later it was suggested that by making that statement I had exposed myself to a charge of unconstitutional conduct. My answer to that charge is simply this: that while it is of high importance to avoid even the appearance of infringing a constitutional principle, it is also important that the public should be aware of the general principles upon which His Majesty would be advised in the exercise of His Prerogative.
What I have so far said relates to the statement of 16th April and the circumstances in which it was made. Those circumstances have in my view changed as a result of the further Parliamentary discussion on the Bill. In consequence I feel it right to take this opportunity to make it plain that from now on each case will be considered on its merits, regard being had to the special considerations relating to that case and all other relevant considerations either of a public or private nature.
I am glad that the right hon. Gentleman has so clearly stated that, in view of the decisions which have been taken, the statement of 16th April is modified in the light of those decisions. I should like to be quite clear about this. It is a little difficult to follow these intricate statements, but, as I understand it, the position now is that we revert to exactly the position—[HON. MEMBERS: "No."] I am only asking. Perhaps the Home Secretary might be allowed to answer. Are we reverting to the exact position of the Home Secretary before the statement of 16th April?
I shall consider each case on its merits in the light of all the circumstances at the time I have to tender advice on each occasion.
I am very much obliged. Was not that exactly the constitutional position of the Home Secretary before 16th April?
Answer.
I am not trying to make a point. I am trying to make it clear where we are.
That was the position prior to that statement. The considerations I have to take into account may of course be varied by the growth of public opinion one way or the other.
Oh.
I am glad that the Home Secretary has now made this statement. He has, in my opinion at any rate, made the constitutional position perfectly clear. I think that in making the statement on 16th April he did make a mistake on a grave constitutional issue. I would add that we all know the right hon. Gentleman and his kindliness of heart, and we know that the statement he made on 16th April was made with the very best motive.
Can my right hon. Friend say on what date the change was made in the formula used by His Majesty's judges in pronouncing the death sentence; whether it is proposed that the new form shall continue, whether that change had the agreement of the Lord Chief Justice and the other judges and whether that agreement was given before or after the constitutional doubts arose?
I do not want to say anything that would appear to be a criticism of the Lord Chief Justice
Why not?
It would be completely out of Order.
—in his capacity as Lord Chief Justice, but on 19th April he wrote to me to say that in view of the statement I had made in the House on the 16th, he, in consultation with the judges, proposed to modify the procedure in the courts, and at no time until the speech of an ex-Lord Chancellor in another place had anyone suggested to me that my action was unconstitutional. I would say to the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), whom I thank for what he said, that he is a lawyer and I am not, and as far as I know he did not spot the mistake until it was pointed out.
While I agree entirely with the general tenor of the Home Secretary's statement, there is a point towards the end which I must confess I am quite unable to understand. Are we to understand that we now revert to the position before this House took its decision on the death penalty; and does it follow from that that the Home Secretary, in considering cases now before him or cases which may come before him in the weeks ahead, will be guided by the position as it was before the House, took that vote or by the position as it may be as a result of a compromise agreement? In short, are we reverting to the position before we took our vote when in point of fact it is highly likely that this House and another place will reach an agreement which still rules out several types of murder from being subject to the death penalty?
No, Sir. My position is the constitutional one of Home Secretary. In giving this advice, I have to have regard to all the circumstances surrounding the particular case, and I do not think that I ought to be pressed to go beyond that.
On that point, may I ask my right hon. Friend if part of the general circumstances which he must consider in dealing with each case individually is the effect which the mere accident of time may have as an element in determining the fate of one man as compared with another?
I do not think I have anything to add to the statement which I have made, but it is quite clear that it is possible that that would be one of the circumstances. May I reply to a point put by the hon. Member for Nelson and Colne (Mr. S. Silverman) which I missed? The formula to be used in the courts is a matter for the judges. It was altered by them recently, and I do not think it would be right of me to intervene at this stage to suggest either that the alteration should continue or that they should revert. I think that is a matter entirely for His Majesty's judges.
Referring to what the Home Secretary has just said, with which I entirely agree, would he consider publishing the communications which took place between him and the Lord Chief Justice, in order to clear away the impression which was created in another place—which I believe was quite wrong—that the Home Secretary had tried to give a direction to the judiciary?
No, Sir. I hope the House will be prepared to accept the statement I have made. The present formula used in the courts is that which the judges themselves suggested should be used.
On a point of Order, Mr. Speaker. Could I seek your Ruling on one point? This discussion arises out of a statement which was made by the Lord Chief Justice—[HON. MEMBERS: "Lord Chancellor."] Up till now, while we have been permitted to comment on and quote from statements made in another place by Ministers, that has not extended to the case—or the case has not come up—where such a statement is made by an officer of State. It is a very difficult position, I would suggest, with all respect to this House, when statements are made which we cannot criticise and cannot even quote. I was going to suggest that it would perhaps be possible, where a statement is made by an officer of State criticising a Minister in regard to the Executive's conduct, which it is the duty of this House and not of any other place to judge, that, it should be proper for us to quote and refer to what was said.
I am afraid I can give the hon. Member no encouragement whatsoever. If we once start quoting speeches made in another place, be they by the Lord Chancellor, the Lord Chief Justice, or any private Member, we are getting back into the stage when this House is going to fight with the other, which is the one thing we always try strongly to avoid. I must rule that any quotation, any reference to a speech—which was a debating speech after all, not a statement of law—is out of Order in this House.
I could not agree more with what you have just said, Mr. Speaker, but I want to make the position quite clear. The position as I understand it is that, we in this House are entitled to refer to statements of policy but are not entitled to quote or refer to individual speeches?
I was speaking about the case of the other day when the Lord Chancellor made a statement, in the course of debate which I thought was liable to be quoted. I was wrong. Even that one may not quote. It must be a definite statement of policy by a Minister of the Crown. That can be quoted in this House, and that is all.
May I put one question to the Home Secretary? I understood him to say that he did not appreciate until some weeks later that this constitutional point arose. How does he reconcile that with the statement made by the Lord President of the Council a week ago today that he had thought the point might have been taken at once, and thereby showed that he was well conscious of the constitutional point?
I do not think I am called upon either to reconcile the statement or to defend my right hon. Friend. The hon. and learned Gentleman himself, on occasion, tries to claim the position of being a constitutional authority. Not a single lawyer on that side of the House, or on any other side of the House, suggested that any constitutional principle was involved until an ex-Lord Chancellor spoke in another place.
Without any reference to the content of the question of the death penalty, it seems to me we have reached a most difficult position this afternoon. Certainly, being an unlearned Member of this House, I have no idea now whether a constitutional issue was raised or not. Will the Home Secretary say whether there has been a constitutional issue of any kind involved and, if so, what the answer is, because it will have a great influence on the future.
A question was raised last Thursday as to whether I would make a statement. On Friday the right hon. Member for Warwick and Leamington (Mr. Eden) put me another question, and I said I would make a statement. That statement I have made this afternoon. Whether it concerns a constitutional issue or not I think everyone must make up his own mind.
May I raise a point of Order, Mr. Speaker? [HON. MEMBERS: "Oh."] Oh, yes. I can assure hon. Members that this is still the House of Commons. The point of Order is this. On a strict interpretation of the Rules it might be held that, what I might describe as the Debate we have just had on the statement of the Home Secretary, would preclude the further discussion which many of us wish to have at considerable length when a cer-
tain Bill comes back from another place. I presume that our rights are in every way safeguarded?
Yes, I imagine that there will be some discussion when it comes back from the other place, and I should think it will be prolonged and fairly wide. Nobody's rights are diminished in any way. I suggest we get on with the Business now.
Business of the House
Motion made, and Question put:
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[ Mr. H. Morrison. ]
The House divided: Ayes, 292; Noes, 113.
Division No. 204.] AYES. [3.56 p.m. Acland, Sir Richard Cooper, Wing-Comdr. G Guest, Dr. L Haden Adams, Richard (Balham) Corbet, Mrs. F K (Camb'well. N W) Guy, W H Adams, W. T. (Hammersmith, South) Corlett, Dr. J Haire, John E (Wycombe) Allen, A. C. (Bosworth) Cove, W. G Hall, Rt. Hon. Glenvil Allen, Scholefield (Crewe) Crawley, A. Hamilton, Lieut.-Col. R Andersen, A. (Motherwell) Daines, P. Hannan, W. (Maryhill) Anderson, F. (Whitehaven) Davies, Rt. Hn. Clement (Montgomery) Hardman, D. R. Attewell, H. C. Davies, Edward (Burslem) Hardy, E. A Austin, H. Lewis Davies, Ernest (Enfield) Harrison, J. Awbery, S. S. Davies, Harold (Leek) Hastings, Dr. Somerville Ayles, W H. Davies, Haydn (St. Pancras, S.W) Haworth, J Ayrton Gould, Mrs B Davies, R. J. (Westhoughton) Henderson, Rt. Hon. A. (Kingswinford) Bacon, Miss A Davies, S. O (Merthyr) Henderson, Joseph (Ardwick) Balfour, A. Deer, G. Hobson, C. R Barnes, Rt. Hon. A. J de Freitas, Geoffrey Holman, P. Barstow, P. G Delargy, H. J. Holmes, H. E (Hemsworth) Barton, C Diamond, J. Horabin, T L. Battley, J. R. Dodds, N. N. House, G Bechervaise, A E Driberg, T. E. N. Hoy, J. Benson, G. Dugdale, J. (W. Bromwich) Hubbard, T. Berry, H. Dumpleton, C. W. Hudson, J H. (Ealing, W.) Beswick, F. Dye, S. Hughes, Emrys (S. Ayr) Bevan, Rt. Hon. A. (Ebbw Vale) Ede, Rt. Hon. J. C. Hughes, Hector (Aberdeen, N.) Bing, G. H. C Edwards, John (Blackburn) Hughes, H. D. (W'lverh'pton, W.) Binns, J. Edwards, N. (Caerphilly) Hutchinson, H. L. (Rusholme) Blackburn, A. R Edwards, W J. (Whitechapel) Hynd, J. B (Attercliffe) Blyton, W. R. Evans, Albert (Islington, W.) Irving, W J. (Tottenham, N.) Boardman, H. Evans, E. (Lowestoft) Isaacs, Rt. Hon. G A Bottomley, A. G. Evans, John (Ogmore) Jay, D. P. T. Bowen, R. Evans, S. N (Wednesbury) Jeger, G. (Winchester) Bowles, F. G. (Nuneaton) Ewart, R. Jenkins, R. H. Braddock, Mrs. E. M. (L'pl, Exch'ge) Fairhurst, F. Jones, D. T. (Hartlepool) Braddock, T (Mitcham) Farthing, W J Kendall, W. D. Bramall, E. A. Fernyhough, E. Kenyon, C. Brook, D. (Halifax) Field, Capt. W. J Key, Rt. Hon C W. Brooks, T. J. (Rothwell) Foot, M. M. Kinley, J. Brown, T. J. (Ince) Forman, J. C. Kirkwood, Rt. Hon. D. Bruce, Maj. D. W T. Fraser, T. (Hamilton) Lang, G. Buchanan, Rt. Hon G Freeman, Peter (Newport) Lawson, Rt. Hon J J Burke, W. A. Gallacher, W. Lee, F. (Hulme) Butler, H. W. (Hackney, S.) Ganley, Mrs. C S Leonard, W. Byers, Frank Gibbins, J. Lever, N. H. Carmichael, James Gibson, C. W Lewis, T. (Southampton) Castle, Mrs. B. A. Gilzean, A. Lipson, D.L. Chamberlain, R. A Glanville, J. E (Consett) Lipton, Lt.-Col. M Champion, A. J Gooch, E. G. Longden, F. Chater, D. Goodrich, H. E McAdam, W. Chetwynd, G R Gordon-Walker, P. C McEntee, V La T Cluse, W. S Granville, E. (Eye) McGhee, H. G Cocks, F. S Greenwood, A. W J (Heywood) McGovern, J Coldrick, W. Grenfell, D. R Mack, J. D. Collindridge, F. Grey, C F. McKay, J. (Wallsend) Colman, Miss G M Griffiths, D (Rother Valley) Mackay, R. W. G (Hull, N. W.) Comyns, Dr. L Griffiths, W D. (Moss Side) McKinlay, A. S. Maclean, N. (Govan) Pursey, Cmdr. H. Thomas, I. O. (Wrekin) McLeavy, F. Randall, H. E. Thomas, John R. (Dover) Macpherson, T. (Romford) Ranger, J. Thomas, George (Cardiff) Mainwaring, W H. Rankin, J. Thurtle, Ernest Mallalieu, J, P. W. (Huddersfield) Reeves, J. Tiffany, S. Mann, Mrs. J. Reid, T. (Swindon) Titterington, M. F. Manning, C. (Camberwell, N.) Rhodes, H. Tolley, L. Mathers, Rt. Hon. George Richards, R. Tomlinson, Rt. Hon. G. Medland, H M. Robens, A. Ungoed-Thomas, L. Mellish, R. J. Roberts, Emrys (Merioneth) Usborne, Henry Middleton, Mrs. L. Roberts, Goronwy (Caernarvonshire) Vernon, Maj. W F Mikardo, Ian Robertson, J. J. (Berwick) Viant, S. P Monslow, W. Rogers, G. H. R. Wadsworth, G. Morley, R. Ross, William (Kilmarnock) Walkden, E. Morris, Lt.-Col. H. (Sheffield, C.) Royle, C. Walker, G H Morris, Hopkin (Carmarthen) Scollan, T. Wallace, G. D. (Chislehurst) Morrison, Rt. Hon. H. (Lewisham, E.) Scott-Elliot, W. Wallace, H W (Walthamstow, E.) Mort, D. L. Segal, Dr. S. Warbey, W. N. Moyle, A. Shackleton, E. A. A. Watkins, T E. Murray, J. D Sharp, Granville Watson. W. M. Nally, W Shawcross, C. N. (Widnes) Weitzman, D. Naylor, T. E. Shawcross, Rt. Hn. Sir H. (St. Helens) West, D. G. Nichol, Mrs M. E. (Bradford, N.) Silkin, Rt. Hon. L. Westwood, Rt. Hon. J. Noel-Baker, Capt. F. E. (Brentford) Silverman, J. (Erdington) Wheatley, Rt. Hn. (Edinburgh, E.) Noel-Baker, Rt. Hon. P. J. (Derby) Skeffington, A. M. White, H. (Derbyshire, N.E.) Noel-Buxton, Lady Skinnard, F. W. Whiteley, Rt. Hon. W. O'Brien, T Smith, H. N. (Nottingham, S.) Wigg, George Oldfield, W. H Snow, J. W. Wilkes, L. Paget, R. T. Solley, L. J. Willey, F. T. (Sunderland) Palmer, A. M. F. Sorensen, R. W. Willey, O. G. (Cleveland) Parker, J. Soskice, Sir Frank Williams, D. J. (Neath) Parkin, B. T. Sparks, J. A. Williams, J. L. (Kelvingrove) Paton, Mrs. F. (Rushcliffe) Steele, T. Williams, R. W (Wigan) Paton, J. (Norwich) Stewart, Michael (Fulham, E.) Willis, E. Pearson, A. Strauss, Rt. Hon. G. R. (Lambeth, N.) Wills, Mrs. E. A. Peart, T. F. Stross, Dr. B. Wise, Major F J. Perrins, W. Stubbs, A. E. Woodburn, Rt. Hon A Piratin, P. Summerskill, Dr. Edith Woods, G. S Poole, Cecil (Lichfield) Swingler, S. Wyatt, W. Popplewell, E. Sylvester, G. O. Yates, V. F Porter, G. (Leeds) Taylor, H. B. (Mansfield) Younger, Hon. Kenneth Price, M. Philips Taylor, R. J. (Morpeth) Pritt, D N. Taylor, Dr. S (Barnet) TELLERS FOR THE AYES: Proctor, W. T Thomas, D. E. (Aberdare) Mr. Simmons and Mr. Wilkins.
NOES Agnew, Cmdr. P. G. Gridley, Sir A. Peake, Rt. Hon. O. Amory, D. Heathcoat Grimston, R. V. Peto, Brig. C. H. M. Assheton, Rt. Hon. R. Hannon, Sir P. (Moseley) Pitman, I. J. Baldwin, A. E. Hare, Hon. J. H. (Woodbridge) Ponsonby, Col. C. E. Barlow, Sir J. Harvey, Air-Cmdre. A. V. Raikes, H. V. Baxter, A. B Haughton, S. G. Rayner, Brig. R. Beamish, Maj. T. V. H. Head, Brig. A. H. Reed, Sir S. (Aylesbury) Beechman, N. A. Hope, Lord J. Reid, Rt. Hon. J. S. C. (Hillhead) Bennett, Sir P. Hulbert, Wing-Cdr. N. J. Roberts, P. G. (Ecclesall) Birch, Nigel Hurd, A. Roberts, W. (Cumberland, N.) Boothby, R. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Robertson, Sir D. (Streatham) Bossom, A. C Hutchison, Col. J. R. (Glasgow, C.) Ross, Sir R. D. (Londonderry) Bower, N. Jarvis, Sir J. Sanderson, Sir F. Boyd-Carpenter, J. A. Jeffreys, General Sir G Savory, Prof. D. L. Bracken, Rt. Hon. Brendan Jennings, R. Scott, Lord W. Braithwaite, Lt.-Comdr. J. G Legge-Bourke, Maj. E. A. H Smiles, Lt.-Col. Sir W Buchan-Hepburn, P. G. T. Lennox-Boyd, A. T. Smithers, Sir W. Bullock, Capt. M. Lloyd, Maj. Guy (Renfrew, E.) Stewart, J. Henderson (Fife, E.) Carson, E. Lloyd, Selwyn (Wirral) Stoddart-Scott, Col. M. Clarke, Col. R. S. Lucas-Tooth, Sir H. Strauss, H. G. (English Universities) Crosthwaite-Eyre, Col. O. E MacAndrew, Col Sir C. Studholme, H G. Crowder, Capt. John E. Macdonald. Sir P. (I. of Wight) Sutcliffe, H. Cuthbert, W. N. McFarlane, C. S. Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Darling, Sir W. Y. Mackeson, Brig. H. R. Teeling, William De la Bère, R. McKie, J. H. (Galloway) Thorneycroft, G. E. P. (Monmouth) Digby, S. W. Maclay, Hon. J. S. Thornton-Kemsley, C. N. Dodds-Parker, A. D Maclean, F. H. R. (Lancaster) Touche, G C Drayson, G. B. Macmillan, Rt. Hon. Harold (Bromley) Wakefield, Sir W. W Drewe, C. Macpherson, N. (Dumfries) Walker-Smith, D. Duthie, W. S. Maitland, Comdr. J. W. Webbe, Sir H. (Abbey) Eccles, D. M. Marples, A. E. Wheatley, Colonel M. J. (Dorset, E.) Eden, Rt. Hon. A. Marsden, Capt. A. Williams, C. (Torquay) Elliot, Lieut.-Col. Rt. Hon. W. Marshall, D. (Bodmin) Willoughby de Eresby, Lord Fletcher, W. (Bury) Mellor, Sir J. Winterton, Rt. Hon. Earl Fraser, H. C. P. (Stone) Moore, Lt.-Col. Sir T. Young, Sir A S L. (Partick) Galbraith, Cmdr. T. D. Morrison, Maj. J. G. (Salisbury) George, Maj. Rt. Hn. G. Lloyd (P'ke) Noble, Comdr. A H. P. TELLERS FOR THE NOES G'lyn, Sir R. O'Neill, Rt. Hon. Sir H. Major Conant and Gomme-Duncan, Col. A Orr-Ewing, I L Major Ramsay.
Orders of the Day
Gas Bill
Considered in Committee (on recommittal) [ Progress, 9th June. ]
[Major MILNER in the Chair]
CLAUSE 25.—(Increase of value of securities of companies suffering loss of revenue from war causes.)
4.6 p.m.
I beg to move, in page 31, line 38, after "for," to insert "any class of."
The object of this Amendment is to extend the provisions of Subsection (1) to include not only ordinary shares but preference shares also. Clause 25 provides that in the event of there being a shrinkage of sales owing to war damage— this is an abbreviation of the Clause—provision can be made for an increase of the amount of compensation to offset any diminution in the values of securities. The Subsection as drafted applies only to a decrease in the value of ordinary shares. The words "any class of" will have the desired effect of including preference shares also.
Before thanking the right hon. and learned Gentleman for his acceptance of the suggestions of my colleagues, made during the Committee stage, let me say, as a political opponent, that all of us on this side of the Committee are delighted by the high honour conferred upon him. If courtesy and industry are of any account in public life, that honour was indeed highly deserved. I notice that one of the most respected newspapers in the country —the "Manchester Guardian"—referred to the "gentleness" of the Solicitor-General. While I quite agree that his ways are ways of gentleness, I have had the misfortune from time to time to come up against him in controversial matters in Committee upstairs. I can assure you, Major Milner, that although his general ways are ways of gentleness, the right hon. and learned Gentleman is as formidable a controversialist as the Attorney-General—and a much more acceptable one to us.
Having said that, let me once again thank the right hon. and learned Gentle- man—I may be anticipating his interview with His Majesty, but one of my right hon. Friends during Debates has already referred to the Solicitor-General as the "right hon. and learned Gentleman"— let me say we are grateful for the acceptance of Amendments to the working out of which we have given a great deal of time and trouble.
Amendment agreed to.
Further Amendments made: In page 31, line 39, at end, insert "and."
In line 40, leave out "and preference stock."
In page 32, line 15, leave out Subsection (3), and insert:
"(3) On a reference under this Section, the arbitration tribunal may, if they think it just to do so, having regard to the principles on which costs are awarded in the High Court, direct that, in the case of any securities to which the reference relates, the total compensation payable in respect thereof shall be reduced by an amount determined by the tribunal, not exceeding the costs incurred by all parties to the arbitration proceedings, and the amount of the reduction of the total compensation aforesaid shall be apportioned among such of the said securities in respect of which compensation is payable, and in such manner, as the tribunal may determine."—[ The Solicitor-General. ]
I beg to move, in page 32, line 24, to leave out "(8)," and to insert "(9)."
I am encouraged by the fact that the Minister has put his name to an Amendment which is almost exactly similar to feel that this Amendment stands a reasonable chance of being accepted. It is put down to correct an oversight on the part of the Government in not making a necessary Amendment to the new Subsection (6) and thereby putting the numbers forward.
May I preface my observations on this Amendment by thanking the right hon. Member for Bournemouth (Mr. Bracken) very cordially for the extremely kind things he said about me, and then proceed to thank the hon. and gallant Member for East Grinstead (Colonel Clarke) for putting down this Amendment, which we are very happy to accept.
Amendment agreed to.
Further Amendment made: In page 32, line 30, leave out "(8)," and insert "(9)."—[ The Solicitor-General. ]
I beg to move, in page 32, line 31, at the end, to add:
(5) This Section shall apply to a holding company, being an undertaker to whom this Part of this Act applies, with the modification that for the references in paragraph ( a ) of Subsection (1) to the company there shall be substituted references to a subsidiary of the company, and where a reference is made under Subsection (2) of this Section in the case of a holding company and a subsidiary thereof, the proceedings shall be heard together.
This is really a consequential Amendment. It adapts the provisions of Clause 25 to a holding company. As at present worded, the effect of Clause 25 would probably be that a holding company would in general be excluded from its provisions, because a holding company does not sell gas. Therefore the initial wording of paragraph ( a ) would have the result of excluding holding companies. In subsection (5) we seek to provide that when a holding company is referred to, the sales of gas about which we are talking are the sales of gas by a subsidiary company of the holding company. In other words, if the sales of gas of the subsidiary of the holding company decrease in the circumstances described in the Clause, the Clause is applicable to the securities of the holding company. The securities of the subsidiary company would be extinguished by the vesting of the holding company in the new authority.
I am grateful to the Solicitor-General, but I still do not know what the Amendment means. I take it that it means well. There may be someone behind me who has a greater grasp of the principles of economics as expressed through the mouth of the law, and if so, perhaps he will lose no opportunity of dealing with this point.
I hope my right hon. Friend the Member for Bournemouth (Mr. Bracken) will join me in giving a welcome to this Amendment. As I understand it, it means that any subsidiary of a holding company can qualify for the benefits of Clause 25. I think, however, that the Amendment needs looking at a little closer especially in regard to its drafting before being finally passed. For instance, in line 4 of the Amendment it is stated
reference to both the holding company and the subsidiary company. I suggest that the Amendment should read
4.15 p.m.
I am much obliged to the hon. and gallant Member and we will have a look at the wording. When there is a reference to each of such companies they would be heard together.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 28.—(Further compensation to local authorities in respect of severance.)
May I draw your attention, Major Milner, to the fact that there is an Amendment down to Clause 27?
The Amendment proposed to Clause 27 in page 34, line 7, at end, insert:
"Provided that if, in the case of any local authority, the aggregate of the amounts payable as aforesaid by the Area Board to that local authority shall be less than an amount equal to five hundred pounds for each complete million cubic feet which (according to the annual return made by the local authority under Section fifteen of the Gas Regulation Act, 1920) were sold by the local authority during the year nineteen hundred and forty-seven then the amount of such deficiency with interest thereon at three per centum per annum from the vesting date shall be paid to the local authority by the Area Board together with the last of the other payments by this Subsection required to be made."
has not been selected, because the matter arises again on a later Clause.
I bow to your Ruling, but I hope we shall not be limited in the discussion, as this covers a separate point. We thought that if we had a short discussion on this it might clear up the matter, but we are willing to take the course suggested.
:I beg to move, in page 34, line 39, at the end, to insert, "five hundred thousand."
The purpose of this Amendment is to increase the local authority compensation for severance from £2 million to £2,500,000. It will be within the recollection of several hon. Members opposite that in dealing with this matter upstairs an Opposition Amendment was put forward to raise this sum to £5 million. In the subsequent discussion, while urging the Committee to reject the figure of £5 million, the Financial Secretary indicated that we would look at this figure again and it might be that we would find that £2 million was a little low and that in all fairness it required to be increased. The original figure of £2 million was related to the compensation paid for severance of the electricity undertakings of local authorities, which was £5 million, and this £2 million was in the same proportion to the £5 million as the gross revenue of the two industries. The period taken for the purpose of companies was the years 1940–43 and at that time the gross revenue of the gas undertakings was 40 per cent. of that of the electricity undertakings of local authorities. We have reviewed this matter taking into account figures for later years, and the gross revenue of gas undertakings then came out at 50 per cent. of that of the electricity undertakings. We therefore arrived at the figure of £2,500,000 for compensation, that is half the compensation, for severance paid in respect of electricity.
We also arrived at the figure of £2,500,000 by comparison with the compensation paid for severance in the case of transport. The gross revenue of the gas undertakings is about equal to that derived from transport by local authorities and £2,500,000 was the sum provided in the case of transport. We also made sample tests of gas undertakings which showed that central establishment charges were about 1.3 per cent. of the gross revenue or approximately half a million pounds per annum, and assuming that such costs should be met for a period of five years that brings us again to the figure of £2½ million. Having made that very clear explanation I have not the slightest doubt that it will be accepted immediately by hon. Members opposite.
I am far from satisfied with the explanation of the Parliamentary Secretary that £2½ million, which includes this £500,000, will anything like pay for the severance of these undertakings. He is basing his argument on the ground that it has some relation to electricity, and he also brought in the question of transport. If both those methods are bad it is equally right that this method is bad. Two blacks do not make a white. This is purely a guess and I think it is typical of the guess work we have had throughout this Bill.
In order to find out what is the damage done through severance to a water and gas undertaking I maintain that it needs a very highly skilled man, skilled from both the technical and the accounting standpoints, to separate the various forms of administrative costs, technical costs, and so on. I do not think that gross revenue should be the right basis upon which to base the question of damage suffered from severance. When it is quoted as similar to electricity, I say equally that that is a wrong basis. There is no other basis properly to allocate the damage suffered by severance than by getting a detailed estimate from each individual company, and this is where we blame the Government for its rush tactics.
We are not dealing with companies. These are local authorities.
I thank the hon. Member for his correction. It should have been possible to get at the exact cost and damage if the Government had not exercised haste. I take it that this is what the Minister of War meant in relation to coal—and it is the same in relation to gas—when he said, "We thought we knew everything about the industry, and we now find we do not."
Here is something which will react very badly as between one local authority and another. It is difficult to place them on the same footing and say that a certain proportion of severance damage is due to them out of this global sum of £2½ million. We know of the difficulties regarding a global sum by reference to the global sum which is being discussed in the courts, at great cost, by the various people entitled to some part after the coal nationalisation.
Here is a global sum that has to be allocated over a large number of local authorities who can show that they have suffered severance damage. The global sum is to be taken on a basis which, in my opinion, is completely unfair, on the gross revenue basis. The right and sensible way to award and consider the damage done in circumstances of this kind is to compile an estimate. Surely there are not too large a number of them, and the time taken would not have been wasted if we had had care and patience in the consideration of this gas nationalisation scheme.
If we had taken care one of the first things would have been to ask for estimates of the loss or damage suffered from severance. I do not say that we should have obtained an accurate figure. A figure upstairs was put down asking for £5 million.
How did the hon. Gentleman arrive at that figure?
We felt that the figure of £2 million was obviously far too small and that we had better be on the right side. What the Government have done is like throwing up a coin. It is, "Heads I win, tails you lose" all the way with compensation in this Bill. It should have been perfectly reasonable and possible to obtain estimates from the various local authorities as to what this severance was going to mean to them and how it would affect conditions, questions of technical management, of staff, of administrative costs and a thousand and one other things which an ordinary business concern would have had to get out if it were separating two parts of its industry.
If such a firm had a claim for damage suffered in that direction it would have employed technical experts in accounting and in the particular industry and would have said to them, "There are our accounts. There you can see what we have spent over various years in the combined units. Give us some reasonable or near estimate." I feel that the rush here is such that the Government have first put down £2 million and then come along and put down another £5 million
No; £500,000.
Well, half a million. What does it matter to the hon Gentleman's Government whether it is half a million or five million? I am surprised that he corrected me. There is this haste, or lack of consideration in reviewing all the various important issues which should have been given the greatest care and detailed consideration. There should have been no guess-work at all, and this is absolutely guess-work.
indicated dissent.
The Parliamentary Secretary says "No." He did not convince me in his speech that it was anything else. The figure has been placed on the gross revenue and some sort of hypothetical calculations were made. In this connection the Minister and the Government remind me, in their anxiety to rush this through, of the devil on horseback riding to hell.
Having served as an elected member of a local authority for some years, I find some confusion in the arguments put to the Committee by the hon. Member for Hallam (Mr. Jennings). I think he is confusing the attitude of the local authority, in supplying its service, with the attitude of the private company, which is primarily concerned with profits. I think he would agree that, in the cases we are discussing now, where severance takes place, all that local authorities are concerned with in the first place is that the service they themselves have created and offer to the public shall be carried on at least as well as it was carried on before. Obviously they would not object to an addition of £500,000 in the global sum, but that is not their primary interest.
4.30 p.m
The hon. Member for Hanley (Dr. Stross) was talking about what is or is not the primary interest of a local authority. That is not the issue in this case. The issue is on the question of how much is to be allotted to local authorities as compensation for severance. The Committee ought to be clear on the reasons why compensation is being paid. It is not being paid for losses to rates which, in some cases, were subsidised from the revenue of the gas undertakings. It is compensation to cover overheads such as central establishment charges, accommodation, accounting departments and staff, legal departments, committee rooms, buildings and so on.
It is compensation for all the various losses which may fall upon a municipality because they are left with staff and accommodation, and so on, which has been paid for in the past from their gas revenue which is being taken away, thus leaving them with certain liabilities without anything with which to meet them. That is what we are talking about. Obviously, local authorities have every reason to hope that the services will be carried on well, otherwise they will not be able to cook their dinners. I will not put it any higher than that. Clearly, that is a consideration. But I had always understood that in addition councillors had an obligation to see that the rates did not rise higher than necessary.
We are concerned whether this amount is the right amount. I do not altogether agree with my hon. Friend the Member for Hallam (Mr. Jennings). He assumed that the amount was too low. I do not know whether it is too low or too high. The right amount should be paid. This figure has been justified on two analogies, the first being that of municipal transport services. It seems to me that, in essence, municipal transport services are so different in the way they are run that they are really no parallel to gas undertakings. The main analogy was the analogy of the Electricity Bill. Those of us who had the misfortune to sit upon the Electricity Bill Committee remember very well what happened on this matter. There was no provision in the Bill originally on the subject of severance. There was a great deal of complaint about that. One day the present Secretary of State for War moved an Amendment to compensate to the tune of £5 million. He was asked on what it was based and he had no idea of any sort whatever. It was a purely arbitrary figure.
What the Government are doing here is arguing by analogy from a figure which was come to by thinking of a number and halving it, and then adding on a half, thus getting back to whatever number they thought of first. That was how the thing was arranged. One would not have thought that the Secretary of State for War, with his Scottish background, would have acted like that. I always think of him singing "Shinwellton braes are bonny."
Clearly what we require—and I cannot see why it should not be done—is that the actual losses for which the Government seek to give compensation should be arrived at accurately. That has been done in many instances in previous Bills when providing for compensation for severance or closely analogous matters. The amount may be £1 million; it may be £1 million. It may be that we are wasting the taxpayers' money. I should not be in the least surprised if that was so. What we say is that if we can, as surely we can, arrive at a correct figure, why not do so instead of simply putting in a guess-work figure.
This is double-guess work, because it is a figure based on another guess. It is extremely unlikely that it has any particular reference to what is happening. I believe that the Association of Municipal Corporations have agreed to the figure. Presumably they have agreed because they think that it is the maximum which they can screw out of the Minister. It may be that they have screwed too much. What should be paid as compensation to private people is the right amount and not some amount reached on unsound principles.
The hon. Member for Hanley (Dr. Stross) was making a distinction which was not altogether fair. In point of fact, local authorities and companies both have a desire to give a good service to their consumers. The question whether this involves a loss on the rates or whether it involves a loss to the revenue of the company is, to that extent, secondary, but in both cases it is a secondary of great importance. In this Clause we are trying to save local authorities from a loss, if there is one.
I now turn to what the Parliamentary Secretary said, because he rather chided us on this side of the Committee that we had not come forward with specific details of how this global sum of £5 million which we had moved upstairs could be justified by figures put down precisely in a Schedule. He said that it was therefore unreasonable for us to ask him how his figure of £2,500,000 was arrived at. It seems to me perfectly clear that it is the Government and his Ministry who are seeking compulsorily to disturb all local authorities. It is, in those circumstances, surely for the Government and not for us on this side of the Committee to produce the precise figures. Moreover, we have not got the means to go into this matter in detail and to find out what is the exact amount which ought to be paid. All that we know is that we proposed a figure of £5 million in the Standing Committee upstairs and, in the intervening period, the Minister has thought that the compensation which he proposed in the Bill as drafted was not adequate.
That was not arrived at by altering the method of computation. It was arrived at merely by taking a later set of figures which it is right to take, but which were not available at the time the original computation was made.
That strengthens the point which I am about to make, that the Ministry are in this dilemma: Either they have increased this sum from £2 million to £2,500,000 because of our global Amendment of £5 million—or because of representations by local authorities who were dissatisfied with the £2 million figure and made the point that it was not enough sufficiently cogently to the Minister—or they have increased the sum because of some other cause. If the latter be true, it is up to the Minister to tell us what has been the initiating force which has caused him to agree that what he proposed originally was insufficient and unfair to the ratepayers of those municipalities which own and operate gas undertakings. It is common knowledge that the municipalities which own gas undertakings are still dissatisfied with the figure of £2,500,000. They feel that the onus is on the Minister to justify the amount which he now proposes, and we on this side of the Committee agree with them. The figure he first proposed he now admits is insufficient, but he is still going to compensate by means of a global round figure unsupported by any precise details and factual background whatever.
There is in gas undertakings of this kind a sharing of the overheads of the general municipal charges with the gas undertaking and every gas undertaking will have in this a specific problem of loss. They are being compensated under Clause 27 for what they lose in the net revenues of the gas undertaking—which incidentally we think is insufficient—but, in addition to compensation for loss of their net profit, so to speak, there is need to compensate for the gross profit earned by the gas undertaking towards the municipality's overheads. We seek to get a figure placed on a realistic basis, and to that end we have tabled the proposition, which seems to me to be self-evident, that, for every local authority in the country, this figure of £2,500,000 taken out of a hat is going to be unfair. Since this is a transfer from the taxpayer, in his capacity of national voter, to ratepayer in his capacity of municipal voter, there is no element of unfairness in this respect.
It is not a transfer from the taxpayers, but from the gas consumers.
This is a transfer from taxpayers to ratepayers, and when I say that if there is to be a round figure it should exceed the precise figure, I do not mean anything except that the round figure should be the nearest above the precise figure for the whole of the municipalities of this country. The extent of the subsidy then from the taxpayer, in his national capacity, to the ratepayer, in his local authority capacity, will be so small that it should not have any real significance at all.
We feel that one of two things is necessary. Either the Minister should say to municipalities A, B and C precisely how much will be paid to each by reason of this loss of gross profit, or that the round figure backed up by precise figures will to the nearest convenient total exceed what is the total of the ascertainable loss.
4.45 p.m.
I always speak with reluctance and diffidence, but I have been forced to take part in this Debate for two reasons. The first is because my hon. Friend the Member for Flint (Mr. Birch) had the effrontery to rewrite or bowdlerise Robert Burns. The second is a really serious matter, of which I do not think the Committee is well aware, namely, that this question of the nationalisation of gas under takings is a much more important and serious matter for Scotland than it is for England. I regret to see that there is no representative of Scotland on the Treasury Bench at the moment—
I do not think my hon. Friend participated in the Committee upstairs, but if he had done so, he would have known that the Solicitor-General for Scotland appeared on one day and the Joint Under-Secretary of State for Scotland was also there. The Under-Secretary, during the whole of the Debates, was gagged and was not allowed to speak. The Solicitor-General spoke once and then we saw him no more.
I thought from my perusal of the proceedings of the Committee that the Secretary of State and the Under-Secretary were not there at all, and I concluded that there were perfectly good reasons for that. My right hon. Friend now explains that there was a more sinister reason—that they were gagged. Fortunately, the Government cannot gag me, and I shall assert what is not generally known in England and Wales —that the gas industry in Scotland was almost entirely, and certainly in the major cities and towns, owned by the people. The private gas company, which is illustrative of the somewhat retrograde life of the South, is a profit-seeking, if not profit-making, undertaking.
The loss sustained by the nationalisation of the gas industry in Scotland is very much more serious than is the case in England, because the compensation in England is given to a large number of private firms, and will, in turn, be diffused in spending power throughout the community. In Scotland, no such large expenditure will be made possible, because there will merely be a transfer of ratepayers' property and taxpayers' property. This is a serious matter, and I would like to repeat what a Socialist administrator said to me the other day: "This is the rape of municipal Socialism in Scotland." In Scotland, we were pioneers in local government management and in the management of industry for the people by the people, and it is poor compensation for us to have our carefully fostered, prudently managed, and, in the main, successful and prosperous local government industries taken from us by this Measure. I should be grateful if there could be an answer to the point I have made. This proposal will give a large amount of money to English and Welsh owners of shares in gas undertakings, but not a penny to our people in Scotland.
The second matter to which I want to refer is relatively unimportant. Where local authorities in England have indulged in municipalisation in only one or two industries, the loss is very severe, from the point of view of establishment charges.
I must ask the hon. Gentleman to keep to the point of the Amendment. There is a new Clause on which the wider aspects of the matter may be discussed, but this covers rather a limited question.
I was only taking up the point made by the Parliamentary Secretary about the 1.3 cost of establishment charges. If there is a multiplicity of local government enterprises, to remove one may not be very serious, but if we remove three and leave perhaps only another three to be managed by the local authority, the establishment charges will be very high. In the city of Edinburgh, we have several capital undertakings, and three are to be removed from us, but we will still have the Lord Provost, who is an expensive figure to maintain, the parks and all the paraphernalia of a great capital city, so that it is a serious matter for the municipality which has gone in for municipal Socialism.
I support the Amendment as being the more reasonable course. The Amendment suggests £5 million as being a suitable sum within which all reasonable claims might be settled. This is not for all local authorities. They are all being raped, but some have a little solatium in that they are to go on getting something if they satisfy the prescribed conditions. Perhaps either the Minister or the Parliamentary Secretary will tell us which local authorities are going to get nothing— because several are going to get nothing. The sum of £2,500,000 will not meet all the demands which they could reasonably place upon it. Will the Minister tell me which local authorities in Scotland are to get nothing, which, in his opinion, will not fulfil the prescribed conditions, and who are being robbed without compensation? These are the questions which lie behind my opposition to this proposition. I suggest that the figure in the Bill should be £5 million.
If I might invite the Committee to return from delectable Scottish braes —[ Interruption. ]—however one spells it— to the points more immediately apposite to the Amendment, I would say that our objection to this figure in the Amendment is, as it would be to any figure, that it cannot in the nature of things offer true compensation. As has already been said, we are equally concerned to see that too much compensation is not given. We are anxious to see that the true figure is arrived at. I cannot understand why efforts have not been made to provide in this Bill for the assessment of the right figure. I am rather surprised because in two previous nationalisation Statutes there has been done what the Opposition wished to do in this Bill, and we are asking the Government, in regard to this Bill, to do precisely what they have done in two previous Measures, and done presumably because the Government thought that it was the right thing to do in respect of those Measures.
I invite the attention of the right hon. Gentleman to the provision in Clause 47 of the Transport Act, 1947. There it is expressly provided that in those cases in which severance arises:
I cannot understand why what was done—and in my view rightly done—in the case of two previous nationalisation Measures passed by the House, should not be done in the case of the Bill which is now before us. That, as I understand it, is the objection which we feel to the revised figure, as to the original figure. All that we urge upon the Government, in this case, at any rate, is to repeat what they have done, and have done in their judgment, no doubt rightly, on two occasions previously.
My hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has cogently summed up the discussion. The Parliamentary Secretary gave us some astonishing arithmetical formulae and announced with modest pride that that was a very clear statement. He said that £2½ million was half of £5 million. We agree with that rather elementary computation. Then, passing up the ladder of learning, he came to the astonishing conclusion that one equalled one, and he spread that before us with the same childlike glee. But these were not the points with which we wished him to deal. We know that it is half the sum which was given under the Electricity Act and that it is equal to the sum given under the Transport Act. What we were anxious to ask was, first, how the Government arrived at the figure given in the Electricity Act and the figure given in this Bill? Secondly—and this is really an important point—why is it that none of these figures arose until an Opposition Amendment was put down?
The fact is that we press the Government, sometimes it may be thought unduly, upon points which the Government stoutly resist for a long time, and then they come down with an air of generosity and proceed to demonstrate with the most convincing arguments their conclusions, which are our conclusions, are right. The Secretary of State for War, a powerful although not always a very ratiocinative speaker, explained most vigorously that he would not give the local authorities any money, and then one day, as has been stated by my hon. Friend, he came down and explained that he was going to give £5 million for severance. The Parliamentary Secretary will remember very well that in our arguments upstairs we tried to arrive at some figure. The Parliamentary Secretary now tells us that 1.3 of the gross revenue equals this figure of half a million.
That is not a strict arithmetical calculation but it is roughly true.
You will realise, Major Milner, why our proceedings in Committee upstairs took a considerable time. It is like that remarkable invention of the Americans, called the rubber collar; one could stretch it and it became larger and larger. The Government have a rubber policy in that, stretched by a vigorous Opposition, it becomes larger and larger because it is not pinned to anything. It is responsive to pressure, and we hope that by virtue of pressure we may succeed, in the course of the evening, in producing more satisfactory results.
Surely the point is that, accepting that the Minister has decided upon this figure of £2½ million, how is it to be distributed? My hon. Friend the Member for South Edinburgh (Sir W. Darling) put forward a strong case to the effect that a considerable amount of it would require to go to Scotland. He gave reasons why severance would cost the Scottish local authorities more, reasons which were well justified. Apart from that, the discretion is here given to the Minister that the compensation shall be divided:
None of us will be able to consult with any local authority on the basis that there shall be paid a prescribed figure in accordance with prescribed conditions and which shall be determined
The Bill is in Committee because it is not possible to discuss this matter on Report. As far as the Parliamentary Secretary has been able to go, almost all the discussion might have taken place on Report. I do not think that we have got very much further.
5.0 p.m.
I ask the Parliamentary Secretary whether he can in any way elaborate the calculation which he gave us of 1.3 per cent. of gross revenue, which he has now explained was not in any way meant to be an exact calculation. He justified the £2,500,000 upon that calculation. Secondly, I ask him whether he can give us any information upon the various prescriptions which are about to be issued. Thirdly, I ask whether he can answer any of the cogent questions asked by my hon. Friend the Member for Kingston-upon-Thames as to why the Government found it necessary to depart from the excellent precedents they set up in previous Acts, such as the Transport Act, where a commission was empowered to give the sums and the Coal Act, where the amount to be given was to be determined by the district valuer. Lastly, will he say why none of these questions arose until the matter was suggested by the Opposition? If he can answer these questions we might be able to pass on to other stages of the Bill.
If I can answer these questions I will do so. I will deal first with the question why this Amendment has been put down by the Government since the matter was discussed in Committee upon an Amendment by the Opposition. I have already explained that we originally arrived at the figure of £2 million after looking at figures of gross revenue for the years 1940–1943. Figures for the subsequent years were not available when the original computation was made. During the Committee stage, discussions were taking place with the appropriate associations of local authorities on this matter.
It was not convenient at that time, by reason of the timetable, to put in the later figure arrived at for compensation, after considering the revenue in the later years. I think hon. Members will recall that it was stated that the gross revenue of the gas undertakings rose from 40 per cent. to 50 per cent. of those of electricity undertakings of local authorities after 1943. That is the reason why we came along with this Amendment and why the Financial Secretary indicated during the Committee stage that it was possible that £2 million was rather low and that we would look at the matter again. There is nothing mysterious about it. It was the result of the normal method of consultation and of dealing with the matter as the Bill was proceeding.
We have been engaged on this Bill for a very long time, but not since 1943. The thing is stretching out to the crack of doom. Frankly, the idea that because the Committee stage was very protracted the local authorities were able to get better compensation suggests that if we extend consideration for another several months it will be even better, and is almost an invitation to the Committee to go on discussing the Bill indefinitely.
That was the position. I do not think there is any point in re-discussing this matter. It was advantageous that we had the Amendment before us in Committee. We discussed for an hour and a quarter in the Committee upstairs all the matters that we have discussed this afternoon. All the arguments were replied to in very great detail by the Financial Secretary to the Treasury, dealing with the matter in his usual way. He explained them very clearly. It was not the fault of the Financial Secretary and of my right hon. Friend if hon. Members on the opposite side of the Committee could not understand that clear exposition. It was their inability to—
That is a very ungrateful way of putting this matter. What the hon. Gentleman has come here to do this afternoon is to admit that we were right and that the local authorities were undercompensated. It was the virtues of our Amendment that brought some sense into the Government. Why cannot the hon. Gentleman have the generosity to admit it?
I do not want to go back again over what I have said, and I do not propose to do so. A long experience of the right hon. Gentleman has warned me against jumping at all the very delicate baits that he puts forward. Let me proceed to deal with the very pertinent ques- tions put to me by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot).
He asked me what would be the prescribed method of distributing this compensation among local authorities. We shall consult again the bodies responsible. [ Interruption. ] Why not? If the local authorities are to receive this sum it is very sensible that the Minister should consult their associations. The global sum is settled by the Clause. We shall say: "All right. We shall discuss the fairest and most equitable way of distributing it." That is sound and sensible. My right hon. Friend will have these discussions with the local authorities' associations, and the principles that may be prescribed will be based upon those consultations.
Those are the points which were made by the right hon. and gallant Gentleman. We shall not agree on this sum; that is clear. We could not agree in Committee and we shall not agree upon the total sum here. I do not propose to argue the whole case once again. Hon. Members have heard the arguments here and in the Standing Committee. We feel that the amount we have decided on is reasonable and fair. The method of distribution will be on the basis of consultation with the local authority.
I am going to advise my hon. Friends not to vote against the Amendment put down by the Minister. If arguments could affect one's judgment, we ought to vote against the Government. The Parliamentary Secretary does not seem to understand that we want to know the basis of compensation. The Minister is to distribute large sums of public money. He has told us that his way of distributing them will be to consult the local authorities. I should have thought the way to do it would be to have a valuer and an accountant, and to discover what the properties were worth—not to invite the local authorities to London and say: "We have £2,500,000 to distribute." That will only result in an ungodly scramble for the boodle, as they would say in the United States. The Government tell us in this Committee that the way they are going to hand the money out is to invite the local authorities to London, give them what the hon. Member for Warrington (Mr. E. Porter) calls "a do" and then invite them to help themselves. It might even come to pass that some municipalities, by virtue of the principle of Government by comrades, may get a greater share of the loot or spoil.
All these things fill me with apprehension. If the Government are going to distribute £2,500,000, I beg them not to consult the local authorities in the first instance, but to get an accountant and a valuer. It would be a good thing to invite a solicitor, too. I hope that this suggestion will infiltrate the Benches opposite and show them the way in which the Government wish to dispose of the money. Knowing the Treasury as I do, I do not honestly believe that they will dole it out in the way suggested by the Parliamentary Secretary. I rather think, by the gloomy silence of the Minister, that he is inclined to agree with me in that respect.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 29.— (Compensation to composite companies.)
I beg to move, in page 35, line 32, after "pounds," to insert" and ten shillings."
The purpose of the Amendment is to increase the compensation for severance for composite companies from £3 to £3 10s. for each complete thousand therms of gas sold during the year 1947. That is clearly justified by reason of the Amendment which the Committee have just accepted. We have increased the amount to local authorities for severance. There must be a consequential increase to the composite companies. That is only equitable and fair. The Opposition have an Amendment down to my Amendment to increase the amount by 15s. I have presented the case for increasing the amount from £3 to £3 10s. The reason that it is not more than £3 10s. is that the original sum of £3 was fixed in relation to severance for local authorities but was rounded-up in favour of the composite companies. This new position leaves the composite companies relatively in the same position to the local authorities as they were before.
The word "relative" covers a multitude of sins. The Parliamentary Secretary said that the increase in compensation to composite companies for severance was justified by reference to the increase in compensation to municipalities for severance. That is a very curious argument. It seems that what the hon. Gentleman is doing is using an elastic tape measure—a thing which is often done by Members of the Government. At times it is very useful. What happened in the case of local authorities was that the compensation for severance went up from £2 million to £2½ million; that is to say, it went up by 25 per cent. In this case the compensation is going up from £3 per thousand therms to £3 10s. per thousand therms. The mathematicians opposite will readily calculate that that is an increase not of 25 per cent., but of 16⅔ per cent.
It seems very odd to compensate on that basis, particularly in view of what the Minister said in Committee. He said:
It seems that we are getting into an increasingly ridiculous position on this question of severance. What none of us can understand is why the actual amount should not be accurately assessed. That is all we are asking for. It may very well be that too much is being paid, or too little; nobody knows. [ Interruption. ] The hon. Member for South Ayrshire (Mr. Emrys Hughes) may know; he knows everything, but we do not know, and it may be too much or too little. Compensation means an equivalent, and we say that in this case it should be an equivalent. We do not know if this is an equivalent. It is clear from the behaviour of the Government that they have no idea either, because they would not have had to modify these figures in regard to composite companies and municipalities if they had worked out what the amount ought to be. They have varied both figures, and they have done so by different amounts. Why that should be we do not know. If one figure is increased by 25 per cent. the other should be increased by 25 per cent. We wish to find out what the amounts ought to be, because the people concerned ought to be paid the correct amount—neither more nor less.
Amendment agreed to.
5.15 p.m.
The next Amendment I propose to call is in page 36, line 44, to insert a new Subsection.
It was agreed that our Amendment to the Government's Amendment which has just been accepted, to leave out "ten," and insert "fifteen," should not be called and that the discussion should take place on the Minister's Amendment. Of course, we should prefer to take the discussion on the Question "That the Clause stand part of the Bill" which would enable us to raise the wider issues. We have not had an opportunity of getting answers to the points which we raised. I hope it will be possible for the Minister to review the matter later.
I beg to move in page 36, line 44, at the end, to insert:
It is not going too far to say when the Amendment was discussed in Committee the Minister's first reaction was in favour of our point of view. Therefore, I think we are entitled to be told what other factors have intervened to prevent the right hon. Gentleman following what was quite clearly and obviously his inclination at that stage. I believe I am also entitled to refer to the fact that in Committee the Amendment was very properly withdrawn by my hon. Friends in view of the right hon. Gentleman's undertaking. However, if now the right hon. Gentleman has not some good reason for not having put down an Amendment of his own, not necessarily in the same words, to deal with this point, I think we on this side of the Committee are entitled to press him and to discuss the matter on its merits. So far we have been given no reason whatsoever why words to this effect should not be inserted. Our discussion in Committee produced nothing of that sort. Therefore, if today we hear objections to the addition of those words, it will be for the first time. I hope the right hon. Gentleman will tell us why so far he has not accepted the point of view expressed by this Amendment.
The hon. Member for Kingston - upon - Thames (Mr. Boyd - Carpenter) has explained the circumstances in which this Amendment has been put down and I entirely agree with his account. My own view on this matter has not changed. I promised that I would consult the Minister of Health, and I have done so. However, his officers are still thinking the matter over, and I have not been in a position to put an Amendment down at this stage.
With reference to the Amendment which is under discussion, the part about which I feel most doubtful is the question of giving the water companies—because that is what they will be—the right to re-invest the proceeds of Gas Stock in any way. I think the Committee will remember that was the point of difficulty we came across upstairs. I must, therefore, ask the Committee to be so kind as to let me have a little more time on the matter and after consideration, if necessary, we shall put down an Amendment in another place. Before the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) gets up and seeks to pay tribute to another place, let me say that we have never had any objection to its doing that sort of job.
It was not my object to pay tribute to another place. Its glories have so increased since the vote yesterday that no words of mine can add to its distinction. I think on the whole we can adopt the policy suggested by the Minister. I must say I do not know what relationship the Minister maintains with his colleague, the Minister of Health, but it seems that a. long time has passed since the Minister had an opportunity to hold this discussion. I agree that the Minister has a difficult man to deal with, but surely one should get an answer out of him in six or seven weeks. I know these Ministerial difficulties—a disunited Government, and a ferocious Minister of Health—and, therefore, it is better that we should adopt the Minister's suggestion.
The Minister promised, after these conversations with the Minister of Health, if they take place in the life of the present Parliament, to ask another place to insert the ideas propounded by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). On that assurance we can go ahead, with, perhaps, this rider—that we are putting an immense amount of work on unpaid legislators.
In view of what my right hon. Friend has said it would seem reasonable not to press the matter further. Perhaps, as one who also on occasion, though with less privilege, has had to deal with the Ministry of Health, I may say I very much appreciate the Minister's difficulty in extracting a reply from that singularly ill-administered Department. In the circumstances, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
We have had the Government running pretty true to form. We have had one apology and one partial concession. On this average we shall do not too badly, but the Minister has not yet explained, and we are very anxious that he should explain and answer, the point raised by my hon. Friend the Member for Flint (Mr. Birch), which was why these composite companies are to be compensated at a lower, instead of a higher, rate than the local authorities. I have no doubt that in addition to the charming exercise in simple arithmetic with which he favoured us about local authorities, he has also taken out some figures in this respect and will be able to give some information as to how this sum was arrived at.
Frankly, I do not think he favoured the Committee with a full explanation. No doubt he intended to speak a little longer on the question "That the Clause stand part of the Bill" and I will not stand between him and the Committee, for we are anxious to know how this sum was arrived at in relation to the local authorities. He said previously that the sums were brought into some form of harmony, but now this harmony has been disturbed by the difference between 25 per cent. and 16⅔ per cent. It may be that the lapse of years has done it. In the course of our protracted consideration of this matter, the local authorities' proportion of ownership of gas, we were interested to hear from the Minister, has gone up to 40 to 50 per cent. It looks as though, before long, gas would happily have been municipalised and the Minister would never have needed to bother with this Bill at all.
This invitation to us to protract our proceedings indefinitely while the Ministry makes up its mind on arithmetic and while the Minister of Fuel and Power tries to get an answer out of the Minister of Health—which, except for invective, we all know in any case is a very difficult thing to do—should not be given at this stage when we are anxious to make progress with the Bill.
Even if invitations are given, they need not be accepted.
The Government are inclined to consider us surly and discourteous if we do not respond to their invitation. We have frequently tried to accelerate progress with this Bill. We were met last night with requests by the Minister to tell him more. [ Interruption. ] Oh yes; it is in HANSARD. The Minister said, "I have not yet acquired enough information, convince me, tell me more, I begin to be convinced, but you should go on." It is a very discourteous thing to refuse to reply to an invitation so courteously extended, but we do not wish to trespass on the time of the Committee in this respect, and as the Minister shows certain signs of rising to reply I will not further detain the Committee.
I am deeply obliged to the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) for the many compliments he has paid to the very masterful way in which I dealt with the subject of simple arithmetic, and because of that, I feel certain that an encore is demanded from me. If I may have the attention of hon. Members, I will have another go.
First, we cannot agree on both sides of the Committee what is the right amount of compensation for severance for the local authorities. We say that £2,500,000 is fair; hon. Gentlemen opposite say it is not. That is a matter which will have to remain one of disagreement. If we take our figure at £2,500,000, let me say that that works out at £3 7s. 3d. per thousand therms of gas—I notice right hon. Members have pencils and paper— sold by local authorities in 1947. If we take the production in therms of the composite companies we find that the amount to them, being £3 10s. per thousand therms sold, represents substantially better treatment for the composite companies than that given to the local authorities. After all, 2s. 9d. per thousand therms is not to be sneezed at. When previously I referred to "rounding up," that was what was in my mind. We have rounded up that figure of £3 7s. 3d. to £3 10s. That is the simple explanation and I am quite sure that hon. Members, who are examining, these figures, will find they come out quite easily and will agree that we have given a complete answer to the point made.
I must say that never since the days of Mr. Lewis Carroll, who was a distinguished mathematician and a clergyman, as well as a good author, have I heard a more astonishing financial explanation. "Alice in Wonderland" was simple by comparison with the Parliamentary Secretary. I am not going to follow his strange calculations. I want to remind him of a substantial promise made in Committee upstairs—and it is just as well that the Minister should also have the advantage of listening, or re-listening, to his own words, when he said:
I would not deny that composite under takings have a more difficult position to face as a result of severance than the local authority."
That in itself obviously indicated they would get more. Then the Minister went on to say:
"What would be relevant … would be the joint establishment charges involved."—[OFFICIAL REPORT; Standing Committee D, 27th April, 1948; c. 956.]
In my judgment, the Minister was right. That would be the amount. That would be the most relevant form of compensation, but it is not the form of compensation offered in this Bill. Several of my hon. Friends want to speak on this, and that will afford the Minister a few moments for reflection, after which I hope he will deal with that point. I hope that the Parliamentary Secretary, whom we have missed in the last few days—he has been silenced, but now he is vocal—will answer the point put forward by my hon. and gallant Friend the Member for New Forest and Christ-church (Colonel Crosthwaite-Eyre).
5.30 p.m.
This is a most interesting point. When we were on the Minister's Amendment concerning the local authorities we asked whether or not this figure had been picked out of a hat, and whether there was any factual basis for the figure of £2,500,000. We are now told the figure of £3 7s. 3d. per 1,000 therms was taken on the sales in 1947. If I have that wrong, will the Minister please correct me? He dictated those figures. They are a little confusing, but he said that was the basis on which the local authorities were to be compensated for severance. That figure of £3 7s. 3d. per 1,000 therms seems to me quite clearly to have no factual background whatever and to be the sort of figure arrived at ex post facto and not a priori ; that is to say, the Minister did not state what are the losses the local authorities have to suffer by reason of severance, but the figures happen to come out at £3 7s 3d. on the total sales of gas during 1947; they miraculously happen to come to that number of therms which, when multiplied by 1,000 therms per £3 7s. 3d. equals £2,500,000. It is asking too much of the credibility of this side of the Committee to ask us to believe that this figure for compensation to companies and to local authorities has come from anywhere except out of a hat.
The duty of the Government in compensation of this kind is two-fold. On the one side, it is not to pay taxpayers' money out without due consideration and regard for the fairness of the situation; and on the other, to be fair. There can be no possible justification for taking figures out of a hat because they happen to be round figures. In the first case there is the round figure of £2,500,000, and in the second case there is the round figure of £3 10s. On the Minister's own admission they must have come out of a hat. The Minister is nodding his head. Will he say in which instance I am wrong?
With pleasure. The hon. Member goes wrong because, he constantly says this figure of £2,500,000 is taken out of a hat. My reply is that we spent an hour and a quarter in Committee on this, when a full explanation was given of how this sum was arrived at. Today, I have made three very short points upon it. It will always remain a matter of difference between us. It is not taken out of a hat. Thus 1.3 per cent. gives an approximation of £500,000, and that over five years is £2,500,000. It is of no use hon. Members saying the figures were taken at random. They were not taken at random.
I prefaced my remarks by asking the Minister to correct me if I was wrong. He said that this figure of £3 7s. 3d. was the initiating figure from which he started and that the £3 10s. 0d. was in accordance with his undertaking upstairs, in which he said he did agree that the local authorities had a less good case than the companies for as generous severance compensation, because the companies, on the whole, were much smaller. He was very fair, and very right. The difference proposed is 2s. 9d. Those are his starting figures from which he worked. If that is so, then it is taxing the credibility of this side of the Committee too far to say that that figure having been arrived at objectively, and the figures of sales of gas for 1947 equally having been arrived at objectively, they miraculously produce, when multiplied together, this astonishingly round figure of £2,500.000. It just does not wash. That figure of £2,500,000 must have been agreed as a global figure.
Perhaps we may leave that point, because it seems to me to be so clear, although the Minister cannot see our main difficulty over it. We disagree with him on that issue. I do not want to spend any more time on that. I want to spend some time on the figures of £3 7s. 3d. and £3 10s. The Minister has said that he has had conversations and will have conversations with the Association of Municipal Corporations.
On the distribution.
Purely on the distribution? From that I gather he did not have consultations with them as to whether his figure of £3 7s. 3d. was acceptable to them or not. I would ask him whether they have agreed that this is a fair figure for severance. Secondly, I would ask him whether he has similarly consulted in advance the association representing the composite companies, as to whether they agree that £3 10s. is enough, and, if so, whether they agree. It is an important issue for both the municipalities and the companies. The Heyworth Report, at paragraph 73, gives the figures of the number of local authorities. The number of local authorities is 269, and they account for 35.7 per cent. of all the gas sold by the industry. Compensation in that case at £2½ million is something very considerable. I think I am right in saying there are only 17 composite companies, and many of them are quite small companies. Although the Minister is giving the impression they are being paid 2s. 9d. more than the local authorities in point of fact, they are in total to get very much less, because their number of therms sold is different. The Heyworth Report does not give the figures in that case. If the Minister has them I hope he will give that information, for it is relevant.
I am glad that the Financial Secretary has come in because I feel we may now get some figures on which somebody can agree. The Parliamentary Secretary has produced a most astonishing set of premises. He started with the assertion that 1.3 of a revenue charge was the basis on which he worked out £2,500,000. He then went on to substantiate the figure by mentioning what had been done in the case of electricity and transport. Just now he went on to say that what he really meant to say was that this sum worked out at £3 7s. 3d. per 1,000 therms sold by local authorities. Which of this criteria does he stand by?
The first one. Having arrived at the £2½ million, we worked that back into per thousand therms because that is the measure of compensation to the composite companies, and it worked out at £3 7s. 3d. per thousand therms. Having arrived at the global sum, about which we shall continue to disagree, we worked it backwards, and it worked out at £3 7s 3d per thousand therms, and we then go on to increase the amount to the composite companies.
It seems that all that the £3 7s. 3d. means is that it is a counter-calculation of the hon. Gentleman's original calculation. The Parliamentary Secretary says he has rounded it up to £3 10s. Why did he not say £4 4s. or £5 5s. [HON. MEMBERS: "Because it is less."] That is a very good answer. We are dealing with public money. But why we should be asked to take a round figure, which hon. Members opposite say is less, as a criterion, I cannot imagine. If we take £3 7s. 3d. from £3 10s., that leaves 2s. 9d. Why does the Parliamentary Secretary think that 2s. 9d. in any way covers the additional burden borne by composite companies over the local authorities? The amount of 2s. 9d. is about 4 per cent. on what the local authorities are receiving. I should like to know why 4 per cent. is thought to be the difference in hardship suffered as between a composite company and a local authority. Or do we at this stage go all the way back, and say that it has something to do with the revenue charge which has not been stated?
The Parliamentary Secretary may pride himself on his mathematics, but this is the most extraordinary gaggle of figures that I have ever heard produced, and there has been no attempt to justify them. Now we have the Financial Secretary fresh from his labours on the Finance Bill, who is, no doubt, dying to give us the truth, and perhaps we may hear from him why 2s. 9d. is the margin, and why £3 10s. is the figure rounded up, which is suitable from the Government's point of view; and, above all, on what basis in fact the Government are trying to compensate the composite companies. We must have some reason why this margin has been laid down.
5.45 p.m.
I want to help the Financial Secretary out of his difficulty and to help the Parliamentary Secretary as well. We have not yet had a reply from the Financial Secretary, but he is in a difficulty until he does reply. The help which I want to offer him is in the Coal Industry (Nationalisation) Act, 1946, Section 17, where compensation for severance in regard to the coal industry—a similar problem to that which we are considering—is successfully dealt with so far as the District Valuation Boards can deal with it at the present stage.
We have heard from hon. Members on this side of the Committee of the great difficulty experienced in trying to come to any reasonable and sound basis of compensation on the method which the Parliamentary Secretary has adopted. There seems to be a great deal of difficulty in following his argument. I agree that if we accept £3 7s. 3d. it is a reasonable suggestion to accept £3 10s., but the whole argument is that we do not agree with the premise set out in this Clause. I tried to resolve that by suggesting that he should consider going back to what happened in the Coal Industry (Nationalisation) Act which his predecessor helped to draw up. At that time, that was a very reasonable way of doing it. I agree that there is a difference in the method of payment of compensation but the fundamental principle of severance is the same.
I hope that the Parliamentary Secretary, having listened to the Debate and heard the very cogent arguments put to him by this side of the Committee, will realise the difficulties into which he is getting himself, and which the Financial Secretary is also in, until he replies, if he does reply—but I doubt if he will be able to help his side. These difficulties become worse and worse. I hope that he will tell us the reasons, because he has not already done so either in Committee or on the recommittal of this Bill, which made him depart from the already accepted principle of arbitration before a District Valuation Board, or some such valuation board set up by the Minister, as provided in Section 17 (2) of the Coal Industry (Nationalisation) Act, 1946. We should like to know what made him depart from that, and what makes him think that this method is any better than that one. If he can do that, he will convince my hon. Friends and some of the doubtful faces on the other side of the Committee that what they voted for two years ago was not wrong. Hon. Members opposite said that the method of compensation for severance was all right in regard to the coal industry, and I think they went into the Lobby in favour of it. Now they are being asked to agree to something completely opposite to that, which is very difficult to understand, and which does not seem to have any advantage. I hope that he will be able to give us an explanation, which he has not yet given either upstairs or on the Floor of the House.
There is a major issue involved quite apart from the question of severance. It is up to the Minister and to the Financial Secretary to the Treasury to see that not one penny piece is paid out as compensation, either to local authorities or to composite companies, unless it is accurately arrived at. In this case, the Parliamentary Secretary has taken the figure of £3 7s. 3d. and he tells the Committee that the Government would round it up to £3 10s. Whose money are you giving away?
I would point out to the hon. Member that I am not giving anyone's money away.
I would not ask you for any, Mr. Beaumont. I think you realise that I meant the Government. I feel that this is a major issue, and one of great responsibility. The Parliamentary Secretary has arrived at this compensation on a basis which cannot bear any relation to the facts. If the Government had taken the trouble to ascertain the facts and to get a proper assessment by expert people, which would not have taken a great length of time, that would have been the only basis on which the Minister should allow compensation to be paid out. If this is the method adopted, it will go forward to the country that the funds of the country are being very loosely paid out. I ask the Parliamentary Secretary to pay attention to the facts of the case and to pay compensation on that basis only.
We had hoped that it would not be necessary for us to have a Division. We had expected a speech from the Financial Secretary to the Treasury. That right hon. Gentleman is an ornament to this Committee; but the Sphinx is also an ornament. I do not see the point of the Financial Secretary coming down to this Committee if, on a matter of great financial importance he remains silent.
He loves to look at the right hon. Gentleman.
Many other people have wished to do likewise. I regard this procedure of the Financial Secretary's as being discourteous. [ Interruption. ] It's no good you "Yahing." That does not help anyone.
I would point out to the right hon. Gentleman that I was not "Yahing." Secondly, I fail to see what this has to do with the Question "That the Clause, as amended, stand part of the Bill."
Nobody who knows you, Mr. Beaumont, would ever expect you to use such a larrikin word as "Yah." You are, if I may say so, a gentleman of great distinction, and I wish some of the hon. Members opposite would follow your example. All I was saying was that we need not go trailing through the Lobbies—as we may have to do at all hours of the night, and perhaps for most of tomorrow morning—if the Financial Secretary made any attempt to answer the points made by my hon. Friends. I cannot understand why the Government want to prolong this business. Last night I had to move the Closure myself. Today the business is being prolonged because of the mulish obstinacy of the Financial Secretary.
I listened to the right hon. Gentleman accusing the Minister of being discourteous. In my opinion Members on the Government Front Bench are not discourteous enough to hon. Members opposite. It is about time they were showing some more discourtesy to the Opposition.
Like the hon. Member's patron in Russia.
If the Government took a lesson from the discourtesy which the Opposition are in the habit of showing to the working class of this country they would be able to give hon. Members opposite plenty of discourtesy. I am concerned about the attempt which is being made to increase the amount of compensation. I want to say just one or two words. I have been watching what has been going on.
Hear, hear.
I say, "Hear, hear," too. If the owners of the gas companies had spent less money on preparing useless briefs for their useless representatives here, there would have been no need for a demand for increased compensation.
Question put, "That the Clause as amended, stand part of the Bill."
The Committee divided: Ayes, 293; Noes, 113.
Division No. 205.] AYES. [5.54 p.m. Acland, Sir Richard Cluse, W. S. Gaitskell, Rt. Hon. H. T. N. Adams, Richard (Balham) Cocks, F. S. Gallacher, W. Adams, W. T. (Hammersmith, South) Coldrick, W. Ganley, Mrs. C. S. Alexander, Rt. Hon. A. V. Collindridge, F George, Lady M. Lloyd (Anglesey) Allen, A. C. (Bosworth) Collins, V. J. Gibbins, J. Allen, Scholefield (Crewe) Colman, Miss G. M. Gibson, C. W. Alpass, J. H. Comyns, Dr. L. Gilzean, A. Anderson, A. (Motherwell) Corbet, Mrs. F. K. (Camb'well, N. W.) Glanville, J. E. (Consett) Anderson, F. (Whitehaven) Corlett, Dr. J Gooch, E. G. Attewell, H. C. Cove, W. G. Goodrich, H. E. Austin, H. Lewis Crawley, A. Granville, E. (Eye) Awbery, S. S. Crossman, R. H. S Greenwood, A. W. J. (Heywood) Ayles, W. H. Daines, P. Grenfell, D. R. Ayrton Gould, Mrs. B Dalton, Rt. Hon. H. Grey, C. F. Balfour, A. Davies, Rt. Hn. Clement (Montgomery) Griffiths, D. (Rother Valley) Barnes, Rt. Hon. A. J Davies, Edward (Burslem) Griffiths, W. D. (Moss Side) Barstow, P. G. Davies, Ernest (Enfield) Guest, Dr. L. Haden Barton, C. Davies, Harold (Leek) Gunter, R. J. Battley, J. R. Davies, Haydn (St. Pancras, S. W.) Haire, John E. (Wycombe) Bechervaise, A. E. Davies, R. J. (Westhoughton) Hale, Leslie Bellenger, Rt. Hon. F J Davies, S. O. (Merthyr) Hall, Rt Hon. Glenvil Berry, H. Deer, G. Hamilton, Lieut.-Col. R. Beswick, F. de Freitas, Geoffrey Hardman, D. R. Bevan, Rt. Hon. A. (Ebbw Vale) Delargy, H. J. Hardy, E. A. Binns, J. Diamond, J. Harrison, J. Blackburn, A. R. Dodds, N. N. Hastings, Dr. Somerville Blyton, W. R Driberg, T. E. N. Haworth, J. Boardman, H. Dugdale, J. (W. Bromwich) Herbison, Miss M. Bottomley, A. G. Dumpleton, C. W. Holman, P. Bowden, Flg. Offr. H. W. Durbin, E. F. M. Holmes, H. E. (Hemsworth) Bowles, F. G. (Nuneaton) Dye, S. Horabin, T. L. Braddock, Mrs. E. M. (L'pl, Exch'ge) Ede, Rt. Hon. J. C. House, G. Braddock, T. (Mitcham) Edelman, M. Hoy, J. Bramall, E A. Evans, Albert (Islington, W.) Hubbard, T. Brook, D. (Halifax) Evans, E. (Lowestoft) Hudson, J. H. (Ealing, W.) Brooks, T. J. (Rothwell) Evans, John (Ogmore) Hughes, Emrys (S. Ayr) Brown, T. J. (Ince) Evans, S. N. (Wednesbury) Hughes, Hector (Aberdeen, N.) Burke, W. A. Ewart, R. Hughes, H. D. (W'lverh'pton, W.) Butler, H. W. (Hackney, S.) Fairhurst, F Hutchinson, H. L. (Rusholme) Byers, Frank Farthing, W. J. Hynd, H. (Hackney, C.) Callaghan, James Fernyhough, E. Hynd, J. B. (Attercliffe) Carmichael, James Field, Capt. W. J. Irving, W. J. (Tottenham, N.) Castle, Mrs. B. A. Follick, M. Isaacs, Rt. Hon. G. A. Chamberlain, R. A. Foot, M. M. Jeger, Dr. S. W. (St. Pancras, S.E.) Champion, A. J. Forman, J. C. Jenkins, R. H. Chater, D. Fraser, T. (Hamilton) Jones, D. T. (Hartlepool) Chetwynd, G. Freeman, Peter (Newport) Kenyon, C. King, E. M. Parker, J. Taylor, H. B. (Mansfield) Kinley, J. Parkin, B. T. Taylor, R. J. (Morpeth) Kirkwood, Rt. Hon. D. Paton, Mrs. F. (Rushcliffe) Taylor, Dr. S. (Barnet) Lang, G. Paton, J. (Norwich) Thomas, D. E. (Aberdare) Lee, F. (Hulme) Pearson, A Thomas, I. O. (Wrekin) Leonard, W. Perrins, W. Thomas, John R. (Dover) Lover, N. H. Piratin, P. Thomas, George (Cardiff) Levy, B. W. Poole, Cecil (Lichfield) Thurtle, Ernest Lewis, T. (Southampton) Popplewell, E. Tiffany, S. Lipton, Lt.-Col. M. Porter, G. (Leeds) Titterington, M. F. McAdam, W. Price, M. Philips Tolley, L. McAllister, G. Pritt, D. N. Tomlinson, Rt. Hon. G McEntee, V, La T Proctor, W. T. Turner-Samuels, M. McGhee, H. G. Pursey, Cmdr. H Ungoed-Thomas, L McGovern, J. Randall, H. E. Usborne, Henry Mack, J. D. Ranger, J. Vernon, Maj. W. F McKay, J. (Wallsend) Rankin, J. Viant, S. P. Mackay, R. W. G. (Hull, N.W.) Reid, T. (Swindon) Wadsworth, G McKinlay, A. S. Rhodes, H. Walker, G. H. Maclean, N. (Govan) Richards, R. Wallace, G. D. (Chislehurst) McLeavy, F. Robens, A. Wallace, H. W. (Walthamstow, E.) Mainwaring, W. H. Roberts, Emrys (Merioneth) Warbey, W. N Mallalieu, J. P. W (Huddersfield) Roberts, Goronwy (Caernarvonshire) Watkins, T. E Mann, Mrs. J. Robertson, J. J. (Berwick) Watson, W. M Manning, C. (Camberwell, N.) Rogers, G. H. R. Weitzman, D. Manning, Mrs. L. (Epping) Ross, William (Kilmarnock) Wells, P. L. (Faversham) Mathers, Rt. Hon. George Royle, C West, D. G. Mellish, R. J. Scollan, T. Westwood, Rt. Hon. J. Middleton, Mrs. L Scott-Elliot, W Wheatley, Rt. Hon. J. T. (Edinb'gh, E) Mikardo, Ian Segal, Dr. S. White, H. (Derbyshire, N.E) Millington, Wing-Comdr. E. R Shackleton, E. A. A. Whiteley, Rt. Hon. W. Mitchison, G. R. Sharp, Granville Wilkes, L. Monslow, W. Shawcross, C. N. (Widnes) Wilkins, W. A. Moody, A. S Shawcross, Rt. Hn. Sir H. (St. Helens) Willey, F. T. (Sunderland) Morley, R. Silverman, J. (Erdington) Willey, O. G. (Cleveland) Morris, Lt.-Col. H. (Sheffield, C) Silverman, S. S. (Nelson) Williams, D. J. (Neath) Morris, P. (Swansea, W.) Simmons, C. J Williams, J. L. (Kelvingrove) Morris, Hopkin (Carmarthen) Skeffington, A. M. Williams, R. W. (Wigan) Mort, D. L, Skeffington-Lodge, T. C Williams, Rt. Hon. T. (Don Valley) Moyle, A Skinnard, F. W Williams, W. R. (Heston) Murray, J. D Smith, C. (Colchester) Wills, Mrs. E. A. Nally, W. Smith, H. N. (Nottingham, S.) Wise, Major F. J. Naylor, T. E. Snow, J. W. Woodburn, Rt. Hon A Neal. H. (Claycross) Solley, L. J. Woods, G. S. Nichol, Mrs. M. E. (Bradford, N.) Sorensen, R. W. Wyatt, W. Noel-Baker, Capt. F E (Brentford) Soskice, Sir Frank Yates, V. F. Noel-Buxton, Lady Sparks, J. A. Young, Sir R. (Newton) O'Brien, T. Stewart, Michael (Fulham, E) Younger, Hon. Kenneth Oldfield, W. H. Stross, Dr. B. Oliver, G. H. Stubbs, A. E. TELLERS FOR THE AYES: Palmer, A. M. F Swingler, S. Mr. Joseph Henderson and Pargiter, G. A. Sylvester, G. O. Mr. Hannan.
NOES. Agnew, Cmdr. P. G. Eden, Rt. Hon. A. McCorquodale, Rt. Hon. M. S. Amory, D. Heathcoat Elliot, Rt. Hon. Walter Macdonald, Sir P. (I. of Wight) Assheton, Rt. Hon R. Fletcher, W. (Bury) McFarlane, C. S. Baldwin, A. E. Fraser, H. C. P. (Stone) Mackeson, Brig. H. R. Barlow, Sir J. Fraser, Sir I. (Lonsdale) McKie, J. H. (Galloway) Baxter, A. B. Fyfe, Rt. Hon. Sir D. P. M Maclay, Hon. J. S. Beamish, Maj, T. V. H. Gage, C, Maclean, F. H. R. (Lancaster) Bennett, Sir P. Galbraith, Cmdr. T. D. Macmillan, Rt. Hon. Harold (Bromley) Birch, Nigel Gomme-Duncan, Col. A Macpherson, N. (Dumfries) Boles, Lt.-Col. D. C. (Wells) Gridley, Sir A. Maitland, Comdr. J. W. Bower, N. Grimston, R. V. Manningham-Buller, R. E Boyd-Carpenter, J. A. Harvey, Air-Cmdre. A. V Marlowe, A. A. H. Bracken, Rt. Hon. Brendan Haughton, S. G. Marples, A. E. Braithwaite, Lt.-Comdr. J. G Henderson, John (Catheart) Marshall, D. (Bodmin) Buchan-Hepburn, P. G. T Howard, Hon. A. Mellor, Sir J. Carson, E. Hurd, A. Molson, A. H. E. Challen, C Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Morrison, Maj. J. G. (Salisbury) Channon, H Hutchison, Col. J. R. (Glasgow, C.) Mullan, Lt. C. H. Clarke, Col. R. S. Jarvis, Sir J. Nicholson, G. Clifton-Brown, Lt.-Col. G. Jeffreys, General Sir G Nield, B. (Chester) Crosthwaite-Eyre, Col. O E Jennings, R. Noble, Comdr. A. H. P Crowder, Capt. John E. Keeling, E. H. Nutting, Anthony Darling, Sir W.Y. Lambert, Hon. G. O'Neill, Rt. Hon. Sir H. Davidson, Viscountess Linstead, H. N. Orr-Ewing, I. L. Digby, S. W. Lloyd, Maj. Guy (Renfrew, E.) Osborne, C Dodds-Parker, A. D Lloyd, Selwyn (Wirral) Peake, Rt. Hon. O. Dray son, G. B Low, A. R. W. Peto, Brig. C. H. M. Drewe, C. Lucas-Tooth, Sir H. Pitman, I. J. Duthie, W. S. MacAndrew, Col. Sir C. Ponsonby, Col. C. E. Raikes, H. V. Spearman, A. C. M. Watt, Sir G. S. Harvie Ramsay, Maj. S Stewart, J. Henderson (Fife, E.) Wheatley, Colonel M. J. (Dorset, E.) Roberts, P. G. (Ecclesall) Strauss, H. G. (English Universities) Williams, C (Torquay) Ross, Sir R. D. (Londonderry) Studholme, H. G. Willoughby de Eresby, Lord Sanderson, Sir F. Sutcliffe, H. Winterton, Rt. Hon. Earl Savory, Prof. D. L. Thomas, J. P. L. (Hereford) York, C. Scott, Lord W. Thorneycroft, G. E. P. (Monmouth) Smiles, Lt.-Col. Sir W Thornton-Kemsley, C. N. TELLERS FOR THE NOES: Smith, E. P. (Ashford) Turton, R. H. Sir Arthur Young and Smithers, Sir W. Wakefield, Sir W. W. Major Gonant.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 58.—(Compensation to officers.)
6.0 p.m.
I beg to move, in page 71, line 18, at the end, to insert:
"(2) Regulations shall provide for the payment by the Minister out of moneys provided by Parliament of compensation, in such cases and to such extent as may be specified in the regulations, to any or all of the following persons, that is to say—
This Amendment fulfils an undertaking given by my hon. Friend during the Committee stage about meter examiners and gas examiners. As those of us who were in the Committee will recall, we had to put down an additional Money Resolution for this purpose. The point is that the appointments and duties of these men will, in future, under Clauses 53 and 54, be under the jurisdiction of the Minister and not of the present appointing authorities.
We are grateful to the Minister for this Amendment which fulfils a promise made to us in Committee; I was going to say during the "Committee stage" but, as we all know, we are having two Committee stages, to the great regret, not to say bitterness, of the Opposition who would wish to turn their attention to other business. There is no doubt that the Minister is greatly improving the Bill by this Amendment. On the whole it is a good Amendment, but some of my colleagues would like to say a word or two about it in the light of the proposed Amendment to the Amendment, after "rights," to insert: "or whose position is worsened," which is not to be called, and that can, I think, best be done on the Question "That the Clause stand part of the Bill."
Am I right in thinking that practically all these people will be employed not by the nationalised gas industry but by the local authorities? So far as I understand it, these people are in the employment of the local authorities and those other bodies watching over the activities of the gas industry. Will they remain under the local authorities, or will they all pass to the nationalised industry?
The answer is quite clear. The Minister becomes responsible for this task of inspection, and the vast majority of these people will therefore pass to the employment of the Ministry. This Clause simply provides for the same compensation in the event of redundancy which is already granted to employees of the gas undertakings—it now extends that to examiners.
Amendment agreed to.
Further Amendment made: In page 71, line 21, leave out "the said Subsection," and insert "this Section."—[ Mr. Gaitskell. ]
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
I suggest that whatever statutory instrument is used to define the method of compensation, regard should be had to the very excellent precedent which has been set by the Fourth Schedule of the Local Government Act, 1933, which will be well known to the Minister. It has worked well in local government, where there have been many cases of smaller authorities being absorbed by larger authorities and compensation having to be paid to officers. It sets out the procedure in considerable detail, and there is considerable flexibility. It makes allowance for war service to be reckoned in determining compensation, which is a very necessary thing to do. It is a comprehensive code and one which we feel is well worthy of being used as a basis for the present Bill. I hope the Minister will promise us that he will work on the lines of that Schedule.
In discussing this Clause as it now stands we once again ask the Government to reconsider the question of bringing in the words "or whose position is worsened" which they could do at some later stage. It has application to the new words added to the Clause and particularly to those officers mentioned there. I want to draw the Committee's attention to the argument used in the Committee upstairs. The Parliamentary Secretary, when replying, did not, in point of fact, quite get the points of the argument put by this side of the Committee, and therefore, the replies he made are not accurate.
When this point was put to him he said that there was no need to put these words into this Bill although they were in the Electricity Act, because no one working in an undertaking was excluded under this Clause and, therefore, was not excluded from the Bill. In the Transport Act these words were included, so that the arguments used by the Parliamentary Secretary do not apply to the Transport Act. I am a little puzzled, however, because while I can see some argument for putting them in the Electricity Act and leaving them out of this Bill I cannot see an analogy with the Transport Act. I should be obliged if the hon. Gentleman would explain that to the Committee.
He went on to give an example of someone whose position would be worsened, but who would not, in point of fact, be covered by the Bill. There are a number of instances where the position of officers and men who are employed, whether under the Ministry or the Gas Council or an area board, will be worsened, and they will not get any compensation under this code. I do not think that it is the intention of the Government that that should happen. The Parliamentary Secretary gave one example when he said:
The next point I want to make is that there may be a case of a man who has to take a new house because he is travelling from one area to another. Prices of houses at the moment unfortunately are Very high. He might have to give up one dwelling where he now is, and by going to another area be forced to pay either a considerably higher rent or possibly higher capital charges for the purchase of the house. It does not seem that that person is covered. There is another case of someone whose child has a scholarship at the local school, which is a day school. If these people have to move and leave the area in which that school is, it will be difficult for their child to carry her scholarship with her, and possibly she will have to be put into another school. What about compensation in such a case?
Those cases are not covered by the Clause nor by the Amendment which we have made to it. I hope the Parliamentary Secretary or the Minister will give us an assurance, first, that it is the intention of the Government to give compensation to those workpeople and to others who suffer such damage; and, secondly, having given that assurance, to go further and say that he will look at this Clause again to see whether the arguments I have put up are sound, and if they are sound that he will consider some Amendment such as the one we have suggested, for insertion in another place.
6.15 p.m.
I want briefly to support the case put by my hon. Friend the Member for Ecclesall (Mr. P. Roberts). We are not here dealing with the actual requirements provided for the giving of this compensation. We are merely empowering Ministers to make regulations. The type of case which my hon. Friend has mentioned could be excluded from the regulations to be made if it were considered an improper case. All we are asking the Government to do is to take power to make regulations if the Minister finds that in due course it is necessary. I do not feel myself that he should be able to resist a request because he cannot amend the Bill in the necessary sense. If he gives an undertaking to consider the matter, and if suitable to insert an Amendment in another place, we shall be satisfied.
I hope we shall have a further reply from the Government to the various points raised by my hon. Friend the Member for Ecclesall (Mr. P. Roberts) and my hon. Friend the Member for South Hendon (Sir H. Lucas-Tooth), and particularly would I support what has been said by my hon. and gallant Friend the Member for East Grinstead (Colonel Clarke). I hope the right hon. Gentleman will call into operation the Local Government Act, 1933, which applies to Scotland as well as to England and Wales. It is with cases from the Northern Kingdom that I am most concerned. I am well aware that the Local Government Act, 1933, when it was presented to Parliament did not escape criticism, especially with regard to the compensation Clauses, from the Socialist Party who were not represented in that Parliament in anything like the strength of today, otherwise, we should have had more ungenerous provision in regard to compensation than we have.
I hope that the right hon. Gentleman will disabuse his mind of this kind of provision when taking action on compensation claims, which will certainly be made as the result of the passage of this Bill. I hope that he will not only bring the necessary Clause of the 1933 Act into operation, but that even now he will tell us in advance how he proposes to do it. I associate myself with the substantial points made by my hon. and gallant Friend the Member for East Grinstead and with my hon. Friends the Members for Ecclesall and South Hendon that this Clause, comprehensive though it is, does not cover every case, and that such people as were mentioned by my hon. Friends may be penalised by not being awarded compensation.
I am sorry that there are no representatives of the Scottish Office on the Treasury Bench at the present moment, because it is quite clear that Subsection (4, b ) is a very important part of this Clause, and there may be many occasions when the proceedings which will take place in Scotland will take place after consultations with the Secretary of State. I am sorry that we have not had one of the Joint Under-Secretaries or the Lord Advocate here to answer specific points if the right hon. Gentleman or his assistant are not in a position to satisfy us or even do not take the trouble to do so. I understand that the hon. Member for South Ayrshire (Mr. Emrys Hughes) will press to know how these cases will be dealt with in Scotland. We ought to have a further reply before we add the Clause to the Bill.
I have one or two observations to make in connection with the compensation provisions. Not having been a Member of the Committee which conducted the marathon upstairs, I am somewhat in the dark. I am modest enough to admit that I am in the dark. There are some people who will never admit it.
Some of them have never seen the light.
When a service is transferred to a local authority or to the State, hon. Gentlemen opposite are most anxious about the future financial welfare of the persons who may suffer. No doubt the compensation to be paid will be made the theme song of the excessive overhead charges in the gas undertaking. I was a member of a local authority which paid a considerable amount of compensation owing to the generosity of people who were opposed to municipal enterprise. I know local authorities which paid compensation to the extent of thousands of pounds under the 1929 Act for loss of office, and yet the persons concerned lost nothing. They resumed private employment and pocketed the compensation. I know an instance of a minor official who has been drawing £6 a week since 1929, and he has not been idle for a day—and he very rarely performed a useful service during his working life. I must speak with humility in the presence of the most distinguished First Sea Lord we have ever had. I understand from hon. Gentlemen opposite that they were responsible for the Minister giving effect to this. The, Minister is only given power to frame regulations. I hope that in framing the regulations he will also do something about definitions. What constitutes a gas inspector? Is the gas inspector the fellow who reads the meter
I will get up and explain.
I say to my right hon. Friend the Member for North Paddington
He is the Member for North Paddington no more. If the hon. Member is going on with his filibustering, at any rate he ought to be accurate.
I think it is the accuracy of my observations which is causing the irritation. I would like the Minister to make it crystal clear what is meant by a gas inspector. [ Interruption. ] You are trying to provoke me to say something.
I am not trying to provoke the hon. Member. I hope I am encouraging him to keep to the Amendment.
I had anticipated what you were going to say, Mr. Beaumont, and I had my apology ready. I want to know what constitutes a gas inspector. Is he the fellow employed by the gas department who uses an electric torch for the purpose of carrying out his duty of reading the meter? Is a, gas inspector the man who forms a search party to look for gas escapes? No gas inspectors have been in this Chamber for quite a time or they would have observed that gas was escaping, even at a late hour last night. What about the mason, the bricklayer and the building trade labourer who are associated with them? Are we to compensate the mason, the bricklayer or the labourer? Are we to compensate those who construct the culverts which may carry the gas main? They can very rightly make out a case that had it not been for the taking over of the undertaking, their prospects of promotion might have been better.
I hope that the Minister will take the necssary steps to ensure that when the regulations, are framed we shall not have charges laid on local authorities for generations to come. [An HON. MEMBER: "Local authorities? "] I under stand that we are dealing with the employees of local authorities. If a man is employed in a gas undertaking by a local authority and the gas undertaking is taken over by the State, he ceases to be employed by the local authority. I presume that is the jumping off place where he can claim compensation. Whether it is the local authority or a State undertaking, all such compensation payments find their way into the cost and the charges for the supply of gas. All I am asking the Minister to do is to take the necessary steps to see that the compensation regulations are not just as loosely framed as the provisions of the legislation referred to by the hon. Member for Galloway (Mr. McKie) who complimented himself on the generous compensation provisions
No, the hon. Gentleman must not misinterpret me. I said that I considered that it was a fair basis.
It is a matter of opinion. The hon. Gentleman said it was a fair basis, and if it is a question of compensation and hon. Gentlemen opposite agree that it is a fair basis, then in my view it is quite naturally an exaggerated basis. All I am asking the Minister to do is to exercise care in framing the regulations so that the industry shall not be saddled with overheads which it can very well do without. I do not understand this part of the Bill for compensation for loss of office. One might as well suggest that if in the future, in the interests of the efficiency of gas distribution, slot meters or automatic meters are installed in every place where gas is consumed, we should compensate the people who used to come and read the meter for the purpose of sending in the account, and that we should compensate the wood-worker for the moulding machine that put an end to his activities of running mouldings with the hand. It smacks to me of the days of the Luddites. We shall not destroy the machine but we shall dissipate the value of it by saddling it with overheads. While he appears to be generous, I hope that the Minister will see that the regulations he frames at least safeguard the undertakings we are taking over.
I want to emphasise the warning uttered by the hon. Member for Dumbartonshire (Mr. McKinlay). The hon. Member for Galloway (Mr. McKie) quoted the 1933 Act as it applied to Scotland, and we have had some unfortunate experiences in Scotland with regard to compensation which should be a warning to the Government in any future administrative experiences. We have no reason to be elated about that Act, which gave compensation to ex-employees of local authorities who argued that they had suffered from loss of office, and in too much of this Debate we have heard special pleading for people and interests who are out to make as much as possible from compensation. We have frequently heard warnings from these benches about inflation, about the burdens on the taxpayer, on the consumer and on the community, but we have heard precious little of that in this Debate.
The hon. Member for Galloway was quite wrong in arguing that the 1933 Act was a really useful piece of legislation guaranteeing compensation and justice to people who suffered from loss of office, because people who could not be described accurately as suffering from loss of office, and thereby deserved compensation, got away with quite considerable sums from that Act. Scottish Members will remember that in Ayrshire we had extravagant and extortionate claims put forward by a county clerk, the amazing total of £4,500 being paid as salary and, when that gentleman retired, he received £2,500 a year pension as compensation for loss of office. In addition to that, he came along with another bill for superannuation when he retired which was turned down by the arbiter appointed by the Court of Sessions.
I ask the Minister to be careful with this legislation, which is meant to protect the small salaried person who may suffer hardship, so that it is not used as an excuse by the well paid person who looks upon this as an opportunity for getting a comfortable income from the State for doing nothing.
I rise only to say a word of sympathy with the Government because the filibustering conduct of their supporters fills us with indignation. If only we could get the new Companion of Honour in here to keep Order—[HON. MEMBERS: "Oh!"]—yes, an appointment that has given us infinite pleasure— we might get on with the Bill rather more rapidly.
My hon. Friend the Member for Dumbartonshire (Mr. McKinlay) asked me to define the inspector of meters and the gas examiner. I would refer him to Section 4 of the Sale of Gas Act, 1859 for inspectors of meters, and to Section 13 of the Gas Undertakings Act of 1934 for gas examiners. However, if he really wants a description of gas inspectors, he would do well to look at the Committee Debates and see the very eloquent description given of them by the right hon. Member for Bournemouth (Mr. Bracken), as a result of which I feel certain he will lose every gas inspector's vote in Bournemouth at the next election.
To return to the serious aspect of this Clause—and it is an important Clause because it relates to the compensation of all servants—where the term "officer" is used here it means, of course, all servants of the gas undertaking whether they are craftsmen or managerial. The words that are used, "loss or diminution of emoluments" are wide because, in Clause 70, the word "emoluments" is defined as including
consultation, and the trade union movement has always taken good care, when there has been transfer of workers because of re-organisation, to make an agreement with the employers.
I gave an assurance that we would expect area boards or the Gas Council, whoever was involved, to be good employers on this question of transferred workers and the like, and that they would come to proper arrangements and agreements with the appropriate trade unions to deal with those cases. They are far too varied and individualistic to be put inside this Bill, and we feel that with the Clause as it is, with the interpretation of the word "emoluments" as I have described, plus that assurance, no hon. Member need feel any anxiety that the workers in the industry will be unfairly treated in any re-organisation that might take place as a result of this Bill.
I am glad to hear the Parliamentary Secretary give that assurance, but I do not follow how he will carry it out. First, I put this question to him: Assuming that evidence came forward of some man being unfairly treated, could we put down a Question in this House to the Minister? What right has the individual, what rights have Members of Parliament to bring this lack of benefit to the mind of the Minister himself? He has given an assurance but, as far as I can see, has no responsibility in this matter.
My second point is this: does he consider that the Coal Board is carrying out this form of good management? It is important for us to realise what the hon. Gentleman means by this, because exactly similar cases of the type he mentioned have occurred in the past and I have to tell him, if he does not know already, that minor officials are inclined to say on the telephone, "This is the job you have to do. Take it or leave it" and "Are you going to fight an organisation such as this?" He has given us an assurance that it will not happen in the future, but I do not see how it can be implemented.
I can give a short answer. I agree that this is important. After the assurance I have given it is quite clear that the trade unions negotiating with area boards have some matter of substance upon which to argue—an assurance by the Minister. Let us assume that, despite that assurance, an area board blankly refused to deal with specific cases raised by the trade union. They can then say to the Minister, "The area board refuses to carry out the assurance which you or the Parliamentary Secretary gave in Parliament on this matter." Under the Clause the Minister can then make the regulations under which the area board would have to carry out that obligation.
The hon. Gentleman will remember, of course, that a number of people affected are not trade unionists. Am I right in assuming that this promise extends beyond the trade union movement?
Yes. I hope that the managerial staffs will belong to their professional associations, but any odd people outside the movement would have recourse to the same machinery.
I was distressed to hear what was said by the hon. Members for Dumbartonshire (Mr. McKinlay) and South Ayrshire (Mr. Emrys Hughes) about redundancy. I should have thought this was one of the points on which there would have been unanimity on both sides of the Committee, particularly as the gas industry has been such a good employer of labour throughout its history. In the past, when a member of the public joined the gas industry, he felt that he was going into a good job for life. Now, through no fault of his own, but because of the policy of the Government as expressed through Parliament, he will find himself out of a job. To hear hon. Members opposite saying, as I understood them to say, that that was no problem, and that we on this side should be particularly careful to be cheeseparing, and not allow redundancy to be taken, into account, is surely something which ought not to pass without some educative effort from this side of the Committee.
The hon. Member for Bath (Mr. Pitman) will be aware that when the parish councils were taken over in 1929, the officers who lost their jobs got compensation. I know of instances and other hon. Members will know of similar examples. One man received compensation of £350 a year—£7 a week —and immediately stepped into another job. If that individual, who has been drawing £7 a week compensation since 1929, is now employed with a gas company, will he get another pension in addition to his original one?
The hon. Member for West Fife (Mr. Gallacher) raises several points. Many of them should be answered by the Minister, but on two points I can reply. I fell into the same error myself upstairs during the Committee stage: in this Clause the expression "officer" is not used in the sense in which it is applied to the Fighting Services as a distinction from "other ranks." A later Clause in the Bill defines an officer as being literally any employee from the office boy to the top. When the hon. Member for West Fife was raising this point, I think he had in mind officers—
No.
I thought that was what the hon. Member for West Fife had in mind. The second point is that if he reads the beginning of the Clause he will see that it is the Minister, by specified regulations, who will deal with the matter. As I read the Bill, there is no automatic provision that the Minister will have to give as generous compensation as the hon. Member for West Fife has suggested in cases where it would be wrong to do so. As I see it, the intention of the Clause is that genuine cases of redundancy should be fairly and decently treated. The other error into which the hon. Member for Dumbartonshire fell was in supposing that the inspectors referred to in the Amendment are employed by gas undertakings. I hope the Minister will correct me if I am wrong in thinking that the essence of his Amendment is that those inspectors are employed by people other than the gas industry—that is, by local authorities and others.
6.45 p.m.
They would be employed by the Minister.
In future some would be employed by the Minister, but some of them, having been employed hitherto by people other than the gas industry, would not come under the redundancy Clause but for the Minister's Amendment. I would say to the hon. Member for Dumbartonshire that in the Amendment we are concerned not so much with people employed in the gas industry as with those employed by local authorities and others, who will be rendered redundant. The whole point of the Clause is to deal with the issue of redundancy whether it occurs with people hitherto employed by the gas industry or any other person.
I am advised that there is some legal doubt about the power of the Minister to make regulations which would meet the wishes of hon. Members on both sides. I leave the matter with the Minister, but, if, our legal advice is right, I hope he may be able to put things right in another place.
Question put, and agreed to.
Clause, as amended, ordered to stand part of the Bill.
NEW CLAUSE.—(Payments in respect composite companies
(1) Where, in the case of a composite company, a reserve is shown in the last audited balance sheet of the company before the vesting date, and either—
(a) the reserve or a part thereof is derived from profits made by such part of the company's undertakings as is not included in the gas undertaking or from other assets held for the purposes of that part of the company's undertaking but is represented immediately before the vesting date by assets (other than cash or investments) which will vest by virtue of this Act in an Area Board; or
(b) the reserve or a part thereof is derived from profits made by the gas undertaking of the company or from other assets held for the purposes of the gas undertaking, but is represented immediately before the said date by assets (other than cash or investments) which will not vest as aforesaid;
the Area Board shall, in the first mentioned case, pay to the company, and, in the second mentioned case, be entitled to receive from the company, a sum equal to the amount of the reserve or part thereof.
(2) Any question arising under the preceding Subsection shall, in default of agreement, be determined by arbitration under this Act.
(3) This Section shall apply in relation to any provision (within the meaning of paragraph 1 of Part IV of the First Schedule to the Companies Act, 1947) shown in the said balance sheet and in relation to any undistributed profits so shown as it applies in relation to a reserve so shown.
(4) Any payment made by an Area Board or composite company under this Section shall be deemed to be a capital payment.—[ Mr. Gaitskell. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This is a complex matter arising in connection with the compensation arrangements for composite companies. The composite company is defined as one which is both a water and a gas undertaking. Some of these companies may elect to be taken over as a whole but others may choose to be divided, in which case compensation has to be paid to them in respect of the gas part of the undertaking. I do not think I need again go into details of the full arrangements for compensation. The difficulty which has arisen is in connection with reserve funds. We agreed in the Committee upstairs that there would be such a difficulty under the Bill as drafted. Let us suppose that out of the reserve fund, to which the profit from both the water and gas sides has contributed, the undertaking, shortly before vesting date, has purchased a gas asset. That asset would be transferred to the area board and the company might be worse off than if, instead of purchasing the asset out of the reserve fund, it had, for example, borrowed the money to purchase the asset. If the undertaking had borrowed the money the liability to repay the money would be transferred also.
It was necessary, therefore, to deal with this difficulty. The new Clause does so by providing, in effect, that, where an area board comes into possession of an asset purchased from a reserve built up out of the profits of the water side of the undertaking, it has to pay to the company the value of the asset; and vice versa, in the event of the water undertaking remaining in possession of an asset purchased out of the profits of the gas part of the undertaking, it has to pay the Area Board the corresponding value. Provision is made for arbitration in the event of dispute. This seems a fair and satisfactory method of dealing with a difficult issue.
My hon. Friends are very pleased with this new Clause. We ought to be, because we are its parents. As the Government have failed to acknowledge paternity, or even to pay tribute to the wise, able and dutiful Opposition, I willingly undertake the task, of course in a brief and modest way, by saying that the little that is good in this Bill is due to my right hon. and hon. Friends. With that brief statement I sit down, but before doing so, I wish to say a word to the Patronage Secretary, and to tell him that we on this side of the Committee are truly delighted at the honour conferred on him by His Majesty yesterday.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
NEW CLAUSE—(Compensation to local authorities.)
(1) There shall be paid by the Area Board in whom are vested by virtue of this Act property and rights of any local authority by way of compensation for the vesting of that property and those rights of the undertaker and in lieu of any other compensation therefor, such amount as the gas undertaking of the local authority might have been expected to realise if—
( a ) it had been sold as a going concern on the vesting date in the open market by a willing setter to a willing buyer;
( b ) the effect of the sale had been to transfer to the buyer the property, rights, liabilities and obligations which vest by virtue of this Act in the Area Board, except any property, rights, liabilities or obligations which so vest on terms agreed and determined in accordance with regulations; and
( c ) this Act had not been passed.
(2) Any question as to the amount of compensation to be paid by an Area Board under this Section shall, in default of agreement between the Board and the local authority, be determined by arbitration under this Act.— [ Mr. Raikes. ]
Brought up, and read the First time.
(Liverpool, Wavertree): I beg to move, "That the Clause be read a Second time."
My right hon. Friend the Member for Bournemouth (Mr. Bracken) said a moment or two ago that he was very pleased with the new Clause moved from the Government Benches. I can only wish, and indeed I have a slight hope, that the Government may feel pleased— as they ought—with this extremely important Clause which I am moving on behalf of the Opposition. This Clause deals with one of the most important matters in the whole of this extremely complex Measure. Some £90 million worth of gas undertakings are being removed from elective bodies, that is to say, local authorities, and placed in the hands of nominated boards—a very considerable changeover, and one of vital importance to innumerable ratepayers all over the land. The effect of the proposed Clause is to give local authorities a fair value for their undertakings and to enable that value to be assessed by arbitration, if it is not agreed in the first instance.
The basis laid down in this clause is nothing new. It is the basis applied today in all compulsory purchases and it is also applied by the Gas Bill itself under Clause 11 in regard to the compulsory purchase of land. Judging by what was said in Committee upstairs, the objection to our form of fair compensation based on arbitration is that to transfer from one public body to another requires no compensation at all, because merely public bodies are involved. The Committee will forgive me for spending a little time on these matters, because this is a question which, even at this late stage of the Bill, should be argued with clear, and, I hope, open minds. One thing which a gas board will be prepared to take over is the outstanding loan when municipal authority undertakings are taken over. Unless the new Clause, or something on this basis, is adopted, local authorities who have been repaying their outstanding loans in the past will be greatly penalised compared with other local authorities which have not done so to the same extent.
I give two examples to prove my point. Manchester, in regard to gas, has a total capital of £6,288,000. That will be taken over for the amount of the outstanding loan, which is £918,000, a very small proportion of the total capital. It means that because Manchester pays £5,500,000 on outstanding loans they get an extremely small return, £918,000. Nottingham has a capital of £2 million. That is being taken over by the amount of the outstanding loan for £998,000; that is to say, Nottingham with a capital of £2 million is in a better position financially in regard to this take-over than Manchester, with a capital of nearly £6 million. Inevitably it will be the case that wherever outstanding loans have been substantially paid off by progressive local authorities—and I am sure the Parliamentary Secretary to the Ministry of Fuel and Power will agree that Manchester is such—they will be penalised as compared with those local authorities which have not paid off their outstanding loan.
The next point to which I draw attention is on the same question. The immediate effect of putting into opera- tion the Government's plan in Clause 27, instead of this proposed new Clause, will be in many cases penalisation of ratepayers of municipal authorities. Where a local authority in the first instance was unable to run its gas undertaking at a profit and was subsidised from the rates to put it on its feet, but as a result of such subsidy, has made a profit in the last few years, the ratepayers have gradually been getting back the money they initially spent on the undertaking. But now, as Clause 27 stands, the moment these undertakings are taken over, no compensation is paid in regard to the money paid back to the ratepayers who normally would continue to receive back their payments. That will be cut off the moment this Bill becomes an Act.
I maintain that that is obviously unfair, because it means that ratepayers are suffering, through no fault of their own, as a result of the money which they expended in order to get these gas undertakings in the first instance. One can, in fact, say that the ratepayers have paid for the undertakings first and now the undertakings are taking the money from them.
7.0 p.m.
To revert to the argument to the Government that one public undertaking cannot really swindle another, and that if something passes from one undertaking to another all is well, I would point out that local authorities are all public bodies. When they deal with one another it is on the usual business footing.
I would remind the Committee also that local authorities have to pay Income Tax to another public body, the Treasury. Suppose a local authority were to come along to the Financial Secretary who is sitting here with his usual air of geniality, and say, "As one public body to another, we suggest that we pay only half of our Income Tax. What is the transfer of public money from one public undertaking to another? Why not scratch the thing out? We are all public undertakings together whether it be the Treasury or the local authorities." If such a suggestion were made, I tremble for the effect on that local authority when the Financial Secretary got his claws into that form of argument. But that is the form of argument which is adduced in support of the methods adopted in regard to the com- pensation of local authorities, and which we are doing our utmost to remove in this new Clause.
In the past, gas corporations have, on a number of occasions, purchased municipal undertakings from municipalities. They have done so at a fair price and as going concerns. The result to the citizens of those municipalities, call them consumers or ratepayers, has been in all cases that the ratepayers have gained the price of the undertaking that they sold. They have got something into the kitty. The second thing which has happened in many cases—and hon. Members who have read the Heyworth Report will have noticed a reference to it—is that in many cases the ratepayer has got the money on the one hand, as a consumer, he has had provided for him new and better services. Indeed, in a considerable number of cases, he has had a reduction in the price of gas.
We might say that the citizen has gained both ways and that the municipality has gained both ways. But I do not think there is anybody who would suggest that that thought is shining in the hearts of the citizens, whether as consumers or ratepayers, with Clause 27 as it is at present. On the one hand, they get nothing for their undertaking, apart from the gas, and on the other hand, judging from other experiences of nationalisation, it is almost certain that, instead of cheaper gas they will have more expensive gas. Unless the attitude of the Government changes very much they will suffer both as ratepayers and consumers. The Heyworth Report itself went into the question of compensation, not only to private companies but also to municipalities. In paragraph 260, the Report states:
"We consider it essential, however, that the terms should be agreed by an impartial body as fair to the existing owners (private or municipal)."
Obviously the Heyworth Report realised that arbitration was necessary, because unless an impartial body is to consider what the compensation is to be there will be no object in appointing such a body in any shape or form. That was the view of the Heyworth Report in November, 1945. That view, which we have endeavoured to follow in this new Clause, may well have been coloured by the fact that the signatories read the famous document "Let us Face the Future," which laid down that
What they realised—and this point, which is sometimes a little confused should always be made—was that the majority of gas consumers are, in fact, ratepayers. Nevertheless, in their capacity as consumers, they have built up an asset which will be taken from them in their capacity as ratepayers, and for such an asset they deserve a reasonable degree of compensation. Under the new Clause we endeavour to put that forward. I would remind the Committee that we are faced with a situation, disguise it how we will and with whatever words we please, in which municipal assets of about £90 million are to be acquired for somewhere about £20 million. If words mean anything at all, that is barefaced robbery of muncipalities.
(Dorset, Western): I am in strong support of this Clause for two reasons, and I am against the present terms of the Bill for the same two reasons. The first is that I consider it is very bad for the area boards to get something for nothing. The second reason is that I believe that a large number of ratepayers in this country are to get a raw deal. With regard to this question these area boards are getting assets in return for no stock which is to be issued. On the question of companies, the compensation is not satisfactory at all. That we know. But in this case of local authority compensation we have even more clearly, a case of the Board receiving something against which they have to give out no gas stock at all.
It was the estimate of the Heyworth Report that the local authority undertakings were worth £90¾ million. That was probably a conservative estimate. We also know, as has been mentioned, that the compensation which is to be received by these local authorities is likely to be about £22½ million, leaving a gap of very nearly £70 million. Those will be assets which will vest in the new boards and for which they will not have to raise capital in any way. It has been said for the Government that it is a perfectly fair thing to transfer from one form of public ownership to another. It is all very fine when you say that, if you mean that you are transferring from the ratepayers to the electors. Then there might be something to be said for it. But that is not what you are doing. We know only too well that when these nationalised boards come into existence the electors do not have very much to say about it. Even this House is restricted in the questions which it can pose about how that money is to be spent. What you are doing is to transfer from one body of ratepayers who have not been thrifty in the past, and you are—
I hope that the hon. Gentleman will not continue to attribute all these matters to me.
I beg your pardon, Major Milner. The result of the thrift of one body of ratepayers in one municipality is being turned over to the board for the whole of the area in which the municipality is included. The result of that thrift will not benefit those ratepayers who may have bought up gas companies under the terms of previous Acts. The benefit will go to the whole of the area in which there may be other local authorities who have been less thrifty, who have not gone in for a policy of expansion and who have loans outstanding.
In this Bill we have yet one more example of the determination of this Government to discourage thrift in any way in which they can. This is a great injustice to a large number of local authorities who have conducted their gas undertakings in a creditable manner. It might be said that the reason why this £70 million is to be taken by the boards without payment is that they will be hard up for cash. If we really believe that, we should be surprised at the amount of money which they are to be permitted to raise in other ways for new development. We know that that amount is £250 million, which is very much the same as the total present value of the whole industry as given by Heyworth. I submit that there is no case for treating the local authorities in the niggardly way suggested. It is most undesirable that the boards should take over these assets without giving anything in return and that the local authorities should be penalised in a completely indiscriminate fashion.
It might be convenient if at this stage I make some comments, after which the Debate could continue and then my right hon. Friend the Financial Secretary could speak later. I know that the right hon. Member for Bournemouth (Mr. Bracken) always likes to hear the Financial Secretary. Obviously, there is a very wide difference between us on this question of compensation to local authorities. Fundamentally we approach public ownership in a way quite different from hon. Gentlemen opposite. The private enterprise profit-making spirit of hon. Gentlemen opposite enters with them into their municipal experience, while my hon. Friends on this side of the Committee regard their municipal enterprise as service to the community. We feel that we are right in saying that this Bill should be based upon the principle that where there is the transfer of a public utility undertaking from one public authority to another public authority, that change should be effected without gain or loss to either party. That is the principle which hon. Gentlemen opposite do not accept. [HON. MEMBERS: "We do."]
If hon. Gentlemen accept that principle, I do not understand why they have produced this new Clause. This Bill provides that there shall not be any gain or loss. Clauses 17 and 18 transfer the whole of the assets and the liabilities, other than loans, to the gas boards. Clause 27 continues the servicing of those loans. In Clause 28 there is mentioned the sum of money which we discussed earlier on the question of severance.
I think that the hon. Gentleman has missed the whole point of the interesting speeches made by my hon. Friends. We do not want the municipalities to make a profit out of this transaction of nationalisation. We say that the amount of money which they have spent in creating a gas undertaking in their area should be returned to them in full.
7.15 p.m.
If the right hon. Gentleman can contain himself for a while, I will reach all those points. If I am approaching the points slowly, I must be forgiven. I regard this matter as important and I want to build up my argument in a way which will best represent the case which I am trying to make. I claim that the Clauses to which I have referred carry out the principle of transference without gain or loss. Hon. Gentlemen opposite constantly refer to ratepayers. The real position is that the people who have built up the local authority gas undertakings are not the ratepayers but the gas consumers. The debt charges and all repayments are reflected in the price of gas.
Authorities have taken different views about what they should do. Some have wanted to reduce their loan charges quickly. Others have wished to make some relief to the rates from the profits made by the gas undertaking though I am not sure that every local authority, or every person serving under a local authority, would accept that as being the right function of a municipal undertaking. I do not accept the view that the consumer of gas should be overcharged in order to give some relief to the rates. That is my personal view. Therefore, I suggest that it is not the ratepayers who are concerned, and it is not the municipality. Those who are concerned are the gas consumers in the area who have built up this asset. They have paid for it as they have gone along, by the charges which have been made for gas.
If we take over the whole of the liabilities from that point, and the consumer continues to receive gas at the charges in force at time of the transfer, then the consumer is neither worse nor better off. In point of fact, no loss or gain has been made. The gas consumer has paid for and built up the undertaking owned by the municipal authority, and, if this Clause is approved, he is now asked to pay for it again. This Clause desires that the undertaking should be sold on the basis of the open market as between a willing seller and a willing buyer. It would appear that, having paid once, through gas charges, for the building up of an undertaking which is then transferred to a public undertaking, the consumer would pay again if this Clause was accepted. Presumably, the gross capital value of the undertaking would be paid. That would represent a present to the municipality which does not consist wholly of people who have created the undertaking. The area board, who will supply the same consumers, would be loaded with the extra capital charge and inevitably they would have to charge again for what has already been paid for by the gas consumer. This Clause would not benefit the gas consumer at all.
I well understand the argument which may be advanced by local authorities that they have had a substantial relief from rates because of the profits of the gas undertaking. In fact what they have done is to make a section of their ratepayers relieve the other sections of part of their rates. In my view that is not good in principle and it certainly should not be carried out by this Bill. Therefore, it seems to me that the point which the hon. Member for Wavertree (Mr. Raikes) made is met by what I have just said. It would be quite wrong to treat this transfer of one public undertaking to another, serving the same consumers, in the way hon. Gentlemen opposite want to treat it in this new Clause, which I hope the Committee will reject.
May I put one point to the hon. Gentleman? Is it not a fact that the local authority will be very much worse off in having its undertaking taken over by the area board than, in fact, it would be if it had the opportunity, as it has had in the past, of parting with its assets at a reasonable price to a gas corporation, which is all we ask?
I feel, and I think many of my hon. Friends will agree, that the Parliamentary Secretary has really missed the main point about this new Clause. Let us look at two different types of municipality, and, first, at the virtuous type which rapidly amortises its debts incurred in putting up its gas undertaking; that is to say, either through raising the rates or not relieving the rates as much as it might have done by the gas charges, and in this way writes down that undertaking. Let us take the extreme case of a municipality which has paid £5 million on its gas undertaking and has amortised the lot. It has managed to do that by the abstinence of the citizens of that town. They might have had lower gas charges or levied lower rates, or possibly both, but no amortisation. Under this Bill, there is no benefit at all for their past abstinence.
Now let us take the case of another local authority which amortises nothing of any sort, but even has a deficit requiring further borrowing. That type of municipality gets away with everything. It gets the whole of the benefit of the good time which it has had in the past and gets no pains or penalties. By far the greatest objection which we have to this method is that it does, as do so many other Government measures, encourage improvidence. Every time a municipality or a company has over-distributed—and over-distribution in the case of a municipality means cutting the rates or the charges for gas—it gets away with everything, while the type of municipality which has been prudent and has amortised in order to have the benefit of that action in the future has the whole of that benefit taken away.
Would the hon. Gentleman explain why it gets the whole of that benefit taken away? After all, the consumer is the person who really counts in this matter. If, by reason of the facts stated by the hon. Gentleman, these consumers now have cheap gas, how will they have cheap gas taken away from them the Bill? That is what they get out of it—cheap gas—and that will continue.
Suppose a municipality had amortised thoroughly in the past, it will have done it by charging more for gas, thereby saving more than it could have done if it had not amortised. It will have done that to get the benefit in future, and it would get the benefit in future if it got for its gas undertaking what it was worth.
Or if the consumers got cheap gas, to which they are entitled by reason of that policy.
Do I understand that the hon. Gentleman thinks that it is wrong for a municipality to amortise? It has been laid upon municipalities in many Acts, and I should imagine that the Chancellor himself would think that they should do it. It is a very strange thing to hear that they should run their affairs in such a loose way. I had always understood it to be a good thing to amortise on capital charges of all local government services, because the people who do that can get the benefit of it. If a municipality has done that and then has its undertaking taken away from it, the people cannot get the reward of their abstinence in the past and what rightly belongs to them.
The hon. Gentleman was talking about cheap gas. I do not know what the future is going to be, but the Financial Secretary, in the proceedings upstairs, said that the ratepayer would not notice the trend because there would be greater efficiency and, presently, cheaper gas. I do not think it is very likely, from this, development, that the ratepayer will get the benefit of what has been done in the past unless the municipality receives the value of the undertaking. It is all very well to talk about the horrible profit motive, but who is making the profit on this transaction? The area gas boards are paying for their assets £70 million less than they are worth—it is probably more, but at least £70 million on book values. The Government are having these boards set up on a false basis. I do not think any of them will make a profit, but any other concern, if it acquired assets for £70 million less than they were worth, would be on a very good thing. It is wholly wrong that that should happen. The area boards should acquire these assets at the correct price and have to amortise them at that price.
Our main objection is that this provision of the Bill encourages improvidence in local authorities, and I should doubt whether, if such services are left to the local authorities in future, we shall get the local authorities setting aside the money which they have done in the past. Our main difficulty in building up reserves lies in the fact that savings are too low, and if we discourage public savings—and they were a very large amount before the war—we shall be doing something very damaging to the interests of this country. Therefore, I hope that, even at this late stage, the right hon. Gentleman will think once again.
The hon. Member for Flint (Mr. Birch) has got a little in his argument; this method of compensation may apparently be unfair as between a progressive local authority and an un-progressive one, but I cannot see how the proposed new Clause is going to put that right. We cannot do away with unfairness as between one local authority and another by being unfair to gas consumers generally, and that is what it amounts to. That is why I cannot support this new Clause. A great plea has been made about the ratepayers. Of course, the ratepayers have not invested their personal capital in those concerns. They are in quite a different position from the company investor. Money has been borrowed and has been repaid, and the gas consumers have done the repaying. The adoption of this Clause would simply mean that the consumers would have to pay again, and that would be bound to be reflected in the price of gas.
7.30 p.m.
This Clause could be described simply as a subsidy from the gas consumers to the ratepayers of particular districts, and many of those ratepayers who would get the subsidy if this Clause were accepted would be people who had only recently moved into particular districts. It is foolish to talk about ratepayers of a particular district as if they were a constant factor; they are shifting and changing all the time. I am certain that the gas consumers will be satisfied provided that they get the service to which they are accustomed and that they are certain that they are not paying out of their own pockets a subsidy in retrospect to the rates. That kind of policy of paying subsidies to rates from trading services which are public services has always been a policy condemned by progressive local authorities and their representatives in days gone by.
What is proposed here is to pay that subsidy in retrospect. Therefore, I hope that the Committee will reject this Clause, because it is thoroughly bad. It is extraordinary that the Opposition have suddenly discovered a Clause of this kind and put it down, because when we discussed the Electricity Bill a Clause of this kind was not put down. In the case of electricity the local authorities did not want it.
Precisely the same arguments were put from this side of the Committee in exactly the same way against this treatment of local authorities in the case of electricity.
The hon. Member's point is relevant, but to the best of my recollection the Opposition did not put down any Clause asking for such a provision as this because they knew that local authorities did not want it. I do not know the point of view of local authorities in regard to the gas industry, but it is significant to see this change of front on the part of the Opposition. I suggest that the reasons are purely political.
Would the hon. Member make clear what he is alleging? In my constituency, in Bath, electricity is a municipal undertaking. Is the hon. Member saying that the Bath Corporation are entirely satisfied with the compensation Clauses?
I do not want to embark on topics which are out of Order, but I am saying that the Incorporated Municipal Electrical Association repudiated entirely the payment to local authorities of capital value for their electricity undertakings.
(The High Peak): I am surprised to hear the hon. Gentleman saying that it is we who have changed our ground. This Government have always said that they intended to pay fair compensation for property that was taken over under nationalisation legislation. In the cases, for example, of the railways and the coal mines, the basis of assessment has differed, but the Government have claimed to pay fair compensation for the value of the property taken over. In this case, they are basing their compensation not upon the value of the property that is taken over but upon the financial policy which has been followed in the past in building up that service and in amortising it.
I should have thought that the Socialist Party would have taken the view that these matters ought not to depend upon the particular financial policy followed but rather that the compensation should be based upon the value of the property. It is they who have departed from the general principles of compensation that they have applied in the past. They are here applying a new basis of compensation which is likely to prove to be extremely unjust to many of these municipalities. So far as my party are concerned we have maintained all through this controversy that companies and local authorities should be compensated upon the same basis.
I hope that the hon. Member will not forget that under the London Transport Act—and there was a Conservative majority in the House at that time—the basis of compensation to local authorities in the case of the tramways under that Act was precisely the basis proposed in this Bill.
I do not carry in my memory the details of the Act of 1932, but I would say that experience showed us afterwards that the basis of compensation under that Act was unsatisfactory, and many of us on this side of the Committee afterwards expressed that view. But it is strange that in 1948 the best argument that can be put forward by the Socialist Party for an unsound basis of compensation is that it is the same as that adopted in 1932 by the Conservative Party.
I wish the Government would look at this matter again and see whether it is not the case, as my hon. Friend said, that two municipalities with gasworks of exactly the same value will be compensated at an entirely different figure according to whether, as in the one case, one municipality was prudent in its finance and amortised the capital expenditure, whereas the other municipality went on from year to year refusing to make provision for the inevitable deterioration of the plant and letting the consumer of gas and the ratepayer off more lightly. Surely it is entirely wrong that a larger rate of compensation should be paid in the case of the improvident authority than in the case of the one which has followed the wiser and more prudent policy. The line which the Government are taking is completely at variance with the general principles which they themselves laid down.
Up to now I have not taken any part in this Debate because I have been anxious to help this Bill on its way as quickly as possible, but in view of some of the very strange arguments which have been put before us about the compensation of these gas undertakings I feel compelled to say a word or two. The hon. Member for Wavertree (Mr. Raikes) put before us the cases of Manchester and Nottingham. If I remember aright he said that the Manchester gas undertaking had a value of about £6 million and it would only receive the outstanding overdraft of something under £1 million, whereas in the case of Nottingham, where the total value was some £2 million, the payment they would receive would be almost exactly the same as that of Manchester.
I happen to come from Manchester, which is known as a prudent and very businesslike city, and has built up a great reputation for sound finance. It is most unfair and invidious that the citizens of Manchester, who have amortised their gas undertaking, should part with £5 million's worth of it with no compensation, whereas other and more spendthrift towns will be paid back very substantial parts of the money which they have spent.
(Nottingham, East): Is the hon. Gentleman suggesting that Nottingham city is not entitled to the compensation which it may be receiving?
As I understand the case, the gas undertaking of Nottingham city is worth £2 million. The amount which it will have by way of compensation is nearly £1 million, probably some £900,000. I believe I have the figures right. That compensation will be about half the value of their total undertakings. Manchester has been far more thrifty, but will receive in compensation only about one-sixth of the value of their undertaking. I will leave the comparison at that.
Is it not a fact that the Manchester undertaking serves not only Manchester but the district, and that the Nottingham undertaking serves principally the city? We have developed other sources of light and power. Therefore, the assets of the undertakings are less than in the case of Manchester. I do not think that the hon. Gentleman is justified in suggesting that the Nottingham city undertaking is spendthrift.
I think I am accurate in saying that the citizens of Manchester are giving the area board a gas plant worth £5 million net and getting nothing for it, while the citizens of Nottingham are giving only a plant worth about £1 million and are getting very generous compensation.
The tendency in recent years in the whole of the Government's policy has been to encourage the spendthrift—I will not name any town or district—and to penalise the saver. We see that tendency in every direction. It is thoroughly unsound. For that reason I feel compelled to add a word on this matter. We see it in taxation, in the savings movement, and in the whole gamut of nationalisation. It is the spendthrift organisation or company that gets away with it while the company which is careful and has saved, is penalised time and time again. The present Government penalises them 25 or 50 per cent. The hon. Member for West Fife (Mr. Gallacher) would penalise them 75 per cent, or perhaps 100 per cent.
The fact remains that the whole tendency in Government financial policy— and this is very evident in the Bill—is to penalise those who have been careful in the past, have developed out of profits and have a very nice nest-egg. That nest-egg is being taken now from the municipalities, and from the industries which have been nationalised. It is a very retrograde step and one which the country, the Government, and in this case the city of Manchester, will very much regret. I feel that in the course of time, when the citizens of Manchester realise what is happening, they will put some very pertinent questions to their Members of Parliament, and full explanations will be required. Probably even greater mental gymnastics will have to be performed by Manchester Members in answering those questions from the hard-headed Manchester community than they have performed in this House. The Government's financial policy is thoroughly unsound in this respect. I listened to the Financial Secretary's views on this matter, but they did not convince me in the very least. I hope that my hon. Friends will persevere with this proposed new Clause.
7.45 p.m.
I listened to the speech of the Parliamentary Secretary with great care and I heard him say that we on this side of the Committee approached the subject of municipal enterprises such as gas works in a different way from the approach on his side. They approach it as a service whereas we approach it more as a business. I do not think that is right. We approach the matter as a service, too, but we believe that service, like charity, begins at home and that services should be run as business concerns.
His second point was that the consumers and not the ratepayers paid for the undertakings. I would ask him how many gas consumers in the average town are not also ratepayers, and how many ratepayers are not also gas consumers? We cannot distinguish them as two different groups. I should say that in 90 out of 100 cases the gas consumer and the ratepayer are the same man. That consumer-ratepayer is definitely going to be prejudiced. In the first place, he will have no benefit from many years of abstinence on the part of himself and family, when he paid more for his gas than he would have done if the municipality had not amortised their undertaking. He will get nothing for that sacrifice, whereas gas consumers in a neighbouring town which never bothered about amortising will be much better off.
The capital of the various undertakings will have been pooled in an area. The consumer will not get the same benefit as he has had in the past because of the fact that the capital in his own municipality was well written down and now will be averaged over the whole area. As a ratepayer he has probably enjoyed some subsidy to the rates because of the fact that in his other capacity of gas consumer he has been paying slightly more. Lastly, the consumer is going to lose in another way, because whereas, under our plan, the municipality would be possessed of a large sum in capital in return for the gas works they have lost, which sum might be invested in some other municipality's enterprises, that possibility will now not be available. Fresh borrowings will have to be undertaken by the municipality in order to finance municipal operations such as schools. They are going to be very much worse off.
The hon. Member for Wimbledon (Mr. Palmer) said that on the Electricity Bill we had not moved a Clause of this sort. That is perfectly true, but we opposed the Bill in an almost identical way. Possibly our tactics differed. We may have put down an Amendment instead of a Clause. The hon. Member has been here long enough to know that there are various ways of approaching these things. On this occasion, we are approaching the matter with a Clause.
If the matter is to be referred to in Debate, the Opposition would have to set about it either by an Amendment or by proposing a new Clause.
As we go on, we learn. If our Amendments during the Committee stage of the Electricity Bill did not receive the attention they deserved, no doubt we should have moved a new Clause on the Report stage similar to the one which we are now proposing. Exactly the same procedure might have been adopted in that case as the procedure we are adopting here. An hon. Member said the reason for it was that we thought the electricity undertakings under municipalities did not want this Clause. My answer is that we do not care what the municipalities want. We like to think of them as being representatives of the ratepayers and it is the ratepayers of whom we are thinking. It is quite possible that a large number of Socialist municipalities may not want it, but I do not think many who say that in the open say the same thing in the privacy of their Committee rooms. They probably say something quite different, quite harsh things, about this inexorable taking over of these assets. Indeed, some of them come out into the open and say it.
This is very unfair treatment. It will cause financial difficulties, a point which I hope will be enlarged by other hon. Members on this side. I will simply touch on the fact that it will make certain areas very much better off financially than others and give them an unfair advantage by comparison with other areas. I suppose the real answer is that the Government are short of cash, but that is no excuse at all. After all, it is shortage of cash which makes people rob the till, and that is what is happening here. Lastly, may I repeat that we feel it is prejudicial to the ratepayer-consumer, and on those grounds particularly we feel that our new Clause would be very much fairer. I hope that even now it will be considered much more than it has been considered.
Listening to the Debate, I was struck by the fact that it will have been well worth while if we can bring home to the Opposition the benefits of municipal enterprise. I can remember the time when nothing which a town or a city wanted to do for itself was considered right and proper by hon. Gentlemen opposite. But it is obvious that now, at any rate, they do agree that municipal authorities can run their own businesses and run them well; that is the underlying argument of most of the speeches we have heard. I listened very carefully to the speeches which have been made by hon. Members opposite and to the speech of my hon. Friend the Parliamentary Secretary. I think that he demolished not only the arguments which were put forward before he got up, but that he also disposed in advance of all the arguments which have been put forward since. Nevertheless, as he said that I would offer some further observations from this Box before the Debate closed, I will now proceed to do so.
In this new Clause the Opposition propose that the compensation to be paid to local authorities should be based on the value of the assets as between a willing buyer and a willing seller, that the amount should be arranged between the local authority concerned and the Area Board, and that the matter should go to an arbitration tribunal, if those two cannot agree. As a matter of fact, that is the machinery we set up in the Bill for another type of undertaking which is to be taken over. What the Bill proposes and what the Opposition, both upstairs and here, have said is grossly unfair is that the municipal undertakings in the various areas shall be transferred to the gas boards—that is that the assets and the liabilities, apart from certain loans, shall pass to the Area Boards on a given date. Loans which the local authority has raised definitely for the gas undertaking under its control shall be taken over by the central authority and, from then on until the loan is completely liquidated, shall be serviced by the central authority. In addition, although it has not entered into this Debate—I may as well mention it in order to complete the picture—the Minister of Fuel and Power has laid down in the Bill that compensation shall be paid for severance for a period in order to ease things off where costs go up because an undertaking has been taken over.
We think that this is quite fair for good reasons. It is perfectly true, as speaker after speaker from the other side has said, that local authorities have varied the financial policy they have adopted for their gas undertakings. Some have taken the view that they should benefit the consumer and they gave the consumer low charges. Consequently, so the argument runs, they took longer to pay off their loans, and, that being so, the central authority will have to take over a greater liability than they would otherwise have to. Others thought of their ratepayers and charged their consumers a higher price so that they paid off the loans outstanding at a quicker rate.
Much of this is not strictly relevant, because the Ministry of Health has to agree to loans raised by local authorities; we are not dealing here with loans in general but with loans raised for gas undertakings, or that part of loans applicable to gas undertakings. When the Ministry of Health, which knows its job, is asked by a local authority to approve the issue of a loan, it wants to know what that loan is for. If the local authority has said, as undoubtedly it will have said in all of the cases which we are now considering, that it wants to pay for its gas undertakings, the question will immediately arise, how long will that particular asset last. When will it wear out? The Ministry of Health will then lay down the period over which that loan is to run, the rate of amortisation and so on, according to the estimated life of that asset. Therefore, it is quite true to say that, where a substantial part of a loan will be taken over and serviced by the central authority, the assets will be comparatively new: where the proportion of the loan remaining to be taken over is small, it means that the assets will have already had a long run.
Is the right hon. Gentleman suggesting that in the case of Manchester for instance nothing but a lot of old junk will be taken over?
8.0 p.m.
I did not say that at all. I am simply saying that we cannot without argument take the view that the yardstick offered to us by hon. and right hon. Gentlemen opposite is strictly correct. It is a fact that the assets of the municipal authorities vary. Some are nearly at the end of their useful life; others have been renewed and they have, in almost every instance, been renewed out of loans which have had to be approved by the Ministry of Health.
Why have we adopted the method proposed in the Bill? We do not want to be unfair to the municipal authorities. Why should we? The municipal undertakings are, to us, something to be desired. The party to which I belong views municipal authorities which have gone in for a good deal of enterprise with the utmost friendliness. Why on earth we should be accused of trying to rob them, I cannot understand. We are as human as the next man. We represent the electors just as much as hon. Members opposite do. We shall eventually have to go to them and ask them to return us again—as we hope they will—so why should we throw away their sympathy in advance by doing a thing which, will, so we are told, be considered to be unfair and unjust by every reasonable and decent person? The thing does not hold water for a single moment.
I do not want to be too long, but let me give, quite briefly, once again the reasons why we have come to the conclusion that this is the proper method to be adopted. The Parliamentary Secretary, in an excellent speech, has given them; but let me repeat them. A municipal gas undertaking is not owned by private shareholders, like some gas undertakings. It is owned by a public authority on behalf of its community. These municipal undertakings are to be transferred to another public authority, which will be owned by the community. We say that it is not proper in that case to go through all the paraphernalia suggested by this new Clause in order to value the undertaking transferred on a willing buyer-willing seller basis.
(Ashford): The right hon. Gentleman says that a municipal undertaking is owned by the community. Surely, that is a mistake in fact. A municipal undertaking is owned, not by the community, but by the particular municipality concerned.
I shall not quarrel with the hon. Gentleman over the use of words and what they mean. Actually, I said that it was owned, not by private shareholders, but by a public authority acting for the community in that area. It is to be transferred to another public authority. The population of a municipal area is not static, as my hon. Friend the Member for Wimbledon (Mr. Palmer), who is an expert in these matters, very pertinently reminded the Committee. It is continually moving. Many people remain in the locality all their lives, but others come and go; some people come to the town, while others go out. I do not think that anyone will quarrel with me when I say that it is absurd to argue that compensation should be paid to the citizens of a municipal authority, whether or not they are those who helped to build up the enterprise.
No. Let the right hon. Gentleman be serious.
That is the argument. But we cannot segregate the individuals who helped to make that enterprise. That being so, it would be wrong to pay over to a municipality a large capital sum on the assumption that the municipal authority in some way can pay it to those who made the profit for which that capital sum is compensation. If we did that, it would mean that the area boards would have to find a very large sum of money by way of capital in order to pay the compensation. There is no need for me to tell hon. Gentlemen opposite, many of whom are good and successful business men, that to raise large capital sums means that what is being produced is to cost more, because amortisation and interest have to be met on that capital raised. If we attempted to raise this sum to compensate the municipalities whose undertakings are being taken over, higher prices would have to be charged to the consumers in those areas. What they want, and what we want to give them is good service; gas for such purposes as they want it at the cheapest possible rate. That is what this Bill will give them.
Let me make one observation in reply to the hon. Member for Wavertree (Mr. Raikes) who drew our attention to paragraph 260 of the Heyworth Report. What the Report says there is:
Would the right hon. Gentleman read paragraph 270?
I have not more than that with me. I have that much written out here. If I had known that the hon. Gentleman was going to raise this, I should have been prepared to read more.
Will the right hon. Gentleman please allow me to pass him my copy? Here it is.
Thank you. I was reading paragraph 260. I see that what paragraph 270 deals with is the amount of capital. What that has to do with the argument I am now trying to deploy, I do not know.
It gives the figures for municipal undertakings.
If the hon. Gentleman wants me to read it, I certainly will. It says:
We think that our basis is much better, and that people will get what they are entitled to—a gas service which will be efficient and, so far as we can make it so, cheap. It is essential—and it is the whole underlying basis of the Bill—that we should provide, and plan the provision of, gas on a national basis. In taking over, after long years of private and municipal enterprise, we are bound to employ different methods of compensation for different types of undertakings taken over.
We have only one desire and that is to use the commonsense method and the method which is fairest to those who are going to be dispossessed. Nothing I have heard in this Debate alters the view, which I have held since we began the Debate on this Bill, that what we propose to do for the municipal authorities is fair and just to them and to the consumers.
(Birmingham, Moseley): I think I should apologise to the Committee for detaining it for a few minutes. I do not like to assist at any deliberations where there is a sense of injustice being done. I have it deep in my mind in dealing with this matter that an injustice is being inflicted upon the local authorities. I think that the Financial Secretary will admit that the city of Birmingham has one of the best managed gas undertakings in the country. Believe me, there is a very deep sense of dissatisfaction in the City of Birmingham with the provisions of this Measure. If we are to bring a great Measure of this kind into operation, it ought to find its place on the Statute Book with the full acceptance of the people of the country as to the fairness of its terms. In Birmingham the other night, at an important meeting at which one of His Majesty's Ministers was present, the Lord Mayor gave expression to the sense of dissatisfaction and the feeling of injustice inflicted on the city by the matters which we are dealing with under this new Clause. Notwithstanding the admirable speech made by the right hon. Gentleman, I am sorry that he made a reflection upon this great city.
If the hon. Gentleman will give me the opportunity by giving way, I would say that I did not include Birmingham in that category. Birmingham from the early days has been in the forefront of municipal enterprise, and we are very proud of its record.
I acknowledge that statement with a deep feeling of gratitude. It is a tribute which is paid to Birmingham in all aspects of its municipal life all the time. It is a tribute which will be placed upon record as having come from so outstanding an authority as the Financial Secretary.
We nevertheless feel that we are about to suffer a serious injustice under the operation of this Bill. The ratepayers of Birmingham are in large measure consumers of gas. Their contribution has been to maintain the undertaking in its high state of efficiency. It seems a serious hardship to the ratepayers of Birmingham that no consideration is to be given to the part that they have played in maintaining the efficiency of the authority in the relationship which has existed between the corporation itself and the gas consumer. I am perfectly certain that the Financial Secretary desires this Bill to operate fairly in the interests of the whole community. It will not be a very happy reflection for Birmingham ratepayers to feel that local authorities in the area who have managed their business in a slovenly way and badly are to have the advantage over Birmingham ratepayers when the area board comes into operation. I would have liked the right hon. Gentleman to say that some further consideration would be given to whether the compensation should be on the basis of a willing buyer and a willing seller. My conviction is that the present basis of the Bill is unfair to the local authority.
8.15 p.m.
I am sorry that the right hon. Gentleman said that the Conservative Party has not been in favour of the development and expansion of municipal enterprise. Can he recollect the occasion when they have tried to frustrate municipal enterprise? The leading spirits in our party in Birmingham have done everything possible to contribute to the expediency and efficiency of municipal enterprise. We are proud of our city in that respect. Support in all that work has been given by the Unionists of Birmingham, the Conservative Party and the Conservative Corporation of Birmingham. I am sorry that one for whom I entertain very great respect could not have more sympathy for the development of municipal enterprise.
I think that it is astonishing that there should be disagreement on this issue in this Committee. Both sides of the Committee seem to have the most impeccable intentions in regard to this matter. We are all seeking to do justice to the local authorities in the sum that is paid. Having listened very carefully to this Debate, it seems to me that two points have arisen. The first is, and it was put most forcibly by the Parliamentary Secretary, that the book value of an undertaking is in fact the fair value. That to my mind is clearly not so. Moreover, it is a conception which is rejected by the Government in practically every case in other forms of Government activity.
There are many companies in the world —because I think that it is more prevalent in America and in other places— which out of revenue write down their assets—say their land and buildings—to a nominal sum. A great corporation in America may have its land and buildings standing at one dollar in its balance sheet. That is a book value, corresponding to £22 million of the value in the books of the local authorities of this country of the gas undertakings. The Financial Secretary, I am sure, in his taxation arrangements, with the Inland Revenue behind him, does not go on the basis that book value is the right value. If by thrift and by charging things against revenue rather than against capital, the assets of any undertaking which keeps books are shown very considerably below their real value, then the Inland Revenue themselves are the first people to come along and say, "No, that is not the fair value, that is the book value." They make a big distinction between the book value and the fair value.
The Financial Secretary quoted from paragraph 260 of the Heyworth Report. Mr. Heyworth quite rightly says that it was not his job to do any valuations of the gas industry. When he came to paragraph 270 he had to have some assumptions, and he took three assumptions to go on. He took three figures. Two of them were £90 million roughly. One was the comparable basis of output with the valuation of the companies on the Stock Exchange. The other was the total of what it had actually cost, and the third was the book value. He took all three of those assumptions and dealt with them in turn. In paragraph 260 he says that it was his job not to take any view. He certainly did not take the view that the book value was the fair value to the local authorities.
At this point I should like to reinforce what has been said by my hon. Friend the Member for Moseley (Sir P. Hannon). I believe that municipal authorities are greatly distressed about the price which is being paid; they regard it as unfair, and have a strong sense of injustice about it. The hon. Member for Wimbledon (Mr. Palmer) said that a municipal body had approved of this. I did not exactly catch the name of the municipal body, but I put it to him that it either consists of or includes the employees of municipal undertakings.
The body I referred to was the Incorporated Municipal Electrical Association, which represents all local authorities. I was not, of course, referring to their views on gas. I referred to the example of electricity.
Perhaps the hon. Member will accept the assurance from my hon. Friend the Member for Moseley and others, that the Lord Mayor of Birmingham said that the compensation figures are a matter of very great distress, in that the local authorities are labouring under the impression that they are being treated very unfairly.
The next point, which is at the root of the matter, is the view that the consumer and the ratepayer are, in some way, fundamentally different. In this matter I think that is a quite erroneous view. The movement in any local community over a period of years—and I am sure I am speaking correctly for Bath—is of a percentage of people who move; the actual solid corps of local communities in this country remains pretty steady; it is only the periphery that is splitting up, going to other places, and replacing other people.
(The Hartlepools): Where does the hon. Member think the millions of people from South Wales migrated from before the war if not from the municipalities?
There is no doubt what ever—and please do not think I am saying that evacuation in the war did not take place——
Before the war.
—or that evacuation as a result of unemployment has not taken place. By and large, in big areas of this kind there is a very close relationship indeed between consumers and ratepayers.
Then comes the third fallacy, that there is a real distinction between the local authority and the central Government. If that is really so, I do not understand what, in many respects, the party opposite are up to when they identify the two together. The Financial Secretary, in all his economic papers, treats rates and taxes as very much the same thing; in other words, he treats the municipal pocket and the central Government pocket as alternative pockets of the same pair of trousers. Surely it is not to be regarded as imposing a heavy burden on the central Government if it puts fair compensation—at least £90 million—into the other pocket, that of municipal undertakings?
Let me revert to my first point, of true value as distinct from book value. If the Government seriously maintain that it does not matter whether they pay £1 for a £1,000 article because it is still in the same pocket, why is it, when they have in their own books the surplus war equipment, they do not give it to municipalities whom they supply? Surplus equipment is an item which has been borne against Revenue; we in this Committee have borne that particlar equipment as a Revenue charge for the nation at large; it stands at nothing in the Chancellor's books. When that is supplied by the central Government to the local government, do they say:" You ought to have this free of charge because in our books it stands at nothing"? No; they say: "You have to pay the fair value for it." I submit that here also the central Government should pay the fair value for the local authority undertakings they are taking over. The hon. Member for Wimbledon said that during the passage of the Electricity Act we did not put down a specific Motion or new Clause in this respect.
Or Amendment.
Or Amendment. But he does admit that we talked about it. If I may say so, that is one of the advantages of having more time. The Electricity Act was rushed through without proper consideration, and the hon. Member for Wimbledon is giving point to that and to the further fact that in the intervening time, and in the time we have given to this Bill in Committee upstairs, we have been able to put our finger on to a point and to take some action, which it is our duty to take. If it be true, as we have heard this afternoon, that the Lord Mayor of Birmingham is, on behalf of that great City, thoroughly dissatisfied with this compensation, surely we are right—and the hon. Member for Wimbledon will admit we are right—in raising this question?
In past purchases by municipal undertakings, under compulsory purchase the valuation which has been put by arbitration has averaged £1,577 per 1.000 cubic feet. Under this Bill, at the book value of £22 million, that will work out at only £130—less than one-tenth of the value on arbitration on an output basis. I am sorry that the hon. Member for East Nottingham (Mr. Harrison) is not here, because I think he was right in standing up for the way in which Nottingham had been thrifty in the past. True, as has been pointed out, Manchester has been even more thrifty and is, therefore, giving an even better bargain and losing more over this compulsory acquisition than Nottingham. But Nottingham is still selling for under £1 million an undertaking which has cost it, in good pounds of the old days, over £2 million.
In Committee upstairs the Minister had some very harsh things to say about Nottingham, when he was moving the new Clause which now stands as Clause 36. The Minister complained very bitterly that most unfortunate, happenings—and it was the emphasis he gave which told—had been occurring, and that cities like Nottingham and Leicester had been transferring on their books sums which were properly attributable to the electricity undertakings. I ask the Minister: why is it that Socialist municipalities like Nottingham are doing this? Why is it that Leicester is doing it? It is for one reason only: because they have a very deep sense of grievance, and feel that in being dispossessed of their undertakings at the book value, which happens to be half or less than half the real value, the people of that neighbourhood, either as consumers or as ratepayers—I do not mind which it is, because it has its effect equally in the same way—are being done down.
8.30 p.m.
In that connection, I should like to point out one consequence of this unfair treatment. I seriously advise any hon. Members opposite who wish to get a job on area boards to get a job on any of the northern boards, for the simple reason that municipal undertakings are much more rife in the North than in the South. It will be easier to run the areas in the North because they will be operating with very much less charges for capital. They will be operating with a capital of only £130 per 1,000 cubic feet, whereas in the South they will be operating at about £1,500 per 1,000 cubic feet. It will be dead easy for people in the North to show cheaper gas and greater efficiency, but that cheapness and efficiency will be apparent only; it will take place because of the very low book value at which these municipal undertakings are being taken over.
It seems perfectly clear that both sides are agreed that we want to do something which is fair to the municipalities, but it seems equally clear that the only way in which fairness can be given is to take over, not on book value, but at a fair value on arbitration, which is what we propose in this Clause.
We are now approaching the end of this Debate. Sometimes I think that the Debates on this Bill are like parallel lines which never coincide except in infinity. It is a little difficult to be reproached by the hon. Member for Wimbledon (Mr. Palmer) for not having done this also in the case of electricity. We did our best, as has been said, to put our arguments very briefly; indeed, we actually suppressed arguments and did not put down many Amendments or Clauses, but all we gained from that was that the Lord President of the Council came down and twitted us on the Second Reading of this Bill for not having taken up enough time, and the hon. Member for Wimbledon now twits us for not having taken up enough time on the electricity Measure.
It is lack of logic.
I hope that the hon. Member is not suffering from that too much. As he admits, we advanced the same line of argument on the electricity Measure, but this time we have formulated our argument. Undoubtedly, this Bill has taken longer to discuss, but when the hon. Member reproaches us, it is not because we have taken a long time on this Bill, but because we took too short a time on the electricity Measure. We did our best to meet him. But that is not really the point at issue. The point at issue is the very important point of local authority compensation. On that, important arguments have been advanced, and the hon. Member for Wimbledon himself has advanced arguments which demand a certain amount of attention. I think it is necessary to deal with his arguments before we go on.
I think that the hon. Member was ill-advised to advance the analogy of the London Passenger Transport Act. He will remember that what was being taken over were undertakings which were, on the average, bankrupt; but it is not suggested that that applies to these prosperous undertakings which are being taken over now. It is well known that the amalgamation in the case of the London Passenger Transport Act was in order to float those other undertakings on the most profitable basis and that a valuation of the local authority undertakings would have brought out a very low or even nil figure. If he doubts that, let him look at the terms of the Act. It is only fair to say that in the case of the London Passenger Transport Act exactly what we are contending for was incorporated, namely, that the matter should be determined by an arbitration tribunal. He will find that Section 9 refers to the arbitration tribunal and the rubric of Section 10 refers to the determination of the amount of consideration and the terms of the transfer in the case of local authority undertakings. The technique we are proposing was adopted, and all we are saying is it is reasonable that it should be adopted in this case.
The big general point which is being argued by Members opposite is that the transfer of public services should not be attended by financial compensation, but that surely leaves out of account the wide difference in the state of finance of the various undertakings which are being absorbed into these pools. It is said that the undertakings are remaining exactly where they were. That is not the case. The undertaking is being merged into a larger unit than ever before. Take the most extreme case, which is really the reductio ad absurdum, that of Scotland. In Scotland, all the units are being pooled together. How can they all remain exactly where they were when the Glasgow gas undertaking is in the same pool as the Aberdeen gas undertaking? When a single pool is being made from a number of separate containers, the level of water in each container is of interest and of great importance.
As my hon. Friend the Member for Bath (Mr. Pitman) has said, the amount settled by arbitration when the local authorities were buying in gas undertakings compulsorily was something of the order of £1,500 per 1,000 cubic feet, but the terms of compensation for local authority undertakings will vary from £585 in the case of Glasgow to £130 in the case of Edinburgh and £65 in the case of Aberdeen. It is clear, leaving out altogether whether they ought to be paid in compensation or not, that these widely varying levels represent an anomaly, to put it at its lowest, and represents a real factor which cannot simply be brushed aside by saying that as this is all public money, the terms of transfer are of no importance. That is the fundamental point we should like to leave in the records of this Debate.
It is clear that the Government do not intend to accept our argument, and we shall therefore be forced to register our disagreement in the Division Lobby. I should not like the Committee to feel after this long Debate that there is nothing in the argument at all. There is a very real point, and it is a point which will come up again and again as these matters are embarked upon. The Financial Secretary said that these matters could all be ignored, because a local authority wanting to raise a loan had to go to the Minister of Health who would prescribe the terms, the amortisation and all the financial features, so that a broad general average would naturally prevail throughout the country. I have been a Minister of Health, and I should never suggest that a Minister of Health would dictate such meticulous conditions as the right hon. Gentleman suggests. Besides it proves too much. If that is so, what is the explanation of the wide differences which have been mentioned by my hon. Friend the Member for Wavertree (Mr. Raikes) and by other Members who have spoken? The cases of Nottingham and Manchester are merely two of the many cases of wide differences which exist. These wide differences exist because great latitude has been allowed to the local authorities of the country.
The new identical terms, which run over great areas, are not perhaps evil in themselves. At any rate, nobody can deny that a very wide variation did exist between the great local authorities as to the way in which they treated their assets and undertakings, and that is the essence of good local government in the country. To try to iron these out because the Minister of Health has prescribed treatment by uniform methods throughout the country so that the financial considerations of these undertakings may be disregarded is not in accordance with the facts of the case. When the Financial Secretary and the Parliamentary Secretary say that if sums had to be paid in-compensation they would make this nationalisation Bill impossible, or at any rate would gravely cripple it, they are trying to prove too much. If it cannot be run without confiscation, why compensate private authorities? If, in fact, the argument holds good that there could not be a nationalised gas undertaking unless the Government are allowed to acquire the assets at nil, it is a very strong argument against the practicability of having a nationalised undertaking at all.
No.
But I can assure the- hon. Member that that is so. Not since the Israelites crossed the wilderness has any community found its assets free of charge for any long period. The Israelites were supplied with manna and on occasion quails. No one ever suggests that that is an analogy on which we should build our modern finances, although I think sometimes that some of the arguments and practices of the Government are based on the anticipation of some similar windfall. There is an Arab proverb which says that brotherly love is all very well but accounts ought to be kept. That, in a nutshell, is our contention.
I do not expect to find the Treasury saying to the great local authorities after the vesting dates, "It is a public purse. It is all one now, and if you want electricity, gas or transport we will not charge you anything for it, because it is coming out of the one pocket anyhow. If you want to carry out a great lighting, heating or transport scheme carry on with your plans for what does it matter? You will get these things at nil just as we take them away from you at nil." I am sure it will not. The new masters will insist upon rigid accounting from the new customers coming into existence, and the great local authorities will be one section of those new customers who will have to pay for every unit of electricity and every therm of gas that they buy.
8.45 p.m.
Some local authorities, having handed over their undertakings, will certainly find that they are charged for the use of them by those to whom they have transferred the undertakings for a nil return. I say that that in itself is enough to prove that accounting is the real factor which should be considered in the last stages of the transfer of some £70 million to £80 million worth of municipal property to an entirely new master under entirely new conditions. Local authorities are already beginning to feel uneasy about the process that is taking place, and I am certain we on this side of the Committee more accurately represent, not merely the feelings of local authorities but the big general financial contentions which will have to be taken into consideration in future transactions, however successful hon. and right hon. Gentlemen
on the opposite side are in going through the Lobby and voting down arguments with the mere brute weight of votes.
Question put, "That the Clause be read a Second time."
The Committee divided: Ayes, 94; Noes, 275.
Division No. 206.] AYES. [8.46 p.m Agnew, Cmdr. P. G Gomme-Duncan, Col. A Nicholson, G. Baldwin, A. E. Grimston, R. V. Nield, B. (Chester) Barlow, Sir J. Hannon, Sir P. (Moseley) O'Neill, Rt. Hon. Sir H Beamish, Maj. T. V. H. Harvey, Air-Cmdre. A. V Orr-Ewing, I. L Bennett, Sir P. Haughton, S. G. Osborne, C. Birch, Nigel Henderson, John (Cathcart) Pitman, I. J Boles, Lt.-Col. D. C. (Wells) Hollis, M. C. Ponsonby, Col. C. E Bowen, R. Howard., Hon. A. Prior-Palmer, Brig. O Bower, N Hulbert, Wing-Cdr. N. J. Raikes, H. V Boyd-Carpenter, J. A. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Ramsay, Maj. S Bracken, Rt. Hon. Brendan Hutchison, Col. J. R. (Glasgow, C.) Rayner, Brig. R. Bullock, Capt. M. Jeffreys, General Sir G. Roberts, P. G. (Ecclesall) Byers, Frank Jenkins, R. H. Roberts, W. (Cumberland, N.) Carson, E. Keeling, E. H Ropner, Col L. Challen, C. Lloyd, Maj. Guy (Renfrew, E.) Shepherd, W. S. (Bucklow) Channon, H. Lloyd, Selwyn (Wirral) Smiles, Lt.-Col. Sir W. Clarke, Col. R. S. Lucas-Tooth, Sir H. Smith, E. P. (Ashford) Clifton-Brown, Lt.-Col. G MacAndrew, Col. Sir C Spearman, A. C. M Cooper-Key, E. M. McFarlane, C. S. Sutcliffe, H. Crosthwaite-Eyre, Col. O E Maclay, Hon. J. S. Thomas, J. P. L. (Hereford) Cuthbert, W. N. Maclean, F. H R. (Lancaster) Thornton-Kemsley, C. N. Digby, S. W. Macmillan, Rt. Hon. Harold (Bromley) Turton, R. H. Dodds-Parker, A. D Macpherson, N. (Dumfries) Wadsworth, G. Drayson, G. B Maitland, Comdr. J. W Wakefield, Sir W. W. Drewe, C. Manningham-Buller, R. E Watt Sir G. S. Harvie Duthie, W. S. Marples, A. E. Wheatley, Colonel M. J. (Dorset, E.) Elliot, Rt. Hon. Walter Marshall, D. (Bodmin) Williams, C. (Torquay) Foster, J. G. (Northwich) Maude, J C. Williams, Gerald (Tonbridge) Fox, Sir G. Mellor, Sir J. Fraser, Sir I. (Lonsdale) Molson, A. H E TELLERS FOR THE AYES: Fyfe, Rt. Hon. Sir D. P. M Morris, Hopkin (Carmarthen) Major Conant and Gage, C. Morrison, Maj. J G (Salisbury) Mr. Studholme. Galbraith, Cmdr. T. D Mullan, Lt. C H.
NOES Acland, Sir Richard Buchanan, Rt. Hon. G Driberg, T. E. N. Adams, Richard (Balham) Burke, W. A. Dugdale, J. (W. Bromwich) Adams, W. T. (Hammersmith, South) Butler, H. W. (Hackney, S.) Dumpleton, C. W. Alexander, Rt. Hon. A. V Callaghan, James Durbin, E. F. M. Allen, A. C. (Bosworth) Carmichael, James Dye, S. Allen, Scholefield (Crewe) Castle, Mrs. B. A Edwards, John (Blackburn) Alpass, J H. Champion, A. J Edwards, N. (Caerphilly) Anderson, F. (Whitehaven) Chater, D. Evans, Albert (Islington, W.) Attewell, H. C. Chetwynd, G. R Evans, E. (Lowestoft) Austin, H. Lewis Cluse, W. S Evans, John (Ogmore) Awbery, S. S. Cobb, F A Evans, S. N. (Wednesbury) Ayles, W. H. Cocks, F. S Ewart, R. Ayrton Gould, Mrs. B Coldrick, W. Fairhurst, F. Baird, J. Collindridge, F Farthing, W. J Barstow, P. G. Collins, V. J. Fernyhough, E. Battley, J. R Colman, Miss G. M Follick, M. Bechervaise, A. E. Comyns, Dr. L. Foot, M. M. Benson, G. Cooper, Wing-Comdr G Forman, J. C. Berry, H. Corlett, Dr. J. Fraser, T. (Hamilton) Beswick, F Cove, W G. Freeman, J. (Watford) Binns, J. Crawley, A. Gaitskell, Rt. Hon. H. T. N Blackburn, A. R Daines, P. Gallacher, W. Blyton, W. R. Davies, Edward (Burslem) Ganley, Mrs. C. S Boardman, H. Davies, Ernest (Enfield) Gibbins, J. Bottomley, A. G. Davies, Harold (Leek) Gilzean, A. Bowden, Fig. Offr. H. W. Davies, Haydn (St. Pancras, S.W.) Glanville, J. E (Consett) Braddock, Mrs. E. M. (L'pl, Exch'ge) Davies, S. O. (Merthyr) Gooch, E. G. Braddock, T. (Mitcham) Deer, G. Goodrich, H. E. Bramall, E. A. de Freitas, Geoffrey Gordon-Walker, P. C. Brook, D. (Halifax) Delargy, H. J. Granville, E. (Eye) Brooks, T. J. (Rothwell) Diamond, J. Greenwood, A. W. J. (Heywood) Brown, George (Belper) Dodds, N. N Grenfell, D. R. Brown, T J. (Ince) Donovan, T Grey, C F Griffiths, D. (Rother Valley) Manning, Mrs. L. (Epping) Smith, H. N. (Nottingham, S.) Guest, Dr. L. Haden Mathers, Rt. Hon. George Sorensen, R. W. Gunter, R. J Mayhew, C. P. Soskice, Sir Frank Guy, W H. Medland, H. M. Sparks, J. A. Haire, John E, (Wycombe) Mellish, R. J. Steele, T. Hale, Leslie Mitchison, G R Strauss, Rt. Hon G. R. (Lambeth, N.) Hall, Rt. Hon. Glenvil Moody, A. S. Stross, Dr B. Hamilton, Lieut.-Col. R Morgan, Dr. H. B Stubbs, A. E. Hannan, W. (Maryhill) Morley, R. Swingler, S. Hard man, D. R. Mort, D. L. Sylvester, G O. Hardy, E. A. Moyle, A. Taylor, H. B. (Mansfield) Harrison, J. Murray, J. D. Taylor, R. J. (Morpeth) Haworth, J. Nally, W. Taylor, Dr S. (Barnet) Henderson, Rt. Hon. A. (Kingswinford) Naylor, T. E Thomas, D. E. (Aberdare) Henderson, Joseph (Ardwick) Neal, H (Claycross) Thomas, I. O. (Wrekin) Hobson, C. R. Nichol, Mrs. M. E. (Bradford, N.) Thomas, John R. (Dover) Holman, P. Noel-Baker, Capt. F. E. (Brentford) Thurtle, Ernest Holmes, H. E. (Hemsworth) Noel-Baker, Rt. Hon. P. J. (Derby) Tiffany, S. Horabin, T L. Noel-Buxton, Lady Titterington, M. F House, G. O'Brien, T. Tolley, L. Hoy, J. Oldfield, W H Tomlinson, Rt. Hon G Hubbard, T. Orbach, M. Turner-Samuels, M. Hudson, J. H. (Ealing, W.) Paget, R. T. Ungoed-Thomas, L. Hughes, Emrys (S. Ayr) Palmer, A. M. F Usborne, Henry Hughes, Hector (Aberdeen, N.) Parkin, B. T. Vernon, Maj. W F Hughes, H. D. (W'lverh'pton, W.) Paton, Mrs. F. (Rushcliffe) Viant, S P Hynd, J. B. (Attercliffe) Paton, J. (Norwich) Walkden, E. Irvine, A. J. (Liverpool) Pearson, A. Walker, G H. Irving, W J. (Tottenham, N) Peart, T. F. Wallace, G. D. (Chislehurst) Jay, D. P. T. Perrins, W. Wallace, H. W. (Walthamstow, E.) Jeger, G. (Winchester) Poole, Cecil (Lichfield) Warbey, W N. Jeger, Dr. S. W. (St. Pancras, S.E.) Popplewell, E. Watkins, T. E Jenkins, R. H. Porter, G (Leeds) Watson, W. M. Jones, D. T. (Hartlepool) Proctor, W. T Weitzman. D. Kenyon, C Pursey, Cmdr. H Wells, P. L. (Faversham) Key, Rt. Hon. C W. Randall, H. E West, D G. King, E. M Ranger, J. Westwood, Rt. Hon. J. Kinghorn, Sqn.-Ldr. E Rankin, J Wheatley, Rt. Hn. J (Edinburgh, E.) Kinley, J. Reeves, J. White, H, (Derbyshire, N.E.) Lawson, Rt. Hon. J J Reid, T. (Swindon) Whiteley, Rt. Hon. W Lee, F. (Hulme) Richards, R Wilcock, Group Capt C A B Leonard, W. Robens, A. Wilkes, L. Leslie, J. R. Roberts, Emrys (Merioneth) Willey, F T. (Sunderland) Lever, N. H. Roberts, Goronwy (Caernarvonshire) Willey, O G. (Cleveland) Levy, B. W. Robertson, J. J. (Berwick) Williams, D. J (Neath) Lewis, T. (Southampton) Rogers, G. H R. Williams, J. L. (Kelvingrove) Lindgren, G. S. Ross, William (Kilmarnock) Williams, R. W (Wigan) Lipton, Lt.-Col. M Royle, C. Williams, W R. (Heston) Longden, F Sargood, R. Willis, E McAdam, W Scollan, T. Wills, Mrs. E A. McAllister, G. Scott-Elliot, W. Wilson, Rt. Hon. J H McGhee, H. G. Shackleton, E. A. A Wise, Major F J McGovern, J. Sharp, Granville Woods, G S. Mack, J. D. Shawcross, C N. (Widnes) Yates, V F McKay, J. (Wallsend) Shawcross, Rt. Hn. Sir H. (St Helens) Young, Sir R. (Newton) McKinlay, A. S Silverman, J (Erdington) Younger, Hon Kenneth McLeavy, F. Silverman, S. S. (Nelson) Macpherson, T. (Romford) Simmons, C J TELLERS FOR THE NOES: Mainwaring, W H Skinnard, F W Mr. Snow and Mr. Wilkins. Mann, Mrs. J. Smith, C. (Colchester)
Bill reported with Amendments; as amended (in the Standing Committee and on recommittal) considered.
The Clerk at the Table informed the House of the unavoidable absence of Mr. SPEAKER from the remainder of this day's Sitting.
Whereupon Mr. BEAUMONT, the DEPUTY-CHAIRMAN, took the Chair as DEPUTY-SPEAKER, pursuant to the Standing Order.
NEW CLAUSE.—(Transfer of proceedings from England to Scotland and Scotland to England.)
(1) It, at any stage in any proceedings before the arbitration tribunal which would not otherwise fall to be treated as Scottish proceedings, the tribunal are satisfied that, by reason of the fact that questions of Scottish Law arise, or for any other reason, the proceedings ought thereafter to be treated as Scottish proceedings, the tribunal may order that they shall thereafter be so treated, and the provisions of this Part of this Act shall have effect accordingly.
(2) If at any stage in any proceedings before the arbitration tribunal which would otherwise be treated as Scottish proceedings, the tribunal are satisfied that, by reason of the fact that questions of English law arise or for any other reason, the proceedings ought no longer to be treated as Scottish proceedings, they may make an order that the proceedings shall thereafter not be treated as Scottish proceedings and the provisions of this Part of this Act shall have effect accordingly.—[ The Solicitor-General. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
Hon. Members will have in mind that in many Clauses it is provided that questions of dispute have to be decided by arbitration. The arbitration provisions are set out in Clauses 60 and 61, and during the Committee stage discussions it was represented that where questions of Scottish law arise, the proceedings should be tried in Scotland. At the moment Clause 60 (5) provides that the proceedings should take place in Scotland where the principal place of business of the body concerned is in Scotland. We have put down this new Clause to give effect to the proposals which were made by the Opposition that there should be another ground of removal to Scotland, namely, when questions primarily of Scottish law are involved.
The effect of the Clause, taken in conjunction with certain other Amendments which appear later on the Order Paper and which I hope will be selected, will be that if during the course of proceedings, or before proceedings are begun, it becomes apparent that the question really is one of Scottish, as distinct from English law, the tribunal can sit in Scotland. Furthermore, if the proceedings have actually begun, the proceedings can, if the tribunal so decides, continue in England. Hon. Members will bear in mind that it might be extremely inconvenient, if proceedings have already gone some length before it becomes apparent that Scottish law is primarily involved, to discontinue them and begin again in Scotland.
9.0 p.m.
We welcome the new Clause and we are grateful to the Solicitor-General for commending it to the House and for his statement, which is, I think, in accordance with the memory of all of us on the Committee, that the Clause was requested by hon. and right hon. Members from this side. The grounds which he gave were discussed at some length in Committee, and I do not think it is necessary to cover them again. I think it will be for the convenience for litigants in either country that this further procedure is allowed for. As a former holder of the Great Seal, and in that respect head of the legal system of Scotland, and in that respect occupying a position somewhat slightly analogous to that of the Lord Chancellor in England, I can only say that I am glad to have had the opportunity of maintaining in every way the security and integrity of our ancient Scottish legal system.
I welcome this interesting and curious new "Clause. It is rare to see a new Clause added to a Bill at this stage to rectify two fundamental mistakes. First, it is possible that under this new Clause certain things can be segregated as purely Scottish law and, secondly, it is clear that others can be segregated as being purely English law. It has come to my notice in listening to the proceedings that this was never inserted in the original Bill, and if it had not been for the intelligence and diligence of the Opposition this mistake might easily have led to a lot of litigation. I congratulate, if I may—[HON. MEMBERS: "Hear, hear."] I congratulate the Government most sincerely—if hon. Members like that better—on having found this out. May I make one request to the Government, that they represent to the Lord President of the Council that His Majesty's Ministers would be completely incapable of carrying on except for His Majesty's Opposition.
I welcome this new Clause though the Solicitor-General might have pointed out that its putative father is the hon. Member for Northwich (Mr. J. Foster). I should like to ask him how it is to be fitted into the Bill. The right hon. and learned Gentleman referred to other Amendments on the Order paper, but there does not appear to be an Amendment affecting Subsection (5) of Clause 60. If that Clause remains in the Bill, and is to be read with this new Clause, it will mean that in cases where this Clause will have to be invoked in order to secure a tribunal after the hearing of proceedings in accordance with English law, none the less, if the principal place of business of the company concerned is in Scotland, it will have to start there and then be transferred under this Clause. It seems to me that there are some loose ends which require tying up, and in case I have misapprehended the interaction of these two Clauses, I should be grateful if it could be explained how they dovetail in, or whether that aspect of the matter has inadvertently been overlooked.
The new Clause provides that in certain eventualities proceedings are being treated as Scottish proceedings. On page 3582 of the Order Paper there is an Amendment to Clause 60, line 38, page 73, which contains the necessary tie-up. It provides that the proceedings shall be treated as Scottish proceedings, and subsequent Amendments to Clause 61 provide what is to happen when proceedings are treated as Scottish proceedings. Subsequent Amendments appear further down on the Order Paper, and the hon. Gentleman will see that, read together, once proceedings have to be treated as Scottish proceedings, all the necessary consequences follow.
I am much obliged.
I am not quite sure that the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) has not been too grateful to the Government for this alleged concession to Scotland. According to the new Clause, the arbitration tribunal will have the power, on legislation affecting the Gas Bill, to say whether it is to be decided according to Scottish law or English law. Scottish Members should ask that Scotland should have an absolute right that matters affecting Scotland should be decided according to Scottish law and not be subject to the decision of this arbitration tribunal. Many of us know that English law is in many ways not so fair as Scottish law. [HON. MEMBERS: "Oh."]. If hon. Members had been accused of libel under English law as I have been, they would understand. In this Bill Scotland is defined as an area, but in Scotland there is a very genuine fear that when this Measure comes into operation the Scottish gas industry will not be controlled in Scotland, but that there will be what is dreaded very much in Scotland, remote bureaucratic control from London. This point needs to be very carefully watched in all this legislation on gas, coal, and electricity. We need to watch very carefully the tendency to over-centralise administration in London. The gas industry in Scotland could be an independent unit largely operating independently of Whitehall.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
NEW CLAUSE.—(Restricted application of Companies Act,1947.)
(1) In this Section,—
(a) the expressions "holding company" and "subsidiary" have the meanings assigned to them respectively by Section eighteen of the Companies Act, 1947;
(b) the expression "group accounts" has the meaning assigned to it by Section fourteen of the Companies Act, 1947.
(2) The provisions of the Companies Act, 1947, in relation to the preparation and submission of group accounts by a holding company and to the annexation to the balance sheet of a holding company of statements relating to its subsidiaries shall not, in respect of any financial year or other period ending before the thirtieth day of June, nineteen hundred and forty-nine, apply,—
( a ) to any gas holding company, statutory undertaker or non-statutory undertaker; or
( b ) to a holding company, so far as such provisions would relate to any subsidiary which is a gas holding company, statutory undertaker or non-statutory undertaker.
(3) No undertaker to which Part II of this Act applies shall, without the consent of the Minister, alter the financial year in force immediately before the passing of this Act.—[ Sir H. Lucas-Tooth. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This is a somewhat technical matter and is concerned mainly with the form of accounts of certain of the undertakings which are being nationalised by this Bill. As far as I am aware, it has no financial application, but is purely an accountancy matter. The Companies Act, 1947, is to be re-enacted shortly and there are complicated provisions to be complied with regarding the accounts of holding companies and their subsidiaries. There are two Sections which are relevant to this new Clause. Section 14 of the Companies Act, 1947, requires consolidated balance sheets and profit and loss accounts where there is a system of a holding company and subsidiaries. That question would apply to gas holding companies and also to certain other companies which are not affected in the same way by this Bill, where some of those subsidiaries might be gas companies, which are directly affected by this Bill. Section 17 of the Companies Act requires that the financial year of the subsidiaries shall coincide with the financial year of the holding companies, unless there are good reasons to the contrary.
If consolidated balance-sheets, and so forth, are not complied with, as they need not necessarily be under the Act, then a number of other provisions come into operation, in particular a number of statements, which would require a certain amount of time and trouble on the part of the company to prepare and submit, I think it is, to the Board of Trade. With regard to gas holding companies, at the present time I understand it is very often the case that their financial years do not coincide with the financial years of their subsidiaries. Therefore, if the Act were to be complied with, there would have to be a very great deal of accounting all virtually to no effect whatever, because the gas holding companies and their subsidiaries will fade out of existence as soon as this Bill comes into operation.
The purpose of this new Clause is to avoid unnecessary complications by making the provisions of the Companies Act, 1947, inapplicable to the undertakings which are being taken over by this Bill. Again, this Bill gives a definition of "financial year" which would be at cross purposes with the provisions of the Companies Act, and the provision with regard to the financial year for the purpose of this Bill does not permit of a change. Further, there would be other complications. The sliding scale companies, I understand, would be in immense difficulties in complying with the provisions of the Companies Act. Statutory companies are compelled by law to keep their accounts in a form which is at variance with the form required in the case of companies registered under the Companies Act. There would be great complication where there is a system of holding companies and subsidiaries, some being Statutory companies and others being registered under the Companies Act.
I think I have said enough to indicate to the House that there are a great number of complications which would arise, if, in fact, we compelled these particular undertakings to comply with the provisions of the Companies Act. Those provisions are perfectly sound in themselves, but they do involve the expenditure of a great deal of labour and trouble that would be virtually wasted, because by the time the new provisions came into force the companies would cease to exist. Therefore, we think the best thing to do is to take the Companies Act right out of the picture, and that is the purpose of this Clause.
I beg to second the Motion.
It has been so ably presented by my hon. Friend the Member for South Hendon (Sir H. Lucas-Tooth) that, in order to expedite the business, I second it formally so that we may hear what the Government have to say about it.
We on this side of the House accept the general burden of the argument to which we have just listened. It would involve a great deal of unnecessary labour if gas holding companies, and other gas companies which are scheduled to be dissolved, should be required to prepare the groups of accounts required by Section 14 of the Companies Act of 1947. Therefore, we are prepared to meet the substance of the arguments put forward.
The matter is one of considerable complication, and so is the requisite drafting. There are some defects in the Clause on the Order Paper. For example, there is already in the Bill a definition of a holding company, and it would clearly, as a matter of drafting, not be appropriate simply to repeat that definition. There are other technical matters which would require to be considered, but if the hon. Gentleman who moved the Clause would ask leave to withdraw it, we would undertake to put down a Clause at a later stage which would meet the substance of his points. I can inform him that an alternative Clause is in process of being drafted, but it is one which requires a great deal of consideration.
9.15 p.m.
I am grateful to the hon. —indeed, the almost immediately right hon.—and learned Gentleman the Solicitor-General for what he said. I would not like anyone in this House to agree to any light departure from the Companies Act, 1947. That is an excellent Act. It is probably the only good Act produced in the present Parliament. There was never any real controversy about it. The Chancellor of the Exchequer, many Members of my party, and myself, worked in perfect amity to create that Act. It went through the House of Commons far more speedily than the wretched Bill we are now discussing, and I think that the Chancellor would agree with me that we held it to be a great reform. Of course, the Solicitor-General played a very considerable part in the creation of that Act. I think he would agree that it would be wrong of us to make any lighthearted exceptions to that Act. This new Clause is perfectly sensible. A lot of these conditions are passing out of existence and, therefore, should not bear the rigours of what we used to call, "Cohen "—which is another name for the Companies Act.
It will require a great deal of thought and ingenuity to fulfil the desire we ex press in this Clause. We are perfectly happy to leave it with the Government to find a solution. We wish them well in their work. I think it will be what one might call craggy work. Nevertheless, our goodwill is a great help to any Government.[ Interruption. ] Hon. Gentlemen opposite should not laugh at these self-compliments, if I may put it that way. It is probable that we shall be sitting in this House at nine or ten o'clock in the morning. Thoughtless laughter simply adds to our labours. The Minister and I are most anxious to get on with the Bill.
In view of what the Solicitor-General has said, I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.
NEW CLAUSE.—(Consumers councils.)
(1) The Industrial Coal Consumers Council and the Domestic Coal Consumers Council established under the Coal Industry Nationalisation Act, 1946, shall, in addition to the duties mentioned in that Act, be charged with the duties of considering any matter affecting the sale or supply by Area Boards of coke, breeze or manufactured fuel (in the case of the Industrial Coal Consumers Council) for industrial purposes or other purposes involving supply in bulk, and (in the case of the Domestic Coal Consumers Council) for domestic purposes or other non-industrial purposes not involving supply in bulk, being a matter which is the subject of a representation made to them by consumers or purchasers of such coke, breeze or manufactured fuel, or which appears to them to be a matter to which consideration ought to be given, apart from any such representation, and, where action appears to them to be requisite as to any such matter, notifying their conclusions to the Minister.
(2) On the notification or making to the Minister by either of the said Councils of their conclusions or report on any matter, if it appears to him, after consultation with the Area Board concerned and with the Council concerned that a defect is disclosed in that Board's general arrangements for the production, sale or supply of coke, breeze or manufactured fuel, he may give to that Board such directions as he may think requisite for remedying the defect, and the Board shall give effect to any such directions.
(3) Subsection (10) of Section 4 of the Coal Industry Nationalisation Act, 1946, shall have effect as though the duties referred to therein included the duties imposed by this Section.— [ Mr. P. Roberts. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
The object of this new Clause is to deal with complaints about coke, breeze, briquettes and other manufactured fuel which come from the gas industry, and also with complaints which may be made against the area boards. When this matter was raised in Committee upstairs it was pointed out by the Minister that at the moment these complaints were being referred to the Coal Consumers' Council, domestic and industrial, and that they were dealing with them. He said:
If the Minister is inclined to consider this suggestion favourably, perhaps he would like to consider another point which does not appear in this Amendment. Section 4 (2) of the Coal Industry Nationalisation Act states: Obviously, those persons are to represent the Coal Board. I ask him to consider whether it might be possible to put upon these councils representatives of either the Gas Council or the area boards, so that when these complaints are advanced to these bodies there will be present people who represent not only the Coal Board but also the gas industry. I do not think that idea is embodied in the present new Clause, but I hope he will bear it in mind. I hope the Minister will look favourably upon this new Clause and accept it in toto or at least accept the principle behind it.
I beg to second the Motion.
As the hon. Member for Ecclesall (Mr. P. Roberts) pointed out, the difficulty in this matter of coke arises from the fact that the consumers' councils set up under the Coal Industry Nationalisation Act are already dealing with coke, and, therefore, I think he would agree that Subsections (1) and (3) of the New Clause are in any case redundant. The only possible addition which these subsections makes to the existing words in the Coal Industry Nationalisation Act is the word "breeze." I am advised that, although nowhere defined, breeze means small coke or coke dust, and it may be said to fall within the description of coke, which, of course, is mentioned together with manufactured fuel and coal in the terms of reference of the coal consumers' councils set up under the Coal Industry Nationalisation Act.
The more important point which is raised in the New Clause is contained in Subsection (2), which provides that the Minister, in certain circumstances, can issue directions to the area board if there is a defect in their general plans and arrangements connected with coke. I agree that, on grounds of pure symmetry, there may be something to be said for this part of the New Clause. I am advised, however, that there is no question of the Minister not being able to give directions to the area boards should such a defect in their plans or arrangement for the disposal of coke appear to him to exist. He can do that under Clause 7, which gives him power to give general directions on matters concerning the national interest, and I think therefore that this subsection (2) is really unnecessary.
The hon. Member also asked me whether I would consider appointing members of the Gas Boards to the coal consumers' councils. There are already representatives of the gas industry on these councils. On the industrial coal consumers' council, there is a distinguished gas engineer—Mr. Chester, who is, I think, managing director or general manager of the Swindon Gas Company, while Mr. Cooke, of the London and Counties Coke Association, is a member of the domestic coal consumers council, so that liaison does exist. I readily agree that it will be necessary, when the consultative councils are set up, for something rather closer than exists at the moment between them, on the one side, and the coal consumers' council on the other.
In my view the new Clause is unnecessary; certainly Subsections (1) and (3), are not necessary. In regard to Subsection (2) I am prepared to give an assurance that, should the kind of situation arise which was envisaged—namely, a defect in the plans and arrangements of the area boards for supplying gas—I would consider adopting exactly the same procedure as I have specific powers to take under the other Clauses of the Bill. I hope that, with that assurance, we may proceed.
I am sure that hon. Members on all sides are grateful to my hon. Friend the Member for Ecclesall (Sir P. Roberts) for his constructive speech. It is only too true that the consumers' councils are the public's last foundation of hope for warmth and solvency, and I do not think any one will deny that the National Coal Board, in relation to the gas industry, is an immense and costly bruiser. I have told the Minister many times that the Coal Board, out of its greed, is determined to grab coke, and, if it can, it will grab many other things from the gas industry. For instance, the great chemical developments from the gas industry may easily be frustrated by the appetite of the Coal Board.
9.30 p.m.
Of course, we on this side are most anxious to strengthen the Gas Council against the Coal Board. The Minister's assurance is good in parts. I think, partly because he has the advantage of having an academic mind—which one must not jeer at; it is one of the most useful minds in this country—the Minister is likely probably to stand up quite strongly against the inexorable pressure put upon him by the miners' union, but of course if a nominee appointed by Mr. Horner were in his present office I should be very sorry indeed for the gas industry.
I wish I could wholeheartedly accept the Minister's assurance but, of course, it is extremely limited. It reminded me of assurances I have heard in the past, from a very distinguished Lord Chancellor, who might be called of a Liberal persuasion, and who has been making some speeches on hanging—Lord Simon; distinguished but with an economy of words occasionally which jars on simple souls like my hon. Friend and myself. The Minister took a very Simon-like line tonight. It was probably a good thing he did from the Government's point of view. Although in a way I should like to suggest to my hon. Friends that we vote on this Clause, nevertheless, as I know we shall see the dawn in this House, it is more merciful and sensible to accept the extremely cautious and limited assurance given by the Minister.
I would ask leave to put one point to the Minister. He said he had powers under Clause 7 (1) but I must point out that these powers are dealing with what
"appear to the Minister to be requisite in the national interest.''
I venture to suggest it would be a little difficult if he gets a complaint from the housewife
I thought the hon. Member was going to ask a Question. He seems to be making another speech.
I did ask the leave of the House, Sir. It is a very short point. It would be a little difficult if a small housewife or a small consumer brings forward a complaint for him to say that is "in the national interest." The only other small point is, of course, that the people who are on these councils and whom he mentions represent gas consumers. I was pointing out that, of course, people representing the Coal Board are on this. It may be useful to have representatives of the gas industry.
In reply to those points, the representatives on the coal consumers councils are representative of the gas industry, not of gas consumers. The gas industry is the coal consumer. On the first point, I think the new Clause proposes that the Minister should have power to give directions if he is satisfied
"that a defect is disclosed in a Board's general arrangements for the production "
and so on. That, I am advised, certainly brings it within the scope of Clause 7.
In the circumstances, I beg to ask leave to withdraw the new Clause.
Motion, and Clause, by leave, withdrawn.
CLAUSE I.—(Establishment and general functions of area boards.)
I beg to move, in page 2, line 4, at the end, to insert:
I should like to quote two opinions which would seem to show that many people consider that in the case of gas a duty should definitely be placed upon the boards to do more than develop and maintain the gas services. These opinions are that there should be an extension of activity. That, I am sure, all sides of the House will agree is desirable. The first of these is contained in the Heyworth Report, in paragraph 247, where these words appear: That is very different from the wording at present in this Clause, where there is nothing approaching the meaning of the words "maximum development." We want to see that duty placed fairly and squarely on these boards, so that there can be no case in the future for them to say, if they fail to extend their services, "We had no duty so to do." The second opinion I would pray in aid is contained in a certain research pamphlet which is called, "Fuel and Power: a study in industrial organisation and control." It is published by the Fabian Society. They say that they consider that these regional units which are being set up now
I represent a rural constituency, and, therefore, in moving this Amendment. I am thinking particularly of the rural areas. It is important that gas facilities, where necessary, should be extended in the towns, but, on the whole, the need is very much greater in the rural areas. It is there that we want to be quite sure, too, that the gas boards will do their duty. The advocates of gas nationalisation have not hesitated in the past to say that one of the advantages of nationalisation would be that the towns would come to the rescue of the country districts and that the country districts would be subsidised, as it were, at the expense of the towns. I want to ask the Minister specifically whether that is to be his policy or not. Is it to be the policy to extend gas in the country districts, at a loss if necessary, or is it not? I should like to have a specific answer to that question.
I commend this Amendment to the Minister. I am quite certain that the words used in the Clause at present are not nearly strong enough, and if he will not accept our words, I hope that, after reflection, he has found other words which will place that task fairly and specifically upon the area boards.
I beg to second the Amendment.
I do so on two specific grounds. The first is that earlier this afternoon the Minister got a great deal of assets at a very cheap rate. He took over something like £90 million worth of assets for a discount of only £50 million. I think that he has ample reserves out of which he can undertake the purpose of this Amendment, which is development of the supply of gas in the rural areas. The Clause does not go far enough. We understand that the nationalised gas industry is going to spread its wings over a wide area both urban and rural. I think that the Amendment ought to be accepted by the Minister because he is starting off on a first-class wicket. He is taking over the assets of the local authorities and paying very little compensation for them, which will give him ample funds to develop in the direction we suggest. The Amendment asks for what the country has expected and has been promised of a nationalised gas industry. If the Minister does not accept the Amendment, I am afraid that part of that promise will not be fulfilled. I feel that in the circumstances the Minister ought wholeheartedly to accept this development, and say quite frankly to the country, "This is our intention and this is what we are going to do."
I support the Amendment. I, too, represent an agricultural constituency. On all sides we are told that we must have more rural electrification. It is very often forgotten that gas can take the place of electricity just as efficiently and just as easily in many cases, and even more efficiently in some cases. There are certain deficiencies about electricity which anyone living in South-East England 10 days ago fully recognised. That was underlined the other night, when the Chancellor of the Exchequer was prepared to take the Purchase Tax off gas appliances while leaving it on electrical appliances. I think that there are definite reasons for adopting gas in certain cases.
It is not always recognised that in the country there are very few things for which electrical power can be used for which gas cannot be used as easily and even more cheaply. Everyone knows what a reliable fuel it is and the amount of labour that it saves. Everyone knows that the difficulty of getting agricultural workers today is, a very real one. Milk production is one of the aspects of the agricultural policy which the party opposite most accentuates, and it would be helped very much by a supply of gas for the cleaning and sterilising of bottles and in lighting the cowsheds. A supply of gas in the workers' homes will help in that it will enable the milker, before starting out, as he often does, at five o'clock in the morning, to get a cup of tea quickly. Gas can also be used for the working of milking machines, just as electricity is used; it can be used in grass drying, and in a great number of other agricultural operations, just as easily as electricity.
9.45 p.m.
We are not satisfied that the Government, having taken over the industry, will continue to increase the distribution of gas in rural areas, as has been done under private enterprise in the past. We are rather afraid that the bias may be in favour of electricity which, in many ways, is more expensive, certainly less reliable, and less flexible in use. I hope the Minister will pay some regard to this Amendment, and will give us an assurance that the distribution of gas in rural areas will be extended. I would remind him of the plans made between the electrical companies and the National Farmers' Union in the extension of electricity. I hope he will work out something of the same sort for gas, which will be a real blessing to the countryside.
The short purpose of this Amendment is to add a third paragraph to this Subsection. We already have paragraphs ( a ) and ( b ); but this Amendment, if accepted, would come in as paragraph ( b ), and the present paragraph ( b ) will come in as paragraph ( c ). That is not an emphasis of the obvious; it has great relevance, because there is a well known principle in drafting Bills of this kind that inclusio unius does lead to exclusio alterius. If there were no paragraphs ( a ) and ( b ), I think it would be open to the Minister to argue that by introducing an extra paragraph we were not adding to the duties imposed on area boards but were, in fact, detracting from them; and that although we appeared to add to them we were, in fact, diminishing them. Since there are already two paragraphs there, that cannot be the case.
What we want to do is to place upon area boards this third duty, because it is this Clause which constitutes their terms of remit and their charter of action in giving a national service in their particular area. I represent the City of Bath. I should not like to pretend that that is a rural area; but on the other hand, the very essence of the success of the Bath Gas Company has been the extent to which it has pushed out its lines of supply to the whole surrounding area. In going to places like Chippenham, Melksham, Devizes and so on, it has developed a considerable load in the surrounding rural areas. That expansion has not only benefited the rural areas to which that gas has been supplied, but it has also been of benefit to Bath itself by reducing the price of gas. It is a case like charity which blesses him who gives and him who receives.
For that reason it is very important that development into rural areas should be kept carefully in mind, and that Members who represent urban constituencies should not think that in this we are in any way requiring any sacrifice from them. I deprecate the statement which has been made, that this in any way represents a subsidy by the urban areas of the rural areas. That is not the case. Expansion of the gas industry in the rural areas is going to benefit the towns as much as the surrounding rural districts.
I should like to make clear the point that we are all the victims of our environment. When we draft a Bill for this great industry at a time of restriction, it is very easy for us, in our appreciation that steel pipes, retort houses, gasholders and everything else are extraordinarily difficult to obtain, to import into everything we do a restrictive attitude towards expansion. Therefore, it is all the more important that at this time we should watch very carefully to see that we do not import into this Bill that environment of today, and that we should enable area boards to embark on expansions in future. Expansion is of very great importance, because if there is one thing the gas industry has been working towards, it has been towards expansion and integration up to the 10 million therm limit. If hon. Members care to read the Report of Sir Geoffrey Heyworth, they will see that he has very carefully worked out what was known and practised in the gas industry, that up to the optimum level of production of 10 million therms per annum, there is greater and greater efficiency as you add units of production. This expansion has been going on for years and years, and it is tremendously important that it should persist and continue under this Bill, as under private enterprise in the past.
It is for that reason that we are asking the Minister to include in the Bill the specific requirement on the area boards that they are to take cognisance of expansion. From what I have studied in the field of Organisation and Method there is one lesson that is laid down, and that is that any body which is given a responsible job should have a clear definition of its terms as to power and as to responsibility, and what we are seeking here is to make it quite clear to the area boards that they do have a responsibility—and an important responsibility—to expand their undertakings along these lines, particularly into rural areas. If I may say so, the Bill as at present drafted is static; that is to say, in Subsections ( a ) and ( b ) the whole of the emphasis is on development of existing supply and on maintenance. In other words, all that the new undertakers are being asked to do is to take coal and turn it into gas, maintaining it on that basis. What we are asking is that this additional Subsection should be introduced and that this specific duty should be laid on them to expand and develop in rural areas.
We all know of the famous pamphlet, "Let us Face the Future." That is what we are asking the Minister to do in this particular case. Let us face a happier future when possibly we shall get the retort houses and the coal in the quality and quantity suitable for gas production, and not slate and ashes, which are extremely wasteful and deleterious to the retort houses of this country. Let us look forward to a time when we can lay those pipes all over England and bring expansion to these wonderful undertakings that we are inheriting from private enterprise. Let us face the future and give the area boards, which are to carry on as the heirs of private enterprise, a specific remit to do the job for the rural areas on an ever-expanding basis.
I do not know whether the Minister is interested in this Amendment or not, but malicious propaganda has been carried on in this country by the Members of the Tory Party against nationalisation; yet in this Amendment and in the speeches which have been delivered in connection with it I have heard the greatest possible testimony to nationalisation. The hon. Member for Western Dorset (Mr. Digby) is a Tory, and he would say he is proud of his folly, but he expressed in the most emphatic manner the belief that through nationalisation, something will be done which he has long desired and which he never hoped would be done while the industry was in private hands.
For a century and a half there have been gasworks in this country which have been controlled by private enterprise, and they would have been in private hands for another century and a half and the rural areas would not have got the gas which now they will get under nationalisation, which means justice for all. On that basis of justice for all, the nationalised industry will now do what private enterprise would never have done, which is get to the poor people in the rural areas gas heating and gas lighting. A happy future for these people will come only when the people own their own property.
A good way to prolong our proceedings is for hon. Members opposite to make speeches like that of the hon. Member for West Fife (Mr. Gallacher). [ Interruption. ] It is quite understood by the Minister that those followers of his who are behind him now, say they do not mind to what hour we sit here. Let me begin by saying to the hon. Member for West Fife that the tremendous aesthetic sermon which he has just delivered might well be sent to the 20 million or 30 million freezing slaves in Russia.
10.0 p.m.
They are sweating there; it is Summer time.
If the hon. Gentleman will go to his spiritual home in Siberia, he will find it cold.
Yours is in Wall Street.
The right hon. Gentleman seems to have started on a rather dangerous subject. May I suggest that we get back to the Amendment.
There are times when, as Sir Walter Scott said, one must brave bad weather as well as bear it. I want to turn to the Amendment. It certainly was a bracing Amendment. I think that the speech of my hon. Friend the Member for West Dorset (Mr. Digby) was one of the best speeches of its kind I have heard in this House. First of all, it had the merit of being short; secondly, it had the merit of being highly constructive; and, thirdly, my hon. Friend stressed a point of great importance to this country, which is that a really vigorous policy of development is essential to the future of the gas industry and, indeed, of all British industries.
Hon. Friends of mine have cruelly reminded hon. Members opposite of the lush promises of aspiring Socialists out of office, and they say that they are feebly reflected in the bleak language of this Bill. I do not go as far as my hon. Friends, because it is very difficult for Parliamentary draftsmen to incorporate platform promises in Acts of Parliament. Most of the Acts with which we have to deal at the moment are complicated, but if election promises had to be enshrined in Acts of Parliament most of our draftsmen would put their heads in gas ovens.
I have said before that a policy of expansion is necessary not only to the gas industry but to all British industry. I go further and say that it is our only real hope of survival. It is, indeed, highly important that gas should be extended not merely to rural areas, as we suggest in our Amendment, but also to urban areas. Hon. Gentlemen opposite probably know that since 1939 gas has become a prime favourite with industrial producers. People who use great industrial plants have found that on the whole gas is probably the cheapest and most efficient form of power. That development is of very great importance. The gas industry has seen it.
The record of the Gas Light and Coke Company, to mention only one, shows quite clearly the enormous part that gas will play in the future of British industry.
I think that from the point of view of power, gas is preferable in every way to electricity, and I think that hon. Members who come from coalmining constituencies will agree with me that it is much better if possible to use the gas as power than to burn coal, thereby destroying most of the by-products of England's greatest asset, which still is coal. Therefore, it is of high importance that the Government should accept our Amendment.
Extension means, or ought to mean, a reduction in production costs. For my sins, I have been round the world, so to, speak, in the last 15 or 20 days, and I saw with infinite regret signs that we are pricing ourselves out of large numbers of our most important markets abroad. One of the reasons why we are pricing ourselves out of those markets is the high cost of fuel. Do not let us argue the reasons at this moment; let us remember that fuel and transport costs play an immense part in our export industries. I hope—I do not say I believe—that this folly will be checked now, and one of the best ways of making a beginning to the process of cutting costs will be to accept the Amendment.
My hon. Friend the Member for Bath (Mr. Pitman) quite rightly said that we ought to try to bring abundance back to Britain. We ought, and this Amendment is a great encouragement to people who hold this view. I beg the House to remember that unless we adopt a really active policy of expansion in the next few years, the future of Britain——
Why has it not been done before?
If the hon. Gentleman wants to interrupt, perhaps he would have the manners to get up. The medical adviser to a trade union should remember that courtesy is a part of medicine, but his bedside manner is the least attractive part of him. However, I do not want to get involved in an argument with my former constituent, I want to get back to much more serious matters. I hope the Government will accept this Amendment. Honestly, I believe that unless we adopt a policy of expansion in the next few years, the country is doomed. Nobody will be forced to buy our export trade and we are pricing ourselves out of many of our important markets. The only way to deal with this is to do everything we can to extend industry and trade in every respect and, above all, to try to cut the cost of fuel by scientific experiments and by the extension of an industry like gas to every industrialist who needs it in this country, and to many more homes. It is for that reason that I commend this quite uncontroversial Amendment to the Government.
There is not any party point in this. I should have thought we would all have been agreed that this Amendment was excellent. It may, of course, strike some people as being rather a bromide. It is not; it is a genuine attempt to bring home to the Gas Council the fact that when the industry is nationalised, it will be expected of them that they must show the greatest possible liveliness, and that they must adopt resolutely and intelligently a policy of expansion.
This Amendment really raises the question whether we have formulated in appropriate language the duty which we seek to impose upon the area boards. As I view it, it really is a question of language rather than of policy. I do not think the House is in any discord as to what we are trying to describe in the language that we use. This Amendment was put down on the Committee stage, it was then considered, and the Minister replied to the arguments adduced in support of it. In his speech in reply, he formulated what was the end we were seeking to attain by these words. If I might have the permission of the House to do so, I would like for a moment to remind the House of what he said. [HON MEMBERS: "Hear, hear."] He promised consideration, and these are the words he used:
The difficulties of drafting are exemplified in the language chosen in the Amendment. My right hon. Friend has most carefully considered whether we can improve on the drafting in the Bill. I am bound to say, for reasons I will give, that I do not think the language in the Amendment improves on the language we have adopted. The Amendment says it is to be the duty of the boards: rural areas"? Would it really compass what we have in mind to say to the area boards, "You are to extend supplies of gas to persons requiring such supplies in rural arears?" The difficulty I feel about that, as a matter of drafting, is that it would seem that by so doing we were placing on the area boards, never mind what it cost and however uneconomic it may be in particular cases and particular areas, a duty which they cannot escape, to supply gas in all those areas. I do not believe that is what we want to do.
My right hon. Friend expressed what I believe is the common desire in this matter. If we use the words "in rural areas" alone we would be putting on area boards a burden which I am certain the hon. Member for Bath (Mr. Pitman) would not seek to put upon them. It would mean that we were forcing them, never mind the cost and never mind how ruinous financially, nevertheless to see that rural areas were fully supplied with gas.
If that argument applies, does it mean they must maintain, regardless of cost?
They are under the duty to develop and maintain an efficient and co-ordinated gas industry. That is what we want them to do and that is what they have to do. That is the duty we are imposing upon them, but the question is whether, by adding the word "rural" and leaving out the word "urban," we shall make that duty rather lopsided. That would be saying, "Never mind how much you have to take away from the urban areas and how much you are diverting supplies to rural areas, nor how much other areas would suffer, you have to do it." That would be the result of using the words "in rural areas" alone.
10.15 p.m.
If I am right so far, what does the rest of the Amendment add to what we have already said. It is: the industry which means to extend it, to make it larger, more capacious, and more able to serve the national need; to maintain it so that it functions as efficiently as it does now and in such a way that it is co-ordinated economically —in other words, to bring it into one whole plan for the supply of gas throughout the British Isles.
The view I take—and my right hon. Friend has carefully considered this question and the undertaking he gave to the Committee—is that the Amendment does not add anything. In the language we have chosen, we have adequately and accurately described what the area boards are to do. I hope the House will agree that there is no point in adding the words of the Amendment and that if we did so we should obscure the language which we have already used. For those general reasons, I hope the House will not accept the Amendment.
(Weston-super-Mare): The Solicitor-General has stressed the point about efficiency. I think everyone is agreed on that. But quite clearly it is easier to develop efficiency with a concentrated load when one is dealing with gas than with any other form of fuel. If efficient development depends therefore on the concentrated load, the position of the areas in the countryside is very grim indeed. Could he give us some word of encouragement to lead us to believe that, wherever possible, extensions will be laid into rural areas.
I think that is clearly defined in the words we have used:
"to develop and maintain an efficient, coordinated and economical system."
It will be extended so far as it can be extended in a generally sound plan.
One of the difficulties is that under the wording of the Bill rural areas would not have a fair development. The words "rural areas" are put in, with the word "rural" mentioned, because that is one of the great grounds that private enterprise is supposed to have left undeveloped.
We are talking about a supply for the whole of the country, and in relation to that supply we use the word "co-ordinated."
In view of the assurances given by the right hon. and learned Gentleman, in particular to the meaning he attaches to the word "develop," I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 2, line 6, at the end to insert:
"( c ) to develop and maintain efficient methods of recovering by-products obtained in the process of manufacturing gas."
It may be convenient if I speak on the three Amendments which follow in lines 29 and 42. These Amendments arise out of undertakings given in Committee. Hon. Members opposite, who were on that Committee will be well aware of the discussion that took place. My right hon. Friend gave an assurance on this matter. We have used rather different words than those suggested by hon. Members opposite, but the Amendment conveys the same meaning. The second Amendment, in line 29, refers to plant. The hon. Member for Bath (Mr. Pitman) raised this point. I undertook to look at the suggestion. I think I said that I felt that the Clause as worded met the situation, but that if it was found that the hon. Member's interpretation was correct we would make the necessary alteration. In accordance with that assurance, we are making the alteration here. The two remaining Amendments, in line 42, also arise from assurances given in the Standing Committee. Hon. Members opposite moved an Amendment to include the words:
"Upon such terms and conditions."
This question deals with fringe supplies. I undertook that we would look at the wording generally. We have taken the opportunity not only to include the words suggested by hon. Members opposite but also to re-draft this part of the Clause in much more suitable English.
The Parliamentary Secretary, very rightly, thanked the Opposition for providing such excellent ideas as are enshrined in these Amendments. I think he went a little far when he said that the language used by his draftsmen improved the Amendments. However, one must give some little credit for paternity to the Government. If we provide the ideas, we ought not to object to their claiming the language. I thank the hon. Gentleman and his right hon. Friend for putting down these Amendments. I need not go back to what I said on the Second Reading of this Bill about the absolute necessity of recovering by-products and, indeed, developing out of the gas industry a much larger chemical industry than we have in England at present. We welcome the Amendments and again thank the Government. We very much hope that as the night goes on and as the morning approaches—[ Interruption. ] When I hear that sort of senseless baying from the other side of the House, I am impelled to say that a certain house in the zoo at feeding time is more attractive from the point of view of the auditor. I hope that we shall have many more Amendments accepted in the course of the evening, during the early hours of the morning and before lunch tomorrow.
Amendment agreed to.
Further Amendments made: In page 2, line 29, at end, insert:
"and plant required by the Board or any other area board."
In line 42, leave out "such part of."—[
I beg to move, in page 2, line 42, to leave out from "Board," to the end of line 45, and to insert:
"and the gas council may give an authorisation to supply gas to consumers in such part of the area of that other area board and upon such terms and conditions as may be specified in the authorisation."
I wish to make one point on the question of the by-products which have now been included. I hope that the Parliamentary Secretary will give an assurance that the omission until now of this matter does not mean that in his mind he does not put a great deal of importance upon the development of by-products such as benzole, naphthalene, toluol, pitch tar and ammonia. As my right hon. Friend said, upon this question depends a good deal of the future prosperity of the industry, and the only reason why I intervene at this time is to make certain that the Minister realises the importance of this chemical industry. The impression was left in our minds, particularly on the Committee stage that the Government were not aware of the possibilities which lay in their hands, and I hope this Amendment, of which such a small explanation has been given, does not gloss over the fact that the Government do not fully appreciate the importance of these by-products.
I can give the assurance that we are anxious that the utmost use should be made of these by-products. Obviously, we do not want to put into the Bill the stage at which they should be finished off, but it can be assumed that the importance of their development is fully recognised.
Amendment agreed to.
I beg to move, in page 3, line 5, to leave out from the second "rights," to "which," in line 7.
This Amendment is closely related to the following Amendment to page 3, line 8, and it may be convenient if I explain them together. The hon. Member for North Hendon (Sir H. Lucas-Tooth) in the Committee Stage, raised a rather ingenious argument which seemed to disclose that there was some doubt as to the meaning of the words "their functions" in Subsection (4). "Their functions," as the Bill is drawn, might refer to the functions conferred upon the boards by Subsection (4), and it might refer to functions conferred upon the boards by the preceding Subsection. We agree that there is some ambiguity about it, and we are grateful to the hon. Baronet for pointing it out. By these two Amendments, we seek to remove any ambiguity and to make it plain that the functions concerned are those referred to in any Clauses and Subsections other than Subsection (4).
If the hon. Member for North Hendon (Sir H. Lucas-Tooth) were here, he would be grateful to the Solicitor-General for moving this Amendment. The reason why he is not here is that he has been attending the House all day long, as well as other public duties, and he is human enough to have gone out for a moment to have something to eat. We had a controversy in the Committee between my hon. Friend and the Solicitor-General, and I think it has been resolved now in a sensible fashion. The best thing to do, therefore, is to get on with the Bill and thank the right hon. and learned Gentleman for the labour he has taken to try to satisfy my hon. Friend from Hendon.
Amendment agreed to.
Further Amendments made: In page 3, line 8, leave out "their functions," and insert:
"any functions conferred or imposed on them by any enactment other than this subsection."
In line 19, leave out from "with," to end of line 21, and insert:
"other persons operating coke oven plants in the area of the area board."—[ The Solicitor-General. ]
I beg to move, in page 3, line 24, to leave out the first "and" and insert "(8)."
Perhaps this Amendment could be taken together with the following one, in line 25, as they are connected. They follow from a rather long discussion in the Committee Stage which showed that there was a certain amount of misunderstanding about the Subsection as drafted. In effect, the Amendment divides Subsection (7) into two parts, and distinguishes between that part which deals with the functions of the Area Boards in connection with welfare, etc., and, the other part, which deals with the question of reducing prices and avoiding undue preference. I think it has met the point made by the Opposition.
10.30 p.m.
Much as I should like to speed our business, I am afraid I cannot follow so swiftly in the footsteps of the Minister. I wish to make one comment. I will leave it to the Minister and his officials, but I think a slight technical error has been made. The word "the" is either to be left in or taken out. This Amendment has been put down to meet our desires which were expressed in the Committee upstairs, and again we are grateful to the Minister. My gratitude to the Minister, the Parliamentary Secretary to the Ministry of Food will be glad to hear, is unrationed this evening.
Amendment agreed to.
Further Amendments made: in page 3, line 25, to leave out "this Part," and to insert "section seven.";
In page 3, line 26, after "Act," to insert "every area board."—[ Mr. Gaitskell ]
I beg to move, in page 3, line 29, to leave out "relate," and to insert:
"so far as they confer powers on area boards relate only."
This again is to meet a point which was raised by the hon. Member for Northwich (Mr. John Foster). He pointed out that the words in Subsection (8) of Clause 1 were not wholly satisfactory. They were intended to refer to powers conferred upon the board, but as the language stood, it might be deemed to refer to all the functions which had been described in the previous Subsection as being functions to be exercised by the board. He suggested that the language was not altogether satisfactory. We agreed with him, and we have endeavoured to improve it in the direction which the hon. Member thought desirable by inserting the words of the Amendment.
Again I am grateful to the right hon. and learned Gentleman for accepting an idea put into his mind by my hon. Friend. There is no question that if ever a party deserved credit for improving a Bill it is the party represented by my hon. Friends behind me. Now hon. Members opposite see the good results which come from three and a half months of extensive work upstairs. We are glad to have improved the Bill, although we still think it an extremely bad one. But, for the improvements accepted by the Government, the Lord has made us truly thankful.
Amendment agreed to.
CLAUSE 2.—(Establishment and general functions of Gas Council.)
I beg to move, in page 4, line 18, leave out from second "rights," to "which," in line 20.
Subsection (5) is in terms almost the same as Subsection (4) of Clause I, and it is precisely analogous to it. This Amendment is analogous to the Amendment which we have just made to Subsection (4) of Clause 1, and it can in that sense be described as consequential. It goes closely with the next Amendment, which is in the same sense consequential.
They are, as the Solicitor-General says, rather more analogous than consequential but, again, we agree that the point is good, and we are grateful to the Government for having moved it.
Amendment agreed to.
Further Amendment made: In page 4, line 21, leave out "their functions," and insert:
"any functions conferred or imposed by any enactment other than this Subsection."—[ The Solicitor-General. ]
I beg to move, in page 4, line 24, after "Section," insert:
"so far as they confer powers on the Gas Council."
This, again, is analogous in the same sense as that which we accepted a moment or so ago. It affects almost the same change in Subsection (6) of Clause 2, which is the corresponding provision to Subsection (8) of Clause I.
Amendment agreed to.
CLAUSE 3.—(Research.)
I beg to move, in page 4, line 40, to leave out from "also," to end of line 42, and to insert:
"after consultation with the Gas Council, conduct research into such matters affecting the functions of the Board as are not included in the general programme settled as aforesaid."
This slightly modifies that part of the Bill dealing with research, and makes it clear that the area boards may conduct research by themselves, providing they have previously consulted the Gas Council; that is, research outside that which is laid down in the general programme of the Gas Council.
This was discussed upstairs and it is a happy solution. We think it was anomalous that the whole area of Scotland, which is one so far as the area boards are concerned, should not be entitled to conduct research apart from that resulting from a decision arrived at by the Government, and we agree to the Amendment.
May I ask for information on one point? It says "to ask the permission of," or rather that is the implication. Is the general policy of research to have no central guidance? If these boards are merely to be invited to carry out research, I think there is something we should consider. A great deal of work is done in the initial sections of an industry which overlaps other activities already taking place, and this matter has been raised in other industrial aspects. I hope we can have some assurance in this.
The Bill provides that the Gas Council is centrally in charge of the general programme of research. This Amendment meets the wishes of the Opposition that area boards may conduct research outside this programme.
I can only speak again, Mr. Speaker, by leave of the House. There must be central direction, but if the area boards are to do what is being done elsewhere there may be overlapping; and when something overlaps one uses scissors, but here there may be so much overlapping and so much use of scissors that we may not get anywhere—[ Interruption. ]—It is too silly for hon. Members to think that when purely technical matters of great importance are being discussed, these casual interruptions are going to forward our considerations. When we are working in a business-like manner it is ridiculous that silly cat-callings and interruptions should be made during discussion on a matter of importance to the scientific progress of the country.
Amendment agreed to.
CLAUSE 5.—(Constitution of area boards and Gas Council.)
I beg to move, in page 5, line 26, at the end, to insert:
But this is our old friend "may" and "shall." In the Bill the words say quite clearly "may" in various Clauses, but what we want to do is to make this obligatory so that there shall be appointed to each board at least one worker. I know there has been a good deal of criticism in the past about the various committees and boards on which workers have served. There have been production committees, workers' committees and output committees. It has been said that a worker who has been appointed to a board and who knows his job automatically becomes a manager. But I think the workers have done a good job on the production committees and output committees and that they ought to be given an opportunity to be elected by the industry to these area boards.
Nationalised boards are in their infancy. Whether the omelettes are going to be unscrambled by His Majesty's Opposition, if ever they do become the Government of the day, I cannot say, but there are still nationalised boards and I think many of them are here to stay. There is still on the one side of the industry the management and on the other the worker, and I can understand Socialism, having made these State industries, going on to establish the necessary incentives for production and so on. But I ask my hon. Friends whether we get that in the industries we have handled? I say that we have still, on the one hand, the managements and executives and, on the other hand, the workers. We have to bridge that gap and the first step—and this is an excellent opportunity—is by appointing workers to the area boards.
10.45 p.m.
It has been said that the workers are not fitted to take seats on the boards. My experience is that that is not true. I want to say this to the Government: I believe that the whole technique on these nationalised boards, the control, direction, and administration of the industries is something which has to be studied by everyone irrespective of party. We have to find out the right technique. We have the London Passenger Transport Board and the Metropolitan Water Board, but we are in the stage of experimentation and we ought to take it out of politics.
I should like to see a number of chairs at provincial universities endowed for this purpose. I see, according to the Press, that it is suggested that the right hon. Gentleman the Chancellor of the Duchy is going to conduct a specialised study of nationalised industries. This is an opportunity to endow chairs at provincial universities for the study of the technique of nationalised management and to give the workers the fullest opportunity to acquire the knowledge of this new technique and to take their full place on the area boards. The essential problem the Government will find in this Bill is how to get over this hurdle, and the problem of incentive. I believe it would be a step forward if the Government would insert this Amendment and I hope they will accept it.
Exactly what does the hon. Member for Eye (Mr. Granville) mean by the word "worker"? He may remember that we had some difficulty in defining "officer." I think it would help the Committee if we knew exactly what is meant, and how high a grade is involved.
I think I can answer the hon. and gallant Member. I mean employee in the sense of the worker in the shop. The ordinary executive and management get their opportunities, because of their position, to get on to the boards. I want to see the man in the shop get on to these boards.
I beg to second the Amendment.
It is clear, I think, that large scale industry does raise a new problem in personal relations which we have not solved by the remedy of nationalisation. I speak as one who supported nationalisation. Part of that problem is that the concern is so vast that the individual worker thinks it is too big for him to have an effective voice in its direction. Although he is pleased that it is within public ownership there is still a sense of frustration. These industries are on trial and I think it is for us to make them work. They are on trial not only in the country as a whole, but in the minds of the persons engaged in them.
It is clear, however, that there is potential tension developing between the management side and the workers. We can see it in the case of the Coal Board. The answer to this problem does not lie totally along the lines suggested in the Bill whereby the power to appoint the boards is given to the Minister. It is true that the Minister can appoint persons appearing to him to be qualified, or having experience in industrial matters or in organisation. I think there is a tremendous difference if the people employed have themselves elected a man, and know that he is there on the board watching their interests all the time—not fighting against the rest but representing the people primarily concerned in that industry.
I do not doubt the sincerity of the Amendment put forward from the Liberal Benches, but to think that it involves something new and will be regarded by the workers as something they have never had before is really quite wrong. The workers are not going to be satisfied by the election of a single individual to an area board. That is not the way to get what the hon. Gentlemen opposite want—the greater interest of the workers of the gas industry in their undertakings—and it would be quite wrong in our view. The Amendment is quite unacceptable; it suggests that between 10,000 and 25,000 workers in the industry should ballot for and select one representative on each area board. After all, there is the place of the worker in the industry to be considered. It is of no use thinking that simply because this is done one has given the worker his proper place in the organisation of the gas industry.
It is not suggested for one moment that this in itself is sufficient; it is in addition to the other measures.
I do not accept this as being the right method at all. My right hon. Friend has every intention of appointing to the area boards persons with experience in the organisation of workers, and in that way there can be no question at all that on the area boards will be persons of the type to which reference has been made. What we want to see in the industry, and what the Bill provides for, is negotiation between the Gas Council and the trade unions, and the area boards and the trade unions—consultation within the industry—by which workers in an undertaking will have machinery which they can use to deal with the problems which arise from day to day, and by which they can make a contribution to the greater efficiency of the industry.
There can be no question that it would be quite wrong in principle to have a method of selection by one section of the community, responsible in this or that direction. The area boards have to be responsible for the broad policy and management of their areas, and the responsibility for appointment is upon the Minister. He must be free to make his choice.
Has the Minister given an assurance that he will invite workers at present connected with the gas industry to sit on one or other of the area boards?
I am not saying that at all, but my right hon. Friend will appoint people experienced in the organisation of workers. It might easily be the case that an individual appointed was a worker in the gas industry but is not now so employed. It may be that the individual has experience in the wider aspects of organisation. The fact that persons of that type will be appointed leads me to say that it seems to me that it would be wrong to have one member only of the area board selected in that special way. If my right hon. Friend could see any advantage to be gained by the workers of the industry in this way he might look at it. I see no personal advantage in it, and I am certain that the workers will not regard it as an advantage that one of their number should be completely removed and be remote from them. The real way in which the workers can be associated with the industry is in an organisation which will be set up after consultation with the trade unions, the Gas Council and all the area boards. That would be a proper machine for the proper functioning of the workers in the industry.
The Parliamentary Secretary has missed the whole point of this Amendment. It lies in the word "election." What happens if nationalisation fails? I wonder if hon. Members on the other side of the House realise the implications of that. We are starting a new experiment, and if nationalisation fails it may be that the people of this country will either go to the Left or to the Right—to Communism or Fascism. We must make a success of nationalisation. My party have agreed that nationalisation is necessary in the gas industry.
Only 50 per cent. of them.
That is not true.
I spoke in this House on behalf of the Liberal Party in support of the nationalisation of this industry. I can claim to have some knowledge of this business, because I served for a period as a member of a local authority. I believe that we must have nationalisation and there is a good deal in stating—
What has nationalisation to do with this Amendment? This Amendment merely deals with how an area board should be elected.
I apologise and bow to your Ruling, Mr. Speaker. We believe that this is a new experiment and that we must get the full support of all sections of the gas industry in order to create greater efficiency. We must have coordination among the workers, those engaged in management and the area boards, and they must support nationalisation for the greater efficiency of this industry. We cannot get that unless we have loyalty to the industry itself. We cannot get that loyalty except by electing a proper proportion of the workers on the area boards, who are prepared to take a full share in responsibility for all decisions which affect the industry.
11.0 p.m.
The whole point of this Amendment is that a member of a trade union being elected is not sufficient. We have to make every employee of the industry alive to the fact that he has a special responsibility to the gas industry. The industry can be nationalised in theory and it can always be stated that it will become more efficient because of integration and coordination, but unless we get the same loyalty to industry, we shall not get the efficiency required. Further, by the form of election we suggest in this Amendment every individual in the gas industry will realise he is part of the organisation and has some responsibility for the promotion of one member of the workers' organisation to the area board. By that method he will realise he is helping to make this great organisation more efficient than it was before. That is the point. However efficient the organisation was before, it must be more efficient under nationalisation. Only by making certain that every individual gas employee knows his responsibility to the industry shall we make certain that we get greater efficiency under nationalisation than under the present system.
We have great sympathy on this side with the need to identify the workpeople with these great area boards which are to be the super-undertakings of the nationalised industry. With the general desire to have the support of the workers at all levels with the management, as represented by the area boards, we do not quarrel at all. In fact, on an Amendment—not called—about co-partnership, our whole argument would have been for the need to identify as closely as possible the workers with the undertaking. We join completely in this with our friends on the Liberal Benches. There is a real need, if nationalisation is to be successful, that people working in the industry should feel that it is their show and that they are bound up in it. It has been unfortunately our experience of organisations nationalised to date that the very opposite has been the case. Just as in practice there is no difference whatever between, workmen in a municipal undertaking and in a company undertaking, whether the undertaking is municipally or privately owned, so we have noticed already in the nationalised undertakings— and many Members opposite have already said so—there is a feeling of grave disappointment that nationalisation does not arouse in the public, and in the undertakings, any sense of identification of the workers with the undertaking. To do so is the problem and this House having embarked on this process of nationalisation, has to solve this problem in some way.
Whilst saying all that, I fear that I am not in agreement with my friends of the Liberal Party nor is the Minister over the technical details of how this is to be achieved. We had two very interesting Amendments moved upstairs on generally similar lines. The hon. Member for Leek (Mr. Harold Davies) moved an Amendment to the effect that not less than one-half of such members should be selected from persons who had been employed in the industry and had been nominated by one of the appropriate organisations of workers in the industry. That differs from this Amendment in two respects. First of all, this alternative is less ambitious than the other, as it asks for only one per area board instead of rather more than half the members, or half dependent upon whether there is an odd or an even number of members. It also differs in the sense that there would be a secret ballot by which the nominations would be made rather than by the trade union.
If we look at the map which shows the various area boards of England I think it would be agreed by everybody that the areas are so big that an area board ballot carried out in that way would be such that nobody would know the candidates for the whole area except by some artificial means of achieving that end, and I therefore think that a ballot is not as practical a suggestion as the one brought forward by the hon. Member for Leek, who was really using the existing trade union principles—
The hon. Member did not support the 50 per cent.
We did not support that Amendment nor that moved by the hon. Member for Edge Hill (Mr. Irvine), who brought forward the conception that the Minister should not appoint anybody who did not believe in nationalisation. He felt that that was putting a strain on the relations—
This Amendment deals with election by the workers.
Probably, then I had better quote what the Minister said in regard to the need for his freedom of action to appoint whoever is the best man for the job. I join with my Liberal friends in thinking that even if there is such a worker who is really fitted to be on the area board, he should be on the board whether he is balloted for or whether he is a nominee of the trade union—
Is the hon. Member suggesting that in the whole of the gas industry there is not a man fit to sit on an area board?
What I am saying is that if there is such a man, then it is the duty of the Minister to elect such a person to the board whether he has been nominated by a trade union or has been elected on a ballot throughout the country.
If, on the other hand the other situation arises, namely, that he is either nominated by the trade union or ballotted for and he is not really fitted for the job, then equally he should not sit on the area board. I think, therefore, that the words of the Minister are very appropriate in this case. In Standing Committee, he said:
I hope that the House will not leave this Amendment without a more satisfactory explanation from the Minister. I do not wish in any way to be hostile, but I had hoped that, after the Scarborough Conference, we should get more than lip service from the Labour Party about industrial democracy. In the Committee upstairs there were views expressed by the Government that they could not accept the principle of workers being nominated to the boards. The Parliamentary Secretary tonight put forward the view that the way we are to do this is for the Minister to appoint a worker, and that he would, of course, have in mind people with the necessary qualifications who had previously worked in the gas industry, or in the organisation of workers in that industry, and it was up to the Minister to appoint the right people.
This is probably the beginning of the battle for industrial democracy in this House. The Parliamentary Secretary amazed me, and I say this quite frankly, by his lack of comprehension of the difference between a man nominated by the Minister and a man elected by the workers. If this is where we are beginning, I do not know how long this battle is going to take. Does not the Parliamentary Secretary see the difference between a man nominated by the Minister and a man elected by the workers? That is the difference. That is what the Scarborough Conference was about, if I read the newspapers aright. Is there any reason why there should not be on a board of seven, one man elected by the workers? What is the Government frightened of? Are they frightened of being found out? [An HON. MEMBER: "Don't be silly.] The hon. Member says, "Don't be silly." The question is have we enough confidence in the workers to accept this Amendment? Have we? There is no answer from the Labour benches. We have not the confidence in the workers of this country to allow them one representative on a board of seven. Then it must be lip service. I mean this quite seriously. All I can say is that this is "man's inhumanity to man." The people who have arrived, do not care a jot for the workers whom they claim to represent.
Surely there is a great difference between a nomination by the Minister of a man whom he considers to be the right man for the job, and the election by the workers of a man in whom they have confidence. That, surely, is the point. Is not that worth further consideration and study? I suggest to the hon. Gentleman that it is worth trying out as an experiment, and I believe that I have the backing of the associations of the gas industry on the workers' side. I am sure that if we went to a representative meeting they would say, "We think that would be beneficial not only to the gas industry, but to the consumer himself."
I am surprised that the Labour Party have not given a more sympathetic answer. I should have expected them to have answered, "This is a point that we shall consider, and see how we can get over it." There may be difficulties over the method of election. But if we have such a straight, blunt refusal as we have received, then all I can say is that the Labour Party pay only lip service to the cause of industrial democracy, and that we shall divide the House.
11.15 p.m.
If there is to be a Division on this Amendment I should like the matter to be made a little clearer. The hon. Member suggested that if there were a representative of the workers on an area board they would have greater confidence in the organisation. I would point out to him that, for instance, the East Midlands Gas Board will operate in Lincolnshire, Nottinghamshire, Rutland and parts of Bedfordshire, Buckinghamshire, Derbyshire, Leicestershire, Northamptonshire, Staffordshire and the West Riding of Yorkshire, and that there will be many thousands of workers there and I cannot see that one workers' representative on the area board will give them that feeling of "belonging." I do not think that is the right approach.
Even if it does not give them much of that feeling, would the hon. Gentleman support the Amendment to see whether it does or not?
That is the first proposition. I shall not answer that question until I have an answer to the next two. There are two other aspects of the matter one has to consider. I do not see any reason why the hon. Member wants to have a ballot of all the workers employed when the Trades Union Congress is already in existence. I have to deal in some small way with the organisations of management and labour, and I should not welcome an entirely new organisation of a ballot to deal with this question. We
have trade union organisations functioning already, and I should prefer to deal with these matters through them. I cannot see the use of bringing in a new organisation. One hon. Member said it would be a case of a nomination by the bosses. It might be nomination by the workers through their organisations. This proposal might bring big politics into industry. I see the hon. Member for West Fife (Mr. Gallacher) opposite. That reminds me—What about Communist infiltration into this sort of thing? I cannot see for the moment that this proposal will be of much assistance.
Cold water from the Conservatives.
I should be glad if the hon. Gentleman would give us a little more information.
I cannot speak again without the leave of the House. The only answer I can give the hon. Gentleman is that what he has said is exactly the sort of reception of such a proposal as this as one would expect from the Conservative Party, which is not really interested in reform designed for the creation of industrial democracy.
I am afraid that that is a most unsatisfactory answer, and that I cannot support the Amendment.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 5; Noes, 240.
Division No. 207.] AYES. [11.19 p.m. Bowen, R. Roberts, Emrys (Merioneth) TELLERS FOR THE AYES: George, Lady M. Lloyd (Anglesey) Roberts, W. (Cumberland, N.) Mr. Byers and Granville, E. (Eye) Mr. Wadsworth.
NOES. Acland, Sir Richard Brook, D. (Halifax) Davies, Haydn (St. Pancras, S.W.) Adams, Richard (Balham) Brown, George (Belper) Davies, S. O. (Merthyr) Adams, W. T. (Hammersmith, South) Brown, T. J. (Ince) Deer, G. Allen, Scholefield (Crewe) Bruce, Maj. D. W. T. de Freitas, Geoffrey Alpass, J. H. Buchanan, Rt. Hon. G Diamond, J. Attewell, H. C. Burke, W. A. Dugdale, J. (W. Bromwich) Austin, H. Lewis Butler, H. W. (Hackney, S.) Dumpleton, C. W. Awbery, S. S. Callaghan, James Durbin, E. F. M. Ayles, W. H. Castle, Mrs. B. A. Dye, S. Ayrton Gould, Mrs. B Chamberlain, R. A Ede, Rt. Hon. J. C. Baird, J. Champion, A. J. Edelman, M. Barstow, P. G. Chetwynd, G. R. Edwards, N. (Caerphilly) Barton, C. Cobb, F. A. Evans, Albert (Islington, W.) Bechervaise, A. E. Cocks, F. S. Evans, E. (Lowestoft) Berry, H. Collindridge, F. Evans, John (Ogmore) Beswick, F. Cooper, Wing-Comdr. G Evans, S. N. (Wednesbury) Binns, J. Corbet, Mrs. F. K. (Camb'well, N.W.) Ewart, R. Blackburn, A. R. Corlett, Dr. J Fairhurst, F. Bowles, F. G. (Nuneaton) Crawley, A Field, Capt. W. J Braddock, Mrs. E. M. (L'pl, Exch'ge) Daines, P. Follick, M. Braddock, T. (Mitcham) Davies, Edward (Burslem) Foot, M. M. Bramall, E. A. Davies, Ernest (Enfield) Fraser, T. (Hamilton) Freeman, Peter (Newport) Manning, Mrs. L. (Epping) Skinnard, F. W. Gaitskell, Rt. Hon. H. T N Mathers, Rt. Hon. George Smith, C. (Colchester) Ganley, Mrs. C. S Mayhew, C. P Smith, H. N. (Nottingham, 5.) Gibbins, J. Mellish, R. J. Snow, J W. Gibson, C. W. Middleton, Mrs. L Sorensen, R. W. Gilzean, A. Mikardo, Ian Soskice, Sir Frank Gooch, E. G. Millington, Wing-Comdr. E R Sparks, J. A. Gordon-Walker, P. C. Mitchison, G. R. Steele, T. Greenwood, A. W. J. (Heywood) Monslow, W. Stewart, Michael (Fulham, E) Grey, C. F. Morgan, Dr. H. B. Stross, Dr. B. Griffiths, D. (Rother Valley) Morris, P (Swansea, W Stubbs, A. E. Gunter, R. J. Mort, D. L Swingler, S. Guy, W. H. Moyle, A. Sylvester, G. O. Haire, John E. (Wycombe) Nally, W. Symonds, A. L. Hale, Leslie Neal, H. (Claycross) Taylor, H. B. (Mansfield) Hamilton, Lieut.-Col. R. Nichol, Mrs. M. E. (Bradford, N.) Taylor, R. J. (Morpeth) Hannan, W. (Maryhill) Noel-Baker, Capt. F. E. (Brentford) Taylor, Dr. S. (Barnet) Hardy, E. A. Noel-Baker, Rt. Hon. P. J. (Derby) Thomas, D. E. (Aberdare) Harrison, J. O'Brien, T. Thomas, I. O. (Wrekin) Haworth, J. Oldfield, W. H Thomas, John R. (Dover) Henderson, Joseph (Ardwick) Oliver, G. H. Thomas, George (Cardiff) Herbison, Miss M Orbach, M. Thurtle, Ernest Hobson, C. R. Paget, R. T. Tiffany, S. Holman, P. Palmer, A. M. F. Titterington, M. F Holmes, H. E. (Hemsworth) Pargiter, G. A. Tolley, L House, G. Parker, J. Tomlinson, Rt. Hon G Hoy, J. Parkin, B. T. Turner-Samuels, M. Hubbard, T. Paton, J. (Norwich) Ungoed-Thomas, L Hudson, J. H. (Ealing, W.) Pearson, A Usborne, Henry Hughes, Hector (Aberdeen, N.) Peart, T. F. Vernon, Maj. W. F Hughes, H. D. (W'lverh'pton, W.) Perrins, W. Wallace, G. D. (Chislehurst) Hynd, H. (Hackney, C.) Poole, Cecil (Lichfield) Wallace, H. W. (Walthamstow, E.) Hynd, J. B. (Attercliffe) Popplewell, E. Warbey, W. N. Irving, W. J. (Tottenham, N.) Price, M. Philips Watkins, T. E. Jeger, G. (Winchester) Proctor, W. T. Weitzman, D Jeger, Dr. S. W. (St. Pancras, S.E.) Pursey, Cmdr. H Wells, P. L. (Faversham) Jenkins, R. H. Randall, H. E. West, D. G. Jones, D. T. (Hartlepool) Ranger, J. Westwood, Rt. Hon. J Kenyon, C. Rees-Williams, D. R Wheatley, Rt. Hn. J. T. (Edinb'gh, E.) King, E. M. Reeves, J. White, H. (Derbyshire, N.E.) Kinghorn, Sqn.-Ldr. E. Reid, T. (Swindon) Whiteley, Rt. Hon. W Lever, N. H. Rhodes, H. Wigg, George Levy, B. W. Ridealgh, Mrs. M. Wilcock, Group-Capt. C A B Lewis, T. (Southampton) Robens, A. Willey, F. T. (Sunderland) Lindgren, G. S. Roberts, Goronwy (Caernarvonshire) Willey, O. G. (Cleveland) Lipton, Lt.-Col. M. Robertson, J. J. (Berwick) Williams, D. J. (Neath) Longden, F. Rogers, G. H. R. Williams, J. L (Kelvingrove) McAdam, W Ross, William (Kilmarnock) Williams, R. W. (Wigan) McAllister, G. Royle, C. Williams, W. R. (Heston) McEntee, V. La T Sargood, R. Willis, E. McGhee, H. G. Scollan, T. Wills, Mrs. E. A. Mack, J. D. Scott-Elliot, W Wise, Major F. J Mackay, R. W. G. (Hull, N.W.) Shackleton, E. A. A. McLeavy, F. Sharp, Granville Woods, G. S. Macpherson, T. (Romford) Shawcross, C. N. (Widnes) Yates, V. F. Younger, Hon. Kenneth Mainwaring, W. H. Shawcross, Rt. Hn. Sir H. (St Helens) Mallalieu, J. P. W. (Huddersfield) Shinwell, Rt. Hon. E. Mann, Mrs. J. Silverman, J. (Erdington) TELLERS FOR NOES: Manning, C. (Camberwell, N.) Silverman, S. S. (Nelson) Mr. Simmons and Mr. Wilkins. Skeffington, A. M.
I beg to move, in page 6, line 1, after "Board," to insert:
"during any vacancy in the office of chairman or."
I suggest that this Amendment can be taken with the following Amendment, in line 2, to leave out "do so," and to insert "attend." These are very simple Amendments designed to cover the case where the chairman of an Area Board unfortunately dies during his period of office, and provides that if that should happen the deputy-chairman may attend and vote in his place. As the Parliamentary Secretary said during the Committee stage, if death is not included it will be put right, and that is what we have done.
The Minister's explanation is quite acceptable to us, but it was not comprehensive. One of the objects of this Amendment is precautionary, and covers the event of a chairman being certified a lunatic. That is a very real risk, because the chairman of a board created under this Bill, unless he is a man of iron nerve, will be driven crazy. The chairman of the board in Scotland has a job of fatigue, and the gas oven may well be a temptation, and then the board would have need to provide a successor. This Amendment, a very necessary one, is due to the sense of proportion which resides in the party which I represent here tonight. What the Minister neglected to say was that this amendment was proposed by us in Committee, and it would be wrong not to thank the Minister for accepting the suggestion we made which I do most gratefully. I hope it will increase the possibility of our concluding the Committee stage before 11 a.m. tomorrow.
Amendment agreed to.
Further amendment made: In page 6, line 2, leave out "do so," and insert "attend."—[ Mr. Gaitskell. ]
11.30 p.m.
I beg to move, in page 6, line 16, at the end, to insert:
(7) The Minister shall, as soon as possible after the passing of this Act, lay before each House of Parliament a statement of the remuneration and allowances that are or will be payable under the last preceding subsection to the members of each of the Area Boards and to the members of the Gas Council, and, if any subsequent determination by him under the last preceding Subsection involves any departure from the terms of the said statement, the Minister shall as soon as possible after the determination lay a statement thereof before each House of Parliament.
This is to meet a request by the Opposition that we should make it clear in the Bill that details of the remuneration and allowances of members of the boards should be published. We had some discussion in Committee on the precise manner in which this should be done, and we all wanted to avoid unnecessary publication. I think this proposal meets the wishes of the Opposition.
I am grateful to the Minister for trying to meet our desire in respect of the points covered in the Amendment. In our discussions in Committee, my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was the fount of wisdom both for the Government and the Opposition. I do not know how this Amendment strikes him, but it seems to me to meet our desires, generally speaking, though I greet it much less joyfully and with a far less sense of gratitude than I showed in dealing with the last two Amendments. It seems to me that if my hon. Friend could catch your eye, Mr. Speaker, he might bring this discussion to a swift close. He has been our expert in this matter, and the case is one which ought to be referred to experts.
I hesitate to accept what my right hon. Friend intended to be a compliment, the suggestion that I had any responsibility for the supply of wisdom to the Government in this matter. This I hasten to repudiate. I thank the right hon. Gentleman for meeting in part the wishes expressed strongly by the Opposition in Committee. It is right and fair to say that this Amendment will prevent much of the secrecy about salaries, which was one of the regrettable features of the earlier stages of the Coal Board, from being repeated in the case of the Gas Council and the area boards. I do not think that the Amendment stops up all the loop-holes. It leaves unstopped one which was discussed in Committee, and that is the state of affairs in which a block allowance is made to the chairman of the nationalised industry and can be specially allotted by him to other members of the board or Gas Council. The chairman of the National Coal Board has allotted to him the sum of £10,000 in addition to allowances, and this he is free to distribute among other members of the Board. How this is distributed has not been revealed, and nor, as I read this Amendment, would it be disclosed in this case in the statement laid before the House by the Minister. If he can assure me it will be disclosed, that will conclude the matter.
As I read it, it is only the remuneration and allowances paid individually to each member of the board that has to be disclosed in this statement, and any block allowance, such as is paid to the Coal Board, will not have to be disclosed. That is how I read it, and the Minister does not contradict it. If that is so, that state of affairs very much diminishes the protection afforded by the Amendment, because it will be possible for the Minister to lay the statement on the Table of the House giving in great detail the remuneration and allowances, which will be wholly misleading by reason of the exclusion of the share of block grants. It would be misleading to say, for example, that Mr. X, or Lord X as seems more likely, is being paid £4,000 plus a £2,000 allowance, if he is in fact receiving on top of that an unspecified and unadmitted share of block allowance. The Minister was very obdurate, if I may use that word, in Committee on this matter. He said:
I do not understand why the Minister cannot go the whole distance and make it clear that when the nationalised gas industry starts everyone shall know what is the real amount being paid to members of the Gas Council and the boards. I suggest that he is doing no service to the nationalised gas industry by persisting in demanding this security blackout on remunerations. It would be better, and it would perhaps prevent suspicion being aroused, if he provided that everything these fortunate gentlemen get is published. It is very misleading to the public and to the House of Commons to bring forward an Amendment of this sort, salutory and admirable as it is, when it excludes what is, in the case of other industries, a very substantial source of additional remuneration. I ask him, in spite of his previous attitude, and I appreciate the force of his contentions, to go one further step which will enable him to say that there is no concealment whatever in the remuneration of members of the Gas Council. I hope he will realise that that is in the true interests of the nationalised gas industry and also concerns the reputation of the nationalised boards of this country.
I rise only for a moment to deal with the points raised by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I think he is confusing two quite distinct things. What we are doing here is to arrange for the publication of all the salaries and allowances decided upon for all members of the boards, and the Gas Council. Whether that money is paid in bulk or not is quite a distinct matter. If it is paid in bulk, it can only be disclosed in bulk; if it is paid individually, it will be disclosed individually.
Whether the boards as a whole should or should not receive expenses allowances is quite a separate matter, which does not arise on this Amendment. I should like to point out, since the Opposition frequently plead the Companies Act in aid, that the Act does not provide that individual payments to directors should be disclosed, but simply that payments or emoluments of directors in bulk should be disclosed. We go much farther—except in the occasional instance in which an allowance is paid in bulk.
The Minister has gone some way to meet us. We are anxious that the uneasiness which has been felt in the past should be dispelled. I cannot say that we are completely satisfied with the position as the Minister has explained it, but in the circumstances I do not think we will divide against this Amendment.
Amendment agreed to.
CLAUSE 6.—(Definition of and variation of areas.)
I beg to move, in page 6, line 37 at the end, to insert:
"for a period of not less than forty days before the making of the Order referring to that map."
This Amendment relates to the availability to the public of maps identifying the areas of the boards, and any variations of the areas which may subsequently be made by the Minister. We have suggested in this Amendment a period of 40 days in which the public shall be able to see these maps. That is a purely arbitrary figure, but it seems to us to be a reasonable period of time. The Solicitor-General told us in Committee that these maps would be available for the public. It is obviously necessary that they should be available for a reasonable time, because people are busy and have other things to do besides going to the offices of the area boards to inspect maps. I hope the Minister will have no difficulty in accepting this Amendment.
I beg to second the Amendment.
I feel that 40 days is a reasonable time in which to allow people an opportunity of inspecting these maps and of seeing exactly what changes there are. It is quite a reasonable Amendment, and I believe that the Minister will raise no objection to it. If he does not accept the time laid down, perhaps he can suggest the period he thinks reasonable and proper. Without a doubt, there should be laid down some specified time in which people have the opportunity of seeing how they are affected.
11.45 p.m.
One appreciates the desire that there should be a reasonable time for these maps to be inspected by members of the public. Under this Clause the Minister must make the maps available for inspection of the public at such times as are specified in a notice published by the Minister, but under Clause 67 (4) copies of the maps must be made available,
"during the period for which the orders or drafts thereof are laid before Parliament, for inspection by Members of each House of Parliament."
The original order under Clause 6 (1) will be a statutory instrument subject to annulment by negative resolution. That means that the order under this Clause will be laid for 40 sitting days after it is made, and during this time the House could pray against the order. It is right—and I accept the point which has been put—that the draft order should be made available to the public, but we could not accept the figure of 40 days, because if there were any defects and the map had to be altered or reprinted, a further 40 days would have to elapse before making the draft order, which means the thing could go on interminably and the vesting date would never take place. I can give an assurance, however, that the maps will be made available to the public in draft for a number of days before the order is made and laid, and I hope Members opposite will accept that assurance.
The best way of acknowledging a concession by the Government at this late hour is to do it briefly. I say, "Thank you," and hope that my hon. Friends will agree to the withdrawal of this Amendment.
In view of the assurance we have received, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
CLAUSE 7.— (Powers of Minister in relation to area boards and Gas Council.)
I beg to move, in page 8, line 13, after "such," to insert, "written."
It will be within the recollection of the House that Clause 7 deals with the powers of the Minister in relation to area boards and the Gas Council. We were anxious in Committee that copies of the directions given by the Minister to the area boards should be laid before Parliament for our consideration, but the suggestion was defeated, and instead an assurance was given by the Parliamentary Secretary that the orders would be given in writing, which, if not all that we wanted, was perhaps second best. The Parliamentary Secretary told us that the Minister would give directions in writing to the Gas Council and the area boards. We thought that it would be an advantage to have that recorded in this way. We feel it ought to be made perfectly clear that they should not be verbal but always in writing, and that these words should be inserted so that the intention of the Parliamentary Secretary as we understood it in Committee, should be implemented.
I beg to second the Amendment.
It will be agreed that it is absolutely essential that these directions, which will be most important directions affecting policy, should be given in writing, and that there should be no possibility of secret directions. The directions must be absolutely clear and the information contained in them should be available not only to the area board for which they are intended but for all the others. It is important it should be written into the Bill that the directions must be given in writing.
On a point of Order. Is it your intention, Mr. Speaker, to call the Amendment in line 22, at the end, to insert:
( c ) any Area Board and the Gas Council shall be entitled at any time, and in such manner as they think fit, to publish any direction given to them by the Minister, except that they shall not at any time, or in any way, publish to any person not being a member or officer of such Board or Council any such direction if it includes or is received with a statement by the Minister that, in his opinion, it is against the interests of national security to publish the direction.
It raises a similar point, and it might be for the convenience of the House if we discussed it with the present Amendment.
That Amendment is not necessary as it is already in the Bill.
In Clause 7 we are dealing with the general directions given by the Minister to the area boards or the Gas Council. It really is inconceivable that directions of that importance would be given otherwise than in writing. There are other places in this Bill which require that directions shall be given, and there is no requirement that they shall be in writing. There are also other acts in which there is no direction that directions shall be given in writing. Anybody would assume that as a matter of ordinary elementary business routine any direction of any importance would be given in writing. Even if given in the first place in the course of conversation, it would certainly be confirmed in writing. That is the elementary practice of any reasonably run business.
I hope the Amendment will not be pressed. We cannot put in all kinds of requirements and fanciful examples of what the Minister ought not to do. They might have to be written on a piece of wood, but there is no reason for putting that in the Bill. I do not advance this in any disrespect to the hon. Member, but it is impossible and undesirable to put every conceivable contingency in every term of the Clause. Obviously, the directions will be given in writing; it cannot be otherwise. If given orally, they would certainly be confirmed in writing. They would certainly be reduced to some minute, put on paper and recorded. We could, of course, put the word "written" in the Clause, but then we would equally have to put it in other parts of the Bill. We have many other Acts on the Statute Book which we ought in consistency, to amend if we accepted this suggestion. It is not necessary, and I hope the Amendment will not be pressed.
The Solicitor-General puts us rather in a difficulty. He makes a most reasonable case, as he always does, and draws attention to the familiar contention: to include in one case is not to exclude in others. It is not an ordinary business we are dealing with here, but a great monopoly conducted under novel conditions, and conducted under conditions in many cases of great secrecy. We feel it is very desirable to ensure that in all cases a record of such directions should exist. After all, as the Solicitor-General knows, directions of a somewhat odd nature were only today the matter of discussion on the Floor of the House, and it would be of very great importance that these things were on record. I wish the learned Solicitor-General could think of some way of meeting us a little on this, if only to give further consideration to it between now and the next stage.
We attach very great importance to this. We had quite a discussion in Committee. We do not wish to be unreasonable, but we wish the Government would see our point of view here. It is not that we wish to put in directions that it should be written on a piece of wood or in some foreign language. These are obviously unreasonable things. But the fact is that under these circumstances directions of very great importance are occasionally given, and I have had much experience myself of this as Chairman of the Public Accounts Committee when directions were given to some factory by Lord Beaverbrook, who was not gravely addicted to written directions when he was Minister of Aircraft Production. In that case, which involved some £250,000, the directions were telephoned. I am certain that as he was a businessman in a very large way he always gave directions of any importance in writing, but it was not possible in this case to find confirmation and great difficulties arose.
I am anxious to meet the right hon. Gentleman, but there is nothing more I can do. The alternative is to accept or reject the Amendment: there is no half-way house. I will willingly give the assurance, if the right hon. Gentleman will accept it, that these directions will invariably be in writing.
It is very difficult to know what to do. If the Solicitor-General could give us an effective assurance over directions in writing that would be the end of our troubles. There is a great deal to be said for showing our point of view by making Members opposite trudge through the Lobbies, but that is not going to get what we desire. We attach some importance to what was said about developments among the area boards. I must say that I have rather a headache in this matter. I think that already this Government are very grievously affected by all this paper work. Some Members opposite may have an admiration for paper-chasing in Whitehall, but seeing that they have shown such self-restraint so far, and as I think you, Mr. Speaker, will still be in your place at 11 a.m. tomorrow, I think we can make an exception on this occasion and accept the rather nebulous assurance of the Solicitor-General.
12 m.
The Solicitor-General may avoid the difficulty of amending "written direction" in the many places in which it appears in this Bill if he would put into Clause 70—the interpretation Clause—a new definition that "direction" meant "written direction." That would obviate any difficulty caused by the need otherwise to have wholesale amendments made. I ask the Solicitor-General, not necessarily at this stage, but possibly in another place, to consider the suggestion I have put forward with a desire to meet the difficulty. So far as the merits are concerned, our difficulty is that whatever assurances may be given, a direction given orally will be legally binding. It might be that if a subsequent Minister violated that assurance the board would be in a difficult position, because they would be faced by the oral direction which, on the construction of the Bill, was binding upon them. I hope that the Solicitor-General will consider that as a possible solution to the very real difficulty to which he referred.
In view of the assurance of the right hon. Gentleman, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 8, line 22, at the end, to insert:
"(2) The Minister may, after consultation with the Gas Council and the area board con- cerned, give to any area board directions as to the use or disposal of any assets vested in the Board by or under this Act which are not connected with the exercise of their powers set out in paragraphs ( a ) to ( e ) of Subsection (2) of Section one of this Act."
When we were upstairs we discussed fully and at great length the question of area boards continuing to operate water companies where composite companies opted to have the whole of their assets taken over. It was generally agreed that there was no desire for area boards to continue to operate water undertakings in such circumstances and I gave an assurance in Committee that we would look at this matter again and introduce words similar to those in the Electricity Act. That is the purpose of this Amendment. I hope that hon. Members opposite will feel that they can accept it.
I agree with the Parliamentary Secretary that he did give an undertaking upstairs to look into this and to bring forward an Amendment which would deal with the request made in Committee. But this is only part of the undertaking that he gave. It has two shortcomings. The first is that, in the taking over of these assets by the area boards and the Gas Council, both these bodies are quite probably going to take over assets which may not have a direct bearing on the carrying out of the object which they intend. From time to time the Gas Council and the area boards may find themselves in possession of assets for which they have no direct use. I feel that the Gas Council ought to be included in this, as well as the area boards. The Minister says that he "may" give directions. I think it is the duty of the Minister, as soon as he is satisfied, after consultation with the area boards and the Gas Council, that they are in possession of any assets which have no direct bearing on or no direct use for the principal object for which they were transferred, to give immediate instructions as to the use to which they are to be put, and to say that they have immediately to be disposed of.
I put two points to the Parliamentary Secretary. The first is that the Gas Council, as well as the area boards, may be possessed of assets and, in addition, it is not a positive instruction. It is that the Minister "may." I should have thought the Amendment ought to provide that the Minister "shall" have a responsi- bility to get rid of any assets for which he has no direct use, either by disposal or by giving some other instruction as to what is to be done with them. Those are my two main objections to the Amendment, and I hope that the Minister will agree that they are reasonable.
I was hoping—[An HON. MEMBER: Order.]—The hon. Gentleman who shouted "Order" should not usurp the functions of the Chair. I do not suppose he will ever achieve that position, but good manners may help him to achieve his ambition. I was hoping that the Minister might help us to get along with the Bill by giving some sort of reply to my hon. Friends, because they have taken great interest in this matter. If he would reply, it would help our progress.
By leave of the House, I would say immediately that there is no desire on the part of the Minister that the area boards should do anything other than run the gas industry. It is true there may be some minor things, apart from water undertakings, that they will take over. It is right they should be divested of them, but I do not think it is a good thing that it should be mandatory on the Minister to divest them immediately. The assets hived off may be quite weak and unable to stand on their own at first, and reasonable time ought to be allowed to elapse for proper arrangements to be made. I give the assurance that there is the desire to divest. It ought not, however, to be mandatory for it to be done immediately.
And the Gas Council?
It all comes to the same thing.
Amendment agreed to.
CLAUSE 9.—(Consultative Councils.)
I beg to move, in page 8, line 41, after "half," to insert "nor more than three-quarters."
This Clause deals with the appointment of consultative councils. It provides that not less than half the membership of the councils shall be appointed from a panel of persons nominated from amongst members of local authorities. The Clause remains silent, however, as to the maximum number that may be appointed from local authorities, and I imagine that it would be possible to have so many that virtually an entire consultative council could consist of members of local authorities to the exclusion of the other persons eligible to be appointed to represent commerce, industry, labour and the general interests of consumers of gas, and so on.
We think that that is going too far, and we suggest that there should be a limit to the number of representatives of local authorities. Obviously, representatives of local authorities may well be in a majority, but they should not be more than three quarters of these bodies. Therefore, we think at least a quarter of the membership of the consultative councils should always be comprised of representatives of these other interests, as described in Subsection (2, b ).
I beg to second the Amendment.
It is a very reasonable case that the hon. Gentleman has made, and I have pleasure in accepting the Amendment.
Amendment agreed to.
I beg to move, in page 10, line 2, after "him," to insert:
"after giving to the Area Board an opportunity to make representations."
I am delighted to see the Solicitor-General here. He is now a right hon. as well as a learned Gentleman; and I should like to pay my tribute to him on the honour that has been done him, which, no doubt, his work on this Bill has well deserved. [HON. MEMBERS: "Hear, hear."] I hope other honours will follow for him in due course. This Amendment is to give an opportunity to the area boards to make representations to the Minister, and to give effect to the Minister's own statement. At present the Minister is required only to hear one side before he decides whether there should be an independent inquiry. The Amendment would permit him to hear both sides. It is, we think, a perfectly reasonable Amendment, and I do not want to waste the time of the Committee by speaking at length upon it. Even if the Minister does not like the wording of the Amendment, I hope he will accept the principle of it.
I beg to second the Amendment.
I do not think that this is a matter of any great substance. It is true that I said the words to which the hon. Member has referred; the only question is whether hearing both sides can best be done by bringing in the area board itself, in addition to the Gas Council. We are already providing for the Gas Council to be consulted, and the chairman of the area board in question is a member of the Gas Council. It seems to me, therefore, that the area board will be adequately covered by that consultation. On the whole, I think it is better to leave the Bill without the Amendment.
I am a little sorry about this. It is the right of access of the area board to the Minister with which we are concerned. I think there is a certain difference between that and the position which the chairman of the area board would have as one of a body of twelve or thirteen. For example, I think it would be reasonable that such bodies as the Welsh Board, or the Scottish Board, should have the right of access to the Minister. I think their position would be strengthened, and their prestige enlarged, and I think that is one of the things we wish to do. I hope the Minister will not close his mind to the possibility of direct representations in such a case, because frankly, if the representations which the Minister receives from the area board come from one-thirteenth of the membership of a general board, which is a body which has already voted down that constituent member, I would have thought that they would have felt a little uneasy about their chances of getting a fair crack of the whip in the discussions with the Minister. I cannot quite see why the Minister should be obdurate over this. I wonder whether second thoughts would not persuade him to go a little further.
I do not think this is a matter worth arguing at great length. It is, after all, only a question of the Minister's making up his mind whether there is a prima facie case. It is not a question of his deciding whether an area board has done something wrong, or whether there are defects in its administration. These are matters which the Minister refers to an independent inquiry. However, I am prepared to have another look at this matter, without committing myself to anything. I will think again about it and then, if necessary, we can make an Amendment in another place.
12.15 a.m.
I am much obliged to the Minister. There is no genuine disagreement between the two sides of the House. I hope the right hon. Gentleman will look at this again, because he is anxious to see both sides of the matter. I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 10, line 14, at the end, to insert:
"and the Minister shall send a copy of any such directions to the Gas Consultative Council."
This is a very simple Amendment to provide that the Minister shall send to the gas consultative council a copy of any directions sent to the area boards.
This Amendment meets representations made by us on the Committee stage, and we are grateful for it.
Amendment agreed to.
CLAUSE 10.—(Annual reports of area boards and Gas Council.)
I beg to move, in page 11, line 34, to leave out "may," and to insert "shall."
Perhaps this Amendment could be taken with the two following Amendments. It was suggested upstairs that it should be mandatory on the gas consultative council to make annual reports. I was impressed by the arguments advanced in support of this and therefore put these Amendments on the Order Paper.
We pressed this matter rather strongly upon the Minister, and we are glad that it has been possible to make this mandatory.
Amendment agreed to.
Further Amendments made: In page 11, line 34, leave out "any," and insert "each."
In line 37, leave out "any such," and insert "the said."—[ Mr. Gaitskell. ]
I beg to move, in page 11, line 41, after "shall," to insert:
"as soon as practicable after the receipt of the last report referred to in this Subsection."
Perhaps this Amendment could be discussed with the following Amendment in page 11, line 43, to leave out "at the same time," and to insert:
"as soon as practicable after the end of each financial year of the Gas Council."
These short Amendments deal with a promise made on the Committee stage. The first has been made to give effect to an assurance given by the Parliamentary Secretary, and I do not pursue the matter further, because I have no doubt that the Government will be prepared to accept the broad lines of that Amendment, which is really to deal with what the Parliamentary Secretary has said. The Gas Council does not have to wait for an area board's report which is delayed by the illness of an auditor or chairman, or something of that sort. I think that these are very reasonable Amendments.
I beg to second the Amendment.
In doing so, I wish to call attention to the assurances which the Minister gave to me in this regard, particularly relating to the fact that it is more likely that it will be the central and main report which will hold up all the others. Area board reports are on operations, and are therefore factual. The very essence of the organisations by areas is that each area should compare its results by thousand therms or million therms with the results of another area. It is highly desirable that these reports, being about operations, should come out, if necessary, piecemeal.
In the south-western area we are not going to buy and read copies of a report of another area. What we are interested in, and what our consumers are interested in, is what the south-western board has done during the year. The Minister's report however will deal with major policy and can be written only when he has the whole of the area board reports and the facts before him. I hope he will accept the Amendment. He has assured me that there is no disagreement between us on principle. We were hoping that he himself would have put down an Amendment to give us what we thought was not in dispute—namely, that these reports should come out as quickly as practicable.
The only reason we have not felt able to put down an Amendment to this effect is the difficulty which was raised in Committee by the hon. Member for Ecclesall (Mr. P. Roberts). Our view is that these reports should be laid before Parliament, together with the annual accounts of the Gas Council and area boards. The hon. Member for Ecclesall pointed out that there might be one area board report which for some reason or another would be unduly delayed, and it would be unfortunate if, everything else was held up until that one came. We were impressed by that argument, and indeed I think the argument also impressed the right hon. Member for Bournemouth (Mr. Bracken) for he agreed with me that we could not lay down rules now and said he hoped reports would not be held up. If we are not to hold up reports for any one area, we should go ahead and publish them all and attach a note explaining why one is missing. But this Amendment would make this impossible, and we would have to wait for the odd report to come in. In these circumstances we should not tie ourselves down.
I give an assurance that I will publish these reports as soon as possible after they come into my hands, and if one report is held up owing to the death of a chairman or some other unavoidable cause, I will not hold back the other reports, but will publish them, together with the report from the Minister. I suggest that it is probably better to leave the matter in that form.
On the second Amendment, we come up against the same difficulty. It refers to the Minister making his report at the same time as that of the boards, and it is open to doubt whether all the reports will be laid together. If they were, there would be no difficulty. It is just because they might not be laid together that the difficulty arises. This is not a matter upon which we feel very strongly, but we think it is better to leave the arrangement as it is and to deal with the questions as they arise, with the assurance that it is our intention and desire that the reports should all be published together as soon as possible after receipt.
In view of what the Minister has said about our having an understanding, I quite appreciate that the wording of the Amendment might in a sense make it more difficult. In view of what he has said I do not want to insist on the actual wording of the Amendment. I beg to ask leave to withdraw the Amendment.
The Minister says that we are in agreement that the reports of the area boards should be published simultaneously. I did not think we were in agreement on that and I do not know where he gets that idea from. I am sure that the boards concerned would rather have a stream of piecemeal reports by the boards themselves and then the main policy report of the Minister on the national issues than wait for all the reports of all the areas as well as that of the Minister.
I said we were in agreement that they should all be laid before Parliament together. That is rather different.
Amendment, by leave, withdrawn.
CLAUSE 13.—(Boards and Council not to be exempt from taxation, etc.)
I beg to move, in page 12, line 42, after "Act," to insert:
"and any transfer of property from an area board or the Gas Council to any other person effected with the approval of the Minister not more than twelve months after the vesting date."
This is really a minor Amendment and refers to a discussion which took place upstairs. It can be found in the OFFICIAL REPORT of the Standing Committee in column 467. The Attorney-General, who was there that day, gave certain assurances that he would consider this matter and on receipt of those assurances we withdrew our Amendment, because we felt he was not unsympathetic and hoped that on Report we might see something on the Order Paper which would satisfy our hope. So far we have not. We trust that is only because of some difficulty in finding a suitable form of words. The object of the Amendment is to take care of transfers made shortly after, and as a result of, the nationalisation of the industry.
I beg to second the Amendment.
I do so if only for the reason that it is such a moderate one that the Government should be panting to accept it. It is true, as my hon. Friend said, that on the occasion to which he referred we did not benefit from the presence of the Solicitor-General. A higher legal luminary was there and he gave, not exactly a promise, but an undertaking that he would look into the whole matter and see what he could do when we came to the Report stage. We have now reached that agreed period and if we can get any assurance from the Minister or the Solicitor-General, we shall be able to get along as speedily as possible with the many things that remain to be discussed.
12.30 a.m.
It is quite true that my right hon. and learned Friend the Attorney-General said that he would investigate the point raised in the Amendment with the Inland Revenue authorities. That has been done. Difficulties arise when one considers the proposal, and I will endeavour to state what they are. Subsection (2) of Clause 13 provides for exemption from Stamp Duty in the case of transfers between area boards and the Gas Council, and between the Gas Council and the area boards. The proposal which the Amendment embodies is that a transfer within twelve months from the area boards or Gas Council to any other person shall be entitled to equal exemption. What in practice would happen is that an undertaking of which the assets were acquired would have been dissolved, and the only kind of transaction to which that Amendment would relate would be the re-transfer or disposal of extraneous assets which were not necessary for the gas undertaking of the area board.
If the area board has taken over certain assets, and it is found that they are not necessary for the purpose of the gas undertaking, those assets would be disposed of. It would be quite possible, if one were re-transferring them to the undertaking from which they were acquired, to provide some sort of exemption from Stamp Duty, but they might be disposed of to anyone—the undertaking would be dissolved, although it is conceivable that they would go back to the original shareholders. One does not know who the purchaser would be: it might be anyone. I cannot see that there would be any case for exemption from Stamp Duty by way of assisting the area boards or ordinary purchaser in a case of that sort. There is no reason why there should be: it would be an ordinary case of a sale by the area board of certain surplus assets of which it is not in need. I do not think the area board has a claim to exemption in a case of that sort. Certainly no stranger in the open market who purchased the assets could possibly say that he had any claim against any other purchaser of any other assets in the open market for exemption from Stamp Duty.
Is the right hon. and learned Gentleman completely satisfied that there can be no question of re-transfer to an ancillary undertaking or composite company? In those cases, the original owners would have continued to exist. That would be an exception to what he has said.
We considered that point. Composite companies and ancillary undertakings are dealt with in Clause 18, and there is machinery provided in Clause 18 for a kind of sifting out between assets which are strictly those of a gas undertaking, and which would go to the area board and which it would retain, and those which are not gas undertaking assets and which would remain the property of the composite company. We have, in point of fact, investigated the extent of that problem—what are the assets which might be affected or might be included in transactions of this kind. We are told that the likelihood is that in any case there would be very few. The problem is a small one: there is no question of any large-scale exemption or relief that could be claimed. We took the view, after careful investigation with the authorities concerned, that there was really no case for this exemption. There is certainly no case for the ordinary stranger in the market, and it does not seem that composite or ancillary companies can be affected by transactions of this sort. For those reasons, I recommend the House to reject the Amendment.
The Solicitor-General has been fairly courteous in discussing the pros and cons of the Amendment, but there is a major side which he may have overlooked. The Clause as it stands deals with transfers from one area board to another such board or from the Gas Council to an area board. While it is suggested that there may not be a lot of such transfers, it may be that an area board might become possessed of a certain amount of property that by later events it would be wiser to transfer to another area board, but which is still part of the initial scheme of the nationalisation of the gas industry. That might be a major issue with regard to one area board and another, and an individual or company is not directly concerned. I feel that if a transfer is made to an area board of property which was part of the initial scheme, and which transfer is for the proper prosecution and efficient running of the nationalised gas industry, such transfer should be free.
I feel we might have several such cases. I cannot say for certain, and the Solicitor-General was very fair when he said that he and the Government had tried to find out the extent of the problem. We cannot say whether it will be large or not, but a large problem might be involved in transferring property from one area board to another. The point I want to emphasise is it should be free if a period of 12 months has elapsed from the vesting date. It is something which is reasonable, and I feel from that point of view that this Amendment has more substance in it than has appeared to the Solicitor-General. For that reason, I hope the Solicitor-General will look at it again.
Transfers between area boards are, of course, entitled to Stamp Duty relief. They are directly within the provisions of Clause 13 (2). Larger items of property which might be involved in transfers between boards would get the exemption.
I can speak again only by leave of the House, but I wish to express some disappointment that it was impossible to find a form of words that would fulfil the promise hinted at by the Attorney-General. It so happens that the new chairman of the Board of Inland Revenue was for many years a colleague of mine at the Ministry of Information. He must be a man of exceptional ingenuity, but he is not sufficiently long installed in office to deal with this knotty problem. Having said what we have said, I feel that the best course to adopt is to withdraw the Amendment. As the seconder of the Amendment, I naturally give way to the proposer.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
CLAUSE 17.—(Vesting of assets.)
I beg to move, in page 16, line 21, to leave out "the vesting date," and insert:
"such date as may be appointed by order of the Minister (in this Act referred to as 'the vesting date')."
This is a very simple drafting Amendment which meets the request of the Opposition that the vesting date should be defined under Clause 17 instead of under the interpretation Clause, Clause 70. A consequential Amendment in Clause 70 will be necessary.
The simple word "Thanks" is perhaps the best way of showing our appreciation of what the Minister said, certainly at this hour of the night.
Amendment agreed to.
Further Amendment made: In page 16, line 31, at the end, to insert:
"(2) The vesting date shall not be less than three months after the establishment of the Gas Council and all the Area Boards and the definition by order made under Part I of this Act of all the areas for which those Boards are established and shall not be earlier than the first day of April, nineteen hundred and forty-nine."—[ Mr. Gaitskell. ]
I beg to move, in page 17, to leave out line 34, and to insert:
"Every agreement, whether in writing or not, and every document (not being an agreement or a document to which the last preceding Subsection applies or an enactment) which refers."
In Committee an Amendment in almost similar terms was put down by hon. Gentlemen opposite. We felt the Amendment was right in its purpose, but were not quite certain about the language and asked the hon. Gentleman who put it down to give us a chance to consider it. We have reproduced almost the exact language he used and are very grateful to him for having called our attention to the point.
It would be wrong of us not to thank the Minister and also wrong not to pay a compliment to ourselves once every hour and a half, in view of all the Amendments the Government are accepting. It shows how much the Bill is improved by the Opposition and the well-known modesty of the Conservative should not preclude me from thanking the Minister once again, not only for accepting the Amendment but for practically adopting the words devised by my hon. Friends.
Amendment agreed to.
12.45 a.m.
I beg to move, in page 18, line 27, after "employee," to insert:
"or a director who before being appointed as a director was employed whole-time by an undertaker to whom this Part of this Act applies."
This is a more important Amendment than the rather minor ones moved earlier. In Committee there was a slight misunderstanding between the two sides. The Parliamentary Secretary thought then that the Amendment was for the benefit of persons formerly directors and for the benefit of holding companies. It was never our intention to deal with former directors. What we wished to do then, and what we wish to do now, is to protect the interests of persons who, at one period, were employed by a company and on their retirement, possibly with a reduction of pension or whatever you like, were persuaded to come along and act as directors, possibly as part-time directors, in an industry of which they had considerable knowledge. It was misunderstood, and that led to a rhetorical speech by the Parliamentary Secretary, who at the moment is not in his place. I am not holding that against him. Heaven knows he has been in his place a long time, and no doubt will be there a long time. He was a little disturbed lest we were trying to be "over-clever," but we have never tried to be over-clever: we have been known for generations as the honest Party. [ Interruption. ] What we really desire is to ensure that where you have a job as a part-time director—[ Interruption. ] There is no sinister motive behind this. I think the Government do appreciate this matter. There may be some slight technical difficulties about it, but I do not think there is any difference between the two sides of this House. We both want to protect these men.
I beg to second the Amendment.
I know that the subject of directors is not a popular one in this House—[HON. MEMBERS: "Hear, hear."]—and there is difficulty in persuading hon. Members on the other side of their value, though I believe that the direction of nationalised industry is causing them some concern at present. It has been a very pleasant custom, and a very sound one, in the gas industry to find places as directors, for employees with long and trusted service towards the end of their working lives. It has the double benefit of giving them a financial interest in the company through pensions derived from their director's fees and an interest in the work in which they have been engaged all their lives. If they were completely retired, living somewhere right away from the works, or going there only occasionally, they lose a great deal of the interest of their lives because the gas industry, for those men, is not just something engaged in for a few hours every day; it is something they are engaged in all their lives. It is so much a way of life that their lives are bound up with it. They are men who have been organising it throughout their working career and they are much happier not to be in a state of complete retirement. They prefer to be in a state where they are working—not as continuously as before— but still as people who feel that they are not only deriving their living from the company, but are doing something for it. These men almost certainly ran certain risks when they were employees and they had certain pension rights.
If one of the workers who was made a director happened to be a Communist, would he still be taken over?
My answer is that in private industry, so far as I know, political opinions are not taken into account in that way.
Oh.
Read out the list of Communist directors!
That is rather irrelevant. All I am saying is that this very worthy class of persons should have something done for them because of the risk involved when they become directors and when owing to the regulations and pension rules of the companies, they cease to be eligible for pension. Directors being abolished by this Bill, they lose their director's fees, and their pension, or the right to a pension, that they would have had if they had remained officers, or retired as officers.
We feel that there are very serious difficulties in the way of accepting this Amendment. What Subsection (5, c ) already does is to exclude managing directors, or directors whose functions are substantially those of employees. They are taken over. I am not imputing any sinister intention to the mover of the Amendment, but I oppose it on the ground that I think it is difficult to work—so difficult as to be impossible. How can we distinguish between a director who has been an employee of the company for a number of years, and then, by way of a grant, shall I say, a complimentary appointment is given to him, to occupy him or to give him a little remuneration in his old age? How can we, on any intelligible principle, distinguish between that kind of director and the ordinary director, who is appointed, no doubt, because he has some special knowledge, or some technical qualification or some particular association with the company? It really is not feasible to draw a line and say what directors we are to include and what directors we are to exclude.
Hon. Members opposite have in mind the person who is appointed a director as a reward for his services. That is the basic idea behind the Amendment, and it is an idea that I can well understand. But how is it to be translated into a practical operation? An employee works for a company for a number of years and he is then appointed a director. How is it possible to sift the various cases, and investigate the actual proceedings of a company, and sort out those cases where one could fairly say that the directorship was really part of the man's remuneration for his work as an employee? He is a director of the company and has every right that the other directors have, and all the authority that the other directors have. He also shares the responsibility.
It is perfectly feasible, so we think, and so we have provided, to except managing directors from the category. A managing director has a specific contract for a period of time and specific managerial duties. We also exclude directors whose functions are substantially those of an employee. In that respect one finds oneself on difficult ground, because it is difficult to say of any particular director that his functions are substantially those of an employee. A director's functions are those of a director and the functions of an employee are, generally speaking, different. But we have tried, in order to impart some measure of justice into this Clause, to find a form of wording to bring back those directors who work as employees of the company. If we go further, we shall arrive at a stage where no intelligible distinction can be drawn.
We do not accept this Amendment because we cannot see on what logical and consistent principle we can choose those directors who have been appointed directors in their old age, having served the company for many years. All sorts of things motivate the appointment of directors. A person may be appointed a director because he has done service to the company from outside; he may be appointed a director because for many years he has been in a particular industry and it is thought his presence on the board would assist the operations of the company; a mining engineer who may never have been associated with a particular company may, nevertheless, because of his status in the world of mining engineering, be invited to serve on the board of a company. One gets an infinite variation and all sorts of reasons. It is not possible, we think, to sort out those cases where one could say there is something like—if I may so describe it—a compassionate appointment. It is not feasible to do so. One cannot really draw a distinction between the different reasons for which directors are appointed.
We also think that there is not much ground, on the merits, for singling out what I call compassionate appointments from the appointments for other reasons of other directors. Directors may be distinguished in a particular sphere of industrial life, they may have specialised experience, and for that reason may have been invited to become members of boards of directors. There does not seem to us to be very much of a case for bringing in directors—I am not speaking disparagingly—on compassionate appointments— men getting on in years who can lend help from experience derived from work in the industry. For these reasons, though we have very carefully considered this Amendment, we feel it is not feasible to accept it, and accordingly I ask the House to reject it.
We talked about this Amendment at some length upstairs, on one of the few occasions on which the Parliamentary Secretary showed signs of losing his temper. He was temporarily bereft of his normal bright intelligence. He wholly misinterpreted or misunderstood the point of view put forward by my hon. Friends. I am surprised to find that the Solicitor-General tonight also fails to understand the point of view put forward by my hon. Friend the Member for Wavertree (Mr. Raikes). It is not a question of what the right hon and learned Gentleman calls "compassion." The gas industry has what one may call a special type of director—a pensioner director. I want to explain this with some care to the Solicitor-General. Such a director, generally speaking, is an engineer or, perhaps, a manager who has given up a great deal of his life to the business, but who has still a lot of work in him. If we remember that a very large number of the gas companies in Britain are very small companies we shall understand that it is often convenient to have a retired engineer or a retired accountant on the board of such a company, and it is for this reason that the pensioner director came into existence.
I agree with the Solicitor-General in one respect; such a type of director is peculiar to the gas industry. No other industry in the country has engaged directors of these lines. What has really happened is that small companies with a narrow revenue, having a man who has been a good engineer for many years, and who is getting near retirement, think the best way of paying him is to give him a sum of £50 or £100 a year to serve in the capacity of a director; and he may work for five small companies. I grant that this is an anomaly, but Britain is full of anomalies. That is one of the reasons why this is such an exceptionally fine country. We are not very logical. Here is a case which affects many worthy people. I do not say the number is enormous, but there must be 200 or 300 hard-working men, who have given the best of their lives to the gas industry, who will be grievously smitten unless this Amendment is accepted.
1.0 a.m.
The Solicitor-General has said that there is nothing logical or consistent in what we are appealing for. Of course there is nothing logical or consistent in it. But if we were to base our lives on logic and consistency, the Lord knows what would become of us all. Here we are dealing with an anomaly. The best way to deal with an anomaly is to say that it will not form a precedent, but that the Government are willing to give consideration to this small number of worthy men who are, as I have already described, pensioner-directors. What is to happen to these men? Under this Bill the pensioner-director loses his fee, which is the equivalent of his pension. So he has neither fee nor pension. That is the reward he receives after a long life of service to the gas industry. We are not now talking about plutocrats. We are talking about people who, in these conditions, earn perhaps £300 or £400 a year in many cases.
I should have thought that the Solicitor-General would have been willing to meet us in this way. I do not ask the right hon. and learned Gentleman to do it tonight. All I ask him to do tonight is to give us an assurance, though it would have to be a pretty rigid assurance. I know something about this unfortunate class of people, and I feel that they have no friends except certain people in this House who are trying to do justice to a completely worthy section of the community. If the Solicitor-General could give us an assurance that the Board of Inland Revenue will be asked to consider this whole question between now and the discussion of this Bill in another place, and if he is willing to give that assurance quite firmly to us, I do not think we need press this matter much further.
It is an odd thing that although we have been dealing with matters of immensely greater consequence than this Amendment, I feel that my party has a great responsibility for these unfortunate people who will be deprived both of pension and fees. The middle classes of England are being skinned alive or ground out of existence. So far as we are concerned as a party, we are going to protect the weak in this instance. We much prefer not to vote on this but to ask the Solicitor-General if he can give an assurance that between now and the discussion of this Bill in the Lords a real effort will be made to deal with what I have admitted is an anomaly, but which is none the worse for being an anomaly.
There are two questions which I wish to put to the Solicitor-General. He said it was going to be difficult to distinguish this type of person, and asked upon what standard they would settle who belonged to that type of director. But it is a question of fact; a question of what is the history of the man one is dealing with, of how many years he has served, and why was he placed in that situation. I am sure that hon. Members opposite will know perfectly well that if many capitalists are bad people, there are some people and family companies who have had men who have served them for a great number of years; men who, it may be, have given the greater part of their lives to the service of a particular gas undertaking. It may be that a man suddenly feels that he is not up to the work of an outside manager say, for the hours expected of him. If, in those circumstances, he left the concern, it would suffer a great technical loss.
I know of many cases in various industries where these men are a great asset. The company says, "We must not let this man go because he has a first class technical mind; we will make him a director because he will not have to get up so early in the morning "— [ Interruption. ]—Well, everybody gets old. One cannot stop age, and it does not follow that the older one gets, the bigger fool one becomes. Some people may, but it does not follow. A good case can be made out and I put this case to the right hon. and learned Solicitor-General on behalf of this type of director —the type of man who has a first-class knowledge of the industry, and who has served the major portion of his life in that industry. He has come to the time when the regular, strenuous hours are too much for him, and the company puts him in the position of a director. I will not say there are a large number of these people up and down the country, but there are many who are in this position and they are people of great value.
The hon. Member says these people are not old if they are alert. Does he want the Minister to employ psychologists to decide whether they have alert minds?
I do not understand what the hon. Member means by "alloyed minds."
Alert minds.
It is a question of fact that there are these people. I do not quite understand the interruption, but these people have alert minds, and they can give a great deal of assistance to the companies, and that is why they are made directors. They represent a type of people who should be looked after; it is wrong to shut them out altogether. We should support their case, and support it strongly.
I think this is a case of injustice. We can give the right hon. and learned Solicitor-General the answer to the questions which he posed to us. It seemed to me that he posed two questions, first that the relative fairness between the ordinary director, and this special type of director, would be disturbed. What he is saying is that there are a lot of ordinary directors who were quite properly appointed to these boards for various reasons and who have done first-class service for their companies and who, owing to nationalisation, are going to be disturbed and rendered redundant. They are going to lose without any compensation an office of profit and, I would emphasise, an opportunity to serve their locality. It cannot be denied; that is perfectly true. I think they are suffering something which is very unfair. We made it clear in Committee, and we make it clear again tonight, that we are not really pleading in any way for those ordinary directors at all. Those for whom we are pleading for are the directors of the other type which has been described, and the suggestion that because one type of director is getting an unfair deal, the other type of director should also get an unfair deal, is a very poor argument indeed.
Gas companies can be divided roughly into two categories, those which employ their old technicians on their boards and those which do not. Those which have the habitual background of employing the late works manager and engineer, or even the secretary, when they engage their next top employee, get him from some other company, I can assure the Solicitor-General that this does happen. The chairman of a company will sit down with a short list of those men who are applying to be engineer at that company, and the intending applicant will be very anxious to know what the terms of his employment are to be. In the case of that type of company it is very definitely held out to him as part of the emoluments of his office that it is the practice in that particular company, when the time for retirement comes, unless he has blotted his copy book very badly, or become of unsound mind, to ask him to serve the company in the office of director. That is part of the conditions under which he left his previous employer and took up the new post. When we considered this matter in Committee the Parliamentary Secretary said: in the industry, that some of them undoubtedly will suffer great hardship if the undertakings so clearly given by the Parliamentary Secretary are not carried out.
1.15 a.m.
As this Subsection stands there are only two classes of directors who may be compensated, either a director who is a managing director or one whose functions are substantially those of an employee. During the Committee stage we moved an Amendment designed to cover
We discussed this matter for some time in Committee and I would only add that if the Government are sincere in this paragraph ( c ) there is one thing which they should strive to do. They should strive to make it certain that all those people who, irrespective of whether they started or finished as directors, are employed should receive fair and adequate treatment.
Unless a proviso such as this is inserted in the Bill, it is quite obvious that will not be so. I think that the words which we have put down are more than adequate. They cover all the cases to which we have referred, and we hope that the Minister will consider them again.
There is no question of having to compensate people who have not done their fair share either in the daily working or the development of the industry. All that is asked is that where a person is being employed full-time as a director, on the vesting day he shall be entitled to compensation. There is no question of guinea-pigs or any of those other people whom Members opposite—so rightly, I think—dislike. All that is asked is that anyone who is employed in the industry, or has given his life to the industry and done his best for it, shall be compensated. What the right hon. Gentleman has said seems to miss the whole point of the argument. I hope even at this late stage, the right hon. Gentleman will admit that what the Minister said upstairs represents a fairer deal than that which he has given to the House tonight—which misses the whole point of the Amendment and the object to which it is directed.
Mr. Raikes.
rose —
If the Parliamentary Secretary wishes to pass an observation before I, as mover of the Amendment, make my final comments, I shall be glad to give way.
I feel that in view of the quotation of the hon. Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) that the House is entitled to a word from me on this matter, because we discussed it at great length. I may have lost my temper on that occasion, but it was momentarily. Certainly there were cases which appealed to us at the time. They are of two kinds. One is that of the retired engineer or technician who receives a small pension, and has a place on a board with a small fee in order to supplement his pension and to retain his technical advice. The other is that of the service director—the man who is an engineer of a company but a director of three or four others, because he gives technical advice, and receives a small sum of money from each.
I take the latter case—that of the service director—first. It seems to us, after examining that case with every intention of dealing with it honestly and fairly, that such a man would lose his directorships on the two or three companies with which he is a director and from which he is getting small sums. He would continue as an officer under the area board, because he is still working for one of the undertakings. As good employers, the area board would necessarily have to give consideration to that individual's salary because it is quite likely that he would continue to give technical advice to those other undertakings although, of course, he cannot under the Bill be a director. His emoluments would have been decreased by the loss of those director's fees, but the work which he was doing for the undertakings would remain the same. Therefore, there is a fair case for a good employer to consider and adjust his salary accordingly.
Then we come to the position of the technician who has retired and who has been given a small pension plus a seat on the board. That is quite different. If we are to have words in this Bill to provide for compensation for the loss of directors' fees—we are agreed that he is quite covered on his pension—we should also have to consider all those workers in the gas industry who have inadequate pensions. They have as much right to have their pensions increased as the man who has been fortunate enough to have his pension and director's fees. He is no longer giving his technical advice. If that person has to be considered, it would be only fair to the workers that we should look at the cases of those who have served 30, 40 or 50 years in the industry and who have no pensions at all. Having considered the cases put forward in all sincerity by the hon. Member for Bath (Mr. Pitman), I have to inform the House that we cannot move from the position which we have taken up.
The hon. Gentleman has told us that he would have to re-open the question of the pensions of all workers if he accepted the principle in this Amendment. There is a large distinction, which I am sure he recognises, in the case of those directors who have been enticed away from one employment to another on the understanding— admittedly there is no contractual under standing—that as part of the long term remuneration there was—
The hon. Member has already spoken and he may not speak twice.
By leave of the House.
No.
That being so may I ask a question? Does the Minister not feel that there is a big difference between the case of the employee who has taken on the job at stated terms of remuneration and the engineer-technician who has taken on the job—
This is the Report stage when only one speech can be made by each hon. Member. The hon. Member has made his speech, and that is the end of it. We are not on the Committee stage now.
1.30 a.m.
As the mover of this Amendment I should like to thank both the Parliamentary Secretary and the Solicitor-General for their consideration of the matter and their comprehensive replies. I am only sorry that their replies are not as acceptable as we had hoped they might be. The Solicitor-General talked about logic and consistency, but one cannot be logic when dealing with human beings. If we were logical, we should not be sitting here at this hour of the night, and if we were consistent we would never sit later than 9 o'clock. In fact we do, and sometimes we get a good deal of value out of it. We have had one curious bit of value even on this small Amendment. The Parliamentary Secretary said so far as technicians were concerned, the area boards would do all that good employers might do, but would not go so far as to say that pension rights would be automatically safeguarded. In regard to retired men who become directors, we have got absolutely nothing. There are not many of them. We are not asking him to open a wide avenue, be- cause just a few persons are brought in who are asked, as a little compliment, to come along in their old age. The Government are not prepared to deal with this small human question, but every human question, though it may affect small numbers, is large in its effects. I
am bound to say I stand by this Amendment and shall vote for it.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 46; Noes, 201.
Division No. 208.] AYES. [1.32 a.m. Agnew, Cmdr. P, G Duthie, W. S. Noble, Comdr A. H. P. Amory, D. Heathcoat Elliot, Lieut.-Col. Rt. Hon. W Pitman, I. J. Baldwin, A. E. Foster, J. G. (Northwich) Raikes, H. V. Birch, Nigel Fraser, H. C. P. (Stone) Roberts, P. G. (Ecclesall) Bossom, A. C. Hare, Hon. J. H. (Woodbridge) Ropner, Col. L. Bower, N. Jennings, R. Smith, E. P. (Ashford) Boyd-Carpenter, J. A. Lambert, Hon. G. Spearman, A. C. M. Bracken, Rt. Hon. Brendan Lloyd, Selwyn (Wirral) Teeling, William Buchan-Hepburn, P. G. T. Lucas-Tooth, Sir H. Thomas, J. P. L. (Hereford) Channon, H. Macdonald. Sir P. (I. of Wight) Thornton-Kemsley, C. N. Clarke, Col. R. S. Mackeson, Brig. H. R. Wheatley, Colonel M. J. (Dorset, E.) Crosthwaite-Eyre, Col. O E Macmillan, Rt. Hon. Harold (Bromley) Willoughby de Eresby, Lord Davidson, Viscountess Maitland, Comdr. J W York, C. Digby, S. W. Molson, A. H. E. TELLERS FOR THE AYES: Drayson, G. B Morrison, Maj J G. (Salisbury) Major Conant and Drewe, C. Nicholson, G. Major Ramsay.
NOES. Acland, Sir Richard Evans, S. N (Wednesbury) Manning, Mrs. L. (Epping) Adams, Richard (Balham) Ewart, R. Mayhew, C. P. Adams, W. T. (Hammersmith, South) Fairhurst, F. Middleton, Mrs. L. Alexander, Rt. Hon. A. V. Field, Capt. W. J. Mikardo, Ian Allen, Scholefield (Crewe) Foot, M. M. Millington, Wing-Comdr E. R Attewell, H. C. Fraser, T. (Hamilton) Mitchison, G. R. Austin, H. Lewis Freeman, J. (Watford) Monslow, W. Awbery, S. S. Freeman, Peter (Newport) Morgan, Dr. H. B. Ayrton Gould, Mrs. B. Gaitskell, Rt. Hon. H. T. N Morley, R. Barstow, P. G Gallacher, W. Morris, P. (Swansea, W.) Barton, C. Ganley, Mrs. C. S. Moyle, A. Bechervaise, A. E. Gibson, C. W. Nally, W. Berry, H. Grey, C. F. Neal, H (Claycross) Beswick, F. Griffiths, D. (Rothar Valley) Nichol, Mrs. M. E. (Bradford, N.) Bing, G. H. C. Gunter, R. J. Noel-Baker, Capt. F. E. (Brentford) Bowles, F. G. (Nuneaton) Guy, W. H. Noel-Baker, Rt. Hon. P. J. (Derby) Braddock, T. (Mitcham) Haire, John E. (Wycombe) O'Brien, T. Bramall, E. A. Hale, Leslie Oliver. G. H. Brook, D. (Halifax) Hamilton, Lieut.-Col. R. Orbach, M. Brown, George (Belper) Harrison, J. Paget, R. T. Brown, T. J. (Ince) Haworth, J. Palmer, A. M. F Butler, H. W. (Hackney, S.) Henderson, Joseph (Ardwick) Pargiter, G. A. Callaghan, James Herbison, Miss M. Parker, J. Chamberlain, R. A. Holman, P. Parkin, B. T. Champion, A. J. Holmes, H. E. (Hemsworth) Paton, J. (Norwich) Chetwynd, G. R. House, G. Pearson, A. Cobb, F. A. Hudson, J. H. (Ealing, W.) Peart, T. F. Cocks, F. S. Hughes, Hector (Aberdeen, N.) Perrins, W. Collins, V. J. Hughes, H. D. (W'lverh'pton, W.) Popplewell, E. Cooper, Wing-Comdr. G. Hynd, H. (Hackney, C.) Price, M. Philips Corbet, Mrs. F. K. (Camb'well, N.W.) Hynd, J. B. (Attercliffe) Pritt, D. N. Corlett, Dr. J Irving, W. J. (Tottenham, N.) Proctor, W. T. Crossman, R. H. S. Jeger, Dr. S. W. (St. Pancras, S.E.) Pursey, Cmdr. H. Dalton, Rt. Hon. H. Jenkins, R. H. Randall, H. E. Davies, Edward (Burslem) Jones, D. T. (Hartlepool) Ranger, J. Davies, Ernest (Enfield) Kenyon, C. Reeves, J Davies, Harold (Leek) King, E. M. Reid, T. (Swindon) Davies, Haydn (St. Pancras, S.W) Lever, N. H. Rhodes, H. Deer, G. Levy, B. W. Robens, A. de Freitas, Geoffrey Lewis, J. (Bolton) Roberts, Goronwy (Caernarvonshire) Delargy, H. J. Lindgren, G. S Roberts, W. (Cumberland, N.) Diamond, J. Lipton, Lt.-Col. M. Rogers, G. H. R. Driberg, T. E. N. Longden, F. Ross, William (Kilmarnock) Dugdale, J. (W. Bromwich) McAllister, G. Royle, C. Dumpleton, C. W. McGhee, H. G Sargood, R. Durbin, E. F. M Mack, J. D. Scollan, T. Dye, S. Mackay, R W. G. (Hull, N.W.) Shackleton, E. A. A Ede, Rt. Hon. J. C. McLeavy, F. Shawcross, C. N. (Widnes) Edelman, M Macpherson, T. (Romford) Shawcross, Rt. Hn. Sir H. (St. Helens) Evans, Albert (Islington, W.) Mallalieu, J. P. W. (Huddersfield) Silverman, J. (Erdington) Evans, E. (Lowestoft) Mann, Mrs. J Simmons, C J. Evans, John (Ogmore) Manning, C. (Camberwell, N.) Skeffington, A. M Smith, C. (Colchester) Thomas, D. E. (Aberdare) Wigg, George Smith, H. N. (Nottingham, S.) Thomas, I. O. (Wrekin) Willey, F. T. (Sunderland) Snow, J. W. Thomas, George (Cardiff) Willey, O. G. (Cleveland) Solley, L. J. Tiffany, S. Williams, D. J. (Neath) Sorensen, R. W. Tolley, L. Williams, J. L. (Kelvingrove) Soskice, Sir Frank Usborne, Henry Williams, R. W. (Wigan) Sparks, J. A. Vernon, Maj. W. F. Williams, W. R. (Heston) Stewart, Michael (Fulham, E.) Wadsworth, G. Wills, Mrs. E. A. Stross, Dr. B. Wallace, G. D. (Chislehurst) Wilmot, Rt. Hon, J. Stubbs, A. E. Wallace, H. W. (Walthamstow, E) Wise, Major F J Swingler, S. Warbey, W. N. Woods, G. S. Sylvester, G. O. Watkins, T. E. Wyatt, W. Symonds, A. L. Wells, P. L (Faversham) Yates, V. F Taylor, H. B. (Mansfield) West, D. G Taylor, R. J. (Morpeth) White, H. (Derbyshire, N.E.) TELLERS FOR THE NOES: Taylor, Dr. S. (Barnet) Whiteley, Rt. Hon. W. Mr.[Hannan and Mr. Wilkins.
CLAUSE 18.—(Provisions as to undertakers whose gas undertakings only are taken over.)
I beg to move, in page 19, line 42, to leave out from "determination," to "of," in line 45.
This is one of a series of Amendments. There are 13 altogether, and one is unintelligible without the others. Perhaps I might indicate shortly, therefore, the purpose of all of these Amendments. It is quite a simple one. Clause 18 provides regulations to determine how problems arising under the Clause are to be decided. On further consideration of this matter we thought it desirable to provide that the Clause itself should provide arbitration procedure. That we proceed to do by the Amendment to page 22, line 46, that is to say, that any differences between the local authority and the board are to be determined by the Minister of Health, and in all other cases by arbitration under the Act.
We are accepting all the Amendments, but there is one marooned Amendment in page 21, line 29, in the name of several of my hon. Friends and myself, with regard to playing fields. I take it that that is untouched by the business we are doing now. We are taking these paving Amendments in blocks, but it is necessary to safeguard this Amendment, which is in between the paving stones.
1.45 a.m.
The Amendment in page 21, line 29, was not to be called in any case.
Amendment agreed to.
Further Amendments made: In page 20, line 21, leave out from "be," to end of line 22.
In line 34, leave out from "be," to "determined," in line 35.
In line 46, leave out from "be," to "determined," in line 48.
Page 22, line I, leave out "settled by agreement or."
In line 3 leave out "agreement or."
In line 7 leave out "agreement or."
In line 7 leave out "agreed or."
In line 8 leave out "settlement or."
In line 16 leave out from "be," to the end of line 17.
In line 18 leave out "the prescribed manner," and insert "accordance with the regulations."
In line 33 leave out from the beginning, to "determined."
In line 46 at the end, insert:
"(8) Regulations made under this Section shall provide that any questions to be determined in accordance with the regulations shall be determined by agreement between the Area Board and the undertaker concerned, or in default of agreement shall—
CLAUSE 19—(Adjustment of matters out standing as between accounts of gas undertaking and other accounts of local authority.)
Amendment made: In page 23, line 16, after "date," insert "properly."—( The Solicitor-General. )
CLAUSE 21.—(Disclaimer of agreements and leases.)
I beg to move, in page 25, line 7, to leave out from "tribunal," to the end of the line, and to insert:
"if satisfied that the agreement or variation was not reasonably necessary as aforesaid or was made or varied with unreasonable lack of prudence, shall confirm the notice and if not so satisfied shall revoke it."
This Amendment is to provide that, in the event of an agreement being rejected as having been unnecessarily entered into for the purpose of the undertaking, the onus should be on the area board to show that the agreement was entered into with unreasonable lack of prudence, or was not reasonably necessary for the undertaking of the gas undertaking.
We are more than willing to accept this Amendment, because, like many others, it sprang from the zeal and capacity of the Opposition. Once again I congratulate the Government on enshrining our suggestions in reasonably good Parliamentary prose.
I think there is a point of some importance here, because apparently, as the Amendment is at present drafted, the onus of proof is to be on the person who may object to either the decision of the Gas Council or the decision of the area board. We have an Amendment down to the proposed Amendment in line 2, after "satisfied," to insert:
"by the Board or Council."
I understand it is not to be called. Were it called, and were it accepted, it would alter that onus of proof, and leave it to the Gas Council or the area board to prove the case. I hope that before we part with the Government's Amendment we may have some statement from the Government as to why they have thought it necessary that the proof should be placed on the individual rather than on the nationalised industry, which, in any case, is making the case against the individual.
As our Amendment is at present worded I think it undoubtedly does place the onus upon the board to prove absence of prudence, and the absence of necessity for the entering into the contract. After all, if the board does not prove that the contract was unreasonably entered into one cannot really suppose that the undertaking is going to take on itself the onus of proof of that fact directly contrary to its own interests. So the effect of the Amendment is that it will be for the board to show the necessary facts to enable the contract to be repudiated. It must always be on the board to show that, as the Amendment is drafted.
How does the hon. and learned Gentleman get that interpretation? Can he quote the lines in the Clause as at present drafted?
If the matter comes before the tribunal and no-one proves that the agreement was unreasonably entered into, it cannot be repudiated. The only party who can want to prove that the agreement was unreasonably entered into is the board. Therefore it must be the board, if anyone, who proves that the agreement was unreasonably entered into.
Amendment agreed to.
CLAUSE 23.—(Subsequent transfer of property from the Gas Council to an area board, or from one area board to another.)
I beg to move, in page 27, line 30, to leave out subsection (4), and to insert:
"(4) An order under this Section shall not be made except after consultation with the Gas Council and any Area Board concerned."
This fulfils an undertaking given by the Parliamentary Secretary during the Committee stage that we would provide for an area board to be consulted, together with the Gas Council, before any order was made providing for the possible transfer after the vesting date of property which had been vested in the area board or the Gas Council, as the case may be.
The Minister rightly says that he promised us in the Committee upstairs that he would try to find a form of words to express this idea. We are obliged to him for a form of words which is quite satisfactory to us.
Amendment agreed to.
CLAUSE 24.—(Compensation to holders of securities.)
I beg to move, in page 29, line 41, after "class" to insert: price of issue as denned by Subsection (7), in the case of securities sold by auction, shall only be applicable for the purposes of the provisions of Subsection (5) and Subsection (6). That is to say, it shall not be applicable for the purposes of Subsection (3). Hon. Members will observe that Subsection (3) also speaks about price of issue. The effect of this Amendment is that when you are talking about price of issue you do not mean that for the purposes of Subsection (3), but only for the purposes of Subsection (5) and Subsection (6).
If hon. Members will bear in mind that the object of Subsection (3) is contrasted with Subsection (5) and (6), it will be apparent that the price of issue as determined by Subsection (7) would be inappropriate when trying to work out the valuation which Subsection (3) is providing for. That is the one where you get stocks and shares issued and subsequent stocks issued, and an average provided for. It would be unsuitable if the averaging process were determined in accordance with Subsection (7).
This is an Amendment which can do no harm and may do some good. We on this side of the Committee can hardly congratulate the Minister on this occasion, but we certainly will not oppose him.
Amendment agreed to.
CLAUSE 27.—(Compensation to local authorities.)
I beg to move, in page 34, line 23, at end, to insert: these appear to be annuities of a different sort. Although they are "perpetual," they are redeemable by agreement between the local authorities and the annuitants and, of course, they are diminishing in number year by year.
After the Bill was drafted, doubts were raised in our minds whether the annuities were covered by compensation arrangements already in the Bill. In fact, the first part of the new Subsection does provide for the annuities to be treated under Clauses 18 and 27 as though they were loans and any charges for the service of the annuities and statutory sinking funds will be found by the area boards in the same way as ordinary loans. The proviso enables the annuities to be redeemed subject to agreement of the area boards, who might have to find additional funds to redeem them. I hope I have made the position sufficiently clear, and I commend the Amendment to the House.
The Minister has given us an interpretation of this quite complicated Amendment. I must say that I found it difficult to understand how one could nationalise "eternal annuities," but the Treasury has shown wonderful ingenuity in dealing with this matter. Not so long ago, I appealed to the Solicitor-General to deal with the anomaly of pensioner-directors, but he said he could find no form of words to deal with that anomaly. We must take it that anomalies cannot be charitably treated in this House, but that the Government, when it can lay its hands on some money, is ever ready to rush into the fray with the most ingenious solution to seize the money. I suppose one could say it was anomalous money.
Even at this hour, you would rule one out of Order, Mr. Speaker, if one expressed one's view about the Treasury, but it may be in Order to make one simple comment on the two Amendments. It is that we cannot say we are grateful to the Minister. He did not put them down to satisfy the Opposition, but to satisfy the greedy maw of the Treasury. The best that can be done is that we should wish the Amendments a more or less respectable farewell.
Amendment agreed to.
Further Amendment made: In page 34, line 31, at the end, to insert:
CLAUSE 28.—(Further compensation to local authorities in respect of severance.)
2.0 a.m.
I beg to move in page 34, line 40, to leave out "such of."
The Clause lays down that further compensation may be paid to local authorities. Today the Parliamentary Secretary indulged in mathematical nights and computations that would have made Einstein seem an elementary scholar. We have not a further opportunity of discussing those figures, but if the local authorities are to be given this mystical sum without any justification we feel that all local authorities should be able to participate in the benefit.
As the Clause stands at present it gives the Minister discretion to lay down by regulation which local authorities will participate and which will not. The Government have refused to give us any idea what the regulations are to contain. How it will be possible to take part in the "Robens Compensation Handicap" has never been laid down. Apart from graphic but entirely unconvincing ideas on how compensation was to be allocated, we have had no information from the Government whatever. We feel that if this sum is to be paid, it must be given to the local authorities as a whole.
There must be no conditions laid down which will enable the Minister to select certain local authorities and disregard others. It is our duty to see all local authorities shall be equally entitled to ask for additional compensation which may be payable under the Clause. I hope the Minister will accept the Amendment and see that additional compensation is available for all local authorities, and that he will not produce regulations long after the Bill has become law.
I beg to second the Amendment.
I wish to echo the last words of my hon. and gallant Friend the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) that a long time will probably elapse before these regulations are issued by the Minister and local authorities know what principles are to be prescribed and what their application will be. As this nationalisation legislation continues we get more and more arrears of orders, and more and more into a state of anxiety and suspense. There may, in this case, be a good deal of uncertainty until it is known how this money is to be divided. It is going to be difficult for local authorities to make up their annual accounts if they have large sums in suspense, which they do not know whether they will receive either partially, wholly, or not at all. I feel the Amendment merits consideration and would improve the Bill if accepted.
I am rather surprised at the arguments advanced by the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre). I know it was only yesterday that I made a statement on the matter of the allocation of the £2½ million, but I think I ought to repeat it, because apparently it does not seem to be within their recollection. I made it clear—and this should disabuse their minds of any anxiety— that the Minister would make his regulations only after the fullest consultation with the local authorities concerned. As a matter of fact consultations are taking place in connection with the similar provisions of the Electricity Act. Consultations with local authorities must be kept as wide as possible. It may be that the local authorities themselves will agree that there are some authorities who should not have any of this compensation for severance.
No.
It is no use hon. Members saying "No." Some local authorities may not be in a position because of severance to warrant compensation. I say there might be local authorities themselves who, when we consult them, may conceivably agree that there are certain local authorities who should not have any compensation for severance. If we were to accept this Amendment we should not be able to make regulations after we had consulted local authorities and after they had agreed, in certain circumstances, that they should not receive any compensation for severance. This Amendment, if carried, would make it completely inflexible and every local authority, notwithstanding the circumstances, would have to receive some proportion of the global sum.
If the words "such of" are left out, the sentence would read:
I think the Parliamentary Secretary has not got my hon. and gallant Friend's point. What we are objecting to is that under the Clause as now drafted it would be possible to leave out of account authorities which were in fact entitled to compensation for severance. Surely what we want to ensure is that in the drafting of the Bill it is clear that all authorities which have suffered loss through severance are entitled to such share as the Government is willing to afford. Under the Clause as drafted it is not clear that that must happen.
The Parliamentary Secretary said that if our Amendment were passed it would mean that every authority would get compensation for severance whether they had in fact suffered loss or not. I do not think that is so. Though the hon. Gentleman read out some of the Clause he did not read out the end, which would read in such a way that an authority not entitled because it had not suffered loss would not get it. The words which would be left in are:
Would the Minister give us an assurance on this Clause that local authorities will not be debarred from compensation without their approval? The Minister says that he will be active on the recommendations of the local authorities, who will have an advantage to the extent to which any one or more of them is debarred from sharing in the total. I do not think that this is a good enough assurance for this House. What we want is an assurance that the Minister will see that justice is done. Will he see in his prescriptions that it is impossible for any local authority to be done down if he thinks it is entitled to compensation?
I feel that the Parliamentary Secretary has failed to appreciate the point of principle which lies behind the Amendment. We are being asked, in the passage of this Bill, to take a step which must result in some loss on every local authority in respect of which severance occurs. What we are asking is that in every such case some claim for compensation shall arise. We should be neglecting our duty to those local authorities if we were not to put in this Bill something to give them the right to some share in this compensation. We should be abdicating our responsibilities if we were to hand over the whole decision on compensation to subsequent negotiation, no doubt with the associations which represent the different kinds of local authorities.
It is for this House to secure that proper provision for compensation shall be made. That duty cannot be delegated for negotiation after the passage of the Bill. It is not unreasonable to leave the precise share—which is obviously a complicated matter—to negotiation, but it is quite wrong to leave entitlement to subsequent negotiation. We feel inclined to press strongly for the discharge of our duty to these local authorities by ensuring that their entitlement to a share in compensation shall be provided by Act of Parliament and shall not be dependent on the success or failure of their negotiators in the somewhat large-scale negotiation which will take place. That is a point which we must urge with not unreasonable but real firmness on the Government. We feel we should be neglecting our duty if we adopted any other course.
2.15 a.m.
I have in mind an undertaking in my own constituency, a small undertaking. If there is severance there may be loss. If there is a loss then the undertaking suffering loss as a result of severance must receive some compensation. The question of quantum is a different matter, but I shall not be satisfied unless I receive some assurance that in this particular undertaking where there is loss through severance there is going to be some compensation, although it will only be small. If the matter is left to be bargained for between the Minister and the Association of Municipal Authorities it may very well be that the smaller undertakings will fall by the wayside and receive no compensation. It is a reasonable request to make that where there is loss through severance some compensation should be paid out of the global sum.
We are under a difficulty because of the procedure adopted by the Government in this matter. We are now taking the Report stage immediately after the Committee stage, and we are working without the advantage of having a printed report of what the Parliamentary Secretary said. We are dealing with the sharing out of considerable sums of money, half a million pounds of which was added to the Bill only within the last few hours. Under those circumstances the House is working under great difficulties. The Parliamentary Secretary has been anxious to appreciate those difficulties. I remember well the statement which he made in Debate a few hours earlier, for I also took part in that Debate.
On the question of the half million pounds we find it a little difficult to explain the Minister's unfettered discretion, which was what the Parliamentary Secretary asked for in the remarks which he made to the Committee, when the House was in Committee a few hours ago. He said that the Government intended to enter into conversations and, in fact, had entered into them. He added that it would be wrong of him to say that he could give an indication as to what the share-out—to use a rather slang term— would be. That would depend after consultation—not in consultation because naturally the Minister could not give a veto over his action to the local authorities —with the local authorities. In other words, the Minister reserved complete discretion on this large sum of £2½ million, which has been increased by 25 per cent, within the last few hours.
It is not unreasonable if we register a protest at the conditions under which we have to work here. The Minister is now unable to give us any further assurances than the assurances he has already given us. "The judge of the earth shall judge wisely," and the Minister's discretion will have to be trusted. Without a report of the Minister's words before us, without an interval between the Committee and the Report stages, at twenty past two in the morning and working with a more or less imperfect recollection of what the Minister said, it is not reasonable for the Minister to ask us to avoid registering our protest. Therefore, I am afraid we shall have to go to a Division upon the words which have been moved by my hon. and gallant Friend the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre).
Having sat here listening to all that has been going on, I would like to suggest that the Parliamentary Secretary should have a talk with the Chancellor of the Exchequer and arrange that the Chancellor should hand over the national income to hon. Members opposite. Then maybe we would get on.
I think the Parliamentary Secretary is under a misapprehension. His objection to these Amendments, as I understand it, was contained in one simple phrase: '' We on this side ought to let the Minister and the local authorities get on with the job and discuss this matter. There may be some local authorities who would say they wish to participate in the compensation."
If that is a true summing-up of the right hon. Gentleman's objections, I should like to draw his attention to Clause 28.
The only thing we have proposed is to make it obligatory that all local authorities shall be entitled to receive a share, but in lines 42 onwards we leave it perfectly open to the Minister to make such principles as will qualify local authorities. All we want to do is to say that local authorities shall be entitled to compensation. We leave it to the Minister to say what principles shall entitle them to com-
pensation. If the objections have any validity, it is perfectly possible under line 42 onwards to lay down such principles as would exclude any local authority to which he took objection. I do not think his argument will really hold water when you come to look at it. I am afraid I must ask my right hon. and hon. Friends to show their disapproval of what the Minister said by going into the Lobby.
Question put, "That the words 'such of' stand part of the Bill."
The House divided: Ayes, 191; Noes, 37.
Division No. 209.] AYES. [2.23 a.m. Acland, Sir Richard Ganley, Mrs. C. S. Palmer, A. M. F Adams, W. T. (Hammersmith, South) Gibson, C. W. Pargiter, G. A. Alexander, Rt. Hon. A. V Greenwood, A. W. J. (Heywood) Parkin, B. T. Allen, Scholefield (Crewe) Grey, C. F Paton, J. (Norwich) Attewell, H. C. Griffiths, D. (Rother Valley) Peart, T. F. Austin, H. Lewis Gunter, R. J. Perrins, W. Awbery, S. S. Guy, W. H. Popplewell, E. Ayrton Gould, Mrs. B. Hale, Leslie Price, M. Philips Barstow, P. G. Hamilton, Lieut.-Col. R. Pritt, D. N. Barton, C. Hannan, W. (Maryhill) Proctor, W. T. Bechervaise, A. E Harrison, J. Pursey, Cmdr. H. Berry, H. Haworth, J. Randall, H. E. Bing, G. H. C. Henderson, Joseph (Ardwick) Ranger, J. Bowles, F G. (Nuneaton) Herbison, Miss M. Braddock, T. (Mitcham) Holman, P. Reeves, J. Bramall, E. A. Holmes, H. E. (Hemsworth) Reid, T. (Swindon) Brook, D. (Halifax) House, G. Rhodes, H. Brown, George (Belper) Hudson, J. H. (Ealing, W.) Robens, A. Brown, T. J. (Ince) Hughes, Hector (Aberdeen, N.) Roberts, Goronwy (Caernarvonshire) Butler, H. W. (Hackney, S.) Hughes, H. D. (W'lverh'pton, W.) Roberts, W. (Cumberland, N.) Rogers, G. H. R. Callaghan, James Hynd, J. B. (Attercliffe) Ross, William (Kilmarnock) Chamberlain, R. A Jeger, Dr. S. W. (St. Pancras, S.E.) Royle, C. Champion, A. J. Jenkins, R. H. Sargood, R. Chetwynd, G. R. Jones, D. T. (Hartlepool) Cocks, F. S. Kenyon, C. Scollan, T. Collins, V. J. King, E. M. Shackleton, E. A. A. Corbet, Mrs. F. K. (Camb'well, N.W.) Lever, N. H. Shawcross, C. N. (Widnes) Corlett, Dr. J. Levy, B. W. Shawcross, Rt. Hn. Sir H. (St. Helens) Crawley, A. Lewis, J. (Bolton) Silverman, J. (Erdington) Crossman, R. H. S. Lindg'en G S Simmons, C. J. Dalton, Rt. Hon. H. Lipton, Lt.-Col. M Skeffington, A. M. Davies, Edward (Burslem) Longden, F. Skinnard, F. W. Davies, Ernest (Enfield) McAllister, G. Smith, C. (Colchester) Davies, Harold (Leek) McGhee, H. G Snow, J. W. Davies, Haydn (St. Pancras, S W.) Mack, J. D. Sorensen, R. W Deer, G. Mackay, R. W. G. (Hull, N.W.) Soskice, Sir Frank Delargy, H, J. McLeavy, F. Sparks, J. A. Diamond, J. Macpherson, T. (Romford) Stewart, Michael (Fulham, E.) Driberg, T. E. N. Mallalieu, J. P. W. (Huddersfield) Stross, Dr. B. Dugdale, J. (W. Bromwich) Manning, C. (Camberwell, N.) Stubbs, A. E. Dumpleton, C. W. Manning, Mrs. L. (Epping) Swingler, S. Durbin, E. F. M. Mayhew, C. P. Sylvester, G. O Dye, S Middleton, Mrs. L. Symonde, A. L. Ede, Rt. Hon. J. C. Mikardo, Ian Taylor, H. B. (Mansfield) Edelman, M. Millington, Wing-Comdr. E. R Taylor, R. J. (Morpeth) Edwards, W. J. (Whitechapel) Mitchison, G. R Taylor, Dr. S (Barnet) Evans, Albert (Islington, W.) Monslow, W. Thomas, D. E. (Aberdare) Evans, E. (Lowestoft) Morgan, Dr. H. B Thomas, I. O. (Wrekin) Evans, John (Ogmore) Morley, R. Thomas, George (Cardiff) Evans, S. N. (Wednesbury) Morris, P. (Swansea, W.) Tiffany, S. Ewart, R. Moyle, A. Tolley, L. Fairhurst, F. Nally, W. Usborne, Henry Field, Cap. W. J. Neal, H. (Claycross) Vernon, Maj. W. F. Foot, M. M. Nichol, Mrs. M. E. (Bradford, N.) Wallace, G. D. (Chislehurst) Fraser, T. (Hamilton) Noel-Baker, Capt. F. E. (Brentford) Wallace, H. W. (Walthamstow, E.) Freeman, J. (Watford) O'Brien, T. Watkins, T. E. Freeman, Peter (Newport) Oliver, G. H Wells, P. L. (Faversham) Gaitskell, Rt. Hon. H. T. N Orbach, M. West, D. G. Gallacher, W. Paget, R. T White, H. (Derbyshire, N.E.)
Whiteley, Rt. Hon. W Williams, J. L. (Kelvingrove) Woods, G. S Wigg, George Williams, R. W. (Wigan) Wyatt, W. Wilkins, W. A. Williams, W. R. (Heston) Yates, V. F Willey, F. T. (Sunderland) Wills, Mrs. E. A. TELLERS FOR THE AYES: Willey, O. G. (Cleveland) Wilmot, Rt. Hon. J Mr. Pearson and Williams, D. J. (Neath) Wise, Major F J Mr. Richard Adams. NOES Amory, D. Heathcoat Duthie, W. S. Pitman, I. J Baldwin, A. E Elliot, Rt. Hon. Walter Raikes, H. V. Birch, Nigel Fraser, H. C. P. (Stone) Ramsay, Maj. S. Bossom, A. C Hare, Hon. J. H. (Woodbridge) Roberts, P. G. (Ecclesall) Bower, N. Lambert, Hon. G. Ropner, Col. L. Boyd-Carpenter, J. A. Lennox-Boyd, A. T. Teeling, William Bracken, Rt. Hon. Brendan Lloyd, Selwyn (Wirral) Thomas, J. P. L. (Hereford) Buchan-Hepburn, P. G. T Lucas-Tooth, Sir H. Thornton-Kemsley, C. N. Channon, H. Macmillan, Rt. Hon. Harold (Bromley) Wheatley, Colonel M. J. (Dorset, E.) Clarke, Col. R. S. Molson, A. H. E. Willoughby de Eresby, Lord Crosthwaite-Eyre, Col. O. E Morrison, Maj. J. G (Salisbury) York, C Digby, S. W. Nicholson, G. TELLERS FOR THE NOES: Drayson, G. B Noble, Comdr. A H P Mr. Drewe and Mr. Studholme.
CLAUSE 32.—(Control of dividends, interest and other payments.)
2.30 a.m.
I beg to move, in page 38, line 5, at the end, to insert:
I must admit that we expressed some doubt whether any such case had occurred, but I did say that if any cases were produced, and if, through no fault of their own, any directors had been placed in an awkward position, I would consider a suitable Amendment. We received information since the time when we discussed it in Committee that there were a group of companies where that particular development took place, and where, in effect, excess dividend rates were actually paid. It has been pointed out to us that it might fairly be said that there was scarcely time between the publication date of the Bill and the general meeting of the shareholders, which in this case took place on 28th January—there being a week-end in between—for the full position to have been understood by the directors, so that they could withdraw the Resolution.
On the whole, we feel that a case has been made out, therefore, for taking care of this position. That is the reason why I am moving this Amendment. We think that if we did not do so the directors would be placed in a position where they would be breaking the law, when it was not really our intention that they should be breaking the law. It will be seen that, in effect the new proviso provides that the Subsection shall not apply to any payment approved by the Minister.
We hope to move art Amendment to the proposed Amendment. I am not sure, Mr. Speaker, whether it is to be called, or not. We could, of course, discuss it on the Minister's Amendment.
I am quite prepared to call the Amendment to the Amendment. I did not want two discussions, one on the Amendment, and another on the Amendment to the Amendment. But I am prepared to call it, if a Division is considered necessary.
I think that that course would suit my hon. Friends perfectly well.
Question proposed, "That those words be there inserted in the Bill."
I beg to move, as an Amendment to the proposed Amend- ment, to leave out "said twenty-third day of January," and to insert "tenth day of June."
We are prepared to divide, if necessary, on our Amendment, but I hope that that will not be necessary because I trust the Minister will see his way to accept it. We have again to clear up this unfortunate confusion in Ministers' minds between Bills and Acts of Parliament. You would think, Sir, that they would know by this time, but they are yet a little dubious about it. The Minister has the idea now that anything he introduces into the House of Commons is bound to receive the Royal Assent before very long. It is not so; nor is it part of our Constitution. Furthermore, Ministers have come to the idea that speeches they make have the force of law. Indeed, before long Ministers will claim that the thoughts they think have the force of law, that it is the duty of every citizen to acquaint himself with the thoughts of Ministers, and that if he does not, it shall be presumed that he is deliberately attempting to cheat the public. I would remind the Minister that we are still discussing something which is not yet the law.
What the Minister is bringing forward here is a proposal that this must be done at the weekend after the Minister introduced the Bill, and that the boards of directors should have acquainted themselves with the terms of the Bill and proceeded to alter the resolutions passed at the annual general meetings accordingly. We consider that this is straining the matter a little. It is not even in the middle of the week. It is the weekend. It is going to be a very grim business for the citizen if he has to spend the whole of his weekend perusing these portentous documents, launched upon them and upon the House of Commons, and if he has to anticipate the changes which may be made by Ministers during the Committee stage, their subsequent thoughts on re-committal, the subsequent Amendments on Report, and the bearing upon these of Debates in another place, and frame his commercial policy accordingly. We consider that this is really demanding a gift of prophecy in commercial circles which is really ridiculous. I think that that surely would appeal to hon. Gentlemen opposite who have any commercial experience, and there are many of them who have made great fortunes in business, and who ought to be well acquainted with business procedure.
We suggest, therefore, that this date should be 10th June. We consider that that is a not unreasonable thing to ask; although, indeed, it would be a very reasonable thing for us to ask that none of these provisions should be retrospective, and that they should not take effect until the Bill has become an Act. We have had experience of Bills which have not yet become Acts, and which may be considerably modified before reaching the statute book. The Home Secretary, no doubt, has instances of that kind in his recent recollection, and I am sure he will agree that to suggest that a policy should be modified on the text of a Bill as introduced into this House—or even as it leaves this House—is demanding a belief in the omnipotence of the majority in this place which is not always borne out by the facts. Therefore, we suggest 10th June would be the reasonable date to take.
We do not think that this Amendment especially benefits directors. Under English law they would receive the benefit of the ambiguity in the existing wording. The Minister's Amendment removes that ambiguity, and the fact that the Minister is actually tightening the terms against the directors seems to us to make it reasonable that he should give them this further period; and all the more so since the Minister denied the possibility of this and resisted it stoutly in Committee. He was good enough to admit, on the evidence that was adduced, that he agreed that the view which the Opposition took in Committee was right, and that the arguments advanced with the utmost persuasiveness by the Minister, the Parliamentary Secretary and the learned Law Officers, were mistaken. The mistake may not yet be entirely clear, but he admitted that the weight of argument was on our side in Committee. It might be thought to be on our side on Report.
We are saying that the accused person should have the benefit of the doubt until he is proved guilty by the law. The Amendment to the Amendment, we suggest, is a reasonable one, and is a reasonable compromise between the Minister's original proposal and the proposal one might have thought more normal, that persons should not be subjected to retrospective punishment, and should not be punished for breaking a law which did not exist when they took the action for which they are blamed; and which until King, Lords and Commons gave their consent thereto, was only a form of words and not a law. I hope the Minister will see his way to move one step further and accept our proposal.
I feel that our suggestion errs, if it errs at all, on the side of moderation. We are accepting, for the purpose of this Amendment, the extremely oppressive general provisions of this Clause, even as amended by the Minister's own Amendment. All we are seeking to do by our Amendment is to bring the date forward to 10th June. We start on the basis that we are dealing with retrospective penal provisions affecting acts which were perfectly lawful at the time those acts were done, and which are indeed perfectly lawful today; but which it is proposed, if and when this Bill becomes law, to visit with severe penalties.
I say quite frankly that we err on the side of moderation in accepting that basis, whatever may be the relevant dates. But we put forward as a diminution, though not an elimination, of this evil the bringing forward of the date to the day on which this present sitting of the House began. The reason which impels us to put forward that date is that if we are to make subject to penalties acts which are perfectly legal at this time because subsequently they may appear to violate Clause 32, we suggest that we are not entitled to do that when Clause 32 itself is not settled in its final form.
It is a Clause of enormous complexity and great length. It covers four printed pages of this Bill, and I respectfully suggest that few hon. Members of this House are able to comprehend it on a first, or even after a second, reading. The Clause has been subjected to a good many changes. Vital words in the Bill generally, which are relevant to part of this Clause, words such as "financial year" and "final dividend," have themselves not only been recently amended, but are subject to further Amendments on the Order Paper. It is surely quite unsupportable that we should say that a thing should carry penalties under the Clause, when that act was committed before this Clause had even reached its final form. That is carrying oppressive legislation even further than even this Government has felt inclined to carry it in previous Acts.
2.45 a.m.
Therefore we feel that the Government and the House should say in this Bill that acts shall be protected if they were committed at a time when the Clause had not reached its final form. I do suggest that that is an argument of extreme moderation. When you recollect, Sir, that these acts require the approval of the Minister himself, it would seem that all dangers which the Government apprehend are doubly covered, and it is apparently a small concession to the rights of the people and the liberties of the subject to do something which does not endanger in the slightest degree the purpose which the Government have in mind. The least he can do is to accept the modest Amendment which has been so persuasively moved by my hon. Friend.
I want to speak about the original Amendment. The Minister tried to meet us, but I am not satisfied that he has done so. The original Amendment does not save directors from personal liability, unless the Minister gives his approval, and he may never do that. That sort of thing may be all right, or it may not. But that is not satisfactory from the directors' point of view. There is a certain ambiguity as it is at present, without being amended, which might mean that it would come out badly for the director in a court of law. The main thing, to my mind, is that something which it is perfectly lawful to do today is now being put at the risk of becoming unlawful tomorrow—and "tomorrow" is the day after this Bill receives the Royal Assent.
It may be necessary to pass legislation of this sort, but the more one thinks about it, the more unsatisfactory seems to be the position. One does not know where one is when retrospective legislation hangs over one. From the moment nationalisation was proposed, a shadow descended over a great part of the industry and the lives of the people in it. None of the nationalised industries has been working satisfactorily since nationalisation was first proposed; and it is the same with the individuals in these industries. They have become unsettled and are looking over their shoulders. Here we have uncertainty. I think the Amendment to the Amendment tries to improve a position which is unsatisfactory at present, and I hope for that reason that it will be accepted.
The Minister seems nowadays to regard it as the duty of all business men to be able to read his future thoughts. I never thought that a citizen of this country would be punished for failing to pass some sort of examination in thought reading, but that is what we have in this barrage which the Minister has put up to justify his quite astonishing attitude to the moderate and sensible speeches made from this side of the House. Can the Minister deny that this is a very bad example of retrospective legislation? If Members were to read accounts of legislation like this being enacted in the "iron-curtain countries," they would become more indignant about attacks on liberty. What are we being asked to do? We are being asked to justify a thoroughly bad form of retrospective legislation. If we are going to vote, then let Members know what they are voting for. The new Government in Czechoslovakia are proposing plenty of legislation of this kind. I was interested by the Minister's defence. I took down a sentence. He said it was not really the intention that they should break the law—by "they," he means directors.
How very condescending of the Minister. I never thought I should listen to a speech from a Minister of the Crown in which he said that it was not really their intention that they should break the law. Can the Government really intend that? Is that one of the new powers Ministers are seeking?
It is just the opposite.
It is not the opposite. Secondly, in my judgment our Amendment to the Amendment errs through moderation. We are often criticised for being too modest, and we intend to oppose the Minister's Amendment and to support our own.
There is no case whatever for the Amendment to the Amendment, which is clearly put forward for propaganda reasons. We are very accustomed to that kind of activity on the part of the right hon. Gentleman the Member for Bournemouth (Mr. Bracken). Those of us who were in Committee had to listen again and again to very dull and boring propaganda speeches coupled with rather more interesting personal abuse. The Government Amendment is put forward to deal with the very special and unusual case where directors happened to meet just before the Bill was published and recommended a particular dividend, and the shareholders approved the dividend after publication of the Bill. I agreed that that was a special case and the Government Amendment is designed to cover it. It is unnecessary to extend the period to 10th June. It is out of the question that even the businessmen of whom the right hon. Gentleman was speaking would show no interest at all in the Bill. They have been following it with the closest interest, and probably they have even read the right hon. Gentleman's speeches in Committee. They would be fuly aware as soon as the Bill was published what the dividend restrictions were. That being so, I cannot see that there is any particular purpose in the Amendment to the Amendment, except, perhaps, for a purpose unconnected with the Bill.
Does the Minister believe his announcement that he was going to publish the Bill has the full force of law?
The argument the right hon. Gentleman always falls back on is misrepresentation. I said no such thing. My speech was clear and I do not propose to add to it.
The reply of the Minister is just the typical argument of a Minister who has got no argument left. He just brushes aside the serious points which the Opposition are putting forward at this serious hour of the morning. This particular Amendment puts us in a deplorable position, because by the Minister's proposals the position of the director becomes impossible. The Minister waves the thing aside, and directors are placed in an extremely difficult position. We feel bound to say that we oppose the Amendment put forward by the Government. We stand by the law that honest men shall not be guilty unless proven, and object to the totalitarian methods of putting them into an utterly impossible position.
We are not discussing the question of honest men, because honest men are covered by the Minister's Amendment. I would refer the Opposition to the scriptures, which are apparently unknown to them—
When damaging personal attacks like this are made, I must ask the hon. Gentleman to withdraw.
We are discussing whether 23rd January is the appropriate date. Honest men have nothing to do with the question.
I was going to say to those associated with the gas companies that "he who has clean hands and a pure heart and has not delivered up his soul to vanity." If they can say that, there can be no trouble for these people with the Minister's Amendment.
3.0 a.m.
Question put, "That the words, 'said twenty-third day of January' stand part of the proposed Amendment."
The House divided: Ayes, 187; Noes, 33.
Division No. 210.] AYES. [3.1.a.m. Acland, Sir Richard Guy, W. H. Proctor, W. T. Alexander, Rt. Hon. A. V Hale, Leslie Pursey, Cmdr. H. Allen, Scholefield (Crewe) Hamilton, Lieut.-Col. R. Randall, H. E. Attewell, H. C. Hannan, W. (Maryhill) Ranger, J. Austin, H. Lewis Harrison, J. Reeves, J. Awbery, S. S. Haworth, J. Reid, T. (Swindon) Ayrton Gould, Mrs. B. Henderson, Joseph (Ardwick) Rhodes, H. Barstow, P. G. Herbison, Miss M. Robens, A, Barton, C. Holman, P. Roberts, Goronwy (Caernarvonshire) Bechervaise, A. E Holmes, H. E. (Hemsworth) Rogers, G. H. R. Berry, H. House, G. Ross, William (Kilmarnock) Bins, G. H. C. Hudson, J. H. (Ealing, W.) Royle, C. Bowles, F. G. (Nuneaton) Hughes, Hector (Aberdeen, N.) Sargood, R. Braddock, T. (Mitcham) Hughes, H. D. (W'lverh'pton, W.) Scollan, T. Bramall, E. A. Hynd, H. (Hackney, C.) Shackleton, E. A. A. Brook, D. (Halifax) Hynd, J. B. (Attercliffe) Shawcross, C. N. (Widnes) Brown, George (Belper) Jeger, Dr. S. W. (St. Pancras, S.E.) Shawcross, Rt. Hn. Sir H. (St. Helens) Brown, T. J. (Ince) Jenkins, R H. Silverman, J. (Erdington) Butler, H. W. (Hackney, S.) Jones, D. T. (Hartlepool) Simmons, C. J. Callaghan, James Kenyon, C. Skeffington, A. M. Chamberlain, R. A. Lever, N. H. Smith, C. (Colchester) Champion, A. J. Levy, B. W. Snow, J. W. Chetwynd, G. R. Lewis, J. (Bolton) Sorensen, R. W. Cocks, F. S. Lindgren, G. S. Soskice, Sir Frank Collins, V. J. Lipton, Lt.-Col. M. Sparks, J. A. Corbet, Mrs. F K. (Camb'well, N.W.) Longden, F. Stewart, Michael (Fulham, E.) Corlett, Dr. J. McAllister, G. Stross, Dr. B. Crawley, A. McGhee, H. G. Swingler, S. Crossman, R. H. S. Mack, J. D. Sylvester, G. O. Dalton, Rt. Hon. H. Mackay, R. W. G. (Hull, N.W.) Symonds, A. L. Davies, Edward (Burslem) McLeavy, F. Taylor, H. B. (Mansfield) Davies, Ernest (Enfield) Macpherson, T. (Romford) Taylor, R. J. (Morpeth) Davies, Harold (Leek) Mallalieu, J. P. W. (Huddersfield) Taylor, Dr. S. (Barnet) Deer, G Mann, Mrs. J. Thomas, D. E. (Aberdare) Delargy, H. J. Manning, C. (Camberwell, N.) Thomas, I. O. (Wrekin) Diamond, J. Manning, Mrs. L. (Epping) Thomas, George (Cardiff) Driberg, T. E. N. Mayhew, C. P. Tiffany, S. Dugdale, J. (W. Bromwich) Middleton, Mrs. L Tolley, L. Dumpleton, C. W, Mikardo, Ian Usborne, Henry Durbin, E. F. M. Millington, Wing-Comdr E R Vernon, Maj. W. F. Dye, S. Mitchison, G. R. Wallace, G. D. (Chislehurst) Ede, Rt. Hon. J. C. Monslow, W. Wallace, H. W. (Walthamstow, E.) Edelman, M. Morgan, Dr. H. B. Watkins, T. E. Edwards, W. J. (Whirechapel) Morley, R. Wells, P. L. (Faversham) Evans, Albert (Islington, W.) Morris, P. (Swansea, W.) West, D. G. Evans, E. (Lowestoft) Moyle, A. White, H. (Derbyshire, N.E.) Evans, John (Ogmore) Nally, W. Whiteley, Rt. Hon. W. Evans, S. N. (Wednesbury) Neal, H (Claycross) Wigg, George Ewart, R. Nichol, Mrs. M. E. (Bradford, N.) Wilkins, W. A. Fairhurst, F. Noel-Baker, Capt. F. E. (Brentford) Willey, F. T. (Sunderland) Field, Capt. W. J O'Brien, T. Willey, O. G. (Cleveland) Foot, M. M. Oldfield, W. H. Williams, D. J. (Neath) Fraser, T. (Hamilton) Oliver, G. H Williams, J. L. (Kelvingrove) Freeman, J. (Watford) Orbach, M. Williams, R. W. (Wigan) Freeman, Peter (Newport) Paget, R. T. Williams, W. R. (Heston) Gaitskelll, Rt. Hon. H. T. N Palmer, A. M. F Wills, Mrs. E. A. Gallacher, W. Pargiter, G. A. Wilmot, Rt. Hon. J Ganley, Mrs. C. Parkin, B. T. Wise, Major F. J. Gibson, C. W. Paton, J. (Norwich) Woods, G. S. Greenwood, A. W. J. (Heywood) Peart, T. F. Wyatt, W. Grey, C F. Perrins, W. Yates, V. F Griffiths, D. (Rother Valley) Popplewell, E. TELLERS FOR THE AYES: Gunter, R. J. Price, M. Philips Mr. Pearson and Pritt, D N Mr. Richard Adams.
NOES Amory, D. Heathcoat Digby, S. W. Nicholson, G Baldwin, A E. Drayson, G. B Noble, Comdr A H P Birch, Nigel Drewe, C. Pitman, I. J Bossom, A C Duthie, W. S Raikes, H. V. Bower, N Elliot, Lieut.-Col. Rt. Hon. W Roberts, P. G. (Ecclesall) Boyd-Carpenter, J. A. Lambert, Hon. G. Ropner, Col L. Bracken, Rt. Hon. Brendan Lennox-Boyd, A. T. Thornton-Kemsley, C. N. Buchan-Hepburn, P. G. T. Lloyd, Selwyn (Wirral) Wheatley, Colonel M. J. (Dorset, E.) Channon, H. Lucas-Tooth, Sir H. Willoughby de Eresby, Lord Clarke, Col. R. S. Macmillan, Rt. Hon. Harold (Bromley) York, C. Crosthwaite-Eyre, Col. O. E Molson, A. H. E TELLERS FOR THE NOES: Cunningham, P. Morrison, Maj. J G. (Salisbury) Mr. Studholme and Major Ramsay.
Proposed words there inserted in the Bill.
I beg to move, in page 38, line 14, to leave out "annual rate," and to insert:
"rate, calculated as a rate per annum
This is really an Amendment to pave the way for two other Amendments to Clause 70 which alter the definition of financial periods. The reason for the Amendment is so that we may cover more satisfactorily the case of companies whose financial year is for a period other than for 12 months.
We agree with the Minister that this improves the Bill.
Amendment agreed to.
I beg to move, in page 38, line 18, after "forty-eight," to insert: a ), ( b ) and ( c ): in the case of securities in which the rates of interest are fixed; in the case of preference stock on which the payment is at preferential rates, and in the case of other securities at the rate of four per cent. Where there is an obligation on the company to pay less than any rate set out in Subsection (2), then those rates should be paid.
A company which suffered war damage might well find itself in the position of having accumulated sufficient money to make some recompense to its shareholders for what they had suffered in previous years because, owing to war damage, the company was not able to pay dividends, and, at the same time, it is controlled by Subsection (2), which limits its payments. It would be wrong for us to try to introduce into the Bill something to cover all possible permutations of the incidence of war damage and of what this Subsection might bring on a company; but I think it is right that we should have something which gives the Minister power in his own discretion to allow payment over and above what is set out, if he is satisfied such a payment is necessary. That is what we are trying to do by this Amendment.
3.15 a.m.
I ask Members opposite to realise that we accept that it is right and proper, if one adopts this basis of compensation with which we thoroughly disagree, throughout the Bill, at the same time to control the final dividend. But it would be more satisfactory if this final dividend were to be controlled not by a ministerial qualm but by justice. If it is to be justice, the Minister must have discretionary powers at his disposal to allow companies to pay a final dividend which will reflect the true position of the company and the true position of shareholders who have suffered during the war years. If he has not this power, it is more than certain that a great deal of injustice will be done to shareholders of many companies. We leave it to the Minister, out of his knowledge—and he is the first to tell us of the knowledge he has—to relax this Subsection and allow him to make such payments. I stress that we are not doing anything here to allow assets to be taken away from a company. We are only saying that there is an obvious case of injustice, which the Minister may be able to put right. It is something which both sides would like.
I beg to second the Amendment.
I wish to refer to the very considerable assurances on this point given in Committee. In columns 988–999 and other columns of the Report it will be seen that the Minister and the Solicitor-General have given us assurances and recognise the need for special treatment for companies in this kind of case. The point can be put very shortly. In this Sub- section the Minister has absolutely no discretion at all. He is rigidly restricted, so that he must do what is laid down there, and he has not an iota of discretion left to him.
As to compensation to local authorities, the Parliamentary Secretary said that it was possible that there might be some local authority whose undertaking was taken away and for which he envisaged compensation would be necessary. But there might be some other case in which no compensation need be paid. He admitted that that was a very rare possibility indeed, but he thought it was desirable in a Bill of this character to include a provision of flexibility to meet the very rare case. Let us suppose that in each case exactly that same principle applies; then we should bring into this Bill sufficient flexibility for the Minister to use his discretion in cases of hardship of this kind.
Even the Opposition do not dispute that it is desirable in this Bill to limit the dividend which may be paid by a company before it is taken over, to prevent the dissipation of assets which would certainly otherwise take place. I am surprised at the offer they make in this Amendment. They propose that the Minister—and the Minister only—should have the right to arrange or permit higher dividends to be paid in particular cases by individual companies if he thinks it would be a good thing to do. In view of all the objections which the Opposition have raised to Ministerial powers, it seems to me rather remarkable. It is also noticeable that there is no suggestion that the Minister should have the power to reduce dividends because he thinks a company is exceptionally fortunate—but that, no doubt, is merely an omission which, perhaps, we could correct.
On the whole, I must decline this proposition. I do not think it is at all a good plan to put the Minister in the situation where he has to decide, as the sole arbiter, without any kind of guidance, whether there should be any increase in dividends. I think the Bill as it stands is perfectly satisfactory. In that way it follows the Electricity Act very closely and, therefore, I must ask the House to reject this Amendment.
The Minister made great play with the fact that he had no power to reduce dividends, but hon. Members do not realise the specal cases of hard- ship which may arise under this Clause, and that it might be the height of folly for the Minister to follow the extreme rigidity now laid down in the Clause. The Minister has no justification to say that he should also have power to lower dividends, because they are fixed on a very arbitrary and what amounts to a low basis. There are certain instances, including that of war damage, where there is hardship, and it seemed not at all unreasonable that we should give the Minister that power. It is difficult to give the power to anyone else under this Bill.
If we did not take into account the fact that this Amendment deals with companies which have suffered real hardship through war damage, there might be something in the Minister's modest declaration that he does not want to have power either to increase or decrease dividends. But the Minister did not apply his mind to the Amendment. He knows perfectly well that many cases of hardship are created by war. There is no other person to whom we could apply for a dispensing power, save the Minister. It was for this reason that we put down this Amendment. I do not attach immense importance to it. I do not think I would advise my hon. Friends to divide upon it. I merely say that, so far as we are concerned, we brought forward an Amendment which would remove a hardship from worthy citizens of this country. The Minister has not accepted it, and there it is. All we can do, having done our best for these unfortunate people, is to get on with the next Amendment.
It seems to me that this is a very modest Amendment designed simply to give further flexibility and to meet special circumstances. The analogy which I would put before the Minister is that contained in the Finance Bill which is at present before the House. There, when the Special Contribution is being considered, and the income on which the Special Contribution is based is being taken into account, this specific provision is given for relief to be allowed where income attributable to a period of years was received in the year 1947–48. In that Bill flexibility is given for precisely the same case as we are putting forward. I suggest to the Minister that there is a complete analogy and I ask him once again to consider the matter.
Amendment negatived.
CLAUSE 33.—(Final payment of dividends and interest.)
I beg to move, in page 45, line 9, at the end, to insert:
"or years ending after the first day of January, nineteen hundred and forty-eight, and."
This and the next Amendment, in line 10, are designed to make an improvement to the Bill, and I have little doubt that the Minister will accept both. On page 80 of the Bill there is a definition of the financial year, and there is an Amendment to be moved by the Minister later on, from which it might be imagined, at first sight, that the financial year referred to 12 calendar months. However, the definition in page 80 and the Amendment of the Minister taken together mean curiously enough that that will not necessarily be the case, and that the financial year may possibly be a year of less than 12 months. In order that that should not create hardship it is necessary at this point to insert the words we propose. They will help the Minister; they are, so to speak, paving the way for the Amendment he is to move later.
I beg to second the Amendment.
We are very pleased to accept this and the next Amendment.
I am very glad to see that the amiable Solicitor-General has returned to the Treasury Bench. At any rate, we may expect some good manners in the course of the next hour or two, while we are trying to do business with the Government. The Solicitor-General, I think, will agree with me that these Amendments are really necessary when we get to the definitions. The Minister, for instance, has produced a new definition of "financial year." My hon. Friends feel it will greatly improve the Bill if these Amendments are made at this point. Let me say to the Government once again how grateful they should be for an Opposition which so greatly improves their very bad Bills.
Amendment agreed to.
Further Amendment made: In line 10, at the end, insert "or those years."—[ Mr. Digby. ]
CLAUSE 37.—(Provisions as to foreign investments.)
I beg to move, in page 48, line 34, at the end, to insert:
On the other hand, at least one company has applications pending for foreign patents, and the ban upon the acquisition of foreign investments would discourage any further steps in this direction, and would rule them out completely after the Bill had been passed. We have no desire to stand in the way of the acquisition of rights which may be of value to the gas boards and to the country. The Amendment permits the Minister to authorise companies to proceed with the acquisition of foreign patent rights.
3.30 a.m.
We are only partially grateful to the Minister for his statement because we think that the procedure which he suggests is not entirely the best one. A few moments ago the Minister was anxiously putting his hand upon his bosom and saying that too much responsibility must not be placed upon him. The Minister is now taking some pretty big responsibilities upon himself. But I do not see any way out of this at the moment—though some better solution may be found further on—save to put in the words, "except with the approval of the Minister." If, in fact, the British gas companies are anxious to acquire foreign patents, I suppose that, to speed attempts to create good business for this country, it is desirable to adopt the Minister's suggestion. I think I have shown to the House that we cannot be more than partially thankful on this occasion, but I do not think the Minister wants thanks, whether they be partial or otherwise, at the moment. I think he wants to get on with the Bill.
Amendment agreed to.
CLAUSE 39—(Revenue of area boards and Gas Council to be sufficient to meet outgoings.)
I beg to move, in page 51, line 6, to leave out "or gas fittings," and to insert:
"gas fittings or coke fittings."
Perhaps it would be for the convenience of the House to take, with this Amendment, three others which I shall move formally. They are all consequential upon the extension of the Gas Council's powers, with which we dealt in the Committee by an amendment of Clause 2 (3) covering the manufacture of coke fittings as well as gas fittings.
"Time, like an ever-rolling stream," is supposed to "bear all its sons away," but our Amendments are being swept away pretty rapidly. This Amendment, oddly enough, is consequential upon some which we on this side of the House put down, but which were not called. Now we have reached one of the biggest muddles I have ever seen in my life. I do not suppose it can do any harm. The Amendment itself is quite harmless; it will merely add to the essential badness of the Bill.
I think that an important issue is involved in this Amendment, because the manufacture of coke fittings is less liable to restrictive practices among manufacturers than is the manufacture of gas fittings. In the Committee upstairs, the Parliamentary Secretary exonerated the gas fitting manufacturers of doing anything amoral in this respect. He said that the supply of gas fittings was sufficiently competitive, and that if there was any "ring" at all it was a good "ring" which was operating restrictive practices in a good way and not in a bad way. But he wished to have power in this Bill to prevent the promotion or the use of a "ring" to raise the price of gas fittings and, as he put it, to hold to ransom the gas industry and gas consumers over fittings; he wanted power, for that reason, to set up the very considerable factories necessary for modern mass production of gas fittings.
I would remind the House that a gas cooker is a most elaborate product. It starts in the design and research section, which is a very costly undertaking, and it then proceeds to highly specialised finishing equipment. One cannot turn out gas cookers for the industry unless one is prepared to sink an enormous quantity of capital and develop a really big factory. To that extent, the Parliamentary Secretary made his point that the amount of competition available to keep down prices for gas fittings was not great, and he asked power to manufacture gas fittings of that kind. He is now suggesting that he wants power to manufacture coke fittings.
But there is a big difference between the two; coke fittings are extremely simple and any factory with ordinary equipment, and without any research or finishing facilities can turn out these coke fittings without trouble. Here one does not need the enormous output to keep the factory going. It would be possible for the factory to function, turning out only 100 a year with their ordinary production. What precisely does he fear from the manufacturers of coke fittings? He has made his point as regards gas fittings manufacturers, but what are these dangers he alleges in this other matter?
I think we are talking at cross purposes. The right hon. Member for Bournemouth led the House astray, I fear, when he said we were dealing with an Amendment which had not been called.
I said this was consequential on such an Amendment.
There was an Amendment to Clause 2, Subsection (3) and I was under the impression that it was an Opposition Amendment to include gas fittings. The Opposition asked us to include coke fittings. Now we turn to page 51 and, consequential on what we did in the Committee stage, we must include "gas fittings or coke fittings" as the Amendment says. The argument of the hon. Member for Bath (Mr. Pitman) does not apply. He moved the inclusion of "coke fittings" in Clause 2, and, because of our acceptance of that, we are making consequential Amendments in Clause 39.
Amendment agreed to.
I beg to move, in page 51, line 8, after "not" to insert "substantially more or."
We regard this as an extremely important Amendment, and we start off, if we may, by reference to the pamphlet "Let Us Face the Future." In that connection we read on page 6 that
That is not an unreasonable thing to expect, if we look at those services which have already been nationalised. If we look at the postage, it originally started out as a public service, and there was no element of taxation in it at all. But its power of taxation has been developed and enormous sums have been collected by way of indirect taxation on those who write and post letters. The Chancellor of the Exchequer realises that the indirect tax of three halfpence is so great and valuable that he cannot afford to do without it. If we turn to radio licences, and the B.B.C., these have recently been increased to £1. I would like hon. Members to realise that here again the Chancellor has got his clutches into a form of indirect taxation. The £1 we pay for our radio licence contributes to what should be borne on the vote of the Foreign Office.
3.45 a.m.
I do not think the hon. Member is speaking to the right Amendment. The Amendment I called was the one in page 51, line 10.
The Amendment in line 10 is closely related. I do not know whether I would be in order in dealing with these related Amendments at the same time. That is what I thought was to happen.
The Amendment selected by Mr. Speaker is the one in line 10. If there are others over the page which are related, it would be in order to discuss them, but not any Amendment prior to line 10.
Has Mr. Speaker chosen the Amendment to page 51, line 10?
Yes.
I beg to move, in page 51, line 10, at the end, to insert:
Since it is your pleasure Mr. Deputy-Speaker, it is just as convenient to handle it on the last one, since it is a matter of principle. If it is accepted, no doubt the Government will at a later stage put down a suitable Amendment to ensure that the nationalisation of gas is not used as a method of indirectly taxing the consumer. It seems to me perfectly clear that if the price of gas were substantially above the costs, it would create a substantial profit which would be carried forward and accumulated in the books of the area board and create hidden or exposed reserves, depending on how the area boards conduct their accounts. I was emphasising that this was no small danger. Wherever this has occurred and the Government have had a public service under their control, they have used the charging policy of that ownership and control to impose an indirect tax. I was mentioning postage and the B.B.C. licences and the extent to which we pay here for broadcasts to the Middle East, the Far East, France, and even Russia. Every time the hon. Member for West Fife (Mr. Gallacher) pays his radio licence, he can appreciate that he is paying considerably for that.
The hon. Member must forgive me, but I frankly cannot see that that is in the least relevant to this Amendment. The Amendment is to forbid the area board and the Gas Council accumulating or carrying forward any profit or creating any hidden reserves. It does not seem to me that that has anything to do with what he is saying, or that the fact that the B.B.C. broadcasts to the Far East has anything to do with the Amendment.
With great respect, the argument is quite clear. The charge made for gas can be either charged on cost or loaded with profit. If the latter, they accumulate balances, which are carried forward in their accounts, and create hidden reserves. Then, so far as they are carried forward as profits, they are carried forward as exposed reserves. That cannot happen unless there is a profit by reason of overcharging for gas. What I have said is that there is an analogy in other public services. In fact, in all three, including the national telephones wherever the Government have had control they have used their power to fix prices well above, literally millions above, the cost of the services to them. They use it as a method of taxation. That is most important, because the charges made can produce an accumulation of these profits in the books of the area boards.
In his reply, the Minister may say that the area boards have no power to pay them to the Chancellor of the Exchequer. I am sure that he is not right. Even if he were, hon. Members opposite will know that the Chancellor—I think rightly—has recently adopted an alternative method of presenting accounts to the nation, showing what has come in as revenue in a particular year's taxation, and what is being sterilised as an anti-inflationary balance.
So far as the Chancellor of the Exchequer is concerned, there are two points here. The first is that if money is accumulated by charging extra, and having these big profits in the books of the area boards, that money is extracted from the pocket of the consumer, and becomes an anti-inflationary sterilised balance within the policy of the Government. Under the Clause, which gives the Minister power to direct, he can direct the area boards to make these great profits and to accumulate them. If he does, he is working in with the Chancellor of the Exchequer's budget, and is bringing about that deflationary pressure which he desires—but at the expense of and by over-charging the poor consumer.
Equally, now that the Bank of England is nationalised, and the joint stock banks are under the direction of the Chancellor through the Bank of England, that money, wherever kept in a bank in this country by the area boards, is just as much going into the Treasury as if it were paid over. I hope we will not have from the Minister this absolutely absurd argument that even if they charged twice as much for gas as it properly costs, and did accumulate these enormous balances and carry forwards, that is not taxation. It is taxation because ( a ), it comes out of the pockets of the consumer, and ( b ), goes to the Chancellor of the Exchequer through the Bank of England for sterilisation as he desires.
This issue of the profits which can be accumulated in the accounts of the area boards—although members opposite will not appreciate it—is governed not only by the charge for gas but by the calorific value of gas. It is perfectly possible under this Bill for the Minister to give directions to the area boards telling them to reduce the calorific value of the gas they supply. In so far as he does that, that again will be a form of taxation, because it will mean that the consumer is buying for his money less heating value: if you halve the calorific value of gas supplies at a given price, that is tantamount to doubling the price. If that happens there will undoubtedly be an accumulation of enormous balances which will be carried forward as profits and may easily be carried for ward as hidden reserves of the area boards. It is for that reason that we particularly want to include this Amendment here in order to give protection to the consumers of this country.
We must realise that this is, in effect, a taxing Clause, and indirect taxing in the matter of gas is something which is very serious and ought not to be lightly entertained. If the Minister does not intend to use nationalisation as a taxing device it is up to him to accept this Amendment or at any rate to accept the principle and move his own Amendment. We attach enormous importance to this because it means indirect taxation of the poor consumer. Let us recollect that the consumer is very often somebody very poor, shall we say a poor widow. Why should a poor widow be taxed regardless of her ability to bear that tax, whereas somebody who can afford it is buying gas and not paying so much tax relative to income as the poor widow? The gas industry has a fine record in this respect. A poor widow is able to obtain from the gas company a simple little gas ring on which she is able to boil a kettle at a very cheap rate indeed, because the gas industry, as distinct from the electricity industry, has not in the past—and we hope under this new set-up will not in the future—increase the charges in the way the electricity industry has done, which is a most important point.
I have one other point which I hope the Minister will bear in mind and that arises out of compensation to the local authorities. Under the terms of compensation to the local authorities, it will be possible for area boards, particularly in the North, to make great profits and accumulate and carry them forward in their accounts by reason of the fact that they are buying undertakings from the municipal authorities at not a fair price. The case of Manchester has already been mentioned. In the case of Manchester, we want to be absolutely sure that the Mancunians are able to feel that they are getting their gas at a cost at which gas is made, having regard to the extremely low price at which the Manchester undertaking will be taken over under this Bill.
In the northern areas where municipal undertakings so largely predominate, there will be a great tendency for any Minister of Fuel and Power, who is a colleague of the Chancellor of the Exchequer, to use the fact of having made a great bargain in the purchase price of these undertakings to make a big profit. He will make this big profit by putting up the price of gas, by arguing that if the price of gas down South is fair, then in Manchester it ought similarly to be fair, regardless of the fact that by so doing large profits are being made, which will be carried forward into the accounts and credited to hidden reserves.
The hon. Gentleman is thinking of what he did himself.
I am afraid at this hour of the morning I cannot understand Scottish from the Lowlands or Highlands of Fife, but I am sure what the hon. Gentleman said were words of very great wisdom if only I could have heard them. I have great pleasure in moving this Amendment, which I think is the most important safeguard to the people of Britain moved here tonight.
4.0 a.m.
I beg to second the Amendment.
I think I am entitled to say that the House is or should be indebted to my hon. Friend for enabling this vitally important matter to be discussed. If the hon. Member for West Fife (Mr. Gallacher) had used his tongue a little less and his ears a little more during my hon. Friend's speech, I think he would have become an ardent supporter of this Amendment, since it seeks to do precisely what on every other occasion the hon. Member for West Fife is vociferous in his efforts to effect, the prevention of the accumulation of profits.
I listened to the hon. Member very carefully. He is in the gas business and he was very anxious to in-inform the House that one could not make profit except by putting up prices, and he has been making profits all the time out of gas.
The hon. Gentleman is perhaps also metaphorically in the gas business.
There is very little profit in it.
He could be interested no doubt in the question of profits. I put to him the elementary proposition that there are other ways of making profits than by raising prices. There are methods, such as those in which efficiently-run firms indulge, of achieving greater efficiency and a reduction in the costs of production. The hon. Member will appreciate that, if a monopoly backed by Act of Parliament, with all possible competition excluded by Act of Parliament, desires to accumulate pro- fits, it can do so with the greatest of ease simply by raising prices. Now I have attracted the hon. Member's attention to this matter we shall have his support, and I shall now seek to convert the rest of the House.
The point is of great importance, because it raises squarely the question whether these nationalised monopolies ought to be entitled to accumulate and bring forward profits and create reserves. That is a question which goes to the root of the organisation of and the principles governing nationalised industry, and I hope in due course we shall hear from the Government Bench a speech which apprehends and deals with the vitally important issues raised, issues which are particularly important from the point of view of those who believe, or seem to believe, in the virtues of nationalisation.
It is a matter of immense interest to the consumer— [ Interruption. ]—I agree with the hon. Member for West Fife in his sotto voce remark, "Poor devils," Faced with nationalised industry, it is a very accurate description of the consumer. The poor devil of a consumer is liable to be mulcted by increased prices with a view to the creation of these profits and reserves. The statutory prohibition of these reserves is a far better protection for the consumer than the mumbo-jumbo of the consumers' council. Now that the Minister has done his best to evade any knowledge of the question, it seems to me that a statutory provision is the only way to prevent the hon. Member for West Fife's description of the consumer as a "poor devil" becoming only too bitterly true.
There is a further point. A great deal of attention has been given by the Government as well as by the Opposition to providing for the production and publication of the accounts of these bodies. If none the less hidden reserves are to be allowed to accumulate, much of that work is rendered nugatory and the value of these accounts is vastly diminished; and if it is right, as I believe most hon. Members would agree, that considerable care should be given to insisting that full and proper accounts be produced and published, it is essential to prevent the value of these accounts from being diminished by the accumulation of secret reserves.
Then there is the question whether the country is going to allow the accumulation by these bodies of nest-eggs which would provide a temptation to the naturally predatory instincts apparently inherent in the office of Chancellor of the Exchequer. It is better, surely, to put Chancellors of the Exchequer outside temptation: if there is nothing for them to rob, they will not rob. If there is absolutely nothing to rob, that will defeat the predatory instincts even of the present Chancellor of the Exchequer. It seems to be so much better that these nest-eggs shall not be accumulated. Surely, it is the right thing to say that a nationalised monopoly, given monopoly status by Act of Parliament, with the consumer virtually helpless in its hands, shall be told that it shall balance outgoings and incomings roughly and on the average, and that it shall not be allowed to use its enormous potential powers of exploitation for the building up of reserves.
It is, therefore, in the hope that any intelligent believer in nationalisation that there might be—I must deprecate the comments of some of my hon. Friends that that is a contradiction in terms—will appreciate that the inclusion of the Amendment is the biggest practical contribution to the efficient working of nationalised industry that it is possible to visualise.
The first point I would like to make is that the Amendment which we seek to insert does not preclude the formation of any reserves. Hon. Members will remember the Central Guarantee Fund of £5 million and also certain reserves for the Gas Council and the area boards. What we are seeking to stop is more than an authorised reserve being accumulated. There is a great deal of talk about the losses of the nationalised industries now, but it is perfectly easy to make a profit when you have a complete monopoly of all forms of fuel and power, as now, simply by raising prices. That profit-making is quite consistent with extremely inefficient operation of these industries— but there is the power at any time to do so.
I think the hon. Member for Bath (Mr. Pitman) is absolutely right in saying that the Government should not have the power to tax in that way, because it amounts to a tax if one is charging more for the gas, though it is covered by a reasonable reserve. The hon. Member for Bath drew a grim picture of what a poor widow would suffer. I would also say that we should be wronging a rich widow, because there is no reason why anybody who is a consumer in a State service should pay more than the cost of the article, a reasonable amortisation and a reasonable reserve. There is a perfectly good precedent for the Government robbing hen roosts, such as the Road Fund, and it is wrong that we should get an accumulation simply by raising prices unduly against the consumer. It is to stop that that we move this Amendment.
I have been very interested in the remarks of the three hon. Members opposite who have spoken. Generally speaking, I think we should expect them to be strongly in favour of profits when private enterprise is concerned.
rose —
No, I have only just begun. On the other hand, when it comes to the nationalised industries, no doubt equally for political purposes, they take the view that there should be no profits. Really, the argument should be very much stronger the other way round. If the monopoly were in private hands, then indeed there would be a great danger of excessive profits being made, but precisely because the monopoly is a public one there really is no such danger.
Not at the moment, perhaps.
Let us take the arguments. It has been suggested by the hon. Member for Bath (Mr. Pitman), and this is, if I may say so without offence, almost an obsession with him—I do not know why—that, as in the case of the Post Office, the consumer of gas might be robbed by excessive prices and the profits transferred to the Treasury. Of course, the case is completely different. The Post Office is an ordinary Government Department. The Treasury is perfectly free—it is a matter of Government policy and administration—to take what it likes, by putting up the price of stamps, or anything else that the Post Office happens to sell. But we are not dealing with a Government Department. We are dealing with statutory corporations set up under this Bill, which are completely free from Treasury interference of that kind. There is no power whatever in this Bill, or anywhere else, that the Treasury could exercise and thereby transfer reserves or profits from the gas boards to itself.
What other danger could there be? Suppose, for example, that, owing to the great efficiency with which a Board's undertakings were managed, substantial profits were earned. Of course, some of these profits might be put to reserve, but if there was any danger of an excessive reserve being accumulated there is power for the Minister, with the approval of the Treasury, to say, "No, you are putting too much to reserve, you cannot do that." There cannot be any question of hidden reserves, for the Minister's power to direct the form of accounts would prevent anything of that kind from happening. What would be the purpose of the board in accumulating these vast sums of money at the expense of the consumer, and making themselves horribly unpopular in the area, simply and solely for the sake of a large bank balance which they could not use?
It is an extraordinary picture painted by the Opposition. If they were not so blinded by political prejudice, they would not put it forward so seriously. There is no ambiguity about the intention here. It is that nationalised industries should pay their way and that they should, over a period, cover their costs and balance their accounts. There is no intention that they should make substantial profits. I suggest that the Amendment is completely misconceived, and I must ask the House to reject it.
4.15 a.m.
A very technical speech from the Minister is obviously going to speed up business. A few jeers at the Conservative Party at this hour of the morning can be guaranteed to prolong our discussion, and I am very anxious to obviate that. I was surprised at the Minister's statement, made with an air of virtue, which may have deluded his followers, if they are still awake, but certainly made no impression on my hon. Friends on this side of the House. According to the Minister, the Government would never profiteer. That we are told is a thing one may always rely upon the Government not to do: they will never profiteer. I could give many instances to the contrary, Sir, but I shall not inflict them upon you. However, I would remind the Minister of the Government's famous monopoly in cocoa, which is the biggest profiteering racket in the world; and it is done under the auspices of the Government. So much for the Minister's statement that the Government never profiteer.
The Minister asked us a question. Rhetorically he asked: What would be the purpose of an area board accumulating vast sums of money by way of reserves? It was a fair question to ask in a way, but rhetorical questions are dangerous. I agree with the Minister. What would be the purpose? But strange things happen. For instance, the London County Council, which is quite comparable with the Government in many respects, certainly over-accumulated enormous sums of money, and were much criticised for doing so. We want to make quite certain that these area boards do not build up very large reserves. Our reason is not that we do not believe in large reserves. We think they are essential to any institution, whether a nationalised one or a private business.
But the point of our Amendment is this: we think that reserves should be accumulated in the Gas Council, and that it would be wrong if 13 area boards built up large supplies of cash, which they are quite capable of doing in certain cases. My right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot) knows perfectly well that it is instinctive in the Scots to hold on to any money they may lay their hands on, and not to let the bawbees go over the Border. It will require a good deal of persuasion by the Minister to get the Scottish Area Board to part from any reserves it may like to create. Therefore, I believe that it would be very wise for the Minister to lay down a general rule that area boards should not carry more than a certain amount of cash, and that the rest should be deposited with the Gas Council; and, presumably, the Gas Council would deposit it in the Bank of England.
I do not understand why the Minister got so heated about this Amendment. I do not blame him. He has had a hard day, as we all have; and this is a heartbreaking Bill, and we really have seen a good deal of it. So anyone may be forgiven from time to time for losing his temper, especially the Minister or a humble Gentleman like myself—those of us who have been right through the work on this Bill from the word "Go." However, I can never lose my temper. Therefore, from my superior altitude I can forgive the Minister. I do not see why the Minister does not accept the Amendment. It is entirely helpful to him.
We have done our best. We have tried to persuade him in the most moderate of language. I doubt if there is any Member of the House who has more of the gift of moderation than my hon. Friend the Member for Bath (Mr. Pitman). It may be that hon. Gentlemen opposite think his speeches suffer from no economy, but it is a great mistake to accept the view—this modern heresy— that speeches should be very short. I suffer from tending to that heresy very much myself, but I am glad to see one Member of the Committee who does not. I have to say a word to the Minister much more in sorrow than in anger. If he does not accept this Amendment we shall have to awake that litter of hon. Members lying in the dining room and in the passages. We have got to drag them now from their uneasy slumbers, merely because of the obstinancy of the Minister. Will not the Minister, on humanitarian grounds alone, spare his colleagues from having to walk through the Lobbies again? All the Minister has to do is to accept this Amendment, and then we can go briskly along to the other points which are on the Order Paper. If that personal appeal to him has no result, we must tread the Lobbies.
This Amendment raises a vitally important subject, and I do not think the Minister dealt with it in a way which the House is entitled to expect from him. The hon. Member for Bath (Mr. Pitman) pointed out that the Amendment does not deal with reserves generally and does not forbid the area boards forming reserves. What it does is to prevent the area boards from carrying forward hidden reserves. The Minister repudiated the idea that there was any possibility of these area boards forming and carrying forward hidden reserves. But many of these boards are going to start with immense reserves. Under the provisions for taking over the gas assets of the local authorities, the boards will get something of the order of £90 million worth of assets at a price of £20 million. They will, in fact, begin with some £70 million worth of hidden reserves, because they will receive these assets which are worth this immense sum of money for a mere fraction of their value.
There is a question I would like to ask the Government and which I asked on a previous occasion upstairs. The Minister then refused to answer. How do the Government intend to deal with hidden reserves when in fact they get them? If they simply bring the assets into their books at the value which they have paid for them, some of these boards will start with hidden reserves of some £15 million or £20 million. We are entitled to ask what the Government are going to do with these assets. Are they going to use them as hidden reserves, or to bring them into their books at some excess value and show
the reserve? Are they going to hold these assets indefinitely as a large reserve, or what are they going to do with them? I do not think that is an unreasonable question to ask the Government. [HON. MEMBERS: "Hear, hear."] I am glad to hear that I have some measure of support from some hon. Members opposite, who have refrained from joining the assembled bodies outside, or have revived sufficiently to return to this Chamber. I hope the Government will give an answer to this important question. It is a matter on which the House is entitled to have an answer. I can see that the Minister is adopting what I can only describe as an obstinate stare, and from that I assume that he is determined to conceal this information from the House. That being so, I hope my right hon. Friend will press this matter to a Division.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 33; Noes, 173.
Division No. 211] AYES. [4.24 a.m. Amory, D. Heathcoat Duthie, W. S. Pitman, I. J. Baldwin, A. E. Elliot, Rt. Hon. Walter Raikes, H. V. Birch, Nigel Fox, Sir G. Ramsay, Maj. S. Bossom, A. C Lambert, Hon. G. Roberts, P. G. (Ecclesall) Boyd-Carpenter, J. A. Lennox-Boyd, A. T. Thornton-Kemsley, C. N. Bracken, Rt. Hon. Brendan Lloyd, Selwyn (Wirral) Wheatley, Colonel M. J. (Dorset, E) Buchan-Hepburn, P. G. T. Lucas-Tooth, Sir H. Willoughby de Eresby, Lord Channon, H. Macmillan, Rt. Hon. Harold (Bromley) York, C. Clarke, Col. R. S. Molson, A. H. E. Crosthwaite-Eyre, Col. O. E Morrison, Maj. J. G. (Salisbury) TELLERS FOR THE AYES: Digby, S. W. Nicholson, G. Mr. Drewe and Mr. Studholme Drayson, G. B Noble, Comdr. A. H. P
NOES. Acland, Sir Richard Davies, Edward (Burslem) Grey, C. F. Adams, Richard (Balham) Davies, Ernest (Enfield) Griffiths, D. (Rother Valley) Allen, Scholefield (Crewe) Davies, Harold (Leek) Gunter, R. J Attewell, H. C. Davies, Haydn (St. Pancras, S.W) Guy, W. H. Austin, H. Lewis Deer, G. Hale, Leslie Awbery, S. S. Delargy, H. J. Hamilton, Lieut.-Col. R. Ayrton Gould, Mrs. B Diamond, J. Harrison, J. Barton, C. Driberg, T. E. N. Haworth, J. Bechervaise, A. E Dumpleton, C. W Herbison, Miss M. Berry, H. Dye, S. Holman, P. Bing, G. H. C. Ede, Rt. Hon. J. C Holmes, H. E. (Hemsworth) Bowles, F. G. (Nuneaton) Edelman, M. House, G. Braddock, T. (Mitcham) Evans, Albert (Islington, W.) Hudson, J. H. (Ealing, W.) Bramall, E. A. Evans, E. (Lowestoft) Hughes, Hector (Aberdeen, N.) Brook, D. (Halifax) Evans, John (Ogmore) Hughes, H. D. (W'lverh'pton, W) Brown, George (Belper) Evans, S. N. (Wednesbury) Hynd, H. (Hackney, C.) Brown, T. J. (Ince) Ewart, R. Hynd, J. B. (Attercliffe) Butler, H. W. (Hackney, S.) Fairhurst, F. Jenkins, R. H. Callaghan, James Field, Capt. W. J Jones, D. T. (Hartlepool) Chamberlain, R. A Foot, M. M. Kenyon, C. Champion, A. J. Fraser, T. (Hamilton) Lever, N. H. Chetwynd, G. R. Freeman, J. (Watford) Levy, B. W. Cocks, F. S. Freeman, Peter (Newport) Lindgren, G. S. Collins, V. J. Gaitskell, Rt. Hon. H. T. N Lipton, Lt.-Col. M Corbet, Mrs F. K. (Camb'well, N.W.) Gallacher, W. Longden, F. Corlett, Dr. J Ganley, Mrs. C. S. McAllister, G. Crossman, R. H. S. Gibson, C. W. McGhee, H. G Dalton, Rt. Hon. H Greenwood, A. W. J. (Heywood) Mack, J D Mackay, R. W. G. (Hull, N.W.) Pritt, D. N. Taylor, Dr. S. (Barnet) McLeavy, F. Proctor, W. T. Thomas, D. E. (Aberdare) Macpherson, T. (Romford) Pursey, Cmdr. H Thomas, I. O. (Wrekin) Mallalieu, J. P. W. (Huddersfield) Randall, H. E Thomas, George (Cardiff) Mann, Mrs. j. Ranger, J. Tiffany, S. Manning, C. (Camberwell, N.) Reeves, J. Tolley, L. Manning, Mrs. L. (Epping) Reid, T. (Swindon) Usborne, Henry Mayhew, C. P. Rhodes, H. Vernon, Maj. W. F. Middleton, Mrs. L Robens, A. Wallace, G. D. (Chislehurst) Mikardo, Ian Roberts, Goronwy (Caernarvonshire) Wallace, H. W. (Walthamstow, E.) Millington, Wing-Comdr. E R Rogers, G. H. R. Watkins, T. E. Mitchison, G. R Ross, William (Kilmarnock) Wells, P. L. (Faversham) Monslow, W. Royle, C. West, D. G. Morgan, Dr. H. B Shackleton, E. A A. White, H. (Derbyshire, N.E.) Morley, R. Shawcross, C. N. (Widnes) Whiteley, Rt. Hon. W. Morris, P. (Swansea, W) Shawcross, Rt. Hn. Sir H. (St. Helens) Wilkins, W. A. Moyle, A Silverman, J. (Erdington) Willey, F. T. (Sunderland) Nally, W. Simmons, C. J. Willey, O. G. (Cleveland) Neal, H. (Claycross) Skeffington, A. M. Williams, D. J. (Neath) Nichol, Mrs. M. E. (Bradford, N.) Smith, C. (Colchester) Williams, J. L. (Kelvingrove) Noel-Baker, Capt. F. E. (Brentford) Snow, J. W. Williams, R. W. (Wigan) Orbach, M. Sorensen, R. W. Williams, W. R. (Heston) Palmer, A. M. F Soskice, Sir Frank Wills, Mrs. E. A. Pargiter, G. A. Sparks, J, A. Wilmot, Rt. Hon. J Parkin, B. T. Stewart, Michael (Fulham, E) Wise, Major F. J Paton, J. (Norwich) Stross, Dr. B. Woods, G. S. Pearson, A. Swingler, S. Yates, V. F. Peart, T. F. Sylvester, G. O. Perrins, W. Symonds, A. L. TELLERS FOR THE NOES: Popplewell, E. Taylor, H. B. (Mansfield) Mr. Joseph Henderson and Price, M. Philips Taylor, R. J. (Morpeth) Mr. Hannan.
CLAUSE 41.—(British Gas Stock.)
4.30 a.m.
I beg to move, in page 52, line 30, at the end to insert:
We all know what happened to Dalton 2½ per cents., which, at the time when the right hon. Gentleman for Bishop Auckland (Mr. Dalton) was Chancellor of the Exchequer were launched on the basis that Government credit never stood so high. I do not suppose that any Government stock ever stood so low. —[HON. MEMBERS: "Thirty-three."]— We wish to prevent the same thing happening to the gas industry and we say that no stock issued as compensation should be longer dated than fifty years. I hope the Government think that fifty years is long enough. I am not certain that fifty years is the correct period, but we have deliberately taken fifty years as giving the maximum margin in accordance with whatever may be the exact situation on the gilt-edged market at the date when the stock is issued.
While we want to ensure that the stock issued in the case of the gas industry shall be medium-dated, we are not wedded to the dates we have put down. We feel that the thirty years given is sufficient for whatever might normally be expected. If the Parliamentary Secretary is going to answer, I hope he will say whether a certain variation is wanted. If so, we would be the first to accept. We have put it down in the knowledge that we must have the dates within which the stock will be redeemed. We have seen what has happened in cases in which stocks have depreciated and the unfortunate investor has found that the terms of compensation, alleged to be fair, result in his losing both his interest and capital. We feel that such a safeguard must be in the Bill.
I beg to second the Amendment.
My hon. and gallant Friend showed some of the optimism of youth when he said that if this was accepted it would prevent the rigging of the market. I do not think it would do anything of the sort, nor would it prevent a fall in the market. I do not know why hon. Members opposite shouted: "Thirty-three." Was it the year 1933? If so, that was a boom year, when stocks were recovering from the record low level they reached when hon. Gentlemen last took office. The point is that we do want some assurance from the Government that the stock issued for compensation will be dated stock of some reasonable date.
We do not hold to that wording, but we do not think that it should be left completely loose. Under the Bill as it now stands, we might get stock with no final redemption date, or with a redemption period so long as to make the stock virtually irredeemable. I think that either of those things would be unfair, in view of what is now going on.
I do not think that phrases like "rigging the market" really contribute much to the discussion—especially when repeated on many occasions in almost exactly the same terminology with just as slight a foundation. The Amendment seeks to put into Clause 41 a requirement as to the terms upon which this stock is to be issued. I do not think it can be said that it is necessary to put that into the Bill at this stage. Those are matters which have to be accepted.
The stock to be issued has to comply with the requirements of Clause 24—that is to say that it has to be:
The right hon. and learned Gentleman—always efficient and courteous—has now undertaken in addition to many other duties the task of the Financial Secretary to the Treasury. There is no reason to be astonished, for that task is to conceal from the British public the terms on which they are to be deprived of their investments. [ Interruption. ] The hon. Member for West Fife (Mr. Gallacher) should be very careful; the type of legislation which has gone through the House this night—retrospective legislation—may place him in a situation in which he will find himself in great peril. The Communist purge is proceeding, and there might easily be retrospective legislation which would apply to him. [HON. MEMBERS: "Order."] A friendly warning to a brother Scot is never out of Order.
4.45 a.m.
The Solicitor-General has refused, for reasons which seem good to him and to the Government, to give any indication of the terms on which this stock is to be redeemed. He has said it is not necessary at this stage, but he did seem to hold out hope that the information would be available before long. Could he tell us when? Arrangements have been made tonight, as the Government have repeatedly sought to do, to inscribe in the Statute Book the principle that as soon as a Bill is introduced into Parliament it is law. Therefore, they say, there is no need to worry about the suggestion that the Bill has not yet been passed. The Minister of Fuel and Power and his right hon. Friend the Home Secretary are accustomed to operate on the theory that a Bill once introduced into the House of Commons is as good as law. The Solicitor-General has already succeeded in inscribing at least temporarily on the Statute Book this evening the principle that as soon as a Bill is introduced, people who do not comply with the draft of the Bill are liable subsequently to very heavy penalties. The right hon. and learned Gentleman should go a little further than he has been able to go tonight. Would he be able to tell us when that information might be available?
In due course.
The right hon. and learned Gentleman is becoming more and more the perfect lawyer. His answer to that query was "in due course." It is a very typical answer from the present Government. In due course the stock will be issued and it will go to a heavy discount, and in due course it will become apparent—
Go ahead, Jeremiah.
Not Jeremiah on this occasion, but Cassandra, who always prophesied the truth but never was believed. If the issue of this stock goes
Down and down.
I am not in a bit of a hurry. We have the whole day before us. If this Government stock follows the precedent of other Government stock it will go to a heavy discount, and then it will become apparent to everybody, as was said by my right hon. Friend the Member for Bournemouth (Mr. Bracken) that an abominable swindle had been perpetrated upon the British public. We wish to save the Government from them-
selves, but we wish still more to save the British people. Therefore, if the right hon. and learned Gentleman were in some way able to give the terms of this stock to the public it would go a long way to ensure that fair terms were given. If he secures a blank cheque of authorisation from this House, he secures a blank cheque for issuing a stock which will go to a heavy discount. We cannot connive at that. We cannot agree to sanction such proceedings, and, therefore, we shall divide the House against it.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 32; Noes, 171.
Division No. 212. AYES. [4.50 a.m. Amory, D. Heathcoat Drewe, C. Noble, Comdr. A. H. P Baldwin, A. E Duthie, W. S. Pitman, I. J. Birch, Nigel Elliot, Rt. Hon. Walter Raikes, H. V. Bossom, A. C. Fox, Sir G, Roberts, Major P. G (Ecclesall) Boyd-Carpenter, J. A. Lambert, Hon. G. Thornton-Kemsley, C. N. Bracken, Rt. Hon. Brendan Lennox-Boyd, A. T. Wheatley, Colonel M. J. Buchan-Hepburn, P G. T Lloyd, Selwyn (Wirral) Willoughby de Eresby, Lord Channon, H. Lucas-Tooth, Sir H. York, C. Clarke, Col. R S Macmillan, Rt. Hon. Harold (Bromley) Crosthwaite-Eyre, Col. O. E. Molson, A. H. E. TELLERS FOR THE AYES: Digby, S. W. Morrison, Maj. J G (Salisbury) Mr. Studholme and Major Ramsay. Drayson, G. B Nicholson, G.
NOES. Acland, Sir R. Evans, E. (Lowestoft) Longden, F. Adams, Richard (Balham) Evans, John (Ogmore) McAllister, G. Allen, Scholefield (Crewe) Evans, S. N. (Wednesbury) McGhee, H. G. Attewell, H. C. Ewart, R. Mack, J. D. Austin, H Lewis Fairhurst, F. Mackay, R. W G. (Hull, N.W.) Awbery, S. S Field, Capt. W J McLeavy, F. Ayrton Gould, Mrs. B. Foot, M. M. Macpherson, T. (Romford) Barton, C. Fraser, T. (Hamilton) Mallaiieu, J P. W. (Huddersfield) Bechervaise, A. E Freeman, J. (Watford) Mann, Mrs. J. Berry, H. Freeman, Peter (Newport) Manning, C. (Camberwell, N.) Bing, G. H. C. Gaitskell, Rt. Hon. H. T N Manning, Mrs. L. (Epping) Bowles, F. G. (Nuneaton) Gallacher, W. Mayhew, C. P. Braddock, T. (Mitcham) Ganley, Mrs. C. S. Middleton, Mrs. L Bramall, E. A. Gibson, C. W. Mikardo, Ian. Brook, D. (Halifax) Greenwood, A. W. J. (Heywood) Millington, Wing-Comdr E R. Brown, George (Belper) Grey, C. F. Mitchison, G. R Brown, T. J. (Ince) Griffiths, D. (Rother Valley) Monslow, W. Butler, H. W. (Hackney, S.) Gunter, R J. Morgan, Dr. H. B Callaghan, James Guy, W. H. Morley, R Chamberlain, R. A Hale, Leslie Morris, P. (Swansea, W.) Champion, A. J. Hamilton, Lieut.-Col. R Moyle, A. Chelwynd, G. R Hannan, W. (Maryhill) Nally, W. Cocks, F. S. Harrison, J. Neal, H. (Claycross) Collins, V. J. Haworth, J. Nichol, Mrs. M. E. (Bradford, N.) Corbet, Mrs. F. K. (Camb'well, N.W.) Henderson, Joseph (Ardwick) Noel-Baker, Capt. F. E. (Brentford) Corlett, Dr. J. Herbison, Miss M. Orbach, M. Crossman, R. H. S. Holman, P. Palmer, A. M. F. Dalton, Rt. Hon. H. Holmes, H. E. (Hemsworth) Pargiter, G. A. Davies, Edward (Burslem) House, G. Parkin, B. T. Davies, Ernest (Enfield) Hudson, J. H. (Ealing, W.) Paton, J. (Norwich) Davies, Harold (Leek) Hughes, Hector (Aberdeen, N.) Pearson, A. Davies, Hadyn (St. Pancras, S.W.) Hughes, H. D. (W'lverh'pton, W) Peart, T. F. Deer, G. Hynd, H. (Hackney, C.) Perrins, W. Delargy, H. J. Hynd, J. B. (Attercliffe) Price, M. Philips Diamond, J. Jenkins, R. H. Pritt, D. N. Driberg, T. E. N. Jones, D. T. (Hartlepool) Proctor, W. T. Dumpleton. C. W. Kenyon, C. Pursey, Cmdr. H. Dye, S. Lever, N. H. Randall, H. E. Ede, Rt. Hon. J. C. Levy, B. W. Ranger, J. Evans, Albert (Islington, W) Lipton, Lt.-Col. M Reeves, J. Reid, T. (Swindon) Stewart, Michael (Fulham, E.) West, D. G. Rhodes, H. Stross, Dr. B White, H. (Derbyshire, N.E.) Robens, A. Swingler, S. Whiteley, Rt. Hon. W Roberts, Goronwy (Caernarvonshire) Sylvester, G. O Wilkins, W. A Ross, William (Kilmarnock) Symonds, A. L. Willey, F. T. (Sunderland) Royle, C. Taylor, H. B. (Mansfield) Willey, O. G. (Cleveland) Sargood, R. Taylor, R. J. (Morpeth) Williams, D. J. (Neath) Shackleton, E. A. A. Taylor, Dr. S. (Barnet) Williams, J. L. (Kelvingrove) Shawcross, C. N. (Widnes) Thomas, D. E. (Aberdare) Williams, R. W. (Wigan) Shawcross, Rt. Hn. Sir H. (St. Helens) Thomas, I. O. (Wrekin) Williams, W. R. (Heston) Silverman, J. (Erdington) Thomas, George (Cardiff) Wills, Mrs. E. A. Simmons, C. J. Tiffany, S. Wilmot, Rt. Hon. J Skeffington, A. M Tolley, L. Wise, Major F J Smith, C. (Colchester) Usborne, Henry Woods, G. S. Snow, J. W. Vernon, Maj. W. F. Yates, V. F. Sorensen, R. W. Wallace, H. W. (Walthamstow. E.) TELLERS FOR THE NOES: Soskice, Maj. Sir F Watkins, T E. Mr. Popplewell and Sparks, J A. Wells, P L (Faversham) Mr. George Wallace.
CLAUSE 42.—(Estimates of area boards' requirements and allocation to them of liabilities in respect of stock.)
:I beg to move, in page 53, line 12, after "Minister," to insert:
"after giving to each area board an opportunity to make representations thereon to him."
When we were discussing Clause 42 upstairs in Committee we had some discussion on an Opposition Amendment in respect of the allocation of responsibility for gas stock between area boards. Some apprehensions were felt by hon. Members opposite that area boards ought to be entitled to make representations to the Minister. We felt that as the Gas Council was composed of the chairman of the area boards, this was really unnecessary, but we did agree that we would consider it. Accordingly we present this Amendment to meet that situation, having considered the question and having read the arguments again. I hope hon. Members will accept it.
An air of sweet reasonableness breathes over the Treasury Bench and long may it continue. It would not have been necessary to disturb the slumbering senators so often tonight—[ Interruption ]—if the Minister had shown any sign of accommodation—[ Interruption ]. I hope hon. Members will not interrupt me while I am complimenting the Minister, which I do sincerely. Once again he has adopted one of the innumerable excellent Amendments that have been put down by my hon. Friends. If he had accepted all our Amendments this would indeed have been a much improved Bill—not that it would have been worth improving anyway. The only way to improve it would have been to cut its throat from ear to ear.
Amendment agreed to.
5.0 a.m.
:I beg to move, in page 53, line 24, to leave out from the beginning to "and," in line 25, and to insert:
"required by the Council for the exercise and performance of their functions."
In the same line of sweet reasonableness may I discuss this Amendment, and the one following, in line 29? In this connection there was some doubt expressed in relation to the stock issued in respect of expenditure of the Clause. We submit this Amendment and the next one, which clear the issue, and meet the case put forward by the Opposition in Committee.
As the parents of these Amendments we are delighted that the Government have adopted them. We shall say no more, because at this hour in the morning copious expressions of gratitude tend to strike the human heart less than abbreviated ones.
Amendment agreed to.
Further Amendment made: In line 29, leave out "or for the benefit of."—[ Mr. Robens. ]
CLAUSE 44.—(Central guarantee fund.)
I beg to move, in page 55, line 9, at the end to insert:
The object of this Amendment is to make sure that certain funds are put into this central fund straight away. The object of the central fund that the Treasury is not brought in so early if there is a deficit, and to meet certain other obligations—if one of the boards were to fail to meet its obligations, as may well be the case. If this Amendment succeeds it will bring into that fund trustee stocks which are taken over by the various boards where they take over from the companies. In addition stocks that are not trustee would be converted into trustee stocks and go into this fund. That would appear to be only a measure of normal prudence.
Those investments which they will take over will be capital reserves. The right thing to do with them seems to be to put them into the Central Guarantee Fund, so that they may be available to help whatever part of the industry may be in need of help. I hope the Minister, now that he has had a word with the Treasury, as he promised to do, will be able to agree to inserting these words. I am sure the result will be to strengthen the Central Guarantee Fund, which is a very necessary part of the new structure of the industry.
I beg to second the Amendment.
It would have the advantage of ensuring that the Central Guarantee Fund from the first would be of substantial proportions. Possibly the Minister may think it would be of too substantial proportions, because he is under the impression there are some £20 million worth of gilt-edged securities in the companies, which would be four times the amount required by the fund. It is difficult to assess the amount, but I think that that estimate is wrong. Over the last year or two a great deal of gilt-edged and other investments of that sort have been sold, and the money obtained put into development. A great many replacements have been needed in the industry because of war losses and damage due to wear and tear. I think the reserves are much more on paper than in liquid assets. We could get this £5 million straight away by means of this Amendment, there is no doubt. That would be a great advantage. It would also save the area boards from having to make a contribution to the Central Guarantee Fund.
This Amendment raises a further point. We hope to get some further information from the Minister with regard to a question he promised upstairs to go into, and that is whether some of the investments could be transferred or not. I am wondering whether he will take the opportunity of telling us something about the form of the Central Guarantee Fund and the reserves. We should like to know whether the reserves of the area boards will be in liquid form or not.
Colonel Chinstrap.
Or will they be in a form difficult to realise? This Amendment is really exploratory for the purpose of gaining information with regard to what was discussed upstairs.
The question is whether the Central Guarantee Fund is to be built up out of the securities taken over by the area boards, or whether they should make an annual contribution. I must confess that when the suggestion was made in the Committee upstairs that the former proposal should be adopted. I was rather attracted by it. It seemed to me that from the point of view of the Treasury, as well, there was something to be said for it, because there would have been a fund almost immediately amounting to £5 million. So that guarantee, so far as the Treasury was concerned, was a fairly safe bet.
When I looked into the matter, however, I came across certain difficulties. The major difficulty, which is one which I can see no way round, is that although the boards as a whole will take over a considerable amount of Government securities—the hon. and gallant Member for East Grinstead (Colonel Clarke) might be right in saying that the figure which I gave earlier was exaggerated—some of those boards may have none at all.
Our expectation is that the greater part of them will be concentrated in one or two boards only. That makes the proposition an impracticable one. It would be out of the question to make one or two boards contribute the whole of the Central Guarantee Fund. In the circumstances, and after consulting the Treasury, I am bound to fall back upon the original proposal. That was that the boards should be required to pay an annual contribution. The other point raised was about the level of the area boards' reserves. That must be a matter for them, although the Minister has power to give directions.
I do not feel that the Minister has helped us very much by his answer. There are only two ways in which this central fund can be established. One way is, as the Minister suggests, by an annual contribution. The other way is through the taking over of all the investments which accrue on the vesting day. The Minister has said that in fact there will only be a few boards on the vesting date which will have such investments as can be transferred. His argument, as I understood it, was that it would be quite unfair to ask one or two boards to supply all the money from their investments which they took over for this fund. As I understood it, other boards would not have to contribute. The Minister went on to say that he was therefore forced to fall back upon the assumption that each area board is going to make a contribution.
On the vesting day, a large number of investments will accrue to the new boards. These investments, the Minister has said, will certainly exceed £5 millions and probably will be in the region of £20 millions. What we want to do, and I think again that we are right, is to say that a first charge upon these investments must be to provide the sum for the Central Guarantee Fund.
5.15 a.m.
That fund is going to be the basis on which the whole of the nationalised industry is going to work. If anything goes wrong, the fund will be called in; on that fund is going to fall every charge which may develop. If one board needs some temporary financial assistance and so on, it is this fund which is to be the bolster for the whole of the gas industry. It seems that the one thing we must ensure is that the first charge which this new board requires to see is that the right sum is put into the fund to meet all these obligations. The total amount is £20 million, and all that is necessary to fulfil these requirements is £5 million. That being so, I hope that right hon. and hon. Members on both sides of the House will realise that we should take out of this amount of investment this sum of £5 million and put it into this fund so that the future, so far as financial liability is concerned, is covered under this Bill.
I do not think that we can accept this statement from the Minister that a few boards only would be called upon to pay. Hon. Members on both sides will agree that when these boards are set up they will take over undertakings, and it is quite immaterial to say that any area board will be lucky in that it may take over a number of undertakings with good assets. If an area board is lucky, and takes over a municipal undertaking at about a fifth of its value, it is the board's luck, but because it has been lucky, we cannot say it should not contribute anything to this central fund.
After this nationalised Gas Council has been launched, even with the minimum prospects, it must have sound financial backing behind it. This can only be through the central guarantee fund. If the Minister says: "We are not worried about that, but will set it up over a number of years" he is taking the most appalling gamble. I am certain that unless we have this fund, we are not doing that which the Minister, and I am certain all of us, wish to do, and that is to see that the gas industry shall succeed as in the past in providing a really good service for the public.
I have not a great deal to say—[ Interruption ]—despite hon. Members opposite—except that I offered some advice to my hon. Friends behind me. If hon. Members on the other side wish to deter me, they must be the judges of their own actions. During those long, gloomy hours upstairs, the Minister was much more sympathetic than he has shown himself tonight. He explained that he had had talks with the Treasury thinking that those potentates would affirm suggestions put forward upstairs; but the Treasury came down heavily on the side of what they considered to be financial conservatism. I ask my hon. Friends behind me whether we are wise in pressing this Amendment. In the first instance when we drafted it the terrible scandal of "Daltonism" had not been exposed, nor did we know that a large amount of money which ought to be devoted to the Unemployment Fund was being gambled away on the gilt-edged market. These sinister financial revelations make me doubt whether the security proposed by my hon. Friends is worth anything. I have come to the conclusion that it is not. I think in theory that if we had a good Government—and we have not—it might have been worth while following the counsel of my hon. Friends, but I do not think it is worth doing so.
Amendment negatived.
Amendment made: In page 55, line 14, leave out "or gas fittings," and insert: "gas fittings or coke fittings."—[ Mr. Robens. ]
I beg to move, in page 55, line 24, at the end, to insert:
"(b) the aggregate of the sums contributed as aforesaid to the central guarantee fund, excluding any sums required to make good payments made out of the fund for the purposes mentioned in the preceding Subsection, shall not in any financial year exceed the sum of one million pounds."
This is an Amendment somewhat closely related to the matter we were discussing when we were considering the question of a Central Guarantee Fund. My right hon. Friend, the Financial Secretary to the Treasury accepted the principle of placing a statutory maximum on the contribution the area boards would make. Various suggestions were made during the committee upstairs, which included one that the amount might be ¼ per cent. of the outstanding amount of the gas stock. The Opposition no doubt had in mind the Heyworth proposal but this was on the basis of a fixed payment of ¼ per cent. per annum for so long as the stock is outstanding which would be a far more onerous charge than the Opposition proposal. On the other hand, ¼ per cent. as a maximum may be on the low side. After considering the matter we came to the conclusion that the round figure of £1 million per annum was a reasonable one.
This is an important concession for which we are truly thankful.
Amendment agreed to.
CLAUSE 45.—(Reserve funds of area boards and Gas Council.)
Amendment made: In page 56, line 19, leave out "or gas fittings," and insert "gas fittings or coke fittings."—[ Mr. Robens. ]
CLAUSE 46.—(Contributions by area boards to Council's expenses.)
Amendment made: In page 57, line 5, leave out "or gas fittings," and insert" gas fittings or coke fittings."—[ Mr. Robens. ]
CLAUSE 49.—(Schemes relating to carbonization activities of National Coal Board and area boards.)
I beg to move, in page 59, line 21, at the end, to insert:
"(5) Before giving their agreement to any scheme to be submitted to the Minister under Subsection (1) or Subsection (4) of this Section, the area board concerned shall consult with the Gas Council."
We have now come to the Clause dealing with the arrangements for co-ordinating the plans of the National Coal Board for coke and coal development with those of the gas area boards. We are faced with a certain difficulty because whereas in the Coal Nationalisation Act the only statutory body is the National Coal Board, in the Gas Bill there are a series of gas area boards. The point was made in Committee that it would be rather unequal for an individual area board to negotiate with the National Coal Board. It was suggested that the Gas Council should be included with the area boards. I said that it was difficult to have tripartite arrangements, but I have thought it over and the result of my thoughts is embodied in my Amendment. What we propose is that before giving their agreements to any scheme of co-ordination to be submitted to the Minister, an area board must consult with the Gas Council. I think that meets the point very well. It means that the Council really has the say which it should have in the matter. The negotiations could, for instance, take place between a sub-committee of the Council, composed of the area boards, on the one side, and the Coal Board, on the other. I think the Amendment deals with the points adequately.
I think this is rather a good Amendment for two reasons: one, it meets certain objections we put forward in Committee, and two, it is a much more sensible and balanced arrangement for conducting the gas industry if it is to be nationalised. It would be the height of absurdity to put the Minister in a position where he would be receiving schemes from 13 separate area boards without any endorsement from the Gas Council. I thought that would weaken the Council and that the Council would not be strong enough to control the Boards. This word "co-ordination" which is so popular everywhere, and especially in Whitehall, I think can be used in this Amendment. It was wise to have second thoughts and as it meets the objections we made and seems to be a sounder form of organisation we shall not oppose it.
I am not altogether certain from the wording of the Amendment where the actual responsibility lies. It seems very important that in matters of this kind it should be made quite clear whether it is the area board or the Gas Council which has to carry the "can" or take the ultimate responsibility for decisions on policy in this matter. When we were discussing this question upstairs we did appreciate the difficulties which arose between large integrated units which had taken place under private enterprise. The movement towards integration has been taking place for 100 years or more. Generally speaking, I know of no exception to this generalisation, that it is always the head office at the centre which takes responsibility in matters of policy of big importance of this kind. I would like the Minister to tell us whether the Gas Council, having been consulted, really has the ability to say to the area board "Look here you are doing something which does not suit the whole national aspect in regard to this. We deny the right to make this agreement in regard to coke, or whatever it is, in our area."
5.30 a.m.
We in this House must recognise that in matters of this kind a precedent set by one of the area boards is likely to work through all the area boards. An institution running, for instance, a chain of shops, appreciates such a process could happen, and would not allow one chain shop to set a precedent followed by others unless the matter was carefully examined and a definite ruling instruction given.
It seems not clear as to who is to give the ruling. Is it to be the area board or the Gas Council? Are the Gas Council given any power or is provision for consultation merely made for the sake of giving us an easy Amendment which does not achieve anything?
I support what my hon. Friend says, because it seems that the provision is going to increase only the amount of delay in trying to reach a settlement. As I see the matter, the battle will be between the area board and the Coal Board, and the Amendments which we moved upstairs were designed to strengthen area boards in any disagreement with the National Coal Board. To say, "We have consulted in some backroom with representatives of the Gas Council" does not seem to give the extra lift which we were trying to give them. Can the Minister tell us why he rejected those Amendments?
The Amendment, of course, provides that the area board cannot, in fact, make an agreement with the National Coal Board on its own, without saying anything to the Gas Council. It does not give the Gas Council power to direct the area board. I think it will reassure hon. Members when I say that the Chairman and Vice-Chairman designate of the Gas Council are very satisfied with this Amendment.
Amendment agreed to.
CLAUSE 50.—(Provisions as to supply of gas by persons other than Area Boards.)
I beg to move, in page 6o, line 45, at the end, to insert:
"(b) a person providing, for use in a flat or part of a building let by him, gas supplied to him shall not in so doing be deemed to be supplying gas."
We discussed at some length in Committee the position under this Clause of landladies who re-sold gas. There was some argument, and my right hon. and learned Friend, the Solicitor-General, said he would look at the matter, and that if there was any doubt he would produce words which removed that doubt. The Amendment makes it clear that landladies or landlords who re-sell gas to subtenants do not have to obtain permission from area boards to supply the gas. I think it meets the arguments raised by hon. Members opposite in Committee.
The Parliamentary Secretary was right when he said we had considerable discussion on this matter upstairs, and that most amiable of Ministers, the Solicitor-General, created the impression at one stage of our proceedings that he was actually hostile to landladies. After a certain amount of debate he withdrew his accusation, and we are all agreed it would be a foolish thing, in point of fact, if a landlord or a landlady were not to be allowed to deliver gas to the bedrooms or sittingrooms of the guests. The Minister has produced an Amendment which is written in quite good English. We are grateful to him.
I intervene only for a moment. It is so seldom that anything nice is said about landladies that we welcome this proposal. Looking at the Parliamentary Secretary, even at this hour of the morning, I am glad to know that under this Bill now any landlady, who is supplying him with gas whilst he is engaged in expelling gas outside, will not get into any trouble about it, and that all the hon. Gentleman will have to do is to pay the bill.
I do not know whether the Minister appreciates it, but he has not covered the case of the penny or shilling-in-the-slot machines which are found in the rooms of hotels. That is an important aspect of this matter. I am delighted that the Minister has met us over the case of the sub-supply of gas from the landlady to the tenant. However, he has not, as far as I understand his Amendment, met the case of the landlord supplying gas to the bedrooms and sittingrooms of the guests in his hotel. In Bath there is a great number of hotels. I know cases1 in which shilling-in-the-slot machines are in use, and I should like to know that the hotel proprietors of Bath, one of which is under the Railway Hotels Executive, will not be breaking the law if they have these shilling-in-the-slot machines to supply gas.
We are grateful to the Minister for having seen the error of his ways in this matter. It is an example of the way in which this Bill is being tidied up, and I am sure it was not the intention of the Minister or the Parliamentary Secretary to have in the Bill that condition of affairs which has just been righted. Subsection (1) of this Clause says: because otherwise they would not have risked a prohibition of that kind.
I trust the Minister will be able to give us the assurance that in general these provisions will not be unreasonably used, otherwise we may find we shall have erected a monopoly far more watertight—gastight, if I may say so—than the monopoly which exists at present, because a veto is being given here against other suppliers. The Solicitor-General said this monopoly existed at present. It is not so. It is only based on the power to break up streets. But there are private undertakings supplying gas as against statutory undertakings with perfect success, agreement and usefulness to all concerned though they have not this power to break up streets. I hope the Minister will be able to give an assurance that these provisions will be interpreted in the most liberal manner possible and that this statutory exception we put in here is merely to be taken as an example—one which will not be rigidly interpreted against suppliers who may not be absolutely within the orthodox schemes as contemplated in the Bill.
I should like to raise a drafting point. The Amendment is preceded by the letter b. That would predicate that somewhere further up in the Clause the letter a will be inserted. As I understand it, that is an automatic procedure of the draftsmen and does not require Amendment. But I would like to know, because it affects the structure of the Subsection, where it is intended to insert the a, because the a comes before the b.
I am afraid I shall have to have notice about this a coming before b. The draftsmen will take care of that small matter when it arises. There is no problem about that. With regard to the point about hotels and slot meters. The phrase,
"for use in a flat or part of a building let by him,"
would adequately cover the hotel proprietor who lets a hotel bedroom containing a meter by which visitors pay for the gas used. As regards the other point, I think the right hon. Gentleman can be assured that in dealing with matters of this kind the area boards would take that broad view he has expressed
Is the hon. Gentleman able to give the further assurance that factories which have been supplying gas to their workpeople will be sympathetically considered.
Yes, we have always said that in relation to things of that kind.
Under the Bill the private manufacturer who makes gas for his own works has to give the surplus under certain conditions to the nearest area board. I take it that no expense would be imposed on him in doing so. Pipes would be put in at the expense of the area board.
Amendment agreed to.
The next Amendment I have selected is a long way down the Paper.
On a point of Order, Mr. Speaker. The next Amendment on the Order Paper, which relates to Clause 51.—( Methods of charge and tariffs. ), in page 62, line 8, leave out "special" and insert "written," was put down to correct a matter raised in Committee. The Parliamentary Secretary had pointed out that he had made an incorrect statement, but that it was open to raise the matter at the next stage.
5.45 a.m.
When I began to revise my selection of Amendments yesterday morning I came to the conclusion that that Amendment was not of any particular importance.
CLAUSE 56.—(Provisions as to pension rights.)
I beg to move, in page 68, line 3, after "applies," to insert:
"or by any national association."
We recently had an assurance from the Parliamentary Secretary in Standing Committee—in col. 1528 of HANSARD—that people who served in the industry in national associations should not be left out when the new Board took over and new arrangements were made. This Amendment is put down in order to give the Parliamentary Secretary the opportunity of saying whether since then further consideration has been given to this question and to see if he has anything more to tell us.
I beg to second the Amendment.
After a great deal of discussion on this question, the Committee came to the view—which I think the right hon. Member for Bournemouth (Mr. Bracken) accepted, this time quite rightly —that it was very much better to leave this question outside the Bill and leave it as between the Gas Council and these associations, which were doing a very good work. There were some difficulties about bringing the associations within the terms of the Bill. They are not undertakings, and, as the provisions of the Bill apply to gas undertakings, we came to the conclusion that the Gas Council would consult and deal with these organisations and make an arrangement to take over these servants and assets. That, we thought, would be the most useful and best arrangement to make outside the Bill and would be better than putting provisions in the Bill.
My recollection of this particular discussion is not perfect. One cannot spend three months on a Bill and recollect everything that happened. My impression is that I agreed with the Minister that it would be better if we did not insert these various institutions in the Bill, provided that the Minister could give us a firm assurance that these admirable officials would find proper employment, or that they would be safeguarded in their employment, and in their pensions, by the Gas Council.
There are a number of them, including the Federation of Gas Employers, and the National Federation of Coke Associations. I will not go through the whole list, but there are a number of devoted servants and people of the highest competence. The Minister took the view that their services would certainly be available to the new Gas Council and the area boards. We naturally immediately assented to the Minister's suggestion. I understood it was a firm promise, and I think it is still a firm promise. I think the Minister takes the view that the moment the Gas Council is in a position to absorb them, priority will be given to these devoted officials and organisations. I do not think we can ask any more of the Minister.
I am sure that many of these officials would feel happier if they were in the Bill. I have not asked them. The trouble is that that would make the Bill a little lopsided. I have not yet reached that stage of cynicism that I am unwilling to believe that when two Ministers of the Crown make a promise that promise is going to be broken. I am certain that the Ministers meant what they said. There is another point, that the Council will start off with little or no staff and will be more than anxious to make use of these officials mentioned in the Amendment. I hope that the Council will pay them better than their former employers.
I think my hon. Friends would be well advised to leave the situation where it is and accept the Minister's promise. But, as we are a party of democracy, and not in the least likely to be intimidated by the quips of our temporary leaders, some of my hon. Friends may absolutely disagree with me. I am stating my personal point of view. My hon. Friends may have another point of view, and in a party like ours we bow to the majority rule.
Before other hon. Members opposite express their views, I wish to be quite clear on this assurance, because the right hon. Gentleman has been a little more specific than I was in the discussion. I used the Gas Council as an example in the Committee. I am not saying now that all these associations mentioned in the Amendment will be treated in that way. The British Gas Council does stand out probably more than the others do, but not the whole of them. Some of them represent a sort of employers' federation, and I do not think there would be any obligation on the part of the new Gas Council to take them over entirely.
I do not wish to misinterpret the Minister at all. It is quite true that he gave a broad assurance about the British Gas Council. I do not think the names of the others were mentioned. But I take it that they are not precluded from the beneficence of the Minister.
I thought that the Minister went a little further than that in the Committee stage. He said:
"The hon. Member for Tiverton (Mr. Amory) has made quite clear that the purpose of this group of Amendments is to safeguard the employees of those associations which are now working on behalf of the gas industry; not being trade associations, as the hon. Member indicated, but working almost as a federation in fulfilling functions such as publicity, and so on, on behalf of the whole industry.
"Mr. PITMAN: And in co-ordinating.
"Mr. ROBENS: Yes, and in carrying on co-ordinating activities. We have a great deal of sympathy with the points expressed."
That is a much wider case than that simply of the Gas Council. He went on to say:
"It may be that my right hon. Friend may decide to tell the Gas Council that that is one of the jobs with which they must get on in the next 12 months—the job of discussing appropriate arrangements with the employees."
Then my right hon. Friend the Member for Bournemouth (Mr. Bracken) made some comment, and the Minister said:
"I am sorry if I misled the right hon. Gentleman. I meant to imply that there is room for negotiations to take place, in relation to the Gas Council, and so on."—[OFFICIAL REPORT. Standing Committee D. 10th May, 1948, c. 1527.]
Read some more.
I think hon. Members are being a little ungenerous.
At this time in the morning?
The livelihood of a certain number of people is concerned in this. It may not be much to the hon. Member for West Fife (Mr. Gallacher) but it is a lot to the people concerned.
The right hon. and gallant Gentleman and his hon. Friends have kept the House up all night.
Justice should be done even if the House of Commons has to sit late. The House of Commons has often sat later than this for the sake of a much smaller number of people than are here concerned. We are trying to clear up the position of a small number of people about whom a Ministerial assurance was given. This is important. On account of that Ministerial assurance an Amendment was withdrawn.
Let the right hon. and gallant Gentleman read the whole thing.
The hon. Member should not show so much levity in such a matter. No one wants to read the whole thing. We are anxious not to press the Minister further than he wants to go, but we are anxious to make sure that the Ministerial assurance given on this occasion is as extended as that given upstairs. I am sure that is in the Minister's mind, and that he fully stands by that assurance he gave. That went beyond an assurance concerning the Gas Council alone, as I have shown, I think, from the quotations I have given from his own words. I am asking the Minister to repeat on the Floor of the House the assurance he gave upstairs, which was not confined to the Gas Council alone, and to say that that assurance still stands, and that he regards it as one of the responsibilities of himself and his right hon. Friend that they should discuss with the Gas Council the question of these employees, and that they should seek to solve by administrative means the problem he finds it difficult to resolve in the provisions of the Bill. We agree that it is difficult to put it into the provisions of the Bill, but we are anxious that the administrative provisions which he envisaged upstairs are still in his mind, and that he hopes to carry them through.
I think it would be better if these words went into the Bill, and for this reason. As I understand it, there is no doubt that the Minister is accepting some responsibility for some of these people. What responsibility, and for how many? I hope we shall hear a little more about that in a moment. However, the Minister does desire to take responsibility for some of them. The Clause is an enabling Clause. It begins with the words, "The Minister may make regulations." Therefore, if he accepts the inclusion of the words we seek to move, he does not take upon himself any obligation to take over everybody, but what he does take upon himself is power so to do if he wishes. He will take power to make regulations to cover such people as he wishes.
6.0 a.m.
I want him to answer this question. Can he tell the House whether, if he does not include these words, he has any power to make provision for these people? It does not appear to me that in this Clause as it stands he has such power. The fact that other bodies are specifically mentioned would, I think, lead to the view that he has not the power to cover the staffs under this Clause. If he has not the power under this Clause, under what other Clause has he such power? I am certain that the assurance he has given us was given in all good faith; but the assurance is useless if he has not the power to implement it. If the Minister desires to take care of these people, where in this Bill, if he does not accept our Amendment, has he the power to do so?
Further to the point raised by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) I would like to ask the Minister whether he has referred this Amendment to the chairman-designate and the vice-chairman-designate of the Gas Board, upon whom the responsibility will fall. Recently, over the question of the negotiations with the Coal Board, the Minister said that he had consulted the chairman and vice-chairman-designate of the Gas Council about the Amendment he had put down, and that they agreed. The point raised by the hon. Member for Kingston-upon-Thames is sound. It was that this is permissive, and that if it is omitted from the Bill there is no power for the Minister to do what he has given an assurance that he will do. Moreover, as I understand the procedure regarding questions to Ministers in this House, there will be little prospect of hon. Members finding out by that means whether the intention was carried out. I would ask the Minister to consider submitting the terms of this Amendment to the chairman and vice-chairman-designate, if he has not already done so, and to put this matter right in another place.
It should be recognised by hon. Members opposite that none of these organisations is a gas undertaker. I know that the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) knows that, and that he agrees with what I am saying. But he cannot keep his hon. Friends in order.
Come, come.
The right hon. Gentleman has not been in the Chamber very long, so he need not say, "Come, come" to me. The point I was making is that this Bill is to deal with gas undertakings. I made, I think, a fair offer and gave an assurance. But there is no power in this Bill for the Minister to ensure that the assurance which I have given can be carried out specifically within the Bill, because they are not gas undertakers. I will say frankly that if this kind of assurance is not accepted by the Opposition we shall have to leave these people out in the cold. We have tried to meet hon. Members opposite, and I believe they would be foolish to press this point. We have, in fact, discussed this matter with the chairman and vice-chairman-designate of the Gas Council. They are agreed with this assurance. I hope that with the added comment which I have made, hon. Members will accept what I have said, and act accordingly.
Before the hon. Gentleman sits down, may I say that the Minister has power in another direction, though it may be that he would not choose to exercise it. The Minister could give a direction to the Gas Council. He still has the power of sanction in reserve. I hope that nothing which has been said on this side of the House is going to interfere with the generous promise given by the Minister and his Parliamentary Secretary.
It is not whether he has the will to carry out this assurance, but whether he has the power. That was the point we were making, and that was the reason for this Amendment.
Amendment negatived.
CLAUSE 57.—(Co-partnership schemes.)
I beg to move, in page 70, line 25, to leave out from "undertaking," to "provision," in line 26.
The object of this Amendment, which is very little more than a drafting Amendment, is slightly to enlarge the definition of co-partnership schemes under this Clause. That Clause continues co-partnership schemes, but the wording as it at present stands is such that some co-partnership schemes may be left out. If the words proposed to be left out were included, it might be said that only where there was something in the nature of a formal contract of service were they applicable and some co-partnership schemes could not be brought within the definition of
We are rather embarrassed in dealing with this conse- quential Amendment. Not having had any opportunity to talk about co-partnership, it is difficult for us to talk on Amendments based consequentially on co-partnership. I have consulted with some of my friends who are learned in the law and they say it is a useful Amendment. As hon. Members opposite know, we attach enormous importance to co-partnership. We will not oppose this truncated Amendment.
There is one question I would like to ask, and that is this. This is all governed by the provision
"where no scheme is in force before the vesting date "
These schemes will come over to the entity of the area boards and the area board inheriting a scheme of, say, the Bath Gas Company, will have a scheme which could be by extension applied to the whole of the area. Is that possible?
Amendment agreed to
I beg to move, in page 70, line 30, at the end to insert:
"The regulations made under this Section shall be made not less than one month before the vesting date but without prejudice to such variation of any of those regulations as may subsequently appear to the Minister to be necessary."
This is designed to meet a point raised by the Opposition on the Committee stage. It was suggested that we should insert, in connection with the regulations concerning co-partnership, that they should be made one month or more before the vesting date. I agreed at the time that we should have a period but I wanted to safeguard the position in case we wished to amend the regulations. There might be some unusual case which was not realised when the regulations were made and if we could not amend them the whole of that scheme would be closed down on the vesting day.
The Minister is very lucky, as his co-partnership Amendments are subjected to some scrutiny by the Opposition. I think those co-partners who have badgered the Minister for a long time would, otherwise, accuse the Conservative Party of not looking after their interests and think that the Minister alone was doing so. This Amendment is all right and fits into the general scheme and carries out the promise made by the Minister. I do not oppose it.
Amendment agreed to.
CLAUSE 60.—(Establishment of Gas Arbitration Tribunal.)
I beg to move, in page 73, line 5, to leave out "Subsection (5) of this Section," and to insert, "this Part of this Act."
This Amendment, and some other Amendments which follow, are consequential on the new Clause which was introduced earlier into the Bill dealing with the case where it was found in the courts of arbitration proceedings a Scottish point of law was involved.
These Amendments are consequential on the new Clause, and it is of course one of the difficulties under which the House is labouring that the new Clause has only just been considered and inserted in the Bill, and we have not before us, as one would have hoped, the statute as a whole so we could examine the repercussions. Scottish Members did raise the point about the constitution of the Arbitration Tribunal. I am not quite sure to what extent the Lord President of the Court of Session comes into the appointment of the tribunal. Subsection (3) says:
"The members of the tribunal shall be appointed by the Lord Chancellor, except that any member or members appointed by virtue of the proviso of the last preceding Subsection shall be appointed by the Lord President of the Court of Session."
I take it the Amendments we are now making do not make any difference to the position, or the jurisdiction of the tribunal in itself. It remains a general tribunal appointed part by the Lord Chancellor and part by the Lord President of the Court of Session, and these Amendments are merely to ensure that the legal proceedings which take place in one country or another are easily transferred and the appropriate code, either of English or Scottish law, will be brought to bear on the proceedings.
Their only effect will be to make it possible for the proceedings to be transferred. They do not affect the constitution of the court, which remains as before.
Amendment agreed to.
Further Amendments made: In page 73, line 5, leave out "required to be held in Scotland," and insert "to be treated as Scottish proceedings."
In line 15, leave out from "are," to end of line 16, and insert "to be treated as Scottish proceedings."
In line 38, leave out from first "Scotland," to end of line, and insert:
"the proceedings before the tribunal in respect of the question, dispute or matter shall, subject to the provisions of this Part of this Act be treated as Scottish proceedings." — The Solicitor-General. ]
6.15 a.m.
CLAUSE 61.—(Procedure and enforcement of orders of arbitration tribunal.)
Amendments made: In page 75, line 1, leave out "last preceding Section," and insert "provisions of this Part of this Act."
In line 2, leave out "required to be held in Scotland," and insert "to be treated as Scottish proceedings."
In line 32, at end, insert:
"and, in the case of any such proceedings, the tribunal shall, except in so far as for any special reasons they think fit not to do so, sit in Scotland."—[ Mr. Gaitskell. ]
CLAUSE 63.—(Power to make safety regulations.)
I beg to move in page 76, line 11, after "from," to insert:
"the distribution of gas by an area board or."
It was suggested in the Committee that we had not sufficiently covered the case where there might be an explosion in the distribution system of the gas undertaking as well as in the home of the consumer. The hon. Member for East Grinstead (Colonel Clarke) moved an Amendment to correct the position, but the wording was not quite right and we could not accept it as it stood. This Amendment I think meets the position adequately.
This Amendment does not deserve effusive thanks but it deserves some thanks.
Amendment agreed to.
CLAUSE 65.—(Provisions as to prosecutions and as to offences by corporations.)
I beg to move, in page 77, line I, to leave out from "connivance," to the end of the Clause.
I understand you are calling the first Amendment to page 77, Mr. Speaker. I do not know whether it would be convenient to discuss the next two following Amendments which, although they raise a different point, are all on the same general question.
I did not intend to call the next two Amendments but the discussion can cover them.
I am much obliged. They are distinct points but on the same general question. The Amendment you have selected, Mr. Speaker, raises a matter which was also discussed in Committee as the Solicitor-General will remember, about the same time of the morning. It is one of very considerable importance.
If hon. Members look at the Clause they will see that where an offence under the preceding Clause, or under any regulation made under the Bill, is committed by a body corporate, a director, general manager, secretary or other similar officer is deemed to be guilty of that offence unless he succeeds in proving two things: that the offence was committed without his consent or connivance, and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances. The effect of the Amendment is to relieve such a director of the onus of proving the second of the things which are laid upon him, as the Clause stands. It would leave it therefore that the director or similar officer of a body corporate found guilty of an offence would be able to establish his personal innocence if he proved the offence was committed without his consent and connivance.
We take the view that that is a very heavy load to place on such persons, and is a sufficient burden. The matter was argued in Committee as it has been argued on other Bills under, I think, some misapprehension. The Solicitor-General will recall that he advised the Committee, as reported in column 1837, that there were a very large number of precedents for this Clause. He sought to urge the Committee that the Clause should stand as it now stands because in a large number of statutes a similar provision had been included and a similar onus placed on directors and officers of a body corporate.
The Solicitor-General gave a long list of precedents which seemed to constitute a formidable argument in favour of that Clause as it stood. The statutes which he quoted received Parliamentary assent during a number of different Parliaments in which different political parties were in power. When those precedents are closely examined, it turns out that what he advised the Committee was misleading, and although the statutes were precedents for placing upon directors and other officers some onus, they were not—with two or three recent exceptions—precedents for imposing the heavy onus at present in the Bill. What we are seeking to do in this Amendment is what the Solicitor-General urged, and to follow the great bulk of the precedents.
An analysis of the Solicitor-General's precedents shows that with one exception —an Act of 1939—the only precedents for this course are contained in nationalisation statutes, passed by the present Government. Therefore, the whole basis of the Solicitor-General's argument to the Committee seems to be vitiated, and we intend to discuss the matter on its merits, bearing in mind that it is a matter still open for decision. The precedents established by recent nationalisation statutes are in no sense a compelling argument for doing something, if it seems unjust to hon. Members. That is the substance of the first of these Amendments.
We say that it is quite sufficient for a director of a company who is convicted of an offence to show that the offence was committed without his consent and connivance. The onus of proof being upon him, that is a formidable task which is heavy enougli—and from many points of view too heavy. By way of compromise in the matter, we seek merely to leave out: have been before that House. It is a fact that most recent statutes of this type have some Clause under which directors and other persons—this is by no means confined to directors—are deemed to be guilty when the corporation of which they are directors or officers is found to be guilty of an offence. What it is set out to do is to provide that no person shall be deemed to be guilty of an offence if he was not a party to the proceedings in which the offence was found to be committed by the body corporate. That would seem to be elementary justice: if a person was not a party to proceedings, he has no right to give evidence or cross-examine witnesses.
If for some reason he is not served with process, and is not given the opportunity of being represented, it is completely inequitable. It is contrary to the whole of our ideas of criminal justice that he should be deemed to be guilty of an offence. By this Amendment we seek to secure that no person shall be deemed to be guilty of a criminal offence unless he has had an opportunity of defending himself, cross-examining the witnesses for the prosecution and putting forward his own case.
So far as the third of this group of Amendments is concerned, the Solicitor-General will no doubt recognise if not his master's voice at any rate his master's language for it is the language of a Government Amendment which was inserted during the Report stage of the Motor Spirit Bill. The question arose in this way: This Clause bristles with penalties against directors, and on the Committee stage of the Motor Spirit Bill, when an exactly similar Clause was under discussion, the question was raised with the learned Attorney-General as to whether the members of the board of a nationalised industry were directors for the purposes of sustaining this criminal liability. At that stage the Attorney-General asked for the withdrawal of the matter while he and his advisers considered it. On the Report stage he introduced the Amendment to make it clear beyond doubt that members of the boards of nationalised industries were to be deemed directors for the purpose of the penal section, and consequently to be liable to precisely the same penalties as are the directors of private companies.
It is pretty obvious that what is sauce for the private goose should be sauce for the public gander, and it is clear that if it has been decided to say that where a company commits an offence its directors shall be deemed to be guilty of a criminal offence, it is obviously fair that where a nationalised industry commits a similar offence the members of that board shall be liable. There can be no justification for any differentiation between the two.
The only other point raised on the Motor Spirit Bill was whether the Clause as it stood imposed a responsibility in (regard to criminal liability. The Attorney-General considered that the matter should be put beyond doubt by the addition of a further Subsection, and as we indicate here the liability ought to be the same in this Bill. It is for that reason that we are seeking to do on this Bill precisely what the learned Attorney-General saw fit to do in the Motor Spirit Bill. We seek to add this Subsection for the same reasons and in the same language. It would obviously be highly undesirable if that Amendment were not accepted, because of the fact that on the Motor Spirit Bill the learned Attorney-General definitely came to the conclusion that it did not impose a criminal liability on the members of board of the nationalised industries as is imposed on the directors of private companies. The provisions of the Bill as now drafted would catch the director of a private company but not the director of a nationalised industry. That is so obviously unfair that the Government cannot contemplate perpetuating it and they should approve what we are seeking to do here—to enact what they themselves enacted in the Motor Spirit Bill by reason of the new proviso that they added to it.
These points are of importance. They involve the rights and liberties of a considerable number of people over a good many years. It is absolutely essential that, if it is decided in the course of nationalising industry we must create, as this Clause creates, a whole variety of criminal offences with heavy penalties, we should so arrange the drafting as to ensure that those penalties are fair as between man and man and do not impose an avoidable injustice on any of our fellow citizens.
6.30 a.m.
I beg to second the Amendment
After the cogent, weighty, and indeed, massive argument which has been put by my hon. Friend, I cannot do better than formally second this Amendment and watch its effect on the Government.
Three points were raised by the hon. Gentleman who moved the Amendment, the first one of which arose on the Amendment he was moving and the second two of which arise on Amendments which have not been called. I will deal primarily with the first of the three points.
The Amendment seeks to leave out the words after "connivance" to the end of the Clause. If those words are not there, it is patently easy for a director to evade liability by shutting his eyes and being away from the scene of the offence when it was committed. The Clause as drafted is one which now appears in a number of modern statutes. It provides that a. director who assumes the responsibility of the directorship of a company cannot write off his liability by keeping out off the way.
"Connivance" imports some measure of positive co-operation in the commission of an offence. If he has not been wary about the exercise of due care about the commission of an offence—any director who closes his eyes and keeps away when he knows the procedure is going forward could escape liability. We say he shall not escape liability. He must not only show he did not connive and did not consent, but he must also show he took such steps as could be reasonably expected of a person holding a position of responsibility.
The hon. Gentleman says it is placing a heavy burden on a director. I do not think it is. He is the person who knows what part of the transaction was entirely within his knowledge. It cannot in ordinary circumstances be within the knowledge of the prosecution. If a director comes and explains that he did not consent or connive, and it could not be said he was guilty of neglect in any obvious sense, having regard to the position he occupied in the company, he would be found not guilty of an offence.
Then, the hon. Gentleman says, it ought to be provided that he should be made a party to the proceedings. Clearly it is so provided. The Clause requires him to be a party to the proceedings. Once it is shown that an offence was com- mitted by the company and that he was a director at the material time, then the onus is on him to show that he did not connive and was not concerned, and that in regard to the responsibility he assumed in relation to the company he took reasonable steps to prevent the commission of that sort of offence.
I entirely agree with the right hon. and learned Gentleman's interpretation of the Clause as it stands, but will he tell me where is the provision for ensuring that any particular director shall be a party to the proceedings?
One might just as well state that a person who commits an offence, who would be deemed to be guilty of a felony or a misdeed, and would be liable to be sentenced to imprisonment, could, in consequence of what he did, be convicted of being a party. So here, if you say a director should be deemed in certain circumstances to be guilty of an offence, that means that you must prove in the circumstances that the company committed the offence, and that the director was the director at the material time. The burden is then upon him, he possessing exclusive knowledge which could exonerate him, to say, when charged, "I don't know. I did not consent. I don't deny that my position in the company was this, that or the other. Having regard to that position, I took the following steps."
If the jury took the view that those steps were inadequate, then it may be open for them to convict but it would be for him to say what he did and to explain his position in the company, particularly as to the degree of responsibility as between himself and the company. We do not think that is inequitable: on the contrary, it is right, and we do not think that the director who has been a party or privy to the commission of offences should escape liability simply because the prosecution has not the knowledge he has about the part he has taken in it. We think that is a fair way of approaching this particular problem.
I have dealt with the second point. On the third point I would be prepared to accept Subsection (3), but it has not been selected.
As I understood Mr. Speaker's Ruling it was that discussion should take place on the first Amendment. I have little doubt that that Ruling indicated the possibility of formally moving for a Division, or the absence of a Division.
If Mr. Deputy-Speaker were to change his view about selecting it—
We are trying to help the Solicitor-General. If the Solicitor-General would move it, it would solve the problem.
On a point of Order. I understand that the Amendment not selected by Mr. Speaker will be discussed now and that the Opposition are asking the Solicitor-General to move it. Is that in Order?
I did not understand that, but Mr. Speaker did say that the Amendment might be discussed with the one now before the House.
Now it is being proposed that the Solicitor-General should move an Amendment not selected by Mr. Speaker. Is that in Order?
I did not understand that. Mr. Speaker did say that those two Amendments could be discussed with the present one.
Mr. Deputy-Speaker, if you feel disposed to reverse your view about that and to select the third Amendment, I would accept it, but if you do not feel so disposed, I cannot move it. I will give an undertaking that at a later stage it will be put right.
I am afraid I cannot do that. It is not within my competence.
Further to that point of Order. I did consult Mr. Speaker. I understood, as was very usual that discussion would take place on the first Amendment, but that it was possible to divide on the later one. [ Interruption. ] I am putting a point of Order. If the Government do not oppose the third Amendment it is possible that it could be added to the Bill. I have that clearly marked here on the copy which I went over, not only with Mr. Speaker but also earlier in the evening with yourself, Mr. Deputy-Speaker. The understanding that I had was that discussion should take place on the first Amendment, power of Division on the other two being left to the discretion of the Opposition.
If there was complete agreement in the House that the third Amendment, which I understand is the one in question, be accepted, then I think I should be justified in saying that Mr. Speaker would agree to that course being adopted, but not otherwise.
So far as I am concerned, I would certainly give my personal consent. I do not know how the rest of the House feels about it. If it is not selected I could give an undertaking that an Amendment on similar lines would be put at a later stage.
I had better put it.
We are still, I understand, in the discussion on Amendment number one. In that matter we are in a certain difficulty, because the Solicitor-General has returned a dusty answer to our contention. Victor Hugo said on one occasion, "If I were accused of stealing the two towers of Notre Dame I would cross the frontier." That is what he thought of the premise that he was guilty of certain acts. The ordinary man feels the greatest uneasiness in coming within the sweep of the law. This is a provision by which the State proposes to bring ordinary men within the sweep of the law. They will be brought within the sweep of the law and asked to disprove the contentions of the right hon. and learned Gentleman. They will have to prove that they
"exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances."
My right hon. Friend the Member for Bournemouth (Mr. Bracken) is a director of more than one company. He is also a Member of Parliament. His duties as a Member of Parliament are of a very exacting nature. He has spent a considerable time recently in the conduct of—
This is out of Order.
If the hon. and learned Member listens he will grasp the argument I am putting to the House. [ Interruption. ] Perhaps the hon. and learned Member cannot grasp anything. He has been asleep.
It is because I have been asleep through most of the right hon. Gentleman's drivel that I am able to understand what he is saying now that I am awake.
That proves, as I have not been addressing the House, that the hon. and learned Member has been completely unconscious. He has been unconscious and thinks I have been addressing him.
That is a very natural assumption on my part, for the right hon. and gallant Gentleman is often addressing the House.
He goes on convincing us that he has been completely unconscious of all that has gone on in the House. [ Interruption. ] There is plenty of time.
6.45 a.m.
One can be wide awake and unconscious, and that is the condition of the right hon. and gallant Gentleman.
The hon. and learned Member for North Hammersmith (Mr. Pritt) was not complaining that he was wide awake and unconscious. I am saying that the difficulty of the problems which we confront in facing onerous duties, such as the onerous duties of member of the Gas Council and a director of a company, would lead to the sort of argument in which it would be very difficult for anybody to prove he had exercised due diligence, having regard to the nature of his functions in that capacity and to all the circumstances. He might be led into difficulties it might be awkward to elucidate.
I think that the right hon. and learned Gentleman has been led away by the extreme necessity of procuring evidence in such cases, when he says that he will adopt entirely new criteria on this evidence, which can only be got by proving a person guilty and demanding that he should show his innocence. It seems to me as a mere layman that that is not the sort of case in which I should like to have to defend myself in any circumstances against gentlemen of the acumen of the right hon. and learned Gentleman. It would make me very unwilling to embark on any commercial enterprise whatever, and still more unwilling to embark on any commercial enterprise in which there was any risk. That is the gravamen of our charge—that the whole of these proceedings do tend to make commercial undertakers in this country play for safety in every possible circumstance, and to avoid any activity which might be considered as the sort of thing which could bring them within the sweep of the law at the present time.
Let the right hon. and gallant Gentleman join the volunteers.
The hon. Member for West Fife (Mr. Gallacher) would simply shoot the Opposition, which course he has already advocated tonight, or cast people with whom he disagrees into gaol, thus fulfilling his role as the spearhead of the party to which he belongs. I hope these are not the criteria which this House will apply, and especially that they are not those the Solicitor-General will apply when he is dealing with commercial cases in this country. We are dealing, as he himself says, with a novel set of circumstances. The criteria he has adopted are such as will tend to slow down legitimate commercial activity on many occasions. I ask if he will not find it possible to modify the extreme rigour of the view he has expressed to the House.
I should like to say a word on this because I have heard these arguments so often in this House. I have always regarded them as having no substance. I have not had much experience of criminal law, but I have seen three or four cases in the courts, and I have seen directors establish that they had done their best, and I have seen others fail to establish that they had done their best. If they do not wish to do that or cannot do that, let them not be directors.
May I ask your guidance, Mr. Deputy-Speaker?
rose —
It is very difficult to speak when the English Vyshinsky is interrupting.
The right hon. Gentleman can scarcely be so rude to me when so much noise is being made behind him by the barrow boys.
On a point of Order.
Order. I think the right hon. Gentleman in the interests of moderation, might withdraw that expression.
I must say I really ought to apologise to Mr. Vyshinsky.
Damned insulting.
I think the right hon. Gentleman is rather aggravating what he said. I should be glad if he would withdraw his original expression.
I prefer to be insulted by such people as the right hon. Gentleman.
Whether the hon. and learned Gentleman prefers it or not, I would not like to hurt his feelings, or the feelings of the hon. Member for West Fife who will, I hope, forgive me for any reflection I may have made upon his friends. We would like your guidance, Mr. Deputy-Speaker. We cannot possibly abandon our first Amendment, but I understand that the Government are willing to accept our third Amendment. Would it be in order for us to vote on our first Amendment and in some way or other to move the third Amendment, so that the Government may give it consent.
I am in some difficulty in that matter. It is solely within the province of Mr. Speaker to decide whether an Amendment shall, or shall not, be selected. I would prefer not to have the duty thrust upon me, but if there is complete agreement on all sides on the third Amendment I will take the responsibility of putting the Question to the House. [HON. MEMBERS: "No."] I gather that there is not complete agreement, and in those circumstances the matter must remain for another occasion.
We will vote on the first Amendment and will leave it to the Government to propose, in another place, any adjustment which they think desirable. That probably is the best way.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 155; Noes, 27.
Division No. 213. AYES. [6.53 a.m. Acland, Sir R. Hale, Leslie Pritt, D. N. Adams, Richard (Balham) Hamilton, Lt.-Col. R Proctor, W. T. Allen, Scholefield (Crewe) Hannan, W. (Maryhill) Pursey, Cmdr. H Attewell, H. C. Harrison, J. Randall, H. E Awbery, S. S. Haworth, J. Ranger, J. Ayrton Gould, Mrs. B Henderson, Joseph (Ardwick) Reeves, J. Bechervaise, A. E. Herbison, Miss M. Robens, A. Berry, H. Holman, P. Roberts, Goronwy (Caernarvonshire) Bing, G. H. C. Holmes, H. E. (Hemsworth) Ross, William (Kilmarnock) Bowles, F. G. (Nuneaton) House, G. Royle, C. Braddock, T. (Mitcham) Hudson, J. H. (Ealing, W.) Sargood, R. Bramall, E. A. Hughes, Hector (Aberdeen, N.) Shackleton, E. A. A. Brawn, George (Belper) Hughes, H. D. (Wolverhampton, W) Shawcross, C. N. (Widnes) Brown, T. J. (Ince) Hynd, H. (Hackney, C.) Shawcross, Rt. Hon. Sir H. (St. Helens) Butler, H. W. (Hackney, S.) Hynd, J. B. (Attercliffe) Silverman, J. (Erdington) Callaghan, James Jenkins, R H. Simmons, C. J. Chamberlain, R A Jones, D. T. (Hartlepools) Skeffington, A. M. Champion, A. J. Kenyon, C. Sorensen, R. W. Chetwynd, G. R Lever, N. H. Soskice, Sir Frank Cocks, F. S Levy, B. W. Sparks, J. A. Corbet, Mrs. F. K. (Camb'well, N.W.) Lipton, Lt.-Col. M Stewart, Michael (Fulham, E.) Corlett, Dr. J. Longden, F. Stross, Dr. B. Crossman, R. H. S. McAllister, G. Swingler, S. Dalton, Rt. Hon. H. McGhee, H. G. Symonds, A. L. Davies, Edward (Burslem) Mack, J. D. Taylor, H. B. (Mansfield) Davies, Ernest (Enfield) Mackay, R. W. G. (Hull, N.W.) Taylor, R. J. (Morpeth) Davies, Harold (Leek) McLeavy, F. Taylor, Dr. S. (Barnet) Davies, Haydn (St. Pancras, S.W.) Macpherson, T. (Romford) Thomas, I. O. (Wrekin) Deer, G. Mallalieu, J. P W (Huddersfield) Thomas, George (Cardiff) Delargy, H. J. Mann, Mrs. J. Tiffany, S. Diamond, J. Manning, C. (Camberwell, N.) Tolley, L. Driberg, T. E. N. Manning, Mrs. L (Epping) Usborne, Henry Dumpleton, C. W Mayhew, C. P. Vernon, Major W. F. Dye, S. Middleton, Mrs. L Wallace, G. D. (Chislehurst) Ede, Rt. Hon. J. C. Mikardo, Ian Wallace, H. W. (Walthamstow, E.) Evans, A. (Islington, W.) Millington, Wing-Comdr. E. R Watkins, T. E. Evans, E. (Lowestoft) Mitchison, G. R. Wells, P. L. (Faversham) Evans, John (Ogmore) Monslow, W. White, H. (Derbyshire, N.E.) Evans, S. N. (Wednesbury) Morgan, Dr. H. B Whiteley, Rt. Hon. W. Ewart, R. Morris, P. (Swansea, W.) Willey, F. T. (Sunderland) Fairhurst, F. Moyle, A. Willey, O. G. (Cleveland) Field, Captain W J Nally, W. Williams, J. L. (Kelvingrove) Foot, M. M. Neal, H. (Claycross) Williams, R. W. (Wigan) Fraser, T. (Hamilton) Nichol, Mrs. M E. (Bradford, N.) Williams, W. R. (Heston) Freeman, John (Watford) Noel-Baker, Capt. F. E. (Brentford) Wills, Mrs. E. A. Freeman, Peter (Newport) Orbach, M. Wilmot, Rt. Hon. J Gaitskell, Rt. Hon. H. T N Palmer, A. M. F. Wise, Major F J Gallacher, W. Parkin, B. T. Woods, G. S. Ganley, Mrs. C. S. Paton, J. (Norwich) Yates, V. F Gibson, C. W. Pearson, A. Greenwood, A. W. J. (Heywood) Peart, Thomas F Griffiths, D. (Rother Valley) Perrins, W. TELLERS FOR THE AYES: Gunter, R. J. Popplewell, E. Mr. Snow and Mr. Wilkins. Guy, W. H Price, M. Philips
NOES. Baldwin, A. E Drayson, G. B Morrison, Maj. J. G. (Salisbury) Birch, Nigel Drewe, C. Nicholson, G. Bossom, A. C. Duthie, W. S Noble, Comdr A. H. P Boyd-Carpenter, J. A Elliot, Lieut.-Col Rt. Hon. W Pitman, I. J. Bracken, Rt. Hon. Brendan Fox, Sir G. Raikes, H. V. Buchan-Hepburn, P. G T Lambert, Hon. G. Thornton-Kemsley, C N. Channon, H. Lloyd, Selwyn (Wirral) Wheatley, Col. M. J. (Dorset, E.) Clarke, Col. R. S Lucas-Tooth, Sir H. Crosthwaite-Eyre, Col O. E Macmillan, Rt. Hon. Harold (Bromley) TELLERS FOR THE NOES: Digby, S. W. Molson, A. H E Mr. Studholme and Major Ramsay.
CLAUSE 67.—(Provisions as to regulations and orders.)
7.0 a.m.
I beg to move, in page 78, line 3, after "proceedings," to insert "(other than court proceedings)."
This Amendment is to prevent regulations made under Clause 67 dealing with High Court costs or costs in courts. This was not intended, but in the language used in the Clause doubts were expressed in the Committee stage on this question. This Amendment is designed to remove those doubts.
This is a most excellent Amendment.—[HON. MEMBERS: "Hear, hear."] Every word of it was devised by the Tory Party and adopted by the Government. We take the applause as a compliment, and we ought to have received it before.
Amendment agreed to.
CLAUSE 70.—(Interpretation.)
I beg to move, in page 80, line 6, at the end, to insert:
This is a case of a company which changes its financial period in such a way that there is a gap between the old and the new financial period. It might happen that the period is changed, say, from the year ending 30th September to the year ending 31st December, and some provision must be made for a case of this kind in establishing the financial year for the purposes of settling the maximum permitted dividend under Clause 32. The way we propose to do that is very simple. We propose to say that in such cases, the maximum yearly dividend shall be the dividend in the three-month period multiplied by four. We take the basis of three months only; in contrast to the case of a company with a six-month period where we add together the dividends paid in the last two six-month periods, the first one being the interim dividend, and the second one being the final dividend. Although this is complicated, those who understand it will appreciate that it does, in fact, cover the particular problem raised by the hon. and gallant Member for the New Forest and Christchurch (Colonel Crosthwaite-Eyre).
I should be quite prepared to accept what the Minister has said, that the wording which is now proposed may well be a fairer arrangement, if it had appeared in the Bill as originally drafted, but the trouble is that he is making the Amendment now, in June, and Clause 32 is the Clause on which a number of persons have already acted in the belief that that was the Clause which would govern the dividend administration of their companies from the time of the original Bill to the present date.
The Amendment the Government propose makes an alteration in Clause 32 the result of which may well be retrospectively to put them in the wrong. I think that must be admitted by the Minister, so that if, indeed, there is any result flowing from the Amendment, whether good or bad, that must work unfairly on the very people whom it affects. For that reason, I do not think we can accept this Amendment. I am not denying that it may not be an improvement, but I would like to know from the Government what their attitude would be in the case of a director or undertaking who had followed the Bill as originally drafted before the appearance of this Amendment.
I would like to support what my hon. Friend has said. Under Clause 32 the key date is 23rd January, and anybody who does certain things forbidden in the Bill after that date is liable to have to make up the money. The Bill was published about that date. The interpretation Clause was altered in May, and now it has been altered again in June. It seems retrospective legislation with a vengeance that someone should be punished under a Bill which is continually being altered and which is not law.
I hope we shall get some answer from the Government on the points raised by my hon. Friends. This is an attempt by the Government to juggle with dates for the purpose of retrospective legislation. I do not see what sort of prospect of freedom a citizen has if the Government can, by free alterations of the calendar, convict a person of a crime by retrospective legislation. I cannot conceive how the Solicitor-General has lent his great authority to such a proposal. We on this side of the House must vote against the Amendment if we cannot get an adequate explanation from the Solicitor-General. I believe it is beyond the power of the Minister to give a satisfactory explanation, and I suggest that, in view of the wonderfully co-operative conduct of the Opposition, the Minister might care to withdraw this and the five or six other Amendments which follow, because many involve retrospective legislation. The party to which I belong has always opposed that damnable doctrine.
Would it not be in Order for you, Mr. Deputy-Speaker, to ask that hon. Members opposite should stand in their places if they call for a Division, and if there are any fewer than 40 present you do not give them that Division?
There are various considerations I have to consider before adopting that course.
The case put by the Opposition is purely hypothetical. I am certainly not going to withdraw the Amendment, and I ask the House to adopt it. Should a hypothetical case materialise—which I think unlikely—then it is, of course, still possible to cover it by later Amendments.
It is indeed going to great lengths for the Minister of the Crown responsible for this Bill to say that although no case has arisen yet, a case may arise, and that if such a case does arise the Government will consider altering this Bill yet again. With all this order, counter-order, and disorder, how is it possible for a citizen to escape coming within the ambit of the law if the law lurches about on its feet like a drunken man going home after a late night? To bring this before the House as a contribution to the framing of a Statute is one of the most bare-faced pieces of effrontery of which any Minister of the Crown was ever guilty.
Surely the Opposition are acting under an extraordinary misapprehension? They act as if they were under the impression that the Bill before the House is law, and that every time it is amended in the course of its passage through the House the law is altered—and that therefore the Government are not to amend the Bill because someone may have acted in the belief that the Bill was either the law or that it would not be altered. If a Bill is not to be altered during its passage the one solitary claim of the Opposition of being of any use namely that they sometimes get a Clause improved would have no justification; they would have no function at all.
7.15 a.m.
The hon. and learned Member for North Hammersmith (Mr. Pritt) has, though no doubt unconsciously, touched upon an extremely relevant point, and if he had been physically or mentally present when the House was discussing Clause 32 he would have appreciated that under that Clause there is a provision of the same nature as that which he suggests we are imagining. If the hon. and learned Member somewhat belatedly will turn to Clause 32 he will see
I should like to inform the hon. Member that I was, in fact, here when Clause 32 was discussed. I did know what was being talked about and what was in the Clause, but if it is necessary to dot the "i"s and cross the "t"s of my previous remarks, I would say that people who are attending to their business and who are being given legal advice would be told by their solicitors, even if hon. Members opposite cannot tell them, that the Bill, although it would relate back, would not relate to anything until it existed, and it does not yet exist.
As the hon. and learned Member has given me his assurance that he understands what he is talking about, I accept it by reason of the fact, but only by reason of the fact, of the responsibility which hon. Members of this House have for accepting each other's assurance, but I must confess that I have never had such a difficult task. The point which the hon. and learned Member wholly failed to grasp was that these people are to be affected and punished for things which they have done in January of this year which contravene Clause 32 as it has been amended and defended today and yesterday. It is precisely against that kind of legislation which combines retrospection and mutability that we are protesting. We protest against changing today provisions which affect acts done in January. I hope the hon. and learned Member appreciates that these are things which reasonable people are entitled to resent. I am trying to put our point of view, that these retrospective and suddenly changing positions, imposing a liability on people for things they have done since January of this year, are an outrage upon standards of criminal justice as those standards are understood west of the iron curtain.
The hon. Member for North Hammersmith (Mr. Pritt) has completely misunderstood the point that we are trying to make, and I would ask him to think of the terms of the hypothetical case that, as a director of a gas undertaking, as indeed I am, I might consult him as to what the company should do in the circumstances covered by this Amendment. The whole point of this Clause is that it is the date, 23rd January, which determines that there would be a specific point at which the datum line of time was drawn.
The point is surely this, that in the meantime the law has been altered three
times. [HON. MEMBERS: "NO."] The hon. and learned Member for North Hammersmith alleges it is not law. That, of course, is perfectly true, but there must be some form of definiteness about Bills laid before this House. Particularly in advice tendered by lawyers to their clients, it has been a universally accepted fact that if a Bill is published in this House which says what the Government will regard as legal or illegal, then if it is changed, it is changed in favour of and not against the subject. If it is changed against the subject when there is a backdate giving the datum line on which that Bill when it became an Act is effective, then that change is wholly against the subject and against the advice learned Members might give to their clients.
It seems to me that members of the learned profession opposite should join with us in this protest, because it puts them in quite an impossible position in regard to their advice on any of these matters. If any subject in good faith takes an action which hitherto was entirely legal, and which in the terms of the Bill as drafted is legal, it seems to me to be clearly wrong that that should be made illegal—particularly some act taken when there was no prospect whatever that that was going to be the law at all.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 153; Noes, 24.
Division No. 214.] AYES. [7.23 a.m. Adams, Richard (Balham) Davies, Haydn (St. Pancras, S.W.) Hannan, W. (Maryhill) Allen, Soholefield (Crewe) Deer, G. Harrison, J. Attewell, H. C. Delargy, H. J. Herbison, Miss M. Awbery, S. S. Diamond, J. Holmes, H. E. (Hemsworth) Ayrton Gould, Mrs. B. Driberg, T. E. N. House, G. Bechervaise, A. E. Dumpleton, C. W Hughes, Hector (Aberdeen, N.) Berry, H. Dye, S. Hughes, H. D. (Wolverhampton, W.) Bing, G. H. C. Ede, Rt. Hon. J. C. Hynd, H. (Hackney, C.) Bowles, F. G. (Nuneaton) Evans, A. (Islington, W.) Hynd, J. B. (Attercliffe) Braddock, T. (Mitcham) Evans, E. (Lowestoft) Jenkins, R. H. Bramall, E. A. Evans, John (Ogmore) Jones, D. T. (Hartlepools) Brown, George (Belper) Evans, S. N. (Wednesbury) Kenyon, C. Brown, T. J. (Ince) Ewart, R. Lever, N. H. Butler, H. W (Hackney, S.) Fairhurst, F. Levy, B. W. Callaghan, James Field, Captain W. J. Lipton, Lt.-Col. M. Chamberlain, R. A. Foot, M. M. Longden, F. Champion, A. J. Fraser, T. (Hamilton) McAllister, G. Chetwynd, G. R. Freeman, John (Watford) McGhee, H. G. Cooks, F. S. Freeman, Peter (Newport) Mack, J. D. Collindridge, F, Gaitskell, Rt. Hon. H. T. N. Mackay, R. W. G. (Hull, N.W.) Corbet, Mrs. F. K. (Camb'well, N.W.) Gallacher, W. McLeavy, F. Corlett, Dr. J. Ganley, Mrs. C. S Macpherson, T. (Romford) Crossman, R. H. S. Gibson, C. W. Mallalieu, J. P. W. (Huddersfield) Dalton, Rt. Hon. H. Greenwood, A. W. J. (Heywood) Mann, Mrs. J. Davies, Edward (Burslem) Griffiths, D. (Rother Valley) Manning, C. (Camberwell, N.) Davies, Ernest (Enfield) Gunter, R. J Manning, Mrs. L (Epping) Davies, Harold (Leek) Hamilton, Lt.-Col. R. Mayhew, C P Middleton, Mrs. L. Ranger, J. Thomas, George (Cardiff) Mikardo, Ian Reeves, J. Tiffany, S. Millington, Wing-Comdr. E. R. Robens, A. Tolley, L. Mitchison, G. R. Roberts, Goronwy (Caernarvonshire) Usborne, Henry Monslow, W. Ross, William (Kilmarnock) Vernon, Major W. F. Morgan, Dr. H. B. Royle, C. Wallace, G. D. (Chislehurst) Morley, R. Sargood, R. Wallace, H. W. (Walthamstow, E.) Morris, P. (Swansea, W.) Shackleton, E. A. A. Watkins, T. E. Moyle, A. Shawcross, C. N. (Widnes) Wells, P. L. (Faversham) Nally, W. Shawcross, Rt. Hon. Sir H. (St. Helens) White, H. (Derbyshire, N.E.) Nichol, Mrs. M. E. (Bradford, N.) Silverman, J. (Erdington) Whiteley, Rt. Hon. W. Noel-Baker, Capt. F. E. (Brentford) Skeffington, A. M Wilkins, W. A. Orbach, M. Skinnard, F. W. Willey, F. T. (Sunderland) Palmer, A. M. F. Snow, J. W. Willey, O. G. (Cleveland) Parkin, B T. Sorensen, R. W. Williams, J. L. (Kelvingrove) Paton, J. (Norwich) Soskice, Sir Frank Williams, R. W. (Wigan) Pearson, A. Sparks, J. A. Williams, W. R. (Heston) Peart, Thomas F- Stewart, Michael (Fulham, E.) Wills, Mrs. E. A. Perrins, W. Stross, Dr. B. Wilmot, Rt. Hon. J. Popplewell, E. Swingler, S. Wise, Major F. J Price, M. Philips Symonds. A. L. Woods, G. S. Pritt, D. N. Taylor, H. B. (Mansfield) Yates, V. F. Proctor, W. T. Taylor, R. J. (Morpeth) Pursey, Cmdr. H. Taylor, Dr. S. (Barnet) TELLERS FOR THE AYES Randall, H E. Thomas, I. O. (Wrekin) Mr. Joseph Henderson and Mr. Simmons.
NOES. Baldwin, A. E. Digby, S. W. Morrison, Maj. J. G. (Salisbury) Birch, Nigel Drayson, G. B Nicholson, G. Bossom, A. C. Duthie, W. S. Pitman, I. J. Boyd-Carpenter, J. A. Elliot, Lieut.-Col. Rt. Hon. W Ramsay, Major S. Bracken, Rt. Hon. Brendan Fox, Sir G. Thornton-Kemsley, C N. Buchan-Hepburn, P. G. T. Lambert, Hon. G. Wheatley, Col. M. J. (Dorset, E.) Channon, H. Lucas-Tooth, Sir H. Clarke, Col. R. S Macmillan, Rt. Hon. Harold (Bromley) TELLERS FOR THE NOES: Crosthwaite-Eyre, Col. O. E. Molson, A. H. E. Mr. Drewe and Mr. Studholme.
7.30 a.m.
The following Amendments stood upon the Paper in the name of Mr. GAITSKELL:
In page 80, line 22, leave out "annual."
In line 23, at end, insert:
for the purpose (in the case of a company) of being laid before the company in general meeting."
In line 25, after "are," insert "normally."
In line 34, to leave out from "year," to the end of line 38.
In page 81, line 10, at end, insert:
"' interim dividend ' includes any dividend paid by an undertaker to whom Part II of this Act applies in respect of any such part of a financial year as ends before the end of the financial year."
I understand that these five Amendments hang together.
If I may say so respectfully, they do not hang together. I wish they did, because there is one Amendment that we might be willing not to vote against. I also think that no harm would be done if the Solicitor-General gave us a short explanation of each of these Amendments.
That has been done. The Minister in his statement made it clear that he was dealing with all the Amendments down to and including that proposed to page 81, line 10.
We have less opposition, in fact only fractional opposition, to the Amendment to line 22. We are wholly opposed to the line 23 Amendment. We are absolutely and violently opposed to the line 25 Amendment, and we have not made up our minds on the Amendment to line 34.
I am proposing to put the Amendments. It will be for the right hon. Gentleman and his hon. Friends to vote as they think fit.
Amendment made: In page 80, line 22, leave out "annual."—[ Mr. Gaitskell. ]
Amendment proposed: In page 80, line 23, at the end, to insert:
"for the purpose (in the case of a company) of being laid before the company in general meeting."—[ Mr. Gaitskell. ]
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 150; Noes, 24.
Division No. 215.] AYES. [7.33 a.m. Adams, Richard (Balham) Hamilton, Lt.-Col. R. Pursey, Cmdr. H Allen, Scholefield (Crewe) Hannan, W. (Maryhill) Randall, H. E Attewell, H. C. Harrison, J. Ranger, J. Awbery, S. S. Henderson, Joseph (Ardwick) Reeves, J. Ayrton Gould, Mrs. B Herbison, Miss M. Robens, A. Bechervaise, A. E Holmes, H. E. (Hemsworth) Roberts, Goronwy (Caernarvonshire) Berry, H. House, G. Ross, William (Kilmarnock) Bing, G. H. C. Hughes, Hector (Aberdeen, N.) Royle, C Bowles, F. G. (Nuneaton) Hughes, H. D (Wolverhampton, W.) Sargood, R. Braddock, T. (Mitcham) Hynd, H. (Hackney, C.) Shackleton, E. A. A. Bramall, E. A Hynd, J. B. (Attercliffe) Shawcross, C. N. (Widnes) Brown, George (Belper) Jenkins, R. H. Shawcross, Rt. Hon. Sir H. (St. Helens) Brown, T. J. (Ince) Jones, D. T. (Hartlepools) Silverman, J. (Erdington) Butler, H W. (Hackney. S) Kenyon, C. Simmons, C. J. Callaghan, James Lever, N. H. Skeffington, A. M Champion, A. J. Levy, B. W. Skinnard, F. W. Chetwynd, G. R. Lipton, Lt.-Col. M Snow, J. W. Cocks, F. S. Longden, F. Sorensen, R. W. Corbet, Mrs. F. K. (Camb'well, N.W.) McAllister, G. Soskice, Sir Frank Corlett, Dr. J. McGhee, H. Sparks, J. A. Crossman, R. H. S. Mack, J. D. Stewart, Michael (Fulham, E.) Dalton, Rt. Hon. H. Mackay, R. W. G. (Hull, N W) Stross, Dr. B. Davies, Edward (Burslem) McLeavy, F. Swingler, S. Davies, Ernest (Enfield) Macpherson, T. (Romford) Symonds, A. L. Davies, Harold (Leek) Mallalieu, J. P. W. (Huddersfield) Taylor, H. B. (Mansfield) Davies, Haydn (St. Pancras, S.W.) Manning, C. (Camberwell, N.) Taylor, R. J. (Morpeth) Deer, G. Manning, Mrs. L (Epping) Taylor, Dr. S. (Barnet) Delargy, H. J Mayhew, C. P. Thomas, George (Cardiff) Diamond, J. Middleton, Mrs. L. Thomas, I. O (Wrekin) Oriberg, T. E. N. Mikardo, Ian Tiffany, S Dumpleton, C. W. Millington, Wing-Comdr. E. R Tolley, L. Ede, Rt. Hon. J. C. Mitchison, G. R Usborne, Henry Evans, A. (Islington, W.) Monslow, W. Vernon, Major W. F. Evans, E. (Lowestoft) Morgan, Dr. H B Wallace, G. D. (Chislehurst) Evans, John (Ogmore) Morley. R. Wallace, H. W. (Walthamstow, E.) Evans, S. N. (Wednesbury) Morris, P. (Swansea, W.) Watkins, T. E. Ewart, R. Moyle, A. Wells, P. L. (Faversham) Fairhurst, F. Nally, W. While, H. (Derbyshire, N.E.) Field, Captain W. J Nichol, Mrs. M. E. (Bradford, N.) Whiteley, Rt. Hon. W Foot, M. M. Noel-Baker, Capt. F. E. (Brentford) Willey, F. T. (Sunderland) Fraser, T. (Hamilton) Orbach, M. Willey, O. G. (Cleveland) Freeman, John (Watford) Palmer, A. M. F. Williams, R. W. (Wigan) Freeman, Peter (Newport) Parkin, B. T. Williams, W. R. (Heston) Gaitskell, Rt. Hon. H. T N Paton, J. (Norwich) Wills, Mrs. E. A. Gallacher, W. Pearson, A. Wilmot, Rt. Hon. J Ganley, Mrs. C. S Peart, Thomas F, Wise, Major F. J. Gibson, C. W. Perrins, W. Woods, G. S. Greenwood, A. W. J (Heywood) Popplewell, E Yates, V. F. Griffiths, D. (Rother Valley) Price, M. Philips Gunter, R. J Pritt, D. N. TELLERS FOR THE AYES: Hale, Leslie Proctor. W. T Mr. Collindridge and Mr. Wilkins.
NOES. Baldwin, A. E Digby, S. W Morrison, Maj. J. G. (Salisbury) Birch, Nigel Drayson, G. B Nicholson, G. Bossom, A.C. Duthie, W. S Pitman, I. J. Boyd-Carpenter, J. A. Elliot, Lieut.-Col. Rt. Hon. W Ramsay, Major S. Bracken, Rt. Hon. Brendan Fox, Sir G. Thornton-Kemsley, C N Buchan-Hepbum, P. G. T Lambert, Hon. G. Wheatley, Col. M. J. (Dorset, E.) Channon, H. Lucas-Tooth, Sir H. Clarke, Col. R. S Macmillan, Rt. Hon. Harold (Bromley) TELLERS FOR THE NOES: Crosthwaite-Eyre, Col O E Molson, A. H. E. Mr. Drewe and Mr. Studholme.
Amendment proposed, in page 80, line 25, after "are," to insert "normally." —[ Mr. Gaitskeli. ]
Question put, "That ' normally' be there inserted in the Bill."
The House divided: Ayes, 149; Noes. 24.
Division No. 216. AYES. 7.42 a.m. Allen, Scholefield (Crewe) Bowles, F. G. (Nuneaton) Champion, A. J Attewell, H. C. Braddock, T. (Mitcham) Chetwynd, G. R Awbery, S S. Bramall, E. A. Cocks, F. S. Ayrton Gould, Mrs. B. Brown, George (Belper) Corbet, Mrs. F. K. (Camb'Well, N.W.) Bechervaise, A. E. Brown, T. J. (Ince) Corlett, Dr. J. Berry, H. Butler, H. W. (Hackney, S.) Crossman, R. H. S. Bing, G. H. C. Callaghan, James Dalton, Rt. Hon. H.
Davies, Edward (Burslem) Lipton, Lt.-Col. M Shackleton, E A. A. Davies, Ernest (Enfield) Longden, F. Shawcross, C. N. (Widnes) Davies, Harold (Leek) McAllister, G. Shawcross, Rt. Hon. Sir H. (St. Helens) Davies, Haydn (St. Pancras, S W) McGhee, H. G Silverman, J. (Erdington) Deer, G. Mack, J. D. Simmons, C. J. Delargy, H. J Mackay, R. W. G. (Hull, N.W.) Skeffington, A. M Diamond, J. McLeavy, F. Skinnard, F. W Driberg, T. E. N. Macpherson, T. (Romford) Snow, J. W. Dumpleton, C. W. Mallaheu, J. P. W. (Huddersfield) Sorensen, R. W. Ede, Rt. Hon. J. C. Manning, C. (Camberwell, N.) Soskice, Sir Frank Evans, A. (Islington, W.) Manning, Mrs. L (Epping) Sparks, J. A. Evans, E. (Lowestoft) Mayhew, C. P. Stewart, Michael (Fulham, E.) Evans, John (Ogmore) Middleton, Mrs. L Stross, Dr. B. Evans, S. N. (Wednesbury) Mikardo, Ian Swingler, S. Ewart, R. Millington, Wing-Comdr E R Symonds, A. L. Fairhurst, F. Mitchison, G. R. Taylor, H. B. (Mansfield) Field, Captain W. J Monslow, W. Taylor, R. J. (Morpeth) Foot, M. M. Morgan, Dr. H B Taylor, Dr. S. (Barnet) Fraser, T. (Hamilton) Morley, R. Thomas, George (Cardiff); Freeman, John (Watford) Morris, P. (Swansea, W.) Thomas, I. O. (Wrekin) Freeman, Peter (Newport) Moyle, A. Tiffany, S Gaitskell, Rt. Hon. H. T. N. Nally, W. Tolley, L. Gallacher, W. Nichol, Mrs. M. E. (Bradford, N.) Usborne, Henry Ganley, Mrs. C. S. Noel-Baker, Capt. F. E. (Brentford) Vernon, Major W. P. Gibson, C. W. Orbach, M. Wallace, G. D. (Chislehurst) Greenwood, A. W. J. (Heywood) Palmer, A. M. F Wallace, H. W. (Walthamstow, E.) Griffiths, D. (Rother Valley) Parkin, B T. Watkins, T. E. Gunter, R. J. Paton, J (Norwich) Wells, P. L. (Faversham) Hale, Leslie Pearson, A. White, H. (Derbyshire, N.E.) Hamilton, Lt.-Col R. Peart, Thomas F. Whiteley, Rt. Hon. W Harrison, J. Perrins, W. Wilkins, W. A. Henderson, Joseph (Ardwick) Popplewell, E. Willey, F. T. (Sunderland) Herbison, Miss M. Price, M. Philips Willey, O. G. (Cleveland) Holmes, H. E. (Hemsworth) Pritt, D N Williams, R. W. (Wigan) House, G. Proctor, W. T. Williams, W. R. (Heston) Hughes, Hector (Aberdeen, N.) Pursey, Cmdr. H Wills, Mrs. E. A. Hughes, H. D. (Wolverhampton, W) Randall, H. E. Wilmot, Rt. Hon. J Hynd, H. (Hackney, C.) Ranger, J. Wise, Major F. J Hynd, J. B. (Attercliffe) Reeves, J. Woods, G. S. Jenkins, R H. Robens, A. Yates, V. F. Jones, D. T. (Hartlepools) Roberts, Goronwy (Caernarvonshire) Kenyon, C. Ross, William (Kilmarnock) TELLERS FOR THE AYES: Lever, N. H. Royle, C Mr. Collindridge and Levy, B. W. Sargood, R Mr. Richard Adams. NOES Baldwin, A. E Digby, S. W. Nelson, A. H. E. Birch, Nigel Drayson, G. B. Morrison, Maj. J. G. (Salisbury) Bossom, A. C. Drewe, C. Nicholson, G. Boyd-Carpenter, J. A. Duthie, W. S. Pitman, I. J. Bracken, Rt. Hon. Brendan Elliot, Lieut.-Col. Rt. Hon W Thornton-Kemsley, C N. Buchan-Hepburn, P. G. T. Fox, Sir G. Wheatley, Col. M. J (Dorset, E) Channon, H. Lambert, Hon. G. Clarke, Col. R. S. Lucas-Tooth, Sir H. TELLERS FOR THE NOES: Crosthwaite-Eyre, Col O. E Macmillan, Rt. Hon. Harold (Bromley) Mr. Studholme and Major Ramsay
Further Amendment made, in page 80, line 34, to leave out from "year," to the end of line 38.—[ Mr. Gaitskell.' ]
I beg to move, in page 81, line 10, at the end to insert:
"' interim dividend ' includes any dividend paid by an undertaker to whom Part II of this Act applies in respect of any such part of a financial year as ends before the end of the financial year.''
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes 146; Noes, 24.
Division No. 217.] AYES. [7.50 a.m. Adams, Richard (Balham) Champion, A. J. Evans, A. (Islington, W.) Allen, Scholefield (Crewe) Chetwynd, G. R. Evans, E. (Lowestoft) Attewell, H. C Cocks, F S Evans, John (Ogmore) Awbery, S. S. Corbet, Mrs. F. K. (Camb'well, N.W.) Evans, S. N. (Wednesbury) Ayrton Gould, Mrs. B. Crossman, R. H. S. Ewart, R. Bechervaise, A. E. Davies, Edward (Burslem) Fairhurst, F. Berry, H. Davies, Ernest (Enfield) Field, Captain W J Bing, G. H. C. Davies, Harold (Leek) Foot, M. M. Bowles, F. G. (Nuneaton) Davies, Haydn (St. Pancras, S.W.) Fraser, T (Hamilton) Braddock, T. (Mitcham) Deer, G. Freeman, John (Watford) Bramall, E. A. Delargy, H. J Freeman, Peter (Newport) Brown, George (Belper) Diamond, J. Gaitskell, Rt. Hon H. T. N Brown, T. J. (Ince) Driberg, T. E. N Gallacher, W. Butler, H. W (Hackney, S) Dumpleton, C. W. Ganley, Mrs. C. S Callaghan, James Ede, Rt. Hon. J C Gibson, C. W. Greenwood, A. W. J. (Heywood) Monslow, W. Snow, J. W. Griffiths, D. (Rother Valley) Morgan, Dr. H. B Sorensen, R. W. Gunter, R. J. Morley, R. Soskice, Sir Frank Hale, Leslie Morris, P. (Swansea, W.) Sparks, J. A. Hamilton, Lt.-Col. R. Moyle, A. Stewart, Michael (Fulham, E.) Harrison, J. Nally, W. Swingler, S. Henderson, Joseph (Ardwick) Nichol, Mrs. M. E. (Bradford, N.) Symonds, A. L. Herbison, Miss M. Noel-Baker, Capt. F E. (Brentford) Taylor, H. B (Mansfield) Holmes, H. E. (Hemsworth) Orbach, M. Taylor, R. J. (Morpeth) House, G. Palmer, A M F. Taylor, Dr. S. (Barnet) Hughes, Hector (Aberdeen, N.) Parkin, B. T. Thomas, George (Cardiff) Hughes, H. D. (Wolverhampton, W.) Paton, J. (Norwich) Thomas, I. O. (Wrekin) Hynd, H. (Hackney, C.) Pearson, A. Tiffany, S. Hynd, J. B. (Attercliffe) Peart, Thomas F. Tolley, L. Jenkins, R. H. Perrins, W. Usborne, Henry Jones, D. T. (Hartlepools) Popplewell, E Vernon, Major W. F. Kenyon, C. Price, M. Philips Wallace, H. W. (Walthamstow, E.) Lever, N. H. Pritt, D. N. Watkins, T. E. Levy, B. W. Proctor, W. T. Wells, P. L. (Faversham) Lipton, Lt.-Col. M. Pursey, Cmdr. H White, H. (Derbyshire, N.E.) Longden, F. Randall, H. E. Whiteley, Rt. Hon W. McAllister, G. Ranger, J. Wilkins, W. A. McGhee, H. G. Reeves, J. Willey, F. T. (Sunderland) Mack, J. D. Robens, A. Willey, O. G. (Cleveland) Mackay, R. W. G. (Hull, N.W.) Roberts, Goronwy (Caernarvonshir Williams, R. W. (Wigan) McLeavy, F. Ross, William (Kilmarnock) Williams, W. R. (Heston) Macpherson, T. (Romford) Royle, C. Wills, Mrs. E. A. Mallalieu, J. P. W. (Huddersfield) Sargood, R. Wilmot, Rt. Hon. J. Manning, C. (Camberwell, N.) Shackleton, E. A. A. Wise, Major F. J Manning, Mrs. L (Epping) Shawcross, C. N. (Widnes) Woods, G. S. Mayhew, C. P. Shawcross, Rt. Hen. Sir H. (St. Helens) Yates, V. F. Middleton, Mrs. L. Silverman, J. (Erdington) Mikardo, Ian Simmons, C. J. TELLERS FOR THE AYES: Millington, Wing-Comdr. E. R Skeffington, A. M. Mr. Collindridge and Mitchison, G. R. Skinnard, F. W. Mr. George Wallace.
NOES. Baldwin, A. E. Digby, S. W. Molson, A. H. E Birch, Nigel Drayson, G. B. Morrison, Maj. J. G. (Salisbury) Bossom, A. C. Drewe, C. Nicholson, G. Boyd-Carpenter, J. A. Duthie, W. S. Pitman, I. J. Bracken, Rt. Hon. Brendan Elliot, Lieut.-Col. Rt. Hon. W Thornton-Kemsley, C N. Buchan-Hepburn, P. G. T. Fox, Sir G. Wheatley, Col. M. J. (Dorset, E.) Channon, H. Lambert, Hon. G. Clarke, Col. R. S Lucas-Tooth, Sir H. TELLERS FOR THE NOES: Crosthwaite-Eyre, Col. O. E. Macmillan, Rt. Hon. Harold (Bromley) Mr. Studholme and Major Ramsay.
I beg to move, in page 82, line 20, at the end, to insert "and coke fittings."
This is consequential on an Amendment made in Committee upstairs.
What a pleasant change. Instead of having to vote against the Government on this occasion we can congratulate them and, let us be modest, congratulate ourselves because we are the real fathers of this Amendment. I thank the Minister and his able assistant very much.
Amendment agreed to.
I beg to move, in page 83, line 1, to leave out "means."
This Amendment and the next one, to line 3, are consequential on a change made in Subsection (1) of Clause 17, dealing with the vesting date.
It was of this Amendment that I said that my hon. Friends had not made up their minds. We think this is not an important Amendment. It has some virtues but they are not very obvious. We have no intention of voting against it.
Amendment agreed to.
Further Amendment made: In page 83, line 3, leave out from "undertaker," to the end of line 6, and insert:
"shall be construed in accordance with Sub-section (1) of Section seventeen of this Act." —[ The Solicitor-General. ]
FIRST SCHEDULE.—(Area Gas Boards.)
I beg to move, in page 85, line 10, after "Derbyshire," to insert "Shropshire."
To some extent these changes are drafting, but not wholly. They are geographical. The first three involve a minor change in a boundary which includes a small part of Shropshire in the North-west area. Perhaps I should say that the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) particularly asked me to have a look at these boundaries again. Hence, we have done so. The next Amendment and the one at the bottom of the list are certainly drafting Amendments, because they correct errors. Unfortunately, someone forgot about Surrey. I apologise to the Home Secretary if he is still in the House, and to anyone else concerned. The other two Amendments also consist of minor boundary amendments.
8.0 a.m.
It would not be right to say that these are drafting Amendments: they undoubtedly show great sloppiness, not to say carelessness, in composition. For instance, the county of Surrey, of which the Home Secretary is the principal ornament—[ Interruption ]— and let me add that I also suspect and believe that Mr. Morgan Phillips lives in Surrey and that there will be letters or telegrams going to Ministers before very long—was left out. Taking all in all, we welcome this improvement. We cannot in this instance claim any paternity, but the Amendments put errors right, and that is what Parliament is here for. So I will say no more about these errors, and we can proceed to the next attractive Amendment on the Paper in the right hon. Gentleman's name.
I would like to ask the right hon. Gentleman why it was necessary to provide for placing parts of the county of Surrey in the South-Eastern Area? We had some discussion in the Committee upstairs on the position of Surrey as to why was it necessary for the right hon. Gentleman to place Surrey in two different areas, North Thames and Southern? Now some part of the county is to go into a third area, South-Eastern. It does seem undesirable that the county should be placed in no fewer than three different areas. Consequently, I should like to know what discovery has been made to cause this Amendment. What particular part of Surrey is involved? Why has the discovery been made so late?
The reason why Surrey has been put in is because it was left out before. I might add that Mr. Morgan Phillips does not live in Surrey but in Fulham. As to the other remarks, we cannot make the area boundaries coincide with the county boundaries. The simple answer is that there are parts of Surrey in all these areas.
I cannot quite understand the right hon. Gentleman's remarks. At this hour of the morning I feel exactly like the dividend paid by an undertaker. Can the right hon. Gentleman explain how Surrey came to be left out, and how the county will be divided?
How it will be divided will be seen in a map in a new White Paper which can be obtained from the Vote Office.
Could we be given a simple explanation of why Surrey is in this Schedule three times? The Minister says that he gave an explanation of this matter upstairs, but that is one of the difficulties of important Bills like this being sent upstairs. Hon. Members like myself who were not members of the Standing Committee had not the opportunity to hear this explanation.
Cannot the hon. and gallant Member read?
My hon. and gallant Friend was lucky.
I had not the privilege of being on the Committee upstairs, and I would ask the Minister to give us a simple explanation of the questions put by my hon. Friends.
Amendment agreed to
Further Amendments made: In page 85, line 20, leave out "Shropshire and."
In line 21, after "Leicestershire," insert "Shropshire."
In line 34, after "Middlesex," insert "Surrey."
In line 36, after "of," insert "Bedfordshire."
In line 37, after "Devonshire," insert "Hertfordshire."
In line 42, leave out "Hampshire."— [ Mr. Gaitskell. ]
SECOND SCHEDULE.—(Issue of British Gas Stock in satisfaction of compensation.)
I beg to move, in page 86, line 23, to leave out "similar document" and to insert:
"document of title."
This is a drafting Amendment to meet a point raised during the Committee stage by the hon. Member for Flint (Mr. Birch) whether the words "similar document" were appropriate to include debentures and mortgage deeds. Thus a doubt was raised about it, and to remove the doubt we have introduced these words.
This particular—[ Interruption. ] Hon. Members opposite must not sound like sheep suffering from adenoids. This particular Amendment was first suggested to the Government, like many others in this Bill, by the Opposition. We are quite proud of it, and the best way of expressing our gratitude is to do it in the briefest possible way by simply saying "Thank you."
Amendment agreed to.
THIRD SCHEDULE.—(Code of provisions relating to gas supply.)
I beg to move, in page 91, line 41, after "commence," to insert:
"and undertaking to pay the charges in respect of gas and meter rent as they become due."
This Amendment deals with the undertaking which the owner or occupier of premises has to give if he requires a supply of gas to his premises. An Amendment was put down by hon. Members opposite during the Standing Committee stage, and the effect of this Amendment roughly is the substance of the Amendment put down by hon. Members opposite.
Thank you very much.
Amendment agreed to.
I beg to move, in page 93, line 27, to leave out from "shall," to "be," in line 28.
This Amendment, I think, must be taken with the following Amendment to line 29. If I deal with both at the same time possibly it will shorten proceedings.
The Amendment, which is a fairly simple, straightforward one, concerns the paragraph of the Third Schedule which deals with the penalties to be imposed on an area board if they fail to do certain things, such as supplying gas to premises entitled to it, or to public lamps, or otherwise. As the paragraph is now drafted, the area board would be liable to a number of fines in respect of a single day. The effect of our two Amendments together is to provide that the area boards shall not be liable to more than one fine in respect of any one day. I think the Amendment is reasonable. As there has been a great deal of co-operation between both sides of the House in this latest stage of the Bill, I hope the Government can see their way to accept it.
I beg to second the Amendment.
I hope the House will not accept these two Amendments. One is already provided for in the language of the paragraph which says
"unless the failure was due to circumstances not within their control,"
which reproduces the effect of the proviso in the second Amendment. In regard to the question of fines, we feel that it would be insufficient if an area board, in the event of failing to supply gas, is only liable to a fine of 40s. a day. For these reasons, I hope the Amendments will not be accepted.
We are not at all convinced by the Solicitor-General's arguments, but at the same time we will give the Government the benefit of the doubt.
Amendment negatived.
I beg to move, in page 96, line 26, to leave out "neglects to pay," and to insert:
"has not, after the expiration of twenty-eight days from the making of a demand in writing by the Area Board for payment thereof, paid."
This Amendment and the next provide that before a supply of gas can be cut off there has to be failure to make payment of an amount due for 28 days after the demand has been made, and there also has to be seven days' notice of the intention to cut off the gas supply. The proposal was made by hon. Gentlemen opposite and we are much obliged to them.
This is an excellent concession to the Opposition, and rightly so, because again we may claim parentage. In view of the very good behaviour of the Government and of their supporters in the last five minutes, I will tell the Minister that when we come to the last dim Amendment at the bottom of the page we will not even thank him for what he has done. We will just let it go right through.
I would like to say that I think most of the hon. Members on this side can say they are all now in favour of the restoration of capital punishment.
Amendment agreed to.
Further Amendment made: In page 96, line 28, after "Board," to insert:
"on the expiration of not less than seven days' notice in writing of their intention."— [ The Solicitor-General. ]
8.15 a.m.
I beg to move, in page 99, line 26, at the end, to insert:
The point is short and simple, and in line with the proper spirit of impartiality with which we have approached our heavy task of improving this Bill. It provides for the imposition of a penalty. Much as we dislike many of the penalties in the Bill, we recognise that if the law is not to be made a mockery of, penalties must be provided where necessary. We seek
Bill to be read the Third time upon [Bill 112.]
to provide that a penalty of a fine not exceeding £5 shall be imposed upon any person who interferes with and prevents an officer of a gas authority entering premises either to inspect or to repair. It seems desirable to provide for the possible contingency of officers of an authority being obstructed. As the Clause stands, no penalty is provided, and there would appear to be a gap in the Bill.
If the Solicitor-General can point to any part of the Bill in which an appropriate penalty is imposed, I do not suppose it will be necessary to detain the House very long in this matter. If, on the other hand, there is no such penalty provided, it seems desirable to provide it here. We feel that a £5 fine would enable proper justice to be done without imposing heavy penalties.
I beg to second the Amendment.
The hon. Member who has put this Amendment down has drawn attention to a gap. I am obliged to him for putting the Amendment down. I would ask him to withdraw the Amendment, so that we can reconsider the language and prepare an appropriate Clause, which is under consideration at the moment.
In view of that very proper and, as usual, courteous reply, I have pleasure in asking the leave of the House to withdraw the Amendment.
Amendment, by, leave, withdrawn.
FOURTH SCHEDULE.—(Enactments Repealed.)
Amendment made: In page 102, line 53, at the end, to insert:
Wednesday next and to be printed.
State of Israel (Recognition)
Motion made, and Question proposed, "That this House do now adjourn."— [ Mr. Collindridge. ]
8.19 a.m.
It is with considerable reluctance that I presume to trespass on the indulgence and stamina of the House at this hour, but unfortunately the Government have not seen fit to make a more leisurely Debate possible. The matter is too urgent and brooks no further delay. It has been urged that because, for the last few weeks, and, indeed for some months, the situation in Palestine has been delicate and explosive, the House of Commons is to say nothing about it, but confidentially and quietly to leave it to the same capable hands that during the last three years have secured so many triumphs in the Middle East and so many advantages to the British people.
I am not content as a Member of this House of Commons to be a rubber stamper of faits accomplis of even the Foreign Secretary, and though I realise that when the Foreign Secretary learns that this explosive subject has been discussed he will feel he has been dealt another stab in an already heavily scarred back, or that another brimming glass has been struck from thirsty and disappointed lips, nevertheless, I feel it my duty to raise this subject. I do so unconvinced by the reasons that have been advanced by the Foreign Secretary for not allowing this House to consider this matter in detail on the ground of delicacy. I should have been more convinced by that argument if, during the same period when, week in, week out, he was urging the House not to let fall tactless words on this subject, he had not been shipping large quantities of armaments to one side of the combatants in Palestine. It seems to me that tactless words, according to the Foreign Secretary, may precipitate a war, but that the bombs and guns being shipped were not in any way dangerous.
So I must with humility, but under a sense of compulsion, take up the time of the House to urge this duty on the Government—to recognise the State of Israel. I am very glad, as I am sure everybody in the House is glad, that the truce has been agreed upon in Palestine. However, we must be perfectly clear that the truce is not the end of the matter. It is merely a prelude, a prelude to permanent peace by agreement, or a prelude to a renewal of war far more bitter and devastating than any that has taken place yet in Palestine. Truce is merely the time given to the parties to think again; and not least, time for the Government of Great Britain to think again, so that the evil one of these two alternatives shall not emerge.
I submit to the House that recognition of the State of Israel is necessary, both in the interests of this country and in the interests of peace. It is perfectly clear that peace in Palestine at the end of this truce is possible only on the basis of recognition of the State of Israel. The Jews have shown in Palestine that they will fight for their State to the last. It is perfectly clear, therefore, whether it is justifiable or not, that peace is possible in Palestine only on the basis of the recognition of the State of Israel. As the "Manchester Guardian" puts it, "shyster" lawyers in New York, Howe and Hummel. Having read the proceedings of the British Government at Lake Success, I would say that if they had been born a century later they would have been suitable partners for our Mission. Not that I blame our representatives, but the Government who give them instructions of that kind. Quibbling over the legal status of Israel has no moral foundation whatsoever. The argument that the State can be recognised only when its boundaries have been defined, and so on, is groundless, and certainly has no foundation in history at all.
I understand that the Foreign Office have not even acknowledged receipt of a telegram from the Foreign Secretary of the State of Israel because that would be recognition de facto in some form of the State of Israel. Such arguments must be spurious. I recall that we made a complicated trade agreement with the Soviet Union in 1924, without granting any recognition. When trade interests dictated it, we did not stand on formalities of that kind. This action on our part is a calculated insult to the State of Israel. It was quite avoidable without giving de facto or de jure recognition. Before we gave any sort of recognition to General Franco in Spain, de jure or de facto, we did not find it necessary to snub that gentleman and ignore his letters, in the way we have treated the Foreign Secretary of the State of Israel. We found means of acknowledging correspondence without recognising General Franco at all. The argument that we cannot show courtesy to the Jewish State and its Foreign Minister has no basis whatsoever.
While I urge upon the House the duty of recognising the State of Israel, I think I ought to point out what are the alternatives to recognition. The House ought to be clearly apprised of what responsibilities rested on us during the period we have debated the question of Palestine. What did the Government undertake when they took over the Mandate in Palestine? They undertook the most solemn obligation to the inhabitants of Palestine and to the League of Nations, that we would protect the territory from any other State. How did we fulfil that task of protecting the two million inhabitants of Palestine from attack by a foreign State, and how did we fulfil our duty to the international organisation? It is time the House faced it. We unmistake- ably, and in the most shameful manner abdicated from both those solemn responsibilities to the international authority and to the population of Palestine. We not only went out leaving the whole of the population without any means of military defence against an invading State, but disarmed the people of Palestine. That was how we fulfilled our international obligations. Moreover, we openly evaded the duty of not doing anything that would cede the territory to a foreign power.
An important matter is the role of the Arab Legion. Up to 14th May the Arab Legion acted under the orders of a British general, the General Officer Commanding in Palestine, and were directly led by Brigadier-General Glubb. After midnight on 14th May we would not think of sending a British general to invade Palestine, and so King Abdullah had to cast about at short notice for a substitute, and before the stroke of midnight, 14th May, had died away on the desert air of Amman he found a substitute—Glubb Pasha, who had of course nothing "in common with the general seconded from the British Army. That gentleman, as "The Times" correspondent gratefully records, showed great foresight. While still acting as a seconded British officer commanding the Arab Legion, he showed great foresight by making the necessary arrangements for foreign newspaper correspondents to see the fighting in the impending invasion of Palestine for which he was preparing while still under British orders. We have received well-merited rebukes from the United Nations Commission for our attitude in obstructing them from making their arrangements to exercise authority in Palestine.
I promised to be restrained, but I find it rather difficult. I fear I am more suited to uncouth candour, rather than gentle understatement, on a matter of this kind. However, I will not quote more violent opinions but restrict my quotations to the moderate "Manchester Guardian," which has said:
The course pursued by the Foreign Secretary in relation to Palestine has brought upon us the severest criticism of, almost every responsible newspaper in Europe and America. "The Economist," the "Manchester Guardian" and "The Times," all put it on record that there is hardly a newspaper in France which has not condemned our behaviour in Palestine in the most angry terms. It is no use trying to fob off on to people who follow these matters, the idea that the American view has been worked up by a little corner of Jewish sympathisers in New York. How is it that the "New York Times," the "Herald Tribune," the "Washington Post," and other papers friendly to this country, have all castigated what the last-named described as "the enormity of British Middle East policy "? We cannot go on in this way any longer, creating enmity in the world towards this country, and isolating Britain without a moral leg to stand on by obstinately conducting a policy which is doomed to failure and which will react to the detriment of the people of this country. In view of all those circumstances, recognition is the obvious course.
The Foreign Secretary, in one of those asides which add so much to his stature once said, "There are no Arab's in this House of Commons." If I were an Arab sitting in this House, one of the most repulsive features of the situation would be that under the instigation of the Foreign Office, and with the arms and money provided by the Foreign Office, the starving and impoverished peasants and fellahin of the Middle East go out to fight for the cause of their feudal masters, which is not the cause of the Arab peoples. If the Foreign Office wants to benefit the people of the Middle East, let it not send them guns and bombers to bring them death and starvation. Let it send them food and build them factories, and the means to lift up their standard of life. Let it send them the means to equip their hospitals, so that the disease-ridden peasants of the Middle East may enjoy some of the benefits which the supposedly pro-Arab policy of the Foreign Secretary is designed to secure.
It is a mistake to refer to the Foreign Secretary, as many people do, as pro-Arab. I regard him and his policy of arming these unfortunate people as the most anti-Arab action conceivable. It is not in the interests of the Arabs of the Middle East, but is delivering them into the hands of mediæval pashas and their mad ambitions and greed. The position is clear. Britain's good name, her blood, and her treasure, have been poured out for three years, and it is time that the consciences of hon. Members of this House should be awakened to the fact that Britain's good name has been heavily damaged by the policy pursued so complacently.
I hope my hon. Friend does not think that any of the remarks I have made are addressed to him personally; I do not blame my hon. Friend for this policy. But I would ask him if he can deny that we have no newspaper friends left in France or America as a result of this policy. Can he deny that the good relations between Britain and France and America have been jeopardised by this policy? What do we gain from it? It is as immoral as it is stupid and reckless, and it is no use hon. Members in this House trying to conduct Debates, as they have done, on an adolescent level by fixing one's mind on the dastardly acts of the Jewish terrorists. We must not forget that there are other people killing British troops besides Jewish terrorists, including those killed by British bombs dropped from British 'planes.
The assembly of the United Nations decided on partition, but did not stand by it, and shillied and shallied until the position became clouded and endangered the prestige of the U.N.O. whose first major decision on a threat to peace was being flouted and rendered null. When the nations wobbled, and the oil kings lobbied and the United Nations Assembly was being brought into contempt and impotence I submit it was the courage and firmness of the Jewish people of Palestine that saved the situation and made possible again a United Nations solution of the whole problem. Since then the State of Israel has been recognised by half the world. How much longer has Britain to lag behind?
8.38 a.m.
It is two-and-a-half hours since the "cease fire" agreement came into operation in Palestine, and I cannot agree with my hon. Friend when he says that it is a necessary and proper thing to have a Debate of this kind at this particular time. This "cease fire" agreement marks a stage in genuinely difficult and delicate negotiations. It is difficult, for example, to speak for the British Government in public on these subjects without running the risk of prejudicing the efforts of the United Nations' mediator and I had "hoped that my hon. Friend would yield to my request that we might be spared a Debate on this subject at this moment. It is a bad time, politically, diplomatically, psychologically and, might I add, physically, to discuss this question of Palestine.
He made the mistake, which is surprisingly and unfortunately common, of claiming that Britain was isolated in the policy we have adopted. Numerically, a great many people of the world have taken the same view as we have taken. What of the peoples of Western Europe, India, China, of the Arab countries, of most of America, and of the majority of the Commonwealth?
Will the Under-Secretary state which of the Dominions did not support partition?
I am talking of the subject of the Adjournment, and stating the attitude of the Government.
rose —
I cannot give way. I am talking of the recognition of Israel, and I am saying what is perfectly true, that the numerical majority of the peoples of the world is with us, and the impression which my hon. Friend has given of this country's isolation is wholly false.
I submitted that our isolation was a result of our bad conduct on the whole question of partition, and our behaviour in relation to the United Nations. I challenged my hon. Friend to give one example of a single responsible European or American newspaper which did not criticise them.
There are places other than the United States and France. I have gone through a list of countries, containing huge populations, to rectify the impression given by my hon. Friend that we are isolationist in the position we are taking up. The overriding objection we have to the course suggested by my hon. Friend is that our objective is to help the mediator in carrying out the resolution of the Security Council of 29th May. Count Bernadotte has earned great respect for his handling of the truce negotiations, and all men of goodwill will want to help him to carry out his task and not hamper him in his job in bringing both sides together. Our proper attitude towards the present truce is to observe the status quo in this matter. The purpose of the truce is to obtain a standstill in which negotiations can take place. The purpose of the mediator is to ensure that during the truce no military advantage will accrue to either side.
rose —
No, I will not give way. The resolution of the Security Council said:
Of course, hon. Members can argue that by taking no action we are helping the Arabs. Quite clearly a change of policy here would in fact discourage the Arabs and encourage the Jews. I do not deny that. Why for that reason is it a right, just and necessarily expedient? The view of some hon. Members is that anything which encourages the Jews will help forward a peaceful settlement. The truth is, that we have a moral obligation at present to keep the status quo and not to make this positive act of political intervention. That is clearly our duty. My hon. Friend said we must do it because the Jews are only prepared to negotiate on the basis of an independent Jewish state. Has he heard that the Arabs are not prepared to negotiate except on the basis of political unity in Palestine? Has he ever heard that there is an Arab point of view?
There is the difficulty about the Palestine problem that there are not only a large number of people saying that to encourage the Jews is to take constructive measures to achieve settlement, but also a large number of people who say that to encourage the Arabs is to take constructive measures to get a settlement. The trouble with my hon. Friend, as the whole of his speech shows, is that he is not sufficiently in touch with the Arab point of view on the Palestine problem. He attempted to argue that the resolution of the General Assembly had a binding force and had been fulfilled by the events in Palestine. That argument cannot possibly be maintained.
The resolution of 29th November cannot be invoked as imposing any kind of legal obligation to recognise the Jewish provisional Government and State of Israel. The resolution provided for the gradual application of detailed methods and procedures as steps towards independence.
The resolution provided that the United Nations Commission should make a more thorough and detailed delimitation of frontiers.—[ Interruption ]—I will not be provoked by hon. Members into making statements which will be unhelpful in achieving a settlement.
The resolution also provided for the setting up and appointing of a provisional council for the Jewish state by the Commission and not by the Jews themselves. It provided that the Commission should supervise the progressive handing over of the administration to the provisional Gov- ernment during the transitional period. It provided that the Commission should have general political and military control over the militia of the Jewish State. It provided for democratic elections to take place under a constituent assembly in which Arabs were represented in Jewish areas. It provided for a democratic constitution and that a declaration to the United Nations should be made before independence was given. Nor was it just a Jewish State. It provided also for an Arab State, an international regime for Jerusalem, and economic union. How much of this plan has been carried out?—[ Interruption ]—My hon. Friend stated that events had carried out the resolution of the United Nations. Now hon. Members are saying that none of the plan has been carried out— [ Interruption ]—The position about the Commission is well known. The Com mission was not obstructed by the British Government. In the end it was tacitly admitted—
The Question having been proposed after Ten o'Clock on Thursday evening, and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Twelve Minutes to Nine o'Clock a.m.