House Of Commons
Monday, 29th June, 1959
The House met at half-past Two o'clock
Prayers
[MR. SPEAKER in the Chair]
Private Business
Shell-Mex And Bp (London Airport Pipeline) Bill
Queen's Consent, on behalf of the Crown, signified.
Bill read the Third time and passed.
Joseph Rowntree Memorial Trust Bill Lords
Read a Second time and committed.
South Wales Transport Bill Lords
To be read a Second time Tomorrow.
Offences Relating To Motor Vehicles
Address for Return,
"showing the number of offences relating to motor vehicles in England and Wales, the number of persons prosecuted for such offences, statistics of the proceedings in magistrates' courts, and the number of alleged offences in respect of which written warnings were issued by the police, together with the number of persons concerned, during 1958."—[Mr. Renton.]
Oral Answers To Questions
Pensions And National Insurance
Disabled Persons (Assistance)
1.
asked the Minister of Pensions and National Insurance what consideration has been given to the question of bringing the severely disabled into line with the blind and tubercular as regards a higher basic rate of National Assistance.
In view of the wide discretionary powers to increase assistance in order to meet special needs, I think that the exercise of these powers is the best way of dealing with any special problems which may arise in cases of severe disability.
Does the right hon. Gentleman realise that welfare officers in many local authorities who are dealing with handicapped people of this kind feel very strongly that those people who are homebound cripples should have the same treatment as those suffering from tuberculosis and blind people because they suffer the same kind of disability? Would the right hon. Gentleman look at this matter again, and, if if it is not possible to reconsider it, would he send out a directive to the effect that the discretionary powers should be used to the fullest possible extent in respect of these people so that they are at no disadvantage whatsoever?
I have no doubt at all, as, indeed, I mentioned in the course of our debate last week, that the Board makes very full use of its discretionary powers. Indeed, I quoted figures which, I think, indicated that they are more widely exercised than ever before. The reason for singling out the two categories is, as the hon. Lady knows, largely historical, but I do not think that in practice any real difficulty arises under the present system, and I am quite sure that to attempt to list in special categories all cases of severe disability would create more anomalies than it would cure.
Education Allowance
3.
asked the Minister of Pensions and National Insurance whether his attention has been drawn to the need for increasing the 25s. weekly allowance to children of widows who continue their education beyond the legal school-leaving age; and what action he will take.
The allowance was increased from 21s. 6d. to 25s. a week last year and war widows receiving the allowance may qualify in addition for a rent allowance and an education allowance for school fees and expenses for each child. I do not feel that these provisions taken as a whole are ungenerous, but I am always willing to look at any individual case in which further help seems to be needed.
Would it not be much better if there were some statutory arrangement by which an allowance was available for a sixth form boy or girl so that they did not have to be denied partaking in the activities of their school fellows in or out of school, which is now the position if they are the children of a widow?
It is very difficult to generalise. As the hon. Gentleman knows, in connection with the case with which I have been in correspondence with him, there is a very considerable flexibility in this matter to which I made reference in the concluding words of my main Answer.
Old-Age Pensioners (Transport)
4.
asked the Minister of Pensions and National Insurance if he will now take steps to ameliorate the conditions of old-age pensioners by seeking powers to enable municipalities and county councils to give free transport for old-age pensioners to and from their homes to the places where they receive payment of their pensions.
No, Sir. As the hon. and learned Member is no doubt aware, any pensioner unable to visit a Post Office can nominate a friend or relative to cash his orders on his behalf.
Does not the Minister, of all Ministers, realise that he owes a special duty to the old-age pensioners, who are probably the poorest class in the community today and the best producers of yesterday? Having regard to the way in which the Government have discriminated in favour of the rich, does not the right hon. Gentleman think it a just and honest thing to grant old-age pensioners this small amelioration?
The hon. and learned Gentleman knows very well that the record of Her Majesty's Government in their treatment of retirement pensioners is better than that of any previous Government in British history.
Pneumoconiosis
6.
asked the Minister of Pensions and National Insurance how many persons were examined by the pneumoconiosis panels in the latest year for which figures are available; what percentage of the claims was rejected; how many of those who were rejected appealed and how many had their appeals allowed; and in which areas was there no case of any appeal succeeding.
In the year ending 26th December, 1958, 15,130 persons were examined by the pneumoconiosis medical panels following claims for benefit under the Industrial Injuries Acts. Of these, 54 per cent. were rejected on X-ray examination, and a further 22 per cent. were found not to be suffering from pneumoconiosis after clinical examination. In the same year, 617 appeals against disallowance on X-ray examination were dealt with and 47 were successful. Only in the Newcastle-upon-Tyne area with 18 appeals was no appeal successful.
Has the right hon. Gentleman noted that if these figures are looked at carefully and compared with similar figures given in previous years, only a very small number of people ever appeal and of those who do appeal only an infinitesimal number seem to be successful? Is it not very disturbing for people in some areas who go to appeal feeling that they have no chance whatever because no case is ever successful?
I do not think the hon. Gentleman is entitled to draw that deduction. Indeed, I have often heard precisely the opposite approach. The prevalence of a large number of successful appeals has often been quoted as casting a doubt on the validity of the original decision. At least in these cases that argument cannot be deployed.
Douglas Castle Colliery (Closure)
8.
asked the Minister of Pensions and National Insurance what arrangements he has with the nationalised industries regarding likely shifts in the demand for labour and the likely incidence of redundancies, for example, due to closure of coal mines; and how many former employees of Douglas Castle Colliery, in the county of Lanark, are now in receipt of State assistance consequent upon this closure.
None, Sir, for such matters are the concern of my right hon. Friend the Minister of Labour and National Service. I am informed by the National Assistance Board that no recent employees of the colliery in question are in receipt of National Assistance.
Is it not the case that a further phase of closure at this colliery is shortly coming and that there will be persons who, due to disturbance and the need to go to work elsewhere, may have reason to claim National Assistance or may in other ways be dependent on State assistance? Will my right hon. Friend keep a wary eye on the matter, as great distress has been caused to some seventy families who have moved and there are another forty or fifty who are likely to move?
I understand that redundancy in the colliery is taking place in three phases, two of which have already taken place, with the result, I am glad to say, that we have no recipients of assistance. This is no doubt due, on the one hand, to the very efficient placing activities of my right hon. Friend and, on the other hand, to the operation of the National Coal Board's redundancy scheme.
Coal
Miners, North Staffordshire (Pneumoconiosis And Tuberculosis)
10.
asked the Paymaster-General what number of coal miners in the North Staffordshire coalfield were certified to be suffering from pneumoconiosis in simple and in complicated form for the years 1956, 1957 and 1958; and whether he will make a statement on the general trends or early diagnosis and the action taken.
In 1956, 1957 and 1958, the numbers of cases among coal miners in the north Staffordshire Area of the National Coal Board diagnosed for the first time by the pneumoconiosis medical boards were 405, 513 and 111. The great majority of these cases were diagnosed in the early stages, but, as the hon. Member knows, figures of this sort are subject to so many different factors that they cannot be taken as indicating any definite trend in the incidence of the disease. Separate figures of simple and complicated pneumoconiosis are not available area by area.
Would it be fair to assume from those figures that the dramatic fall in 1958 may be due to the case taking and the vigour with which this matter was investigated in previous years, when there was, of course, a steep rise? May we assume that everything will be done to ensure that every case is diagnosed as early as possible and that any with the complication of tuberculosis will be removed from the coalfield?
I would agree with the hon. Member that the figures are encouraging. I can tell him further that out of the last 111 only five were diagnosed at more than 30 per cent. disability, and so I think there is some indication that the work is being carried on successfully.
11.
asked the Paymaster-General what action is being taken in the North Staffordshire coalfield to discover cases of pulmonary tuberculosis among miners; and with what success.
In adition to the work of the mass miniature radiography units operating under the National Health Service the National Coal Board have now introduced their scheme for the periodic chest X-ray of mineworkers. The Board's West Midlands unit has already started work in the North Staffordshire coalfield; but it is too early to make any statement on the results.
Is the hon. Gentleman aware that the mass radiography investigation, which did such excellent work for a number of years, is now to cease in respect of the North Staffordshire miners? Can he give an assurance that the work will be taken over by the National Coal Board and that there will be periodic examinations of all miners in the coal pits?
I think—I will confirm it—that the hon. Gentleman is wrong. My recollection is that at a recent meeting of the National Joint Pneumoconiosis Committee, at which I was in the chair, the National Coal Board and the Ministry of Health agreed to co-operate as far as possible to ensure overlapping, thus reducing the time between examination. However, if the hon. Gentleman would care to get in touch with me I will look into the matter.
Distribution
12.
asked the Paymaster-General if he will state the progress made in carrying through the recommendation of the Robson Committee on coal distribution that retail depots should be concentrated, giving the number and names of appointed representatives for the preparation of schemes, divided according to allegiance to co-operative societies, private traders and the National Coal Board.
32.
asked the Paymaster-General what consideration his Department has given to the recommendation contained in Command Paper No. 446, that to improve coal distribution there should be a concentration of trade into a smaller number of larger depots; and if he will make a statement.
My noble Friend brought the Robson Committee Report to the attention of the coal trade and a number of schemes are under discussion between them and the railways. We are still awaiting their considered views.
Will the hon. Gentleman agree that it was a recommendation of the Robson Committee that this should be done within twelve months and that it is now twelve months since that Committee reported? Cannot the Department hurry the matter up?
It does not rest only with the Department. We have set the machinery in motion. Perhaps I might draw the attention of the hon. Gentleman to the fact that the co-operative society representative—not private enterprise—has pointed out that there are extreme difficulties in the matter, and they have to be considered very carefully if the schemes are to be of any use. One of the troubles is that the schemes are likely to produce any saving only in big towns, and that is precisely where the possibility of the Clean Air Act making large capital expenditure unremunerative is a factor. However, the discussions are proceeding as quickly as possible.
Gas Council (Prices)
13.
asked the Paymaster-General what general direction he has given to the National Coal Board concerning the cost of coal supplied to the Gas Council.
None, Sir.
Does the hon. Gentleman appreciate the difference in quality and price of coal supplied to the generating stations compared with that supplied to the gas industry? Has he received any complaint from the Gas Council about the price of coal?
Of course, the views of the purchaser and the seller of any commodity do not always exactly agree. These are commercial matters which are discussed between the two nationalised industries concerned. I do not think I can go further than that.
Coke (Shale)
14.
asked the Paymaster-General what percentage of shale is permissible under his regulations in coke sold for domestic consumption.
There are no such regulations.
Does not the hon. Gentleman feel that the public would be much relieved if they felt assured that they were getting value for their money when buying coke produced by the nationalised gas industry?
That is very true, but, of course, for practical purposes all the shale that is in coal supplied to the gas industry has to remain in the coke, and the proportion then is actually higher because one produces less than one ton of coke from a ton of coal. Therefore, the main responsibility is with the National Coal Board, which is doing a great deal. It is spending £20–£30 million a year on trying to improve the quality of its coal. However, I think we are all agreed that we should like the progress to be even faster.
Consumption And Production
16.
asked the Paymaster-General what was the total reduction in the consumption of coal for the 23 weeks of this year ended 20th June; what was the balance of production over consumption for the same period; and what is the estimated balance of production over consumption at the end of the 50-week period beginning on 5th January, 1959.
Coal consumption, including exports, in the 23 weeks to 13th June, 1959, was 8·6 million tons less than in the first 23 weeks of 1958. The excess of production over consumption was 3·6 million tons and may be about 7 million tons for the year as a whole.
Is it not correct that in 1957 there was a fall in inland consumption of 5 million tons and in 1958 a fall of 10 million tons and that in the 23 weeks so far this year there has been a fall of 8·5 million tons? If we assume the same average reduction for the rest of the year, there will be a reduction of a further 10 million tons. This will mean that between 1956 and 1959 there will have been a fall of 33·5 million tons. Does that not create a serious situation? Is it also not correct that, allowing for the increased production per man, it takes about 3,200 workers to produce 1 million tons of coal? Therefore, does not the fall in demand of 33·5 million tons since 1956 create a serious position in the coal industry? Does the hon. Gentleman think—
Order. That is much too long for a supplementary question.
I want to add another sentence, if you will allow me to do so, Mr. Speaker.
I think the hon. Gentleman had better leave it at that.
It is not possible to go into a statistical exercise of that length in reply to a supplementary question.
17.
asked the Paymaster-General the total consumption of saleable coal in 1958.
The total is 207·7 million tons, including exports.
Opencast Mining
18.
asked the Paymaster-General how much less was the total output of saleable coal, including opencast coal, and of opencast coal, respectively, during the 24 weeks ended 20th June, 1959, than during the comparable period in 1958.
Deepmined output was less by 3½ million tons, or 3 per cent., and opencast by 620,000 tons, or 10 per cent. In recent weeks opencast has been 25 per cent. less than a year ago.
Is it right that the reduction in opencast production is less by only about 550,000 tons, when we were promised a reduction of 3 million tons in a year? At the rate that opencast mining is being reduced at the moment, in a year it will reduce output by only 1¼ million tons. Is there something peculiar about the present position or can we have any guarantee that there will be a reduction of 3 million tons so far as opencast mining is concerned?
Part of the discrepancy is perhaps due to the hon. Gentleman overlooking the fact that when comparing the figures as far as deep mines were concerned Saturday working was still being worked early last year. That accounts for about 90 per cent. of the cut in deep-mined output. As regards opencast, broadly speaking, we have every reason to suppose that the planned reduction will take place this year.
23.
asked the Paymaster-General to what extent prospecting for opencast coal is still continuing; and in which counties.
The National Coal Board is at present prospecting about 56,000 acres in twenty-two counties to gain information on the reserves available. I am circulating a list in the OFFICIAL REPORT.
Having regard to the fact that stocks of coal are rising week by week, can the hon. Gentleman say why prospecting continues to take place when we are in the position of having overproduction of coal?
I think I have already answered the Question. Whatever views we may have about opencast mining, these resources are or may be valuable reserves. Surely it is common sense to find out exactly what and where the reserves are in case we want them. If we do not start prospecting until we want the coal we might have a crisis before we find it.
Following is the list:
Counties in which the National Coal Board are prospecting for opencast coal
England.
- Northumberland.
- Durham.
- Cumberland.
- Yorkshire.
- Lancashire.
- Nottinghamshire.
- Derbyshire.
- Leicestershire.
- Warwickshire.
- Staffordshire.
- Shropshire.
Scotland.
- Ayrshire.
- Clackmannanshire.
- Fife.
- Midlothian.
- West Lothian
Wales.
- Flintshire.
- Denbighshire
- Glamorgan.
- Carmarthenshire
- Brecknockshire.
- Monmouthshire.
31.
asked the Paymaster-General how many new authorisations for the working of opencast coal have been granted since opencast mining was governed by the Opencast Coal Act. 1958.
None, Sir.
34.
asked the Paymaster-General when he estimates the nine opencast coal sites in Lancashire will cease working on completion of the tasks now authorised.
35.
asked the Paymaster-General when he estimates the 29 opencast coal sites in Derbyshire will cease working on completion of the tasks now authorised.
36.
asked the Paymaster-General when he estimates the five opencast coal sites in Scotland will cease working on completion of the tasks now authorised.
37.
asked the Paymaster-General when he estimates the four opencast coal sites in Nottinghamshire will cease working on completion of the tasks now authorised.
39.
asked the Paymaster-General when he estimates the 14 opencast coal sites in Yorkshire will cease working on completion of the tasks now authorised.
40.
asked the Paymaster-General when he estimates the 16 opencast coal sites in Wales and Monmouthshire will cease working on completion of the tasks now authorised.
41.
asked the Paymaster-General when he estimates the 14 opencast coal sites in Durham will cease working on completion of the tasks now authorised.
As already announced, the National Coal Board is arranging a drastic reduction in opencast production and is working out the details for each individual site.
We have heard that answer before. It shows that the Government are not making any progress towards the cessation of opencast working. When will the tasks already authorised be completed? Is the hon. Gentleman not aware that within the last 19 years people in Lancashire, particularly in my constituency, have been experiencing great discomfort, trouble and anxiety from opencast working? Surely, we can be told when the existing opencast sites will be concluded. Is the Parliamentary Secretary aware that on Saturday of last week, prospecting was started on another site, although he had told us that it would finish altogether?
We have already dealt with prospecting in a previous Question. Concerning the sites already being worked, surely the hon. Member will appreciate that, in a large programme of this nature, once it has been decided to make drastic reductions a whole series of complicated and detailed negotiations must take place for every individual site. The Coal Board is still engaged in that process. That is why the Board cannot give the dates when the sites all over the country will cease operating.
Is the hon. Gentleman aware that we are apprehensive about this? We recognise the need for negotiating opencast contracts, but is the Parliamentary Secretary aware that in Durham there are large collieries involving huge capital expenditure that will close? Can we not run down the opencast sites and save the deep miner in County Durham?
The Question asked on what date these sites would cease. We are not discussing the principle.
Human Problems (Research)
21.
asked the Paymaster-General what projects of research on human problems within the coal mining industry are at present being undertaken; and to what extent they receive assistance from his Department.
The National Coal Board now has in hand 12 projects of research on human and medical problems in the coal mining industry. Government Departments are co-operating in several of these projects.
Is the Minister aware that in a major industry like the mining industry one is bound to have these human problems and that everything ought to be done to accommodate the people inside the industry when we are faced with these great issues. One has to admit that there is no easy answer to these problems, but does the Minister not think that his Department ought to take a greater interest in this matter than it has been doing in the last few years?
I am not sure that there is any evidence that the Department under different parties has not taken very active steps in this matter. I should have thought on the whole that, since nationalisation, the record of the coal industry in these matters was one of the more satisfactory sides of its affairs.
Mineworkers (X-Ray Examinations)
22.
asked the Paymaster-General, in view of the prevailing high rate of miners still contracting industrial dust diseases, whether he will consider issuing a general direction making it compulsory for all underground workers to be periodically subjected to X-ray examinations.
No, Sir, but my noble Friend hopes that as many miners as possible will, in their own interest, take advantage of the National Coal Board's voluntary scheme for periodical X-ray examinations.
It is all very well for the Parliamentary Secretary to fob it off on to his noble Friend, but will the Paymaster-General institute periodic examinations of men working underground, say, every six or twelve months? Is the Parliamentary Secretary not aware that Lancashire, and other counties too, are very disturbed about the number of miners suffering from chest complaints? Has he read the report recently issued by the Lancashire and Cheshire Permanent Relief Society which indicates a high incidence of men suffering from dust diseases such as emphysema. Will he not take active steps with a view to instituting these examinations?
The hon. Gentleman's Question asks whether we will make these examinations compulsory. It is our view, and that of the National Union of Mineworkers, that these things are best left on a voluntary basis. As a matter of fact, the numbers taking part in this sort of thing are highly satisfactory and of the order of 80 per cent.
Will the Parliamentary Secretary consult the Minister of Pensions and National Insurance and the Coal Board to ascertain whether our fears are correct that results of those examinations show a growth in the incidence of emphysema amongst miners? Has the time not come to review the whole situation and bring emphysema within the schedule of prescribed diseases?
That is a different point which I should not like to answer offhand, but I will take note of the right hon. Gentleman's Question.
Smokeless Fuels
24.
asked the Paymaster-General to what extent his Department is encouraging a greater advertising campaign of the approved smokeless fuels and their respective domestic burning appliances.
My noble Friend and my right hon. Friends the Secretary of State for Scotland and the Minister of Housing and Local Government are encouraging the promotion of clean air by all appropriate means including advertising campaigns on the subject by many local authorities. The advertising of particular products must, however, remain the concern of individual manufacturers.
Whilst appreciating the Parliamentary Secretary's reply, may I ask whether he is not aware of the utmost necessity for the strictest collaboration between these people? It is a question not only of higher grades but of the utilisation and purchase of materials. Many local authorities throughout the country are developing sites regardless of the existing sites. The closest co-operation would be of great advantage to the industry.
If the hon. Member has any specific suggestions for improving the present close co-operation, I shall be very happy to consider them.
Small Coal
25.
asked the Paymaster-General what general direction he has given to the National Coal Board to review its coal preparation methods, especially of small coal.
None, Sir.
Is the Minister aware of the large amount of stocks of this kind of coal, particularly in the East Midlands, amounting, I understand, to 8 million tons? Could not his Department and the Coal Board get together to see whether something useful could be done?
This is primarily the business of the National Coal Board which, on the whole, is not doing too badly in the matter. The Board must find new methods, if there are any, before it can improve what it is doing now. It cannot simply be done by a committee saying, "Let us have better prepared coal".
Marketing And Sales Service
26.
asked the Paymaster-General what consideration he has given to the need to give general directions to the National Coal Board to strengthen its marketing department, and particularly its sales service.
My noble Friend does not regard this subject as appropriate to a general direction. The National Coal Board is taking steps to strengthen its marketing department, and particularly its technical sales service, but the matter is so important that it is constantly under review.
Do I take it from the hon. Gentleman's reply that his right hon. Friend is satisfied with what is taking place concerning the problem of foreign sales? Does he not agree that every possible assistance should be given so that we may be able to regain some of our pre-war markets? What is being done concerning home sales of this vital commodity, which has so important a rôle in the country's economy?
As I have said before, this is primarily a matter for the Coal Board, which is strengthening its marketing arrangements. Neither the Board nor the Ministry, however, is satisfied that the present position is perfect. Again, if anybody can suggest specific changes in the Board's arrangements, I am certain that the Board would be happy to consider them. The Board is, however, well aware of the need to sell coal if it possibly can, and I do not think that it needs any prodding from the Ministry.
Stocks
27.
asked the Paymaster-General the present figure of distributed and undistributed stocks of coal, giving details of opencast coal stocks, general purpose coals and coking coals.
At 13th June, 1959, distributed stocks were 14·5 million tons and undistributed stocks 26·8 million tons, of which 6·3 million tons were at opencast sites. The undistributed stocks included 4 million tons of carbonisation coal, the great bulk of the remainder being general purposes coals.
Is the Parliamentary Secretary aware that the coal situation is getting more serious week by week? Is it not now time that the Government declared what place the coal industry will have in the economy, or are we to contemplate more closures at the end of the year as stocks continue to rise?
As I think the hon. Member knows, the Coal Board is reconsidering the whole of its plan for the next few years. The report has not yet been presented to the Ministry. As soon as it is, it will, of course, be carefully considered. Once again, however, the initiative and the responsibility in this matter have been placed by Parliament firmly upon the Coal Board, and it is up to the Board in the first place to say what it thinks will happen and what it wants. As soon as that is done, it is up to the Ministry to consider it, and it will be considered at once.
As the rise in the stocks of coal is greater than was anticipated and forecast by the Paymaster-General and the Parliamentary Secretary in our last debate, is it the Government's intention to review once again the size of the opencast coal programme and also the reversion to coal utilisation by the power stations which are now being converted to oil?
Unless I misunderstood him, the right hon. Gentleman is not quite accurate. An estimate was given of probable stocks at the end of the year, but no estimate has been officially given for the situation in the middle of the year. As the right hon. Gentleman knows very well, conditions change completely after the summer. Broadly speaking, we have no reason to suppose that the figures for the end of the year will not be reasonably accurate.
Coke Ovens (Closures)
29.
asked the Paymaster-General how many coke ovens have closed during the last twelve months; what further run-down is visualised; and to what extent he envisages an effect on the Durham coalfield.
Since June, 1958, five plants have been closed and one new oven has been opened. The National Coal Board has taken no decision about further closures but is reviewing the position including the effects on the Durham coalfield in the light of the demand for hard coke.
Is the Minister aware that the County of Durham is threatened with serious unemployment, not only because of the closure of coke ovens, but because of the Gas Council's decision to use oil instead of coal and the fact that its estimate of coal usage has now dropped by 7 million tons?
Speaking about what has happened so far, I am happy to inform the hon. Member that in the case of the ovens which have been closed in Durham, my latest figure shows that less than 42 people are now unemployed as a result of the closures.
Gasification
45.
asked the Paymaster-General what recent developments have taken place in the research on high pressure gasification of coal.
I suggest the hon. Member awaits the report of the Committee on Coal Derivatives, the setting up of which was announced on 16th April.
Are we likely to have this report in the near future? Will the hon. Gentleman bear in mind that this development can be very important indeed to the mining industry? May I have an assurance that his Ministry will give all help possible, both materially and spiritually, to this side of the industry, as we think that it will play a great part in keeping some of our miners at work?
I agree with what, I think, the hon. Member has in mind—that if we can make a success of high-pressure gasification of coal great possibilities will be opened up both for the gas industry and for the coal industry. It is not, however, an easy matter. It is a tricky and rather modern process and one cannot hurry it. The scientists must simply be left to see whether they can solve the problem. I hope they can.
Should not the scientists be given greater resources in order to accelerate the programme? Can the Minister assure us that this experiment will not be closed down as the underground gasification experiment was closed down?
It will be closed down, as that experiment was closed down, if the experts come to the conclusion that it is no good. Hon. Members on this side of the House are not in favour of continuing to spend money even when we have no reason to suppose that we shall get anything for it.
Is it not extremely unwise to save a little sum on research when we might achieve a great economic result by going on with an experiment?
In this case not a penny which has been asked for has been refused, because we still think it is a very hopeful programme. But we shall not go on spending money on it if the committee and all the experts concerned come to the conclusion, with great disappointment, that it is a non-starter.
Pits (Closures)
46.
asked the Paymaster-General what general directions he has given to the National Coal Board regarding the conditions which will determine the closing of pits during 1960.
None, Sir.
Can we assume from that Answer that no pits will be closed during 1960? If not, can the Parliamentary Secretary tell us by what criteria decisions are made? Are they made on profits per ton, the quality of the coal, or the state of the market?
The hon. Member must not read into my Answer anything of the sort. Whether or not further economic closures will take place is one of the main questions which will have to be decided when the Coal Board's new proposals reach the Ministry. The considerations mentioned by the hon. Member are certainly among those which the Coal Board and the Ministry—and. I hope, the country—will have to take into account.
Is it not a fact that the Ministry is already aware of the pits which are likely to close down in 1960?
As yet we have had no proposals from the Coal Board relating to particular pits.
How long must we await the proposals which the Parliamentary Secretary has told us are coming from the Coal Board?
As yet we have had no information as to exactly when the Coal Board will be in a position to give us its proposals.
If the Minister has had no information, does he know that it is common knowledge in the industry that a large number of pits will be closed during 1960? To what extent are the Government now prepared to increase the amount by which they undertook to stock coal—that is, the 3 million tons—if there is a greater surplus this year, as present figures seem to indicate?
The right hon. Gentleman must not ask me to confirm any alleged leak which he says has taken place from the Coal Board.
Do I gather that the Minister thinks it is now inevitable that there will be some pit closures in 1960? Is his Ministry consulting the President of the Board of Trade to ensure that men who may be rendered redundant—who have rendered great service to this country in war and peace, and who gave up Saturday work at the request of the Government and the country, and deserve the best of it—will be provided with alternative employment? Does he say that his Ministry is not in consultation with the President of the Board of Trade with a view to making sure that if there is no economic future for certain pits alternative employment will be provided in the communities built up by the miners in those pits over the years?
I do not see how that speech arises out of the Question. I was asked about general directions having been given to the National Coal Board. I was not asked about consultations, or anything else.
Do we understand that when the stage is reached for the Coal Board to announce that because of the circumstances described this afternoon further closures are inevitable, the Ministry will not immediately take up with other Departments the question of alternative employment?
If, after the Coal Board makes suggestions and they have been approved by the Ministry in due course, there are further closures, what has happened in the past will happen again and, I hope, with the same resounding success which has already met the Coal Board's efforts to minimise unemployment.
Is it not a fact that the Chairman of the Coal Board, with his great experience in this industry, is not the sort of man to make any proposal for the closure of a pit without the most careful consideration of human as well as other factors?
Precisely.
Foreign Countries (Bilateral Agreements)
47.
asked the Paymaster-General what consultations he has had with the Chancellor of the Exchequer and the President of the Board of Trade with regard to the inclusion of coal as an exchange commodity in bilateral agreements with foreign countries.
My noble Friend is in constant touch with his colleagues about increasing our export markets for coal by all available means.
Does not the Parliamentary Secretary agree that our coal exports could be increased by a discreet use of the bilateral agreements? Is he taking note of what other coal-producing countries are achieving in this matter?
The question of bilateral agreements raises questions of Government policy going far beyond my Department. If the hon. Member wants to raise any points on bilateral agreements he should address his Question to my right hon. Friend the President of the Board of Trade or my right hon. Friend the Chancellor of the Exchequer. Such Questions are not for me.
Denationalisation
48.
asked the Paymaster-General what forms of denationalisation for the coal industry are being considered by his Department, including the management of groups of pits by private directors.
None, Sir.
Is the Parliamentary Secretary aware that a Member of the Government—namely, the Parliamentary Secretary to the Ministry of Works—put forward this proposal in a public speech on 19th June? Is that speech to be taken seriously as evidence of Government policy, or was it just a piece of typical junior Ministerial nonsense?
Like all speeches made my Members of the Government, it should be taken seriously—more seriously than the Question of the hon. Member, who apparently did not know that, whatever may be the merits or demerits of the suggestion, it was made clear in that speech that no question of denationalisation arose.
On a point of order. In view of the fact that Questions to the Paymaster-General come first next week and that experience of recent weeks has shown that there are likely to be 40 or more Questions then, as there are today, may I submit to you, Mr. Speaker, that before next week you give consideration to the working of the rule whereby Questions of day-to-day administration of nationalised industries cannot be asked in Parliament if they have been asked in a similar sense and refused by the Minister some time before? Is the rule being relaxed in any regard? If it is, there are hon. Members on this side of the House who would wish to ask Questions about railways and electricity.
I can assure the noble Lord that the rule has not been relaxed in any way at all.
Ministry Of Power
Methane
19.
asked the Paymaster-General what dangers exist in connection with the storage of liquid methane and its use as a gas for heating purposes; and what precautions are being taken to avoid these dangers.
38.
asked the Paymaster-General if he will give details of the dangers inherent in the new experiment of the transportation and storage of liquid methane.
The only respect in which liquid methane is more difficult to handle than any other light petroleum product is the need to take special precautions against the effect of very low temperatures on the properties of metal. The tanker and storage tanks used in connection with the experimental shipments have been specially designed after extensive research to ensure safe handling, and have been approved for this purpose by the appropriate authorities. In use methane gas is as safe as ordinary town gas with which it is mixed.
May I ask the Minister two questions? First, is there any danger of liquid methane exploding in storage? Secondly, is it quite clear that there is no greater danger to health if methane gas mixed with coal gas is used for heating and escapes, as compared with ordinary coal gas?
As regards the second question, coal gas contains substantial quantities of methane. The answer substantially is that there is no difference in danger. With regard to the first question, the tanks in which the gas is stored are remote and carefully placed in the light of experience. They are surrounded by earth bunds so that in the event of a breakage burning substance would not flow all over the place but would be contained. One cannot say that there are no possibilities of risk in any of these industrial processes, but I can assure the hon. Gentleman that very careful steps have been taken to minimise the danger.
Has the hon. Gentleman's attention been drawn to a recent meeting of the gas industry? The impression given at the meeting was that despite the dangers of this experiment it is bound to be a success. Personally I do not deplore that, but I am concerned to hear that because of the possible success of this experiment the Gas Council plan to go it alone. Does the hon. Gentleman not think that this is a rather chaotic situation when large fuel industries go shooting off at a tangent with their own policies rather than the Minister taking action to bring them together and get a co-ordinated fuel policy?
I do not think that arises. These Questions are about safety.
Nuclear Power Stations (Plutonium)
20.
asked the Paymaster-General if he will state the amount of money already spent on the proposal, now abandoned, to modify certain civil nuclear power stations for the production of military plutonium including all research, design and development charges; and what is the anticipated cost of the military plutonium modifications at Hinkley Point nuclear power station which it is proposed to complete.
The payments to be made in respect of the modifications at Hinkley Point, and of any nugatory expenditure incurred elsewhere, will be the subject of negotiations and I regret that I cannot yet say what the cost will be.
Does the hon. Gentleman recall that a year ago in an Adjournment debate I argued that this modification was unnecessary and wasteful? I was thoroughly rebuked by the hon. Gentleman for my trouble. Is the hon. Gentleman now quite certain that the modification must be carried out at Hinkley Point, and will he in future not be quite so cocksure?
It was not a question of being cocksure. Perhaps the hon. Gentleman has not followed these matters with his usual care. A great deal has happened since then. In particular, there has been a highly successful agreement between the Governments of the United States and this country from which we are busily engaged in obtaining great benefits. Because of a reconsideration of the whole situation we have made sensible modifications in the policy. We do not stay put for ever.
Fuel Oil (Import)
28.
asked the Paymaster-General the estimated net import of fuel oil during the first half of this year, as compared with the corresponding period of 1958.
About 750,000 tons compared with 660,000 tons last year.
Lurgi Plant, Westfield
44.
asked the Paymaster-General what general directions he has given to the Gas Council concerning the continuation of the Lurgi plant at Westfield.
None, Sir
Will the Parliamentary Secretary be good enough to explain the economic wisdom of investing £6½ million in a plant which is to take opencast coal from a new site on a 20-year contract when millions of tons of opencast coal are in stock, with the net result that 1,500 miners will be thrown out of work?
This was a peculiarly attractive site, details of which are known to the hon. Member. There is no doubt that it will produce gas at a particularly favourable price. The gas board concerned has no doubt that this will open up markets which otherwise it would not be able to get.
Ministry Of Supply
Army Boots
49.
asked the Minister of Supply how many of the 1,250,000 surplus Army boots have so far been sold; to which countries they have gone; what is the total amount realised; and by how much this falls short of the cost of the boots to the taxpayer.
Six hundred and forty-four thousand, one hundred and ten pairs of boots have been sold. About one-third are going to buyers in U.S.A., France, Italy, Germany and Rhodesia. The destination of the rest is a matter for the exporters who bought from the Ministry. While the average sale price was less than the estimated original cost, I regret that for commercial reasons I cannot disclose the prices realised.
Does the right hon. Gentleman appreciate that the surplus boots, or most of them, became surplus because of a blunder? When it has already been announced in the House that the boots cost the taxpayer nearly £2 a pair, why cannot the right hon. Gentleman tell us how much we have got for these boots, so that we may know how much money has been wasted? It must be a very large sum of money.
I am afraid that I cannot tell the hon. Member—
Why not?
—because I have further boots to sell. To disclose to him the prices already realised would prejudice the best price to be obtained for those still to be sold, and that would be detrimental to the taxpayers' interests.
When the sale is completed, will he be able to tell us what the boots have realised so that we can see how much money has been lost to the taxpayer.
Provided I am satisfied that there is no good commercial reason against giving the hon. Member the information asked for, I shall be delighted to give it.
If the Government purchases these boots at a certain price and sells them for another price, either privately or otherwise, surely the House is entitled to know? This is public money. Will not the Minister undertake to let my hon. Friend know when he is ready to give the information, so that the House may know what has happened to these public resources and how far this Government are to be trusted with public money at all?
Certainly the House is entitled to know at some juncture. The only point of my answer was that it would prejudice the public purse to disclose that information prematurely, and I think that is still the case.
Hovercraft
51.
asked the Minister of Supply why a delay of one year took place before a development contract for the Hovercraft was given after the vehicle had been demonstrated to his Department by the designer.
59.
asked the Minister of Supply how far he is concerned with the development for military purposes of the Saunders Roe Hovercraft.
The nine months which elapsed between the demonstration by Mr. Cockerell and the placing of a design study contract by the Ministry of Supply were occupied in finding a contractor who was prepared to undertake the work and in studies by him, by my own experts and by Mr. Cockerell of the most practicable method of proceeding. Possible military applications of the Hovercraft are being studied.
My right hon. Friend is denying that there was a year's delay, as is claimed by the inventor. In view of the fact that the Germans, Americans and Swiss are developing similar principles, would not he agree that every effort should be made to catch up any time which may have been lost?
I certainly deny that there was a year's delay. Indeed, my Department got in touch with possible contractors three days after the demonstration. To the best of my knowledge, the lines on which the Americans are working are somewhat different. None the less, I entirely agree that it would be highly desirable that this development should go forward with all possible speed.
Does the Minister remember the Minister of Defence told us that the Government had not yet decided whether this was an aircraft or a ship? If they decide it is a ship, will the matter be transferred from his Department to the Admiralty and shall we have more delay and more "buck-passing"?
I understood that it was the point of the Question that the Hovercraft at the moment was neither the particular concern either of my Department or the Admiralty. At the moment, it is the concern of the Board of Trade and the sponsor is the National Research and Development Corporation.
Helicopter Airliner
52.
asked the Minister of Supply what progress is being made in the development of the Fairey Rotodyne helicopter airliner; what prospects there are of it being used in inter-city travel in this country; and in what way Government Departments are helping the manufacturers to overcome inevitable difficulties of production at this stage.
Earlier this year the Rotodyne prototype set up a world speed record for convertiplanes, and it has just been successfully demonstrated at the Paris Air Show, Brussels and to SHAPE. British European Airways has indicated its intention of buying Rotodynes, subject to agreement on final specification and financial terms, with a view to operating inter-city helicopter services; and there is keen interest among overseas operators. As I announced to the Press on 5th March, I reached agreement with the Fairey Aviation Company some time ago on the extent of further Government support for this project. As my right hon. Friend the Minister of Defence announced on 3rd June, the possibility of a military requirement is being examined.
Has the right hon. Gentleman anything to say about the dissatisfaction of aircraft firms, including the manufacturers of the Rotodyne, at the poor support given by this Government, in contrast to what has happened in other countries? Will he say when this so-called Government of businessmen will really wake up and do something to help aircraft manufacturers, particularly in this matter?
That question is rather removed from the original Question on the Order Paper, but I think it is entitled to this answer: certainly Government support for the aircraft industry is a matter of considerable moment and importance, but I believe that the hon. Member would be deluding himself if he thought that the troubles of the aircraft industry were due entirely, or even mainly, to the paucity of Government support.
Will my right hon. Friend also bear in mind that those who live near the place where the Rotodyne is being made are concerned about the noise which it makes when it is in the air? In developing this contract, will he take steps to see that every possible effort is made to silence the engines of this machine?
My Department is cooperating with the company in an endeavour to find a solution to the noise problem.
Chemical And Microbiological Research (Animals)
53, 54 and 55.
asked the Minister of Supply (1) how many dogs, cats, pigs and sheep are at present undergoing experiments at the Chemical Defence Experimental Establishment;
(2) from what source the Chemical Defence Experimental Establishment obtains dogs and cats for experimental research;
(3) how many animals, and what kinds, have been destroyed in the past six months during experiments at the Microbiological Research Establishment; and how many are undergoing experiments at this moment.
62 and 63.
asked the Minister of Supply (1) what proportion of the experiments on animals at the Chemical Defence Experimental Establishment are carried out without anæsthetics;
(2) when the Chemical Defence Experimental Establishment was started; how many people are employed there; what has been its cost to the latest convenient date; against what types of chemical warfare it is intended to provide defence; if he will make a statement about the type of work being carried out; and for how long it is envisaged that these experiments will continue.
64 and 65.
asked the Minister of Supply (1) how many cats were used at the microbiological station at Porton during the last year;
(2) how many monkeys have been bought for the microbiological research station at Porton during 1956, 1957, 1958, and 1959.
50.
asked the Minister of Supply what is the total number of dogs and cats that have been experimented upon by the Chemical Defence Experimental Establishment since its inception.
I would refer hon. Members to the answers given on 26th January and 22nd June to the hon. Member for South Ayrshire (Mr. Emrys Hughes) and to the hon. Member for Billericay (Mr. Body) on 22nd June.
I regret that information on the numbers of animals used in the Chemical Defence Experimental Establishment since its inception in 1916 is not available. There are now under experiment there one cat and two pigs. Cats and dogs used there have hitherto been purchased, though it is my intention to reduce purchases to a minimum, and in so far as possible, breed all the animals needed. Most of the experiments involve only simple inoculation or superficial venesection, when no anaesthetic is needed. As for the further figures asked for in relation to the Microbiological Research Establishment, I will, with permission, circulate these in the OFFICIAL REPORT.As the Minister has bunched all these Questions together, may I first ask him to indicate whether arrangements may be made for hon. Members who are interested to visit the Chemical Defence Experimental Establishment and see what is going on there? Secondly, will he say why hon. Members were not allowed to see the animals and the experiments going on at the Microbiological Research Establishment? Thirdly, will he indicate—the figures do not reveal this—whether there are any monkeys at the Establishment, because one escaped and had to be shot? In view of the suspicious circumstances surrounding this gruesome business, is it not time that there was an independent inquiry into the whole affair?
I am not sure that I shall be able to remember all those questions—
I cannot remember all the answers, either.
As to the first question, I will consider the suggestion about allowing hon. Members to go to the Chemical Defence Experimental Establishment. Regarding the second question, about why hon. Members who recently visited the Microbiological Research Establishment did not see the animal wing, the short answer is that none of the visitors was immunised and immunisation is a necessary condition for visiting the wing. As to the more general questions posed by my hon. Friend, none of us really wants to undertake these experiments, but the plain fact—which I think the hon. Gentleman must accept—is that no effective progress can be made against biological and chemical weapons without experiments on animals. But we must endeavour to minimise cruelty to the utmost possible extent.
Is my right hon. Friend aware that anxiety about these experiments is by no means confined to those who oppose vivisection? Regarding Question No. 63, which my right hon. Friend said he was answering with the others, is he aware that so far as I can see he has not answered any part of that Question and that it was not answered in other Answers to which he referred? If my right hon. Friend is unable to give the information now, will he add it to what is to appear in the OFFICIAL REPORT?
With respect to my hon. Friend, I would refer him to the Answer I gave on 22nd January to the hon. Member for South Ayrshire (Mr. Emrys Hughes). That is an Answer which may possibly have escaped him
Is the right hon. Gentleman aware that the only thing about this establishment of which we are certain is that George Washington would never have got a job on the staff? Why did not the right hon. Gentleman state in his Answer to me last week that there were monkeys being experimented on? Is he aware that when we visited this microbiological place we were told that monkeys were being experimented on but the source of supply was dried up at the time of Suez? Is he aware that a scientist indicated that the drying-up of the supply of monkeys could be a tragedy for the whole place? Is it not time that the right hon. Gentleman gave facilities to hon. Members to visit this animal department? Is he aware that when we asked to see the department we were bluffed and brushed off and told we could not go there; that the arrangements were so sanitary and that hon. Members might catch plague?
No monkeys were mentioned in the Answer given to the hon. Gentleman last week or the week before for the very simple reason that the hon. Gentleman asked me for figures of experiments over a certain period and the period mentioned by him in the Question was one in which no monkeys were experimented on.
Oh.
Would the right hon. Gentleman tell the House that he, the Government and most members of the Opposition feel that it is imperative for the future of mankind that experiments should be conducted on cats, dogs and monkeys and the like rather than on men, women and children.
I thank the hon. Member for Barnsley (Mr. Mason) for that question. If that was not already evident in the Answers given, may I make it evident now?
Could the right hon. Gentleman furnish the House with a White Paper about the activities of both the chemical and biological research stations in order that hon. Members might know something about the kind of warfare which is being prepared for and paid for by the taxpayers' money?
If the right hon. Gentleman will examine the answers I have given to Questions on this matter over recent months, I think he will come to the conclusion that, consistently within the limits of security, I have given all possible information on both establishments.
The Prime Minister.
On a point of order. If I heard my right hon. Friend the Minister of Supply aright, he referred me to a Question asked by the hon. Member for South Ayrshire (Mr. Emrys Hughes) on 22nd June, but—
22nd January.
I beg my right hon. Friend's pardon.
The Prime Minister.
Following are the figures:
The following numbers and types of animals are now undergoing experiment:
| 7,914 | mice; |
| 550 | guinea pigs; |
| 248 | rabbits; |
| 9 | chicks; |
| 1 | rat. |
110 monkeys were bought in 1956, 60 in 1957, 17 in 1958 and 39 in 1959.
Business Of The House
Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. R. A. Butler.]
Orders Of The Day
Supply
[18TH ALLOTTED DAY]
Considered in Committee.
[SIR CHARLES MACANDREW in the Chair]
Civil Estimates And Estimates For Revenue Departments, 1959–60
Class Vi
Vote 1 Board Of Trade
Motion made, and Question proposed,
That a sum, not exceeding £3,486,282, be granted to Her Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1960, for the salaries and expenses of the office of the Committee of Privy Council for Trade and subordinate departments, the Monopolies Commission, and the Performing Right Tribunal. [£1,744,000 has been voted on account.]
Whereupon Motion made, and Question, That the Chairman do report Progress, and ask leave to sit again—[ Mr. Legh]— put and agreed to.
Committee report Progress; to sit again Tomorrow
Condition Of Private Industry
3.34 p.m.
I beg to move,
In one sense today's debate is a widening of the one we had last Thursday and it will no doubt once again highlight the basic difference between Government supporters and hon. Members on this side of the House. Government supporters, believing in laissez faire, consider, of course, that any developments in the uncontrolled pursuit of private profit are justified. We would draw attention to a number of unhealthy developments in which get-rich-quick desires and mentalities are utterly overshadowing the need for greater production and investment. We do not intend to be diverted from this objective by the Government's Amendment. We are as ready as the Government are for an economic debate and I hope that we shall have one soon. In one sentence, the Government Amendment is saying that because the fall in import prices a year ago improved our balance of payments and stabilised prices, as the Government have frankly admitted, they regard themselves as absolved from looking at the seamier side of Britain's economic life. We have debated many times the responsibility for the stagnation of industrial production over the past few years. Government supporters regard such stagnation as essential to any Tory policy of fighting inflation. We regard stagnation as inimical to the growth of productivity which is the only real way of fighting inflation. Whatever differences there may be, there can be no argument that the challenge that we are facing as a nation is the growth of industrial production, of investment, and the vast technological and educational advance in the U.S.S.R. and China. The challenge is not only that Russia and China, and Germany as well, are far outstripping us in quantitative measures of industrial advance and productive investment; it is also that, qualitatively, the industrial systems of those countries are more purposively directed. Let me concede right away that in this General Election year the Government have been converted to the case for industrial expansion, at long last, but the temples where they worship—the City, and the boardrooms of some of our big companies—have been infected more and more by get-rich-quick attitudes, a distortion of the industrial process which harmonises ill with the Government's appeal that, in this economic free-for-all, the trade unions alone should show restraint in the matter of economic rewards. We created a Welfare State for all. The Government's achievement is a windfall State from which the mass of the people are excluded. The one justification of a continued private sector in this country is the enhancement of such old-fashioned puritanical virtues as thrift, expansionism, worthwhile production and the mutually advantageous exchange of goods; but is that what we are getting today? During the past few weeks the City has been more concerned to justify Lord Keynes's description of it as a "casino". If we turn to the City columns of any newspaper over the past few weeks what will we find? Take-over bids and rumours of bids; erratic movements of share values, where those who are euphemistically called "investors" are paying less and less regard to the inherent earning power of particular shares and more and more regard to short-run capital gains. The first question I want to raise is posed by the ownership of industry. In the modern world, and especially over the past twenty years, there has been a growing divorcement between ownership and control. On the one hand, we have the largely passive and functionless shareholders, and, on the other, we have the self-appointed and self-perpetuating executive oligarchies with, if I may say so, the Establishment predominating in both camps. Just as shareholders are becoming more and more avid for quick gains, so the Government regard any quick capital gains as good business, to be encouraged whatever the production realities. Of course, the capitalist international knows no national frontiers. In the presence of a quick profit the patriotism of the Government melts like snow in the summer sun. It may or may not be anti-British, but it makes sense to them. The classic case, of course, was Trinidad, when the Prime Minister, in the days when he was a fallible mortal, before his deification, was called to account for his shabby sell-out of a vital Commonwealth oil interest to the Americans. During recent months United States investment in British industry has increased. I want to make it clear that we are not opposed to all American investment. A great deal of it is welcome. [Laughter.] If the hon. Member opposite will listen to these facts for a moment and stop tittering it will be better. In the years after 1945 we encouraged very many United States firms to establish productive units in this country. We had no difficulty in getting them to come and no difficulty either in getting them to settle in the Development Areas Some districts, such as Dundee and parts of South Wales, owed their post-war prosperity to American investment undertaken in a Socialist Britain. The criteria of whether we should or should not encourage such investment should be the national interest. Where American firms bring much-needed "know-how", new processes, new products and an infusion of new blood into some of our rather hidebound and hereditary industries, they are to be welcomed. The same criteria should apply when it is a question not of new investment, but of American participation in an existing concern. In the recent controversial case of British Aluminium, American investment brought in new blood to an Establishment-dominated industry in this country which was largely by-passed by the aluminium resolution of the past generation and in this case there was no loss of British control. The only significant thing was the way in which some of our oldest-established banking houses succeeded in making first-class asses of themselves. Such cases apart, a great deal of American investment during recent years has not been for Britain's productive or trading advantage, but investments have been for purely financial reasons resulting from the overheated condition of Wall Street and fears about the United States dollar. The City gentlemen who sold Britain short in September, 1957, have their counterpart today on Wall Street. Obviously, the Government do not begin to distinguish between different types of American investment. Whichever it is, it is good for share values and, as one hon. Member opposite once said, "Shareholders are the nation". We are not surprised about that, but what I found extraordinary was the attitude of the Economic Secretary to the Treasury, who went so far as to say that the Government welcomed American portfolio investment in this country, even where there is danger of control being obtained. I turn to British take-over bids, whether they are effective, or, as in one rather recent and much publicised case, abortive. It would be wrong to condemn all take-over bids out of hand. If we accept, as we do, the continuance of a substantial private sector, we must accept that there is a case for greater industrial concentration whether by private negotiations or cruder mechanisms of take-over bidding, if the result is greater efficiency, better management and economies in large-scale investment and better utilisation of capital assets. When those conditions are fulfilled there is no objection to industrial concentration. Certainly, during the recent brewery episode I cannot say that I lost a lot of sleep over the anxieties of the brewers. With singularly few exceptions, the brewing trade is commanded by an old-established, hereditary squirearchy run very largely by Old Etonians, not to mention Members of Parliament, honest chaps, whispering, all of them, the sweet enchantments of a bygone age, good husbands and fathers, no doubt, but entirely out of touch with modern industrial society. The brewing trade certainly could do with new men and methods, but this does not mean that we favour Mr. Clore. Far from it. His interest is not in brewing, nor in beer, nor the man in the "pub". The interest of take-over bid tycoons is in quick capital gains, largely tax-free. Many of these gains are derived from the anomalous position of our tax laws, which lay a heavy rate of tax on income and no tax at all on capital gains. It pays these people to buy up concerns which own freehold properties and sell them to insurance companies at a big capital profit which is tax-free and frequently to rent them back for an annual payment which is tax exempt. That is very nice work if one can get it. There is no doubt that many serious-minded Conservatives and many businessmen are concerned about this type of deal. The City editor of the Sunday Times—not, I hasten to add, a fully paid-up member of the Labour Party—said very recently:That this House, in view of undesirable developments in private industry, including take-over bids, excessive speculation in share and property values and practices designed to avoid taxes, calls upon Her Majesty's Government to take steps to prevent these and other abuses and to ensure that private industry is carried on in accordance with the national interest.
We should also be concerned with social and industrial consequences. How can Ministers appeal for wage restraint in the payment for a job honestly and well done, while millions of pounds can be made in this effortless manner by a section which does no work at all? Trade unionists will ask why, if breweries are inherently so profitable, the price of beer was not reduced without the help of the Budget. If the industry is not so profitable, where has this newly-created wealth come from? Even Mr. Clore cannot create wealth out of nothing—not that one loses money if one's bid fails. The City Editor of the Evening Standard said:"it brings the whole system of investment into disrepute. If I were an advocate of a capital gains tax, I would rejoice at certain recent happenings."
That was just for the bid without the take-over, just as on that Friday morning, three years ago, anyone holding £1,000 nominal of Trinidad oil stock cleared £6,000 tax-free in ten minutes. It would take a coal miner in the most profitable mine in the country not ten minutes, but about ten years to earn that sum of money after tax. I ask the Government: what social or economic purposes have been served by all this? These people"In the City some say that Mr. Clore or his Sears group has made a £ 500,000 profit out of Watney shares."
yet their gains come out of British industry and are out of all proportion to any services they render to that industry. I do not need to tell the House that this take-over bid movement is spreading. Harrods are now in it and are not even playing hard to get out, as far as I can see. There are three bidders already in the field and Mr. Clore, Mr. Wolfson and Lord Woolton's Lewis's colleagues are expected hourly. A perhaps more ominous development is the take-over activity of insurance companies. Here—we have not only a trend towards monopoly in insurance business and if there is to be a monopoly it should be public monopoly—but we have to face the fact that more and more of the ownership of general industry is passing into the hands of insurance companies and pension funds. Mergers and take-overs raise a very big problem of industrial power, going far beyond insurance proper. The Government apparently think that all this a good thing. It happens in the City, so it must be right. Ministerial spokesmen have acclaimed it. I have referred to the Prime Minister's defence of the Trinidad take-over. Descending from the sublime to the Parliamentary Secretary to the Board of Trade, we had this encomium at Question Time recently:"toil not neither do they spin"
Not a word about the fact that when the Chancellor of the Exchequer is appealing, as I understand he is still appealing, to industry to be restrained in its dividend distribution, it is precisely the firms which have shown the restraint which he wants which are most vulnerable to the take-over bid technique. In the same interchange at Question Time, the Parliamentary Secretary, growing skittish, asked me whether I should like to give an assurance that before any further nationalisation took place I would secure the views of the workers, for example, in the iron and steel industry. I am not troubled about that challenge. The steel workers' union supports the nationalisation of their industry. A recent Gallup poll showed a large majority of them to be in favour. If any doubt remains, I am sure that my hon. Friend the Member for Penistone (Mr. Mendelson) could dispel that doubt from very recent electoral experience. What amazes me is the hon. Member's simple faith that while Parliament has no right to take over an industry on behalf of the nation, it is all right for Mr. Clore to do it. How many workers did Mr. Clore consult? It shows the schizophrenia on the Government Front Bench as between factors affecting private and factors affecting public enterprise. I should, at this stage, draw attention to a very undesirable consequence of some of these activities—the fantastic provision made in terms of tax-free compensation for loss of office, the so-called "golden handshakes" for the benefit of displaced directors and executives, who, on the Government's own admission—and I am still quoting the Parliamentary Secretary to the Board of Trade—have not been "on their toes". They have not been on their toes; the opportunity has been taken to get rid of them, and now they are to be compensated. They have not ensured the most economic use of the assets entrusted to them. Let us look at one or two recent cases. Lord Portal and the Hon. Geoffrey Cunliffe received £30,000 and £58,000 respectively, tax-free, after the British Aluminium deal. Other recent redundancy cases, arising mainly out of takeover bids or in some cases board-room rows, have been Sir Charles Colston, of Hoovers, £83,000 tax-free; Sir Frank Spriggs, Hawker Siddeley, £75,000; Mr. George Pate, Albion Motors, £60,000: Captain Allan Kyle, of Jonas Wood-heads, £50,000; Mr. Bernard Dixon, Flowers Breweries, £40,000; Mr. Voss, Trinidad, £50,000; Mr. Frank Perkins, only £30,000; and Mr. Craig Wood, of Hedleys, only £35,000. All those are tax-free. We also hear that Colonel Kings-mill, a former but undistinguished Member of the House, is to receive £60,000 as the result of another brewery merger, even though he has said that he will try to get another job. As an ex-Tory M.P. he should not find it difficult to do so. These eleven gentlemen netted between them tax-free redundancy payments of £575,000, an average of £52,000 each. About three-quarters of this is being paid for by the Chancellor of the Exchequer—that is, by less-favoured taxpayers. In contrast, let us take a Lancashire mule spinner, after thirty years in the industry and with little hope of finding alternative work in his own trade. He will be lucky to receive much over £200. Let us take the man with long service in the mines, perhaps thrown out of work because the only pit in the village has closed. He will receive a very small sum by comparison. In both cases, much of the redundancy payment to the mule spinner and the coalminer is lost if the spinner or the miner obtains other work. This is not the case with capitalism's "golden handshakes". That money is theirs for keeps. I suggest that this is one more example of the utterly distorted sense of social and economic values which is being created and which hon. Members opposite regard as being almost divinely ordained. Hon. Members may ask how we should deal with these developments. First, it is our view, and, apparently, that of Mr. Norman Crump, that a capital gains tax would take the gilt off the gingerbread for the less justifiable form of take-over bid, the financial speculation."The great majority of take-over bids are of great benefit both economically and socially to the country. The possibility of such bids keeps directors on their toes and ensures that assets are fully utilised. On the whole, the take-over bids operate in the interest of the workers, the industry and of the country as a whole."—[OFFICIAL REPORT, 2nd June, 1959; Vol. 606, c. 22.]
How would the right hon. Gentleman separate them?
I am dealing with the capital gains tax and I will say what the consequences of it would be.
This would also be done by a reversal of the Chancellor's decision last year to eliminate the differential profits tax on dividend distribution. I do not think that Mr. Clore and his like operate without limited liability protection, and if their companies had to pay a tax on all the gains involved in share and property deals I think that many more ventures would become unattractive and mergers and take-over bids would be much more confined to the type of case, which could be justified, in which operational efficiency and economies of joint working would result. I also suggest that there is a strong case for a Departmental inquiry into the whole working of these take-over bids. That has been very much canvassed in more responsible quarters in the City, and I suggest that the President of the Board of Trade ought by this time to have appointed a full-dress inquiry into the whole question of the methods and the practice and the effects, economic and social, of take-over bids. As for the excessive hand-outs to departing directors, I think that the acceptance of the recommendation of the Royal Commission on the Taxation of Profits and Incomes to make these payments taxable would probably meet the case.Surely the right hon. Gentleman is not seriously suggesting that he can separate the desirable from the undesirable in this way? Does he not realise that this tax would be likely to stop desirable mergers and certainly would not prevent the get-rich-quick man who wants to make capital profit?
I think that the hon. Member is wrong. I think that where there would be a genuine gain as a consequence of a merger, through increased efficiency or cheaper working, it would be encouraged, whereas the purely speculative gains would be dealt with.
The second development in private industry to which I want to draw attention is the growing preoccupation of top level industrial executives not with increasing production, or investment, or exports, or with lowering costs, or with meeting the competitive challenge of Russia or of Germany but with playing politics. One would have thought, for example, that the Institute of Directors would have been genuinely concerned about some of these take-over bids, whether they emanated from Wall Street or from Park Lane. One would have thought that they would be particularly concerned about those stealthy operations which lead to a complete change in the control of the undertaking overnight. No; they are not concerned about these things at all. Their concern is purely to play politics, utterly and deliberately to misrepresent Labour Party policy. [HON. MEMBERS: "What is it?"] I will restate it shortly. Their concern is generally to act as a well-heeled front organisation for the Conservative Party. These people ask for donations of up to £10,000, a limit clearly designed to appeal to the small shopkeeper, and they emphasise in their appeal that they are strictly non-political. This is shown by their high command. The president of the Institute is Lord Chandos, better known to us as Mr. Oliver Lyttelton. Their vice-presidents include the Earl of Derby, president of the Huyton Conservative Association, and such former Tory Ministers and M.P.s as Lord Ismay and the Earl of Dudley. Their Council chairman, Sir Edward Spears, is another ex-Tory M.P. Their Council members include Lord Tenby, better known to us as Major Lloyd-George, Sir William Mabane and Sir Patrick Hannon, not to mention the presidents of the Brighton, Rugby and Whetsted Tory Associations and the treasurer of the London Tories. Their membership includes 100 Tory peers and 105 Tory Members, their Parliamentary panel being headed by that well-known non-political cross-bencher, the right hon. Member for Blackpool, North (Sir T. Low). Hence their claim to a disinterested, non-political neutrality. If they are non-political, the hon. Member for Louth (Mr. Osborne) is a Fabian intellectual. Their political un-worldliness is further emphasised by Lord Chandos's statement:He is leaving nothing to chance. The Institute of Directors has embarked upon a spending campaign running into hundreds of thousands of pounds, but it is not alone in this. There is the National Union of Manufacturers, impudently claiming that subscriptions to its political expenditure are not taxable. There are the steel barons, saying, "It is your vote we want, not your voice". I mean, "It is your voice we want, not your vote". My Freudian slip in giving the quotation meant that I stated what they are really after. Their latest pictorial advertisements suggest a new topic—steel nationalisation—for the loquacious hairdresser. Think of that—one goes to have one's hair cut and hears about steel nationalisation. An advertisement of theirs published this week shows the batsman at the wicket. Here is this unfortunate man, at a time of what should be maximum concentration, having to be prepared for a contribution on the subject of steel nationalisation from a Tory wicket-keeper—a prospect which I should have thought is as repugnant to the laws of cricket as is their whole campaign to the canons of political decency. My one hope is that the batsman will up and swipe the wicket-keeper one over the ear. Then there is Mr. Colin Hurry. There is no need to waste much time on him, or the "suckers" who put up the finance for him. He has never been the same man since the Chancellor of the Duchy of Lancaster hired him to fight the introduction of the National Health Service. I merely observe that he is spending in each marginal constituency two or three times as much as each of us or our political opponents will be allowed to spend on our entire General Election campaign. Since, however, every reputable market research organisation knows that it is not necessary to have a 100 per cent. doorstep canvass to test public opinion and in view, also, of some ominous statements of Mr. Hurry not long ago, I invite Lord Hailsham to confirm that in no single case has information obtained by Mr. Hurry on the doorstep been passed over to Tory election organisations, for use on polling days, or, for that matter, to employers of persons interviewed, for perhaps more sinister purposes. Lord Hailsham being, unfortunately, not a Member of the House of Commons, perhaps the Chancellor of the Exchequer will give us that assurance today, because it is being done with his money, He ought to be concerned about the political effects of the money he is spending. Perhaps he is. The House will expect me to say how we would clean up this particular type of political activity. First, we must deal with tax exemption for political purposes. Clearly, the Chancellor thinks that such activities are an illegitimate form of tax-exempt expenditure; but, although he thinks that, some doubt still remains. Let me make it clear that we support the Chancellor in his view. All this expenditure now going on should not rank for tax exemption and if, in the event, the Chancellor's intentions are not realised we propose in our first Finance Bill, when we come to power, to put the matter beyond all doubt. Secondly, as a contribution to cleaning up both industrial and political life we would propose that all political parties should be required by law to follow Labour's example and publish in detail their political accounts. Thirdly, there is a strong case for an amendment to the Companies Act, requiring all political expenditure made by directors in the name of their shareholders to be reported to those shareholders by being separately detailed in the annual reports and balance sheets. A fourth safeguard I will mention later, when I refer to the code of conduct which we propose to introduce for the bigger industrial concerns. The Motion I have moved refers to a third unsavoury development—the growth of tax avoidance. Successive Finance Bill debates have shown that this is becoming a major industry, parasitic and evil, and that the Government have shown themselves, despite a succession of half-hearted attempts, incapable of dealing with it. I do not propose to repeat the arguments or evidence that we have put forward on various occasions, the more so as my right hon. Friend the Member for Smethwick (Mr. Gordon Walker), if he catches your eye this evening, Mr. Speaker, may have more to say on this subject. I wish to quote two interesting instances, quoted in this House recently in a Finance Bill debate by my hon. Friend the Member for Lewisham, North (Mr. MacDermot). I will summarise them. In the first, a director had an agreement with his company requiring him to live in the company's suite in a West End hotel, and to ride about everywhere in the company's Rolls-Royce. The cost of these luxuries was borne by the company. His declared income for tax purposes was £1,500 a year, but he did not even pay tax on that, because he borrowed large sums from his company, setting off the interest payable against his salary. The second case was that of a director of a private company in the Midlands who lived in a house owned by his company, with three indoor servants, two gardeners and a chauffeur, all on the company's pay-roll. Two cars were put at his disposal. The excuse for all this was that he was supposed to require the house for entertaining foreign buyers. He had had one business visitor in two years. I propose to leave that question there, because we have debated it on many occasions."Let no one think that power and influence do not exist and can safely be ignored."
Were not both those cases culled from the columns of the Divorce Courts, and the only evidence supporting them was from the wives being divorced?
The hon. Member is always most helpful. When the Gentleman finally loses his seat, if his own side does not do it we promise that we will see that he receives very good tax-free compensation for loss of office. The hon. Member is worth it to us. The facts, and the evidence supporting them, were given by my hon. Friend the Member for Lewisham, North in a debate on the Finance Bill. If the hon. Member for Twickenham (Mr. Gresham Cooke) wishes, I can give him the HANSARD reference, so that he may look it up for himself.
Turning from tax avoidance, I do not propose to deal with some of the abuses of advertising, though we have reached a ridiculous situation when thousands of able-bodied persons who could be better employed in productive industry are employed putting soap and grocery vouchers through letter boxes—vouchers which entitle housewives to a deduction of 3d. or 4d. every time they go to the shops for a tablet of soap. When hon. Members opposite were going to cut Government expenditure and the large numbers of civil servants, we used to be told that all these people ought to be in productive industry. I ask hon. Members opposite to consider the thousands of people engaged on this entirely un-productive work. I saw an even more ludicrous situation recently in a chemist's shop. On a display stand there were tubes of toothpaste for sale and to each tube was affixed a new minted 3d. piece. If this is advertising why, in heaven's name, cannot these firms lower their prices? I do not intend to deal with research in industry except to say that the recent D.S.I.R. report shows that of £300 million spent on research and development in 1955—the latest year for which the figures are available—private industry spent only £68 million, less than a quarter. If some of these firms spent less on politics and advertising and more on research we would be better fitted to meet the industrial challenge from the East. I will turn to yet another subject. We are so used to tendentious propaganda attacking publicly-owned industry that shortcomings on the part of private industry are overlooked, even when the question of State intervention is involved. For instance, to judge from their Amendment, the Government are so bemused by their admiration for private industry that they have forgotten the number of cases in which they themselves have come to the rescue with the taxpayers' money. If hon. Members will take the trouble to list the commitments that the Government have made during the present Session—I go no further back—they will be surprised at the wealth of interests involved and the scale of those commitments—steel, cotton, building societies, landlords, and the rest. In the queue are the Cunard Company, de Havillands, and certain shipyards, while the chairman of Vickers, at the annual meeting of the company earlier this month, said:Last Thursday, my hon. Friend the Member for Newton (Mr. Lee) quoted an article in the Daily Telegraph which, after listing the better-known industrial mendicants, went on:"Without firm and early support by the Government, through Royal Air Force orders or otherwise, to back up the initiative of private enterprise … this country is more than likely, sooner than some people might expect, to find itself without a real aircraft industry at all. For it is clear that this initiative … certainly cannot otherwise be continued, or repeated by firms either alone or unaided."
"There may be others unknown to me: experienced spongers often prefer to work in private.
This importunity seems to me as unwise as it is unseemly.
It is in effect to declare, as the Socialists declare, that the present free economic system will not work. Perhaps it will not; but the independence of these great concerns will not survive its passing.
I emphasise those words, "natural and legitimate step"—From State aid to State control is but a step, and a most natural and legitimate step at that"—
"Cash and strings go naturally together; he who pays the piper legitimately calls the tune.
Hon. Members may draw their own moral from that quotation. All I can say is that if the Government are to set up a national assistance board for private industry, I should very much like to see them appoint Sir Geoffrey Hutchison to the chairmanship. Finally, I should like to refer to that part of our Motion thatIf these great concerns really want to be nationalised, why don't they openly say so? If not, they had better keep quiet and put their begging bowls away."
We accept the obligation—which, I am sure, is in the minds of hon. Members—to say what we feel should be done, though, in fact, I shall not, in the next few minutes, be saying anything particularly new. We have already stated what our policy is. But since the Institute of Directors and other top people were denied the educational advantages that some of us enjoyed in being taught to read, I will briefly summarise what we propose in the matter of the ownership and control of industry. First, we shall restore steel and road haulage to public ownership. I shall not repeat the unanswerable arguments that call for this action in the national interest except to say that to us it is intolerable that, in steel, a great deal of public money has to be put in on a fixed-charge basis while the equity pickings go to the favoured few. On road haulage, every inquiry, pre-war and post-war, has shown that the railways cannot be viable except on the basis of an integrated transport system. To denationalise the part that can most profitably skim off the cream, leaving on the railways the obligation to deal with the rest, can be explained only in one of two ways—both of them discreditable. It is either to provide loot for friends of hon. Members opposite at the expense of the community, or it is to force the railways into virtual bankruptcy for propaganda purposes. We have had no other explanation put forward—"calls upon Her Majesty's Government to take steps to prevent these and other abuses and to ensure that private industry is carried on in accordance with the national interest."
rose—
We shall, I hope, be debating transport very soon. I know what the hon. Member has in mind. He wants to ask about C licences. I know—I can read his mind. The hon. Gentleman's mind is very obvious, even when he keeps his mouth shut. I hope, Mr. Speaker, that we shall soon have an opportunity of debating the report which we understand the British Transport Commission has put in to the Government. We shall then have quite a lot to say about C licences—
Do not be so offensive.
I has taken the hon. Gentleman a long time to work out what "Fabian intellectual" meant.
Secondly, we propose to take into public ownership any industry or part of industry found, after due inquiry, to be failing the nation—The timber industry?
Any industry found to be failing the nation—
The timber industry?
In recent by-elections, Mr. Speaker, our opponents have been circulating a list of local firms under the heading, "They've got them on the list"
The timber industry?
Order. The hon. Member for Louth (Mr. Osborne) keeps on interrupting when seated. If he wishes to intervene he should get up, when, if the right hon. Gentleman gives way, he can make his interruption. But I cannot have him conducting a running commentary.
On a point of order. Mr. Speaker. You challenged me to rise to make an interruption, but the right hon. Gentleman promptly gets to his feet to prevent me from so doing.
As I was saying a few moments ago—and I can understand the desire to cause a diversion from the particular words that I am using—in recent by-elections our opponents have been circulating a list of local firms under the heading, "They've got them on the list."
The list they use is taken from the Institute of Directors, whose compilation is, of course, on a nation-wide scale. I may say that the Labour Party has no list. I had never seen these 512 firms listed until the Institute of Directors' publication reached Transport House. It may be, of course, that the Institute considers that these firms, or some of them, are prima facie failing the nation. That may be so. If not, that libel is Lord Chandos's, not ours. We are asked what we mean by "failing the nation". We made that clear nearly two years ago, when I said:"By failing the nation we mean failing the nation"—
Oh.
The hon. Member for Wokingham (Mr. Remnant) must be careful. I understand that he is a brewer and is, therefore, liable to be taken over whether or not he fails the nation.
Will the right hon. Gentleman be good enough to explain who is to be the judge in the matter of failing the nation?
In the case I am mentioning, it would be this elected House, after a complete and independent inquiry. In the case feared by the hon. Gentleman, it would seem to be taking over by Mr. Clore, without responsibility to anybody and without any private inquiry.
If I may complete the quotation:"… we mean failing the nation, and not necessarily just being inefficient. Of course, efficiency will be one test, and an important one, but there are others, such as failing to play an adequate part in the national export effort, abuse of monopoly powers, unwillingness to expand efficiently in the national interest, a lack of drive in investment, bad industrial relations, failure to co-operate in Government planning measures and other tests."
Oh.
Can hon. Gentlemen opposite really justify taking no action if firms are failing the nation in any one of these tests which I have mentioned? Of course they could.
rose—
I am sorry, but I cannot give way.
Having now explained the second of our proposals, I turn to our proposals in respect of the community getting a greater participation in the growth of wealth represented by British companies. Is there anything wrong with that? It has, I think, a most respectable pedigree. Before the First World War, the right hon. Member for Woodford (Sir W. Churchill) invested £5 million in the Anglo-Persian Oil Company, now B.P., and a year ago, I remember a Treasury Minister told me at Question Time that that investment of £5 million was now worth £462 million. That is an increase in wealth of more than 90 times, which has accrued for the benefit of the British people. But there are other examples. Lloyds now allow investment in equities. The Minister of Housing and Local Government, on 15th May, gave us a long list of local authorities which he has authorised to invest superannuation funds in equity shares. Not long ago, the Under-Secretary of State for Commonwealth Relations introduced a Bill to permit the trustees of the pension fund created for widows and orphans of former Indian Army officers and civil servants to invest in equities. This is what the hon. Gentleman said on 17th November:He was right. Then why is it wrong for us to propose that the State superannuation scheme which we shall introduce should have the same freedom? Why is it wrong, as we have suggested, to allow equity shares to be surrendered to the State in payment of Estate Duty? I am not so sure that it will not be over-generous in some cases, because they will get a better valuation that if they had to dump the shares on the market. Let us be clear about this. Capital gains in the funds to which I have referred are earned not by the shareholders, but by the community as a whole, which is the source of all wealth. In the modern world, at any rate, with "blue chip" companies, shareholders are largely passive and functionless, yet today they get capital gains out of all relation to their contribution to the productive processes. Of course, the Stock Exchange today is becoming more and more geared to their lust for still more gains. The capital gains of industry in some cases, though not by any means in all, are due to a monopoly or quasi-monopoly position, and they accrue automatically if the Government of the day pursues a policy of steady industrial expansion, if I can get the Treasury Bench to comprehend such a state of affairs. Why, then, should the people who created the wealth not share in it? At present, these capital gains accrue to a relatively small section of the community. Last year's Inland Revenue report on Estate Duty showed that considerably less than 1 per cent. of the population owned at death 54 per cent. of all industrial equities, and goodness knows how many more had been previously disposed of by inter vivos dispositions. This should be explained today. I cannot understand the mentality of those who say that it is all right for American financial interests to have a substantial participation in British equities, but not for the British people. I cannot understand the mentality of those who say that it is right for the Prudential or Pearl or the Indian Pension Fund to have these facilities, but not a national superannuation fund. Last of all, I turn to our proposal for negotiations for a code of conduct to which large-scale industry will be expected to conform. A study was recently made—many of the propagandists have utterly confused this code of conduct with the other issues—of the importance in our economic life of the 500 large companies with assets of over £2½ million. This was not a list drawn up through the malevolent ingenuity of Transport House. The study was carried out by an independent body, the National Institute for Economic and Social Research, which numbers among its governors my right hon. Friend the Leader of the Opposition, myself, four or five Tory Ministers, the chairmen of most of the banks, the directors of some of our biggest companies, and also includes the former Chancellor, the right hon. Member for Monmouth (Mr. P. Thorneycroft). These firms account for 50 per cent. of the profits of private industry, and if we include the oil and insurance companies they account for 80 per cent. of the total capital appreciation made on the shares of all public companies. It must be clear that the strategic importance of these firms in such matters as employment policy, investment, exports and so on is utterly decisive to the economy. We believe, therefore, that they should be made more amenable to the needs of the public interest by being required to declare in greater detail their investment intentions and their order books, to ensure that their investment plans are harmonised in total, and qualitatively, with the national needs. [An HON. MEMBER: "Nationalisation."] This is not nationalisation. I suggest to the hon. Gentleman that the country paid a very heavy price in the past for the fact that there has been no harmonisation between the growth of steel-using capacity and steel-producing capacity until recently. It would provide that the standards of the best should become generalised in respect of such things as employment policy, schemes for apprenticeship and recruitment, and the training of younger workers, as well as expenditure on "perks", business expenses and campaigns with political objectives. I think that this is not only desirable in itself, but that it is vital if we are to work out for the private sector the degree of harmony and partnership which we must have if the country is to survive as an economic force. I hope that the more reasonable among hon. Members opposite will see the force of the arguments I have put forward. Of others, I have little hope. We had last Thursday's debate, and we have had hints, so far, before the General Election, subdued hints, of an increasing amount of pillage of State-owned assets. We have had the speech of the Parliamentary Secretary to the Ministry of Works, speaking, presumably, on behalf of the Government, though I do not know. We were told from that Box only this afternoon that that speech must be taken seriously. All these things suggest to me that hon. Members opposite are moving quietly but unashamedly to a position where the abuses of privately-owned industry will remain unchecked, and even encouraged to grow, while we shall be left, for the purposes of Tory propaganda, with a rump of State-owned assets, stripped of any hope of paying their way. This will be the reality behind the honeyed phrases and political misrepresentations which we must expect from the Tory Party and its vested interest allies as the General Election draws nearer. It is to guard against these dangers, to warn the British people of the inevitable consequences of Tory policy, that we have brought forward this Motion today."We believe that the beneficiaries will gain benefit from the increased scope of the powers of the Commissioners."—[OFFICIAL REPORT, 17th December, 1957; Vol. 580, c. 344.]
4.30 p.m.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"endorses the policy of Her Majesty's Government of encouraging free enterprise industry which has strengthened the national economy, improved the balance of payments and the strength of sterling and has made possible the achievement of full employment in conditions of price stability thereby raising the general standard of living and rejects all proposals to extend the area of State ownership of industry as inimical to the best interests of the nation"
On a point of order, Mr. Deputy-Speaker. I am sorry to interrupt the right hon. Gentleman, but he has begun his speech by moving his Amendment to the Motion. I should like to know from you, Mr. Deputy-Speaker, what effect that will have on the course of the debate. The Amendment proposes to delete all the words of the Motion after the word "House" and to substitute what looks like a totally different subject. Would it not, therefore, be better if the Amendment were not moved until later in the debate, so that the right hon. Gentleman shall not preclude himself from answering the speech which my right hon. Friend the Member for Huyton (Mr. H. Wilson) has made?
Both Questions will still be under debate.
I take it that it was in order for me to move the Amendment, Mr. Deputy-Speaker.
The right hon. Member for Huyton (Mr. H. Wilson) has adopted a technique of which he is very fond. He can find nothing to criticise or attack along the broad front of the Government's conduct of our economic affairs or in the performance of industry. The debate that he has initiated this afternoon is, therefore, a diversion, or a smokescreen. He has picked out a few selected features and has exaggerated them out of all recognition to build up a completely distorted picture of British industry and its performance. "A windfall State from the benefits of which the bulk of the people are excluded"—what a fantastic picture of our national economy today!It is a technique in which, I admit, he excels. Whether it produces either a fair-minded appreciation, or represents a constructive approach to our national problems, I leave to the House to decide. The clear implication in the words of the Motion in the name of the right hon. Gentleman and his hon. Friends is that there is a good deal wrong, and even rotten, with British industry, and that it is not at present carrying out its functions in accordance with the national interest. Therefore, before we consider further, as we ought, the various allegations that have been made by the right hon. Gentleman, we ought to do two things. First, we ought to take a look at the current performance of our industry and commerce and consider whether they seem to be failing the nation in any obvious ways. Secondly, it would not do any harm to look at the present performance of our economy and its performance under the Labour Government so that we can judge the qualifications that the right hon. Gentleman has for criticising in this field. We must not forget that, although I shall not enlarge on it now. Clearly, the relevant importance of the charges made by the right hon. Gentleman will be related to this standard of performance which has, we shall all agree, such crucial effects on our national economy. The Opposition Motion asks the Government toAs we have indicated in our Amendment to the Motion, we believe that private enterprise, like private industry, is most likely to serve the national interest best if it is encouraged to work in conditions of free enterprise, and we have, therefore, pursued a policy of getting rid of the controls and restraints to which right hon. and hon. Gentlemen opposite have shown themselves so attached. We welcome the opportunity to look at the current position and prospects of industry to which these policies have led. First, there is no doubt that British industry is at present engaged in a definite expansion of production. The Index of Industrial Production, which was 107, seasonally corrected, in February, rose to 109 in March and to 110 in April, according to the revised figures. This April figure is the highest yet reached. Preliminary indications are that the May index will be 110 or 111. Production in the steel industry, which suffered a setback last year, is already more than half way back to its previous peak level. The production of cars is running at a very high figure, and the output of the chemical industry is well above the highest previous level. Even in the textile industries, which have been among the more depressed, there are signs of a revival. The figures for housing starts and orders for other kinds of new building work indicate an upward trend in that industry which seems likely to continue. The recent questionnaire survey conducted by the Federation of British Industries shows clearly that industrialists themselves have no doubt that conditions have improved. The weight of opinion was very definitely that output was rising and that orders were coming in faster. While industrial investment is still running below the recent record level, other private and public investment are running at higher levels, so that the rate of total investment is probably higher than ever. All the indications, therefore, are consistent with a picture of industrial expansion which is strongly under way and which we have every reason to expect to continue. The level of national productivity has also been rising steadily, and the whole position, judged from the standard of the national interest, which the Opposition have in mind, looks to me satisfactory because it is soundly based."take steps to … ensure that private industry is carried on in accordance with the national interest."
What about Scottish aviation?
Let me now turn to the subject of employment. During the first few months of this year the measures to stimulate the economy which the Government took last year have again had their effect on unemployment. Even in January, despite the big increase in unemployment in the outdoor industries, there were signs then of an upward trend in employment and a downward trend in unemployment, particularly in manufacturing. By March we should see a positive improvement. I was doubtful, even so, whether we had done enough then to ensure the continuation of the improvement in subsequent months.
I therefore took steps in the Budget to increase further the demand for goods and services, and, consequently, for labour. In May, unemployment had fallen to 140,000 lower than in January, a good deal more than the normal seasonal fall. I am glad to say that this improvement was fully maintained in June.rose—
I cannot give way now. I have a good deal to say.
The figures which are being issued today show that the numbers unemployed on 15th June were 413,000–67,000 less than in May.On a point of order, Mr. Deputy-Speaker. The right hon. Gentleman is citing figures. Will he cite the most salient figure of all—
That is not a point of order.
Not only does this represent the biggest fall between May and June since the war, but for the first time since October, 1957, the number unemployed is smaller than in the same month in the preceding year.
Will the right hon. Gentleman repeat those figures giving the comparison? I did not hear them.
On 15th June, there were 413,000 unemployed, 67,000 less than in May. These figures are provisional and we do not yet know what changes have occurred in different industries, but there are some particularly interesting developments which emerge from the figures we have.
Will the Chancellor tell us now by what figure the present level of employment in industry exceeds or falls short of the figure of employment in industry a year ago?
I cannot at this moment give the right hon. Gentleman the exact figures for employment because, as he knows those figures take longer to prepare. The latest figures for employment which we have refer back to April, I think.
Will the right hon. Gentleman give us the latest figures he has?
I cannot, without notice, but I will see that those figures are given before the end of the debate
Will the Chancellor agree that there are 200,000 fewer employed than there were last year?
The improvement which has taken place in the economy over the past year is a very significant one indeed and one which is very much in the interests of those employed and those at present unemployed.
The percentage of unemployment in Great Britain is now 1·9 per cent. The three Southern Regions, the two Midland Regions, and the East and West Ridings all have percentages of below 1·7, the percentage for London and the South-East being 1 per cent. The rate for the North-Western Region has gone down to 2·5 per cent., and the only regions with higher percentages are the Northern Region with 3 per cent., Wales with 3·4 per cent., and Scotland with 4 per cent. Even in the difficult areas there has been a great improvement. In Scotland, unemployment has been reduced by one-third since the peak, and in Wales and the Northern Region it has been reduced by one quarter. The improvement in Wales has been particularly marked. There are fewer unemployed there now than in any month last year. It is good news, also, that the numbers temporarily stopped in the Northwestern Region have fallen by as much as 4,600, a sure indication of an improvement in the cotton industry. In Northern Ireland, unemployment has fallen by 1,600 to 36,200, which is 7·7 per cent. I have encouraging news also, although I cannot be specific, of a rising demand for labour. In total, the number of unfilled vacancies rose by 37,000 between 6th May and 10th June, to a figure of 247,000. Whereas, in January last year, there was only one vacancy for every four unemployed, the proportion now is three to every five unemployed. In view of the doubts and the melancholy forecasts about the level of unemployment to be expected this year, I am sure that hon. and right hon. Members opposite will be as pleased to hear these figures as we are.To explain this, will the Chancellor say, first, who made any melancholy forecasts about unemployment this year, and will he quote them? Secondly, will he tell us how much of the improvement in the unemployment figures is due to the fact that people have gone out of industry and have not signed on because they have given up hope of getting work?
I told the right hon. Gentleman that I could not give him the total employment figures. I am dealing now with the fall in unemployment. In our previous debates on unemployment, there were very many gloomy forecasts from the benches opposite about the level of unemployment which would persist and about how ineffective Government measures were likely to be. Once again, they have proved to be entirely wrong.
Moreover—this is something unusual in the post-war period—we are enjoying price stability as well as full employment. The Retail Price Index for May stood at 109, the same figure as at a year ago, but one point less than in April last year. I have good hopes that this stability in retail prices will continue throughout the rest of the year. I shall not claim that we have finally solved the problem of combining full employment with price stability. It would be too soon to do that yet. It is, indeed, an achievement which could be jeopardised by the unrestrained pursuit of higher wages and salaries or the maximum of short-term profits. Nevertheless, it is a satisfactory achievement to have got where we are, and it would reflect badly on us as a nation if we were to throw it all away by ill-considered actions. Besides price stability, there is, as hon. Members know, another constant preoccupation of Chancellors of the Exchequer, namely, our balance of payments. I am glad to be able to report this that this, also, is in a satisfactory state. The House will be aware, since I have explained it in my Budget speech and on other occasions, that we do not expect this year to have the same exceptionally big surplus on our current balance of payments as we had in 1958. We did, however, expect that the position would be reasonably good, and it is, so far, developing in a way distinctly better than we had thought. In April, exports showed a sharp rise, and the May figure was even higher. For the two months together, the increase above the corresponding month of 1958 was 9 per cent. The trade deficit in May was the lowest we have had for a century. We shall publish tomorrow the first of a series of quarterly figures for the balance of payments, and this shows, for the first quarter of the year, a current surplus of £78 million. This, in itself, is a fairly satisfactory figure, and, of course, it does not reflect the high exports for April and May, to which I have just referred. Other developments in international monetary affairs also, such as the successful move towards convertibility and the expansion of the resources of the International Monetary Fund, have been gratifying, and I think we can say that the international position of sterling is stronger now than it has been at any time since the end of the war. The final test of a country's economic policy is its effect on its people's standard of living. Between 1954 and 1958, as I have previously informed the House, the per capita real income was rising at about the rate envisaged by my right hon. Friend the Lord Privy Seal when he spoke of doubling the standard of living in twenty-five years. All the indications are that 1959 will show a further satisfactory advance towards that objective. What is happening to personal consumption now may be judged from the figures of retail sales in April and May, which were up on the previous year by over 5 per cent. in terms of value and by over 6 per cent. in terms of volume, and from the high sales of motor cars. When one reviews all this evidence, there can be no doubt about the present prosperity and industrial progress of the nation. Furthermore—I emphasise this—this prosperity is more strongly based than has been the case at previous times of expansion because it is being achieved consistently, with a stable value of money and a strong international position for the £. It is the Government's clear duty to adhere to correct economic policies to keep the general economy in balance and to create an atmosphere in which the nation can give the best account of itself. But the actual results are achieved by the combined efforts of the nation as a whole, and in that national effort the performance of industry is the most important single element. The right hon. Gentleman has attacked today the conduct of those who share a considerable part of the responsibility for running British industry. Here, I can tell the House without, I think, fear of contradiction that, in my opinion, British industry today is more robust and alert, more efficient, better equipped, better managed and, I believe, in general has better industrial relations than at any time in our generation. This is not intended to be a complacent statement, because the price of progress is not only eternal vigilance, but an unceasing striving for still greater efficiency. We can see clearly before us the road to undreamed levels of achievement stretching out ahead. This goes to show that the present achievements of industry and commerce are very far from indicating the kind of defects and weaknesses painted in flamboyant colours by the right hon. Gentleman in the picture which he has presented. Against that background, let us consider some of the allegations which the right hon. Gentleman has made. He mentioned foreign take-overs and investment in British industry.The right hon. Gentleman is always interested in ascertaining the truth. I should like to ask him whether he has read the leading article in today's Financial Times, which was written by his ex-Treasury colleague, the hon. Member for Wolverhampton, South-West (Mr. Powell), who does not make any claims about the prosperity of British industry. The hon. Gentleman clearly points out that British industry has moved forward with German and American industry. We are reaping some benefits, but we have not caught up with either Germany or America.
I have a great respect for the views of my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), but the views which I am now expressing are my own views.
The right hon. Gentleman mentioned foreign take-overs and investment in British industry. I know that hon. Gentlemen opposite regard such developments with a good deal of suspicion and dislike. I think that they are wrong. In general, we welcome foreign investment in United Kingdom industries. An examination of such investment to date tends to show that it has been beneficial to the United Kingdom. Sometimes it brings us "know-how", sometimes an element of needed competition. The capital transaction often brings foreign currency into the reserves which then enables us to increase our United Kingdom investment abroad. Any outflow in the form of remittances of profits is balanced against the additional capital invested for development and expansion of the undertakings concerned. On the wider issue, if we want opportunities to be available to us to invest overseas, then, surely, we in our turn must not close our doors to foreign investors. In the case of direct investment exchange control, consent is required and is generally given, but each case is considered on its merits in the light of the national advantage and security, particularly where control of the concern or project is involved. I am sure, however, that in general we do well to give a hearty welcome to foreign capital coming to this country, both for new projects and for participation in existing ones. I now come to domestic take-over bids. At first sight, I think that it might be thought that the right hon. Gentleman is well qualified to speak on this subject, as the Government of which he was a member did quite a bit of taking-over, and it seems that the Opposition are planning to thrust more down the throats of the people if they ever again get the chance. There is, however, one vital disqualification. The take-overs of the right hon. Gentleman and his colleagues were compulsory ones, with no choice to the owners. What the right hon. Gentleman today has been inveighing against are take-overs with the collective approval of the owners of the businesses concerned. That is a significant distinction. I am not concerned today to argue whether take-over bids are invariably good or bad things. I believe that there is a good deal of evidence that to date, at any rate, the balance of their effect has been beneficial rather than harmful from the point of view of the efficiency of industry, of the interests of the employees concerned and of the economy at large. But to answer that question in a particular case requires that the case should be examined on its merits. The question is whether, in existing circumstances, there are grounds for important legislative action by Parliament. I do not believe that there are. The essence of a take-over bid is the belief that the assets of the concern could be used more profitably and that the shares are, therefore, worth more than their market value. If that view is held, the offer of a higher price is not unreasonable and may well not be disadvantageous to the future prosperity of the concern. An examination of some of the best known take-overs of recent years indicates that the businesses concerned have prospered and developed still more favourably than they were prospering and developing before they were taken over. Take-over may result in more vigorous management, as I think my right hon. Friend said, but I cannot recall a case where a flourishing firm has been bled to death as a result of a take-over. In cases where take-overs produce bad results I think that the fault would most likely be due to inertia on the part of shareholders in looking after their interests. That by itself would hardly justify major alteration of the law. I agree wholeheartedly that the welfare of those employed is a very important factor to be considered in any change of ownership of a business, but in the case of public limited companies the ownership is changing all the time. Perhaps to the employees the management is even more important than the ownership, but we have to accept that the control of a business is vested in its shareholders. I believe that when confronted with an offer of a take-over bid shareholders, when considering the pros and cons of accepting it, should insist on enough information being made available to them to justify whether not only the take-over will be fair to themselves, but whether it would be fair to the company's employees. That is one of the factors which I think they should consider.Further to that point, does not the right hon. Gentleman agree that a workman employed in one of these companies cannot help but think that he has not been properly rewarded up to date if in one day the value of the shares of the company goes up by 50 per cent., or even doubles?
I do not think that I would go the whole way with the hon. Gentleman, but I agree that what happens to the shares of the company in which a man works is, or should be, and one wants it to be, of interest to him.
The right hon. Gentleman mentioned the capital profits resulting from a takeover. In and immediately after a period of inflation, capital profits are generally fairly easy to come by, but in conditions of reasonable price stability they have a way of being set off by capital losses. The question is whether these capital gains should be subject to tax. That perhaps is a subject more fitted for discussion in a Budget or finance debate, but, whatever hon. Members views on the matter of principle may be, there are two important pragmatic considerations. First, would such a tax be to the advantage of the economy? The majority of the Royal Commission on the Taxation of Profits and Income thought not. They thought that it might amount to a serious disincentive to saving. Secondly, would it bring in enough revenue to make it worth the serious administrative complications? Hon. Gentlemen opposite are seldom very clear whether, in advocating a capital gains tax, they advocate tax relief at an equivalent rate on capital losses. Would they also apply it to pools prizes, for instance? [HON. MEMBERS: "No."] I conclude that, on pragmatic grounds, in present circumstances a capital gains tax would not be justifiable. I am clear, also, that if the arguments are against a general capital gains tax, there is no sound argument at all for applying one to capital profits arising from tax-free operations specifically. The right hon. Gentleman, in spite of a great deal of fire and synthetic indignation—not entirely free, I thought, from an element of rather unattractive underlying spleen—has failed to make out a case for Government intervention in the interests of employees, shareholders or the nation at large. The right hon. Gentleman worked himself up to quite a frenzy of excitement and indignation over business expenses. The law is perfectly clear. It is not concerned with whether the expense is meritorious or not, but with whether it is incurred for the purpose of the business. To be allowed as a charge for tax purposes it must, in the case of a business, be—For an individual, under Schedule E, it must be—"wholly and exclusively expended for the purpose of the trade…."
Where the Inland Revenue considers that the charge cannot be reconciled with these requirements, it challenges it, and the issue is, if necessary, settled on appeal by the special commissioners or the courts. The Royal Commission on the Taxation of Profits and Income discussed the question of limiting expenditure on advertising and entertainment under Schedule D, but decided against it, both on the grounds of principle and of practicability. I want to state with the greatest emphasis that the Inland Revenue administers the law with strictness and impartiality. Some illegitimate benefits and expenses slip through, as they do no doubt in any system, but there is as much criticism from business of severity in administration as there is from hon. Gentlemen opposite of laxity. If right hon. Gentlemen opposite believe that the law is inadequate and needs to be changed, I would remind them that they were in office for six years and did not change it."wholly exclusively and necessarily incurred in the performance of the duties of the employment."
I thank my right hon. Friend for giving way. He has given an accurate exposé of the present state of the law. May I ask him whether the Government are entirely satisfied with the way the Schedule E expenses are working in relation to Schedule D, or would they look into the possibility of making any emendations of the Finance Bill next year?
As my hon. Friend knows, we always have this matter under investigation. We have made one or two changes and we shall certainly continue to keep the difficult question of expenses under Schedule E in mind.
Expenditure of a political nature is subject to the same tests and, in general, would fail to pass them and would be disallowed. It was suggested that I should take additional steps to secure that full information is given to the Inland Revenue about items of expenditure on political propaganda. We must keep this matter in perspective. A large part of the time of inspectors of taxes is taken up with whether companies, and their accountants, in considering whether items charged to the companies' accounts are proper tax deductions. I can assure the House that inspectors of taxes, with the guidance of Somerset House and their long experience, are fully alive to the need for challenging any sizeable items that might prima facie be disallowable, and in seeking full supporting information in cases where they think it desirable. I hardly think that in this area we need further powers to secure information about this kind of expenditure, and I am certain that the Inland Revenue will always do its best to ensure that no debatable items pass unchallenged. Therefore, I think it is doubtful if the present law can be altered with advantage. It is clear and it is fair. The right hon. Gentleman raised the question of large payments that are made to directors as compensation when they cease to hold office. This is a very complicated branch of tax law indeed. Nobody can pronounce on an individual case without knowing all the relevant facts, and it is not, I think, a very good thing when loose allegations are made without proper corroboration.The right hon. Gentleman has just quoted the Royal Commission against us on some other question. What is his answer to the fact that the Royal Commission unanimously recommended that such payments should be taxable?
I will refer to that in a moment.
There is, however, certainly a class of case in which, when an office or employment has terminated and compensation is paid, the payment is of a capital nature and is not income for tax purposes. The classes of compensation payments do not always involve large mergers. All this question was considered by the Royal Commission, as the right hon. Gentleman has said. The Royal Commission considered that it was linked in a general way with the taxation position of lump sum payments made under superannuation arrangements at the termination of employment and made a rather complicated recommendation for taxing payments of compensation for loss of office which were linked with some general proposals about pension payments. The House will realise from what I have said that this is not a simple matter, and certainly not one that should be decided by an attack on a small number of cases involving large amounts. Legislation to deal with the recommendations of the Royal Commission on this and related matters would be very complicated. Whatever views might be held about some payments of which we have read recently, different views might be taken if it were a question of taxing, for instance, the lump sums paid to retiring officers of the Services under the special scheme introduced recently. Much consideration has been given to these problems since the Royal Commission reported, but they are particularly difficult. Whether there would be any justification for isolating any part of the problem for separate alterations of the law is a matter that we shall continue to keep under review. The right hon. Gentleman referred to aid to industry. I would say there that the approach of the Government in assisting industry is essentially a pragmatic one. Our attitude is determined by the needs and the special features of each case as it arises. The means are, as it were, tailored to the case, with attention concentrated not on dogmatic theory, but on the specific object to be achieved in the national interest. In the case of steel, if the party opposite had not made the irresponsible threats they did about re-nationalisation, it would be unnecessary for the Government to be providing capital for the development of the industry. I cannot help suspecting that one reason why the right hon. Gentleman has been threshing about so wildly today is because hon. Gentlemen opposite have got into such formidable difficulties over their own pet panacea for national problems—nationalisation. And what a mess they have got into! Not one statement by any of their leading lights has failed to conflict with another. All is fog and confusion, and the only prevailing sound the grinding of jaws, as one distinguished exponent of Socialist philosophy after another devours his words—and, of course, a general gnashing of teeth. Let me give one or two examples. The Labour Party, if returned to office, intends to do something to the 500—or is it the 600?—largest firms; but still, and in spite of what the right hon. Gentleman has said today, no one knows what. The right hon. Gentleman has given us his view today, but how do we know that some of his distinguished colleagues will not say precisely the opposite tomorrow? The Labour Party's policy on back door nationalisation was presented in the document "Industry and Society", to its party conference in 1957, which debated it as the official party policy. The right hon. Gentleman the Member for Huyton, introducing the document, said:It must be feeling the weight of that "responsibility" today."The National Executive Committee take responsibility if the draft is obscure and lacking in clarity."
The right hon. Gentleman knows perfectly well, if he has read that statement, that we said very clearly that we were not using the purchase of shares by the State superannuation fund for backdoor nationalisation. That has been said in every case and no one has ever said anything in contradiction. The right hon. Gentleman is completely and deliberately falsifying what we have said.
The right hon. Gentleman and his colleagues may have said that on that occasion, but the trouble is that his colleagues have said exactly the opposite on other occasions.
When?
One of the National Executive Committee, the hon. Member for Reading (Mr. Mikardo), tried to make the policy more clear. He said:
"To get the thing absolutely clear, I set down here what I believe to be the programme for which industry and society provides a mandate."
When did he say it?
He said it on 13th September, 1957.
Exactly, before the party conference had agreed on the policy.
This is what the hon. Member for Reading, completely misconceiving, apparently, his own party policy, has said. He said.:
and he was a member of the Executive Committee—"To get the thing absolutely clear I set down here"—
"what I believe to be the programme for which industry and society provides a mandate. It is, that we shall do four things: Transfer to public ownership by compulsory sale, and as quickly as possible, all the equity shares of about 600 giant companies. In addition, use the National Superannuation Funds and the yield of Death Duties to transfer other shareholdings to the State. In addition, renationalise steel and road transport. In addition, nationalise on the old model any industry in which that form is appropriate and any industry whose failings require emergency action."
That is really unworthy of the right hon. Gentleman. Not only is he taking his quotations from the advertisement of the Institute of Directors, but this particular quotation of the hon. Member for Reading—[HON. MEMBERS: "Where is he?"]—as he has admitted, was made before the national conference of the party had decided its final policy on these issues. I know that hon. Members opposite do not understand the workings of a democratic party, but the particular proposal of my hon. Friend was put before the conference and rejected by the conference. Therefore, this quotation, before the party conference, does not represent the policy of the party, and the right hon. Gentleman should know that.
Withdraw.
I am quoting it as an example of statements made by leading members of the party opposite. They never seem to agree. I am going to quote another two.
Is it not customary, Mr. Deputy-Speaker, for notice to be given to hon. Members when they are to be quoted, and has the Chancellor given notice to my hon. Friend?
That is a matter for the hon. Members concerned.
This view was repudiated by another member of the National Executive Committee, the hon. Gentleman the Member for Coventry, East (Mr. Grossman) who said:
The hon. Gentleman the Member for Coventry, East did not say what he thought the policy meant. The public are thus left completely in the dark as to what exactly the Socialists propose on this vital issue which affects, directly, half British industry and, indirectly, our whole economic life. If only we could have three leaders saying roughly the same thing, it would be helpful. The intelligent voter, if he wants to discover what the Socialists probably intend to do, has to study their utterances with the sort of erudition which is normally reserved for studying archaeological hieroglyphics. Would a Labour Government use their powers as shareholder to control these companies? Here again the leaders' explanations are in very sharp conflict. About nationalisation plans generally, the right hon. Member for Huyton presenting "Industry and Society" to the 1957 Labour Party Conference, said—and I think that on this occasion this was endorsed:"I wonder if Mr. Mikardo has ever considered what would happen if by any mischance the Party Conference accepted his advice, and his wild threats of wholesale nationalisation became official Labour policy."
Yet, now Mr. Morgan Phillips denies that the Labour Party plans for the 600 firms amount to nationalisation. Mr. Morgan Phillips said:"In our plans for nationalisation … we are simply going further along the road on which we started in 1945–50. We have proposed to go further and to open up two new and additional paths towards common ownership and control. First, the proposal to acquire equity shares, and, secondly, the proposal to exercise a new kind of control over the large companies."
But if the whole of the ownership and the equity is acquired, and if the kind of control that the right hon. Gentleman has spoken about is imposed, we are not very far away from nationalisation."In fact we do not intend—and we have never stated in any official document that it was our intention—to nationalise the large firms."
The right hon. Gentleman cannot be permitted to misrepresent other hon. Members not here to challenge him. The right hon. Gentleman has just attempted to prove a contradiction between a statement of mine on a particular date—and I have it here—and a statement by Mr. Morgan Phillips. Will he say when I said on that day, or anyone else said in any party programme, that we were going to nationalise the 600 companies? We said that we would allow the State superannuation trustees to buy equity shares but not to use them for control purposes. Will the right hon Gentleman give any quotation from what I said on that date to justify his statement; otherwise, will he withdraw it?
My point is that we cannot rely only on what the right hon. Gentleman says. We have also to listen to what other representatives of his party say. There is a body called the "Victory for Socialism" group. Does that indicate what the party is feeling? The right hon. Gentleman must tell us if we ought to pay any attention to a body like that. It has said:
All this has lead the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) to say:"Central planning and control of privately-owned industry can never be more than a temporary partial substitute for social ownership. Controls … are practicable and manageable only when they are applied to a private sector which shrinks rapidly as the vital industries and the 600 large companies are taken out of it."
He went on to say that"Some members of the Labour Party are going cold on nationalisation."
Right hon. Gentlemen opposite will, no doubt, want to strain every nerve to avoid that appalling possibility. The right hon. Member for Huyton, in his broadcast on Saturday, is reported to have confirmed his party's intention to take over any firm that was"the only answer to present-day problems is the expansion of public ownership. If the Labour Party turn their back on public ownership, I would turn my back on the Labour Party".
and he has reaffirmed that today. But we are still not quite clear who would be the judge of that. We should like to hear more about that and what is meant precisely by "failing the nation", because what the right hon. Gentleman has told us seems to cover everything. If the industry is large, it has failed the nation because it is a monopoly. If the industry is made up of small firms, it has failed the nation because it has refused to rationalise."found to be failing the nation,"
I really do not want to spoil the Chancellor's fun, but will he tell us just for the record, since he is Chancellor, when I or anyone else used either of those arguments? I did not use either of them today. I did not say either of the things attributed to me by the Chancellor. Will he say when I said them?
What I am trying to do is to give a deduction from the very confused statements made by right hon. Gentlemen opposite. They seem to me to indicate that if the industry is made up of small firms it has failed the nation because it has refused to rationalise, and that if it makes a profit, like the steel industry, it has failed the nation because it is profit conscious. Again, if it does not make a profit, it has failed the nation by being inefficient.
If prices go up, like coal prices have sometimes gone up, the industry has failed the nation because the prices are too high. Even lower prices and plenty of competition do not protect an industry. The road haulage industry is due to be nationalised because the financial weakness of the railways is blamed upon it. No industry in England can feel safe from the judgment of "failing the nation." This is what the right hon. Gentleman is reported to have gone on to say in the broadcast.Will the right hon. Gentleman explain to the House, first, whether, in his opinion, if an industry had been shown to fail the nation it ought to be nationalised, and, secondly, what his own definition would be of what amounted to failing the nation?
My experience of most industries which fail the nation is that they go into bankruptcy and solve the matter for themselves.
May I ask the Chancellor whether that is the criterion that he is applying to the cotton industry, where he is giving £30 million to people who could well afford to do without it?
That aid is being given because the industry has been going downhill. We are endeavouring, through that help, to put it on its feet so that it can rationalise itself and start off afresh. I would like to ask the hon. Gentleman whether he would have been in favour of us taking no action at all and leaving the industry to its own devices.
I will answer that. I say straight away that I was quite prepared to vote against the Cotton Bill. [HON. MEMBERS: "Answer!"] The right hon. Gentleman has asked me a question, and I am going to answer it. If he wants me to make my Second Reading speech all over again, I will do so. But that would be too appalling, would it not? I would have given support to the Bill if the criteria which I laid down in my Second Reading speech were in the Bill. They are not. I am against giving £30 million of public money to people who do not need it.
But the fact remains that the hon. Gentleman and his colleagues did not vote against the Bill.
This is what the right hon. Gentleman the Member for Huyton is reported to have gone on to say in his broadcast which, unfortunately, I missed:" And so on." One wonders what those last three pregnant words could not cover. No sign of carrots there, but plenty of sticks. Can any sane person imagine British industry thriving and throbbing with dynamic enterprise under such continuous threats? Right hon. Gentlemen opposite sometimes have the audacity to point out the disadvantages of leaving people in uncertainty. If those responsible believed that there was a real chance of the Socialist Party getting back to power at the next General Election, a paralysis of uncertainty and despondency would settle on industry. The explanation, of course, is not that right hon. Gentlemen opposite want to create this fog of uncertainty and gloom, but that they cannot avoid it. The truth is that on these economic questions they are as hopelessly divided, and as much as sixes and sevens as they are on other fundamentally important issues. I think that right hon. Gentlemen opposite will have to fix up a further series of party meetings and see if they can agree a statement of policy on these matters which will not call forth that poignant cri du coeur from the right hon. Member for Ebbw Vale—" I will not say it." The real reason, of course, for this debate is that the Opposition have lost faith both in their methods of controlling the economy and in their panacea of nationalisation. They have an irresistible aptitude for any measures designed to stop people doing things, which alone would be the undoing of the country if they were ever to get back to power. Their aim is so to hamstring and restrict the activities of private enterprise that the field will be left open for whatever further wild experiments in national ownership they may wish to make. As the right hon. Member for Ebbw Vale has said:"This phrase covered inefficiency, failing to play an adequate part in the national export effort, abuse of monopoly power, unwillingness to expand sufficiently in the national interest, lack of drive in investment policy, bad industrial relations and failure to co-operate in Government planning, and so on".
May the country long be preserved from such a national plan. Fortunately for the country, its affairs are in the hands of a Government who believe that private enterprise is serving the nation well and should be encouraged to give of its best—not nagged, obstructed and denigrated. The nation sees under private enterprise its standard of living rising more steadily than ever before. When the time comes for the electorate to express its views it will, I am confident, reject for the third time the half-baked economic ideas of the Socialist Party."If there is too much private enterprise left it only sabotages the national plan."
5.30 p.m.
The whole House will have enjoyed the speech of the Chancellor of the Exchequer, if for no other reason than that today perhaps we have seen the right hon. Gentleman in his true political colours. His personal charm and integrity are almost as great a legend as the Prime Minister's infallibility. It was refreshing today to find evidence for my own view about the right hon. Gentleman, which is that he is one of the ablest political figures that we have seen for a very long time and perhaps history will record him as the greatest political confidence man since the late Earl Baldwin.
First, I want to deal with what, for briefness, I will call the Treasury part of the brief, which I found rather more interesting than the other part, which I thought was the Conservative Central Office part. I should like, then, to deal with the Chancellor's reference to the state of the economy, to the state of our economic life. As he spoke I was reminded of the old conundrum: "Why are statistics like a bikini bathing costume?" The answer that I was told was that in both cases what they reveal is interesting but what they conceal is vital. That is an apt comment on the Chancellor's speech, because he rather assumed that the Conservative economic policy and the life of the nation began when he became Chancellor. He completely forgets the activities of his right hon. Friend the Member for Monmouth (Mr. Peter Thorneycroft) and that there was a day when there were no Treasury Ministers at all because they had all resigned, and he forgets that the nation has been cursed with the Conservative Administration for eight years and not just since he took office. I know that the right hon. Gentleman is following a very distinguished example in this line of approach. We all know that the Prime Minister believes that the Conservative Government began only after Suez when he became Prime Minister. This is the image which, naturally, the Conservative Party wants to create in the country, because only in that way will it succeed in doing, as the right hon. Gentleman said, "the hat trick". As my right hon. Friend the Member for Huyton (Mr. H. Wilson) said, we are only too glad to debate the economic state of the nation with the Chancellor or anyone else, but today we are concerned with a limited section of the economy, because, obviously, in a general debate about balance of payments and the rest one cannot deal adequately with every aspect of the subject. The Chancellor said that we have a higher rate of production than ever before. It is obvious that that must be the case. Even if the rate went up by only one-millionth of 1 per cent. per annum, in a million years under a Tory Administration we should have a higher production than when it started. Our complaint about the Government stems from the tables of industrial production in the Monthly Digest of Statistics. The Treasury, in the current issue of Economic Trends, goes right back to 1946 in this matter, and one sees in the one table the record of the Labour Government in achieving an average of 5–6 per cent. increase in industrial production per year until 1951. By the same Treasury standard, in 1959 we are only one or two points above the 1955 level, and we are likely in 1959—I agree with the Chancellor on this—to achieve a substantial increase in industrial production for the first time since 1955. What is the common denominator between 1955 and 1959? This is a purely electoral device.Will not the hon. Gentleman agree that the rise at the end of the Labour Government's term of office was utterly inadequate? We had suffered a great shortage of consumer goods throughout the war when the industries of practically the whole world had been devastated, and this country was called upon to deal with an enormous backlog. Perhaps the hon. Gentleman will answer this point. Would not he agree that there has been a world recession, and, naturally, with the devastated countries coming into full production, our production line is much slower than it was during a period when there was no competition?
The short answer to the hon. Gentleman is that we should all, obviously, have liked a greater increase than the 6 per cent. per year that we achieved. However, as a supporter of a Government who have achieved an average of about a half of 1 per cent. over the last five years, the hon. Gentleman ought not to be complaining about a 6 per cent. increase in those years after the war.
The Chancellor also said that the balance of payments situation was satisfactory. What he did not tell the House, and what he ought to have told the House, was that this is almost wholly due to a change in the terms of trade in our favour. If the right hon. Gentleman will look back to beyond the time when he became Chancellor—he was then a distinguished Member of the Government, and he must accept a little responsibility—he will see that the terms of trade have changed by about 20 per cent., and practically the whole of our surplus can be explained by that fact. Thirdly—I put this shortly; I did not expect that today we should have a regurgitation of the Budget speech—the Chancellor takes credit for the stability of the price level. As the custodian of the Treasury, what he ought to do is to explain why it is that with this enormous fall in the prices of raw materials the cost of living has been steady instead of going down. That is the question to which the Chancellor should address himself. I now turn to the Motion and the subject of today's debate. I did not think that the Government, even in the last month before a General Election, would turn to the crude knock-about of talking about free enterprise industry. Is there a single hon. Member who believes that private industry is either free or enterprising? Although on platforms and in highly coloured electoral literature such phrases have a part to play, we all know—the Chancellor has said it many times—that the job of the Chancellor is to plan the economic life of the nation. How can that be consistent with this very tendentious phrase "free enterprise"? The Chancellor made some slighting references to my right hon. Friends and the consequences of our views on the steel industry and its provision of capital. We have never said we would take over the cotton industry, which is asking for money. We have never made any suggestion that we should take over the Cunard Steamship Company, which is asking for money. Surely when we make a definite case the Chancellor should not try to slide out of it by means of a footnote from his Conservative Office brief. There is no real difference between the parties in the basic belief that in these post-Keynesian days the Treasury has a part to play in the planning of our general economic life. And it is not true—as hon. Gentlemen opposite so often try to paint the picture—that my hon. Friends and I want controls for control's sake. I will take the risk of being misquoted afterwards and say that it seems to me—I put it in terms of analogy—that what the Labour Party wants is the same kind of direction and control for the economic system as the rules and laws applying to the flow of traffic on our roads. Surely no one would advocate that free enterprise ought to operate on our roads? If that were the case—Socialist Party parking meters for industry.
That is not a matter for which I have any responsibility. If the hon. Gentleman will wait a moment I will develop my argument a shade further. If there was no rule for driving on the left and if there were no traffic lights the big man would drive how he wanted to and the cyclists and the pedestrians would get no show at all. That is how we see a completely unregulated economy, such as I always think about when I hear the phrase "free enterprise industry". That is the kind of economy that the Conservatives aim to produce if they are reelected at the next election.
rose—
I will give way to the hon. Gentleman in a moment. It is only where it will assist the flow of traffic and give equality of use of the roads as between the various users that we feel there ought to be controls of one sort of another.
I see no distinction between ownership of industrial property and ownership of land, or ownership of some other property or chattel. It has long been agreed between us that in town planning, and in other directions, no individiual must allow his property and his property rights to stand between him and the benefit of the nation. It may be asked, "How do we know what is the public good? Who decides it?" Under legislation that has been passed by the party opposite there is a public inquiry. If one farmer's field is holding up a motorway, or is in the middle of a town where it is desired to have a new arrangement, or a new school, or some other public service, his land is compulsorily acquired at a proper price. The party opposite has had to be bludgeoned by its back benchers into paying a fair market price for land compulsorily acquired. We say that if, by the same test, industry can be shown to be failing the nation, or if its take-over is justified in the national interest, it should be put to the same test as a piece of land or a building. What is there about industrial ownership that distinguishes it from the principles that are now agreed in town planning? I suspect the answer is that whereas the landed gentry used to be the idols of the Conservative Party in the pre-Corn Law days when agricultural land was the be-all and end-all and these industrial upstarts were nothing, today as my right hon. Friend the Member for Huyton described it, it is these managerial and Conservative oligarchs who dominate the party opposite and that is why they have elevated their own property in the way that they have. None of us complain about the Stock Exchange, although when my right hon. Friend the Member for Huyton referred to Lord Keynes's description of it as a casino, I was reminded of the end of the quotation in which Lord Keynes said it was rather like a newspaper beauty competition where everyone entering the competition to pick the most beautiful from several pictures does not put his own choice. He strives to put the choice of the average man. The outcome is that the decision has no resemblance to reality. A lot of share transactions have no reality to the companies whose shares are being traded. It is an attempt to anticipate what the average investor will be putting his money into next week. I suspect that the Stock Exchange is rather less like a casino because in a casino everyone has an equal, or at least a pro rata, chance. It is rather like racing where, apart from the privileged insiders, the only people who can be certain of a steady profit are the bookmakers. The Stock Exchange is in the same category. It is the brokers and jobbers who rarely lose. There is far more information available about the form of racehorses than there is about the form in a great number of these companies. The Chancellor of the Exchequer made very heavy weather of the takeover bids. No doubt we shall hear more about them in the course of the debate, but how shall we know when we are failing the nation? The Chancellor said, and I have heard this in other circles, that every managing director would tremble if the Labour Party were re-elected because the directors would not know whether they were failing the nation or not. Each of these managing directors is an employer of labour. If each employee went to his managing director and said, "When I was employed you told me I had a job for life providing my work was satisfactory. How do I know that my work is satisfactory?", he would be kicked out of the firm on the ground that he was a half-wit if he did not know whether his work was satisfactory. No one earning several thousands a year as a managing director should need us to tell him what the nation requires of him. If he has to be kicked into knowing when his firm is not failing the nation, he is not fit to hold his present job. It would be just as stupid for every employee to say to his managing director, "How can I know that I am satisfactory in my work?" That is a fair comparison, but there is this important distinction between the ordinary workman and the managing director, although technically, according to Income Tax, they are on the same footing because they are paid under Schedule E. I think my hon. Friend the Member for Gloucester, (Mr. Diamond), who knows more about this, will confirm what I have said. There is no "golden hand-shake" for the ordinary workman. If his work is unsatisfactory he is dismissed after being given a week's or a fortnight's notice. If a firm is taken over it is hard on the managing director. It is true that his life's work has come to an end, but he receives a financial reward in circumstances in which he himself would kick a workman out of the door, and very often at a moment's notice. As my right hon. Friend said in opening the debate, we have today a situation in which a managerial, self-perpetuating oligarchy runs great industrial companies. Few rights are vouchsafed to shareholders. The clothing of Table A of the Companies Act which covers the reality of the directors' control is so thin that in many cases the shareholders have no rights at all. One would have thought that one of the most important questions that shareholders had to decide at a meeting would be the amount of the dividend to be paid. It is said that very often companies are taken over, or bids are made, because the company is not paying a sufficient dividend. If we look at Table A, which is the model and is incorporated as a whole by most companies in their regulations, we find that it is the normal practice for shareholders to be deprived of the right of putting forward even for discussion a motion to change the rate of dividend above the figure recommended by the directors.My hon. Friend is not only right but he is understating the fact. It is not only a question of Table A, but of company law affecting every company. No shareholder has the right of increasing the dividend any more than a member of the Opposition has the right of levying txaes.
I am much obliged to my hon. Friend. If he catches the eye of the Chair no doubt he will develop this and other points of company legislation in a way that is not open to me.
That is an argument in favour of the present situation. What is the hon. Gentleman grousing about?
I know the right hon. Gentleman takes a great interest in the liquidity of companies, and low dividends obviously would be in that interest. To suggest, as the Chancellor of the Exchequer did, that no action is necessary, because we can leave the shareholders to look after things in their own interests, is not true, and cannot be true in most of our large industrial companies, because the articles of association of the companies are such that the shareholders have no power at all.
There must have been whoops of delight from hon. Members opposite, when they read their papers today, to find that one of our great industrial takeover tycoons is giving his shareholders votes in his concern. One does not need to be a great expert in these matters to realise that the sole purpose of the manœuvre is not to enfranchise his shareholders, but to promote the value of his shares, so that in turn this promotes the value of his bid for an undertaking called Harrods. That is the situation. It should be illegal for voteless shares to be issued. This is the kind of direction in which we have asked the Government to introduce some kind of legislation. At the weekend, we read in our papers that the former Chancellor of the Exchequer, the right hon. Member for Monmouth and other Members of the House are promoting a Commonwealth unit trust. Other hon. Members are associated with other unit trusts. It may be argued that this extension of shareholding is all to the good. I have a rather neutral attitude to it—I do not condemn it, nor do I go out of my way to promote it. At the same time, it must be realised that people who invest in these unit trusts may well end up with one-millionth of a voteless share in each of our large companies. Thereafter, the shareholders are left to look after themselves. In my view, the existing company legislation is quite inadequate to safeguard the position of shareholders. Secondly, further amendment is required in the public interest. One of the criteria of the public interest is that there should be better competition. One of the ways in which competition can be fostered would be to make it obligatory on the part of our public companies to declare and to state what the turnover of the company had been for the previous year. This, I understand, is a requirement in American law. It is true that some of our companies give this information, both to their shareholders and to the public, but most of them do not. We all know that the gross profits of a concern may not be very significant unless they can be related to turnover. It might, of course, be against the interests of particular shareholders to disclose this information, because if a company has got on to something good, it would not want companies with the manufacturing potential to realise that a gross profit of 20–25 per cent. is being shown on the turnover. Competition might be tempted. Surely, the whole argument in favour of so-called free enterprise has always been competition. Because of the unsatisfactory nature of the shareholding and the lack of effective control by shareholders over their companies and company directors, we must advance to a stage in which a great number of the various actions of companies should not be left to a mere vote of shareholders, but should be at least subject to Court approval. Perhaps we should need to set up a Companies Court with the same kind of composition and powers as the Restrictive Practices Court. Certainly, if the Government will not intervene, if there is not to be statutory provision to give more protection to the shareholders, the Court should have greater powers in this matter. Even under Section 72 of the Companies Act, whereby persons aggrieved at losing their rights can appeal to the court, an appeal has to be made within twenty-one days. We all appreciate the magnitude of trying to get 15 per cent. of the shareholders in I.C.I. or some other large concern together and to swear affidavits in time to put the application to the court within twenty-one days of the company meeting of which complaint is made. In my view, the whole of our company legislation needs to be examined on these lines. My final point concerns the aspect of take-over bids, amalgamations and mergers with which we are all concerned. As my right hon. Friend the Member for Huyton said in opening the debate from this side, we are not against amalgamations, or, indeed, monopolies, if they are necessary or desirable for technical reasons of efficiency and the like. Indeed, the trend of our economy is such that inevitably we shall get larger and larger units. The choice is not so much between competition and monopoly, although I would like to see more real encouragement for competition. That is why I have suggested some of these amendments to the Companies Act and I hope that I shall have support from the benches opposite for some of these devices to achieve competition. The choice today, however, is less between competition and monopoly. As Professor Tawney said over forty years ago, the choice is much more between a private and irresponsible monopoly and one that is public and regulated. We on this side believe that it is essential, both in the interests of the nation and in the interests of the industry itself, that we should develop a proper code of conduct for private industry which would, in the terms of our Motion,"… ensure that private industry is carried on in accordance with the national interest."
5.56 p.m.
We have listened to the hon. Member for Sheffield, Park (Mr. Mulley) making a defence of Socialist policy. I do not want to spend time dealing with the issue of nationalisation. I would merely summarise my feelings about it in these words. I admit that sometimes there is an anti-social tendency, in private enterprise, but I firmly believe—I am reinforced in this by the experience of the last ten years—that it is much easier to control the anti-social tendencies of private enterprise than to try to inject drive, efficiency and service into State organisations. We all admit the problem, but right hon. and hon. Members opposite are going about it the hard way and the way in which they cannot possibly succeed.
There is an incredible naivety on the part of hon. Members opposite when they talk about industry. The hon. Member for Sheffield, Park talked about the ownership of roads in the same sense as the ownership of industry. Industry is a live and vital thing. It is most important that industry should be in the hands of people who have drive efficiency and ideas, particularly the latter. We simply cannot talk about private ownership in terms of railways justifying the ownership of a live and vital thing like industry. It is about time that hon. Members opposite started some really effective thinking about this issue, because the livelihood of themselves and of their supporters, just as much as of us on this side, depends upon the right answer to this question.I do not want to pursue a lengthy argument on matters of detail. I tried to make clear—it is the basis of our argument—that today there is a divorce between ownership and control. Our complaint is that the ownership and capital of all these large firms play no part in the management of the enterprise.
Sometimes the effective ownership by the shareholders may be somewhat remote, but it becomes rather less remote when things go wrong. The fact is that in a private enterprise society it is the customer who ultimately decides who is or is not to be regarded as efficient. An employee does not come along to his employer, as the hon. Member for Sheffield, Park foolishly said, and ask, "Am I efficient?" Neither does the boss ask himself whether he is efficient. By his ability or otherwise in competition with others to make and sell his product, he knows whether he is efficient. We prefer the yardstick of competitive efficiency to all the niceties of Socialist administration and control. Although it may take them a few years, I believe that hon. Members opposite will one day come to this same conclusion.
As one engaged in private industry, I do not complain about the criticisms which are made of it, because there are certain aspects which are open to criticism. It is a healthy thing that people should look at the pattern of industry from time to time and decide which parts of it are favourable and which are unfavourable. But some rather odd people are complaining. If private industry were in the hands of hon. Members opposite there would be some need for the Motion. They are a collection of people who have kept themselves out of office by their own inefficiency; a collection of people who cannot agree upon a coherent policy but are hanging on to outworn concepts which even most of their supporters have overthrown. They are the people who have bungled almost every political situation, and they are now complaining at what industry is doing. I do not complain of criticism, but the critics on this occasion are very strange people indeed. I want to take an objective view, and not the view of the Conservative Party, private enterprise, or the Labour Party. Let us see what the foreigner thinks about the present situation. We can all argue about what this party or the party opposite has done, but what does the world think about Britain's present position and the present achievements of British industry? For the first time we have a physical balance of exports over imports. Today the world is sending funds into this country, but if there were any chance of hon. Members opposite coming to power those funds would disappear. The competitive world test confirms our view that British industry is doing a fine job. There has been too much denigration of British industry by hon. Members opposite. Of course, there are doubtful people in industry, as there are in politics, but British industry generally has established a world-wide reputation for integrity and endeavour. The skill, ingenuity and reputation for fair dealing which merchants and manufacturers have set up is part of our national wealth, and when hon. Members opposite condemn and discredit our merchants and manufacturers they are damaging the interests of this country. But they are prepared to do that in the hope that it will bring them some petty political reward. No body of men running industry in any other country do it with such a high sense of duty, fairness and efficiency as do British industrialists. Sometimes my friends overseas, especially those in America, ask me, "How do you manage with so few laws to regulate this, that and the other?" I reply, "We have less laws regulating conduct in many regards because, on the whole, we can depend on our people to carry out their duties with a high sense of responsibility. It is only when a lot of people are prepared to do the wrong things that we have to tighten up regulations to prevent them". I want to say a word about British industry since the war. Vast changes have taken place. I do not deny that some right hon. Gentlemen opposite have played their part in this. Sir Stafford Cripps had a generally favourable effect upon industry. Since the war it has been revitalised, and in almost every particular great improvements have taken place as compared with its pre-war performance. I want to give a few examples of the demonstrable advantages which present-day British industry has over pre-war industry. First, there is the standard of management. It is true that that standard was lower than it should have been in many British industries, but it has risen remarkably today. British industry today is more technically-minded and progressive in its outlook than ever before. Today, British industry trains its N.C.O.s as it has never done before, and, in the wider field, nearly every employer has a higher sense of responsibility for national and social purpose. The only cause for lament in this otherwise worthy catalogue is the fact that certain elements among labour have not matched the progress of the employers. Because of this we are compelled to have a slower rate of economic growth than otherwise would be the case.That is nonsense.
I do not want to pursue this matter. It is an interesting one, but my time is limited. All I would say is that British industry since the war has demonstrated that it is quite possible to have a free enterprise economy which has a positive national and social purpose. That is the contribution which British industry has made to the world of the post-war era.
I now turn to the question of takeovers. I am not an out-and-out enthusiast for them. As the right hon. Member for Huyton (Mr. H. Wilson) said, if it can be proved that a take-over would produce a more effective unit or would give a better financial backing, it is a good thing, as it is if it replaces inefficient management. But there are many other spheres in which it is highly undesirable, especially where the aim of the operation is to snatch a quick profit from the physical assets and lessen a firm's capacity to meet difficult times later on. The right hon. Gentlemen completely fell down in his attempt to differentiate between these two kinds of take-over. Not being as ambitious as the right hon. Gentleman, I do not profess that I have the solution, and I do not know anybody who has. The solution proposed by the right hon. Gentleman would obviously be ineffective If we put a tax upon these transactions it is likely that we would stop the worth-while ones, because there would not be so much immediate gain, but the speculator, depending upon selling physical assets and then leasing them back, would still carry out the operation if he could see a profit in the transaction even after paying tax. The right hon. Gentleman's suggestion would prevent the right kind of take-over but not the wrong one. The only solution would be for every director to take what steps he or she felt should be taken to prevent take-over bids. I will not go into details as to what can be done to try to prevent them, but the responsibility must rest upon the directors. Any attempt by this House or anybody else to determine what takeover or what merger is in the public interest would be destined to failure. Let us take an example. Had we been asked some years ago to decide whether the Morris-Austin merger was good or bad, what would we really have said? Would we say today what we would have said six years ago? I do not think so. It is utterly impossible for this House to deal in minute detail. If there is any one lesson we could have learned from the post-war period, it is that any attempt by this House to try to regulate our economic society in detail is pre-doomed to failure. If we have any intelligence at all, whether we be Socialist or otherwise, we should recognise that. I said that I was against take-over bids, but I say also that I think British industry is in some danger. I do not want to see financiers and accountants in charge of British industry. I know that the hon. Member for Gloucester (Mr. Diamond) is an accountant, but they ought to be the servants of industry and not the masters. In too many businesses today do we see financiers and accountants in control. Where there is a financial operation to carry out, or where the path is fairly smooth, these gentlemen may well perform their task with distinction. But we are concerned to have at the head of British industry men of ideas, drive and action, men who are really industrialists. There is a danger that the industrialist class is being superseded by the financier-accountant class.The hon. Gentleman will make it quite clear that he is not now attacking the newly appointed chairman of I.C.I.?
I am not. It may well be that there are individuals who have the misfortune to be accountants from training but who are perfectly capable of displaying the other qualities which I should regard as essential for industrial leadership. I am saying that I see too many of them who do not have these qualities in charge of industry. While they may be quite capable and adequate in normal times, when the pressure comes, when it is necessary to think of new developments and new ideas these people will not be capable of filling the bill. Therefore, I say that the tendency in British industry to relegate industrialists and get in accountants, and sometimes bankers and financiers, is, on the whole, a dangerous process which should be watched carefully.
I wish to say a word about expenses. It is a subject on which I have worried the House before, and I think that here there is cause for anxiety. It is, of course, only a limited section of the community which abuses these advantages, but I think that the social harm done is disproportionate to the number of people who abuse them and the amounts involved. In some respects—as has been said by my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke)—there is some disparity between Schedule D and Schedule E which creates a loophole of which advantage is taken by the less reputable members and businesses in the industrial community. If an inquiry could be set afoot with a view to eliminating some of the more vicious abuses that are practised through Schedule D I should be personally grateful, and I know that the vast majority of people in industry who treat these matters in a responsible manner also would be grateful. This Motion ought to be cast out. We ought to be proud of British industry. In fact, we have a much better British industry than British Socialist Party. British industry can point to a record achievement under most difficult conditions. It is no use talking about what was done when the Socialist Party was in power and the world was hungry for goods. What really counts is this amazing performance by British industry today when we have the world fighting us for orders; this great achievement under free enterprise. I am not prepared to say for a moment that wrong practices should not be criticised. I am certain it is proper that industry should be subjected from time to time to scrutiny, and all the more desirable elements would welcome that. But they do not welcome—I say this frankly—the niggardly, carping, ill-informed criticisms of hon. Gentlemen opposite. They do not welcome it because they feel these criticisms and they know them to be grossly unfair. If I may without offence tender some words of advice to hon. Members opposite, I would ask that before they launch—as they so often do—into criticisms of what people do in industry, they find out a little more about it. If one does not work in industry from day to day, it is easy to get wrong impressions. Hon. Members opposite would do their own party and British industry a much better service if they found out the facts before indulging in some of the futile and childish distortions to which they give way from time to time. I am quite prepared to stand by British industry. I believe that it has done a fine job for the country. If the party opposite do as good a job when they are in power, they will do a darned sight better than they are doing now.6.16 p.m.
The hon. Member for Cheadle (Mr. Shepherd) will not expect me to accept everything that he has said, particularly as he said many things which were critical of my party and our lack of ability to understand the facts. I hope that I shall not embarrass the hon. Gentleman by saying that, at all events, he made a much better speech than did his right hon. Friend the Chancellor of the Exchequer, because he started by saying that he was prepared to look at the problem.
The hon. Gentleman had the intelligence to see that behind our Motion, and implicit in it, is a belief in private enterprise which we wish to see bettered, not destroyed. It is only when one is prepared to look at private enterprise, and ask how can we improve it, that one comes the first yard towards our point of view. The Chancellor of the Exchequer made a most extraordinary speech. He spoke for about an hour. He devoted the first twenty minutes to an economic survey which was not called for today and consisted of a rehash of what we have heard so many times before. It could be answered in two seconds. During the last twenty minutes the right hon. Gentleman attempted to do something totally out of character—to persuade himself and his followers of what is supposed to be our policy when he knows full well that it is not. The right hon. Gentleman had to try to rest his statements on the authority of what individuals had said before party conference, and so on. He spent the middle twenty minutes looking at the problem and saying that there is nothing to be done in any respect, that everything is fine, that there is nothing the Government can do. I absolutely disagree with him about that. I salute private enterprise; I salute public enterprise; I salute co-operative enterprise—I salute enterprise whenever I see it. Like the hon. Member for Cheadle, I wish to see these enormous firms manned by people at the top who have ability, ideas, imagination and knowledge, all the things about which the hon. Member for Cheadle spoke and more. Most of these firms will remain in the private sector of industry for as long as anybody in this Chamber is alive, and they are important to our economic and employment policy. But how are we to get that situation if we permit a system under which all entry to the top jobs is determined not necessarily by ability, knowledge and experience but by a trick of the trade, a take-over bid? The hon. Gentleman did not deal with this problem. It is perfectly true that some take-over bids are without objection and bring good results, but there are others which are wholly harmful. The hon. Member for Cheadle resigned when it came to that point. He said that he did not know the answer to the problem. Had he followed his own logic, he would have arrived at the answer. His own logic showed that some take-over bids are good things, to use a very simple term. Some are bad things, again to use a very simple term. What are we to do about it? I believe that there is not a simple rule or criterion by which we can cover all these takeover bids. Each has to be looked at on its merits. The President of the Board of Trade takes certain responsibilities already; he should have the courage to take further responsibilities. He already takes the responsibility of seeing that wherever a take-over bid results in circulars being sent to shareholders with regard to the sale of their shares there is, by and large, no direct fraud. By a certificate from the Board of Trade one knows, by and large, that there is no direct fraud. It would be no interference with the normal machinery of the take-over bids that those bids should go through the Board of Trade. Why should not the President of the Board of Trade be prepared to look at take-over bids in the national and general interest, just as much as the Chancellor of the Exchequer does, and said today that he does, in relation to foreign exchange transactions. The Chancellor is quite prepared to take upon himself the responsibility of defining the national interest when it comes to permitting sterling to be exported. Why does not the President of the Board of Trade take on his own shoulders the responsibility of seeing and saying what is in the national interest with regard to take-over bids? Let the right hon. Gentleman get all the information that he likes about it. Let him hear from the employees what they think about it, and let them be consulted as sensible men would wish to be consulted. Let the company that is to be taken over and those who are making the bid give evidence to the President of the Board of Trade, or his representative, and say why they think that the transaction should or should not be carried out. Then let the right hon. Gentleman decide whether it is in the national interest that the take-over bid should go forward. That is a way to solve the problem completely. I am sure that no hon. Member could say, "Yea" or "Nay" in regard to each and individual take-over bid. No one would attempt to generalise and say that every take-over bid is good or bad, because some are good and some are bad.The hon. Gentleman has been very convincing on this point, as he very often is. Could he tell us what recent take-over he feels not to have been in the national interest? The hon. Gentleman ought to adduce that kind of evidence first before he asks the Government to take the power of deciding these matters.
I have not an hour to speak, as had the Chancellor of the Exchequer, but I thought that it was generally accepted on both sides of the House that there were two kinds of take-over. I do not think that it would be alleged by members of the Conservative Party that take-over bids are always good. If so, I am astonished to hear that. I should have thought that Government supporters with experience of take-over bids would realise that some bids have been against the best interests of the total community represented by the firm in question, having regard not only to profit and loss criteria but to social responsibility as well.
Government supporters should recognise that the position is full of danger, especially if they say, as I do not expect for one moment they do, that we must wave the green flag to every possible take-over bid and open the gates wide to every take-over bidder, the sole criterion being that he has the cash to put down and can make a profit out of the deal. To say that would be to accept a terrible responsibility.Does the hon. Gentleman think that it was quite fair to answer my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) like that? The Opposition have put down what amounts almost to a censure Motion against take-over bids. Surely it is only right that at least one Opposition speaker should give at least one example of the kind of takeover bid that his party is attacking today?
Our Motion does not say that all take-over bids are bad.
Give us just one example.
I am afraid I am rather too close to the ground. One of the difficulties is that if one has specific knowledge of a case one has it in such a form that one is absolutely debarred from closely identifying it. The last thing to do is to give names. I thought that there was a common understanding among experienced people that there are undesirable facets in this business. I am not saying any more than that.
There must be a way to control this process. I shall be very surprised if my professional colleagues in the House differ from what I am now saying. The House cannot lay down one simple rule for control, because these transactions have to be looked at. The only person who is in the position to look at them is the President of the Board of Trade. He looks at them already to a limited extent, but he can widen his power of survey and decision in the national interest. While the President of the Board of Trade is looking into the things that ought to be done in regard to take-over bids, he should concern himself with protecting minority shareholders in the company which is being taken over. There are bids which offer to take over less than 100 per cent. of the shares. That is to say, shareholders who want to sell their shares may not always have their desires gratified. The take-over bidder may acquire 51 per cent. of the shares, and the 49 per cent. minority will be completely under his control. He can deal with those minority shareholders fairly or unfairly. We cannot compel a shareholder to sell his shares if he does not want to, but we can compel a bidder to take everybody's shares who wants to sell so that a willing shareholder may say, "I like his price, so I shall sell", or else, "I am satisfied with the man who is making the bid and I think that the situation under the new set-up will be satisfactory. I am prepared to remain in the company as a minority shareholder and chance my arm." He ought to have some protection. This is not a point which should come from only one side of the House. Government supporters should be equally interested in it.One may buy less than 100 per cent. of the shares in the normal way of business. Surely the hon. Gentleman does not mean that the take-over bidder would have to buy all the shares in a company?
There is nothing to prevent an individual buying less than 100 per cent. of the shares on the market, if he can, but he is taking all sorts of chances in doing so. The kind of takeover which we are now considering, and which is a new development, consists in an advertised and publicised transaction. In those circumstances we should protect the minority shareholder. The bidder should be compelled to take over any shares that are offered to him up to 100 per cent.
The third matter which requires looking at—I speak with reticence here—is the general question of the balance sheet and the auditor's certificate. Most people who take the trouble to find out what their shares are worth have regard to the Stock Exchange quotation and to the balance sheet, which is certified. People are apt to look superficially at the balance sheet and to conclude that it means what it says. It does mean what it says when we look at it carefully. The document may be misleading, because there may have been enormous inflation of land and site values. I am referring particularly to any balance sheet in which assets are considerably understated as to their present-day share value. I am not saying that I have an answer to this situation. Enough is going on now, and there are enough new developments, particularly having regard to inflation of capital values under the last Companies Act, to justify my suggesting a new committee on the lines of the last Cohen Committee. It would look at these things carefully and make recommendations for altering company law, particularly in regard to the problems which I have mentioned.It is true that the certificate on the balance sheet is important if there is no qualification in it, but, as a professional man, would not the hon. Member agree that the various companies of chartered accountants differ about the standards they require? The matter depends more on who has signed the certificate than on what is in the certificate. The reputation and quality of the firm itself has to be considered.
I should not agree with that. I was dealing with the difficulty that certain assets have risen in value since they were acquired and there is the difficult problem of revaluation from time to time.
No one would say that a company should revalue every six months or every year, but, equally, each shareholder should realise that many of the assets may be worth a great deal more than the balance sheet indicates. One has a problem when one is trying to give the greatest amount of information to shareholders and in this respect I doubt whether one is achieving one's desire as much as one would want. Therefore, this is a matter which requires to be looked at. There is the further point of the compensation for loss of office. This often arises on a take-over. It certainly does not always arise on a take-over, but quite often it arises on a take-over and I bring it in here admitting quite freely that it arises elsewhere. Compensation for loss of office is a most curious relic. As far as I know it is the only case in which the Treasury, in the most magnanimous way, can give assistance to the company by saying that it shall have tax relief on that payment in full on Income Tax and Profits Tax for the year in which the payment is made. It goes to the recipient and says, "You will have freedom from Income Tax and freedom from Surtax on the whole of the money the company has paid you and we do not require anything more than that the company shall have volunteered that payment." It does not have to be a reasonable sum. This is a situation of most extraordinary illogicality. No doubt I shall be told if I am wrong, but I believe that it gives rise to great social unease. My constituency is greatly concerned with the aircraft industry, and in that industry there is the Hawker-Siddeley Company. At the time I was leading a march of workers from a large factory to protest at that factory being about to close, and 4,000 aircraft workers being thrown out of work, there came the announcement that one senior director, who spent practically the whole of his lifetime in this same firm, one of the originals, was within two or three years of retirement but was retired earlier for reasons I do not know and shall not conjecture, two or three years before compulsory retirement, and for that was compensated to the extent of £75,000 tax-free. Nobody in the House in his conscience—never mind what we say in public from these benches—will disagree with me that this is a most unfortunate combination of events. The march typified the anxiety of 4,000 workers about to be thrown on the dole and the director was getting £75,000 tax free. I admit that "tax-free" was only further salt on the wound, but it is there and it makes for great unrest, which is a most unfortunate element in private industry. Surely everyone is anxious that there should be good management and good industrial relations and that that is an aspect of the matter with which the Government could and should deal. I disagree with the Chancellor profoundly when he says that this is a complicated matter and cannot be dealt with apart from all sorts of other things. It is perfectly simple for it to be brought under taxation on a reasonable basis by which the remuneration could be spread over a period and for Income Tax and Surtax to be paid at a rate which is not disproportionately high. It is something which has to be done and with other things it would lead to the justification of a proposal I have to make, namely, that we should now have a real Institute of Directors. I am all in favour of a real Institute of Directors. I am all in favour of a real Institute of Chartered Accountants, a real Law Society and a real Bar Council. Why I am in favour of a real Institute of Directors is that I see no other way of achieving any of these things in private industry and raising standards of morality and responsibility which we all want. If we feel there is a single firm which is not playing the game according to the standards which the other firms are observing everyone would agree that that wants looking into. If, therefore, one accepts the point of view that it is one's job to raise the standards of the lowest to those of the highest so that we should have private industry in this country of which every Briton could be proud—which is the target I set myself—we must have some professional body and I cannot see that it could be achieved short of a real Institute of Directors. How pleased I was, therefore, when I was told by an hon. Member opposite that there was an Institute of Directors. I was even asked to join it as a sensible thing to belong to, but what a pity it is that this Institute has prostituted its efforts and come down into the political argument at the lowest possible level. What a pity it is that these gentlemen are more concerned about the short-term vested interests of directors and the right to control their own affairs than considering other people's. What they are saying is that they object to the proposals of the Labour Party to reconcile and harmonise the interests of their big firms with the national interest.As the hon. Member knows, the main point about the Institute of Directors is that it disputes the intention of the Socialist Party to nationalise or bring under public ownership the vast majority of British private industry.
It knows this to be false. It is known by all the intelligent people in the Institute. I did not watch Lord Chandos and listen to him when he was in this House without coming to the conclusion that he was an extremely able and intelligent man, well able to understand simple political matters of this kind. It is because I know the Institute of Directors does not itself believe what it is putting out that I am so disappointed and have come to the conclusion that we must wash this organisation out and look for a sensible professional organisation—give it another name, because that name, perhaps, has been ruined for all time—which will protect and look after the standards and responsibilities of those who have the trusteeship of our major undertakings which is most valuable and important.
The Institute is a Tory bucket shop.
There are two other matters I wish to refer to very shortly in talking about improving private enterprise as I want to see it improved and as I believe hon. Members on both sides of the House, excluding the Government Front Bench, want it improved. In the House the other day we debated the question of entertainment expenses on the ground of taxability. I do not now refer to taxability, but to the wider problem of the justifiability, extravagance or desirability and the moral justification for all so-called entertainment expenditure being included.
I do not suppose that many of us feel absolutely satisfied that not one penny is every spent in entertaining expenses more than need be spent. I do not think that anyone is absolutely satisfied that no expenditure is incurred which is on the borderline of bribery. I will not go further than that. Everybody who thinks about it knows that the extent of entertaining expenditure is continually growing. I see the hon. Member for Eastbourne (Sir C. Taylor), who is very interested in the hotels industry, is nodding. I can well understand the point of view of the hotel owners. If we cut out entertainment expenses we should close down Grosvenor House overnight. Nevertheless, this is a point which we must look at in general terms.Surely the hon. Member does not suggest that customers at Grosvenor House can be bought merely by a very good lunch? There is no bribery in that.
I did not say that there is, nor does the hon. Member think that that is the only thing which is put under the heading of entertainment expenses. I am sure that he knows that all sorts of things are conveniently included under that heading. Moreover, competition, which is a good thing in itself, is driving the salesmen of competing firms to entertain potential buyers to a wholly unnecessary extent. It is a very simple order of events. First, a salesman takes a buyer out for a drink. Next, the salesman from a competing firm takes him out to lunch. The salesman from the first firm then takes him out to dinner. The salesman from the second firm adds dinner and a night club. So it goes on.
I am grateful to the hon. Member for giving way to me again. It is extraordinary that he should assume that the average company gives business simply on the basis of how well the buyer is entertained.
I am not suggesting that it does, but—
Order. The hon. Member for Gloucester (Mr. Diamond) has given way several times in the course of his speech. I ask for fewer interruptions, because they prolong speeches and make it more difficult for me to fit into the debate other hon. Members who wish to speak. I think that the hon. Member for Gloucester has given way quite enough.
I apologise, Mr. Speaker, for the fact that I have a habit always of giving way and of not thinking of others who are most anxious to speak and who can make a far better contribution to the debate than I.
I come to the final point about advertising. This is in the same category as entertainment expenses. I find it unsatisfactory on the grounds that it is very often excessive. We have only to think of petrol advertising, for example, to realise that competition is driving up the amount of advertising to a wholly unreasonable extent. In all these spheres it will be impossible to deal with the matter satisfactorily except through the control of the firms in question and through they themselves having a standard to which they can all agree. As long as it knows that B will play the game, A will play the game, but at the moment, when there is utter chaos, when there are no rules and no code of conduct and when it is impossible for the Government to intervene in these activities of entertaining and advertising to which I have referred one will compete against the other and we shall have a wholly unsatisfactory position. I therefore suggest, particularly to the President of the Board of Trade, not only that we should be prepared to set up machinery whereby take-over bids are examined to see whether they are in the national interest and as to other matters but that there should be a code of conduct established which is intelligently observed by a real Institute of Directors looking after the true interests of management in this country.6.45 p.m.
Accountants have had rather a rough ride this evening and I hope very much that circumstances at the moment are normal so that the hon. Member for Gloucestershire (Mr. Diamond) and I are adequate to deal with them. Circumstances are certainly by no means as normal for the Institute of Directors this evening as I thought they might be. The hon. Member has just said that it is a disgraceful body. I can think of nothing more original that to describe it in some very old words "This animal is dangerous. When it is attacked it defends itself."
The Institute of Directors has played a part in bringing into the open the intentions of right hon. and hon. Members opposite, who have tried with some degree of success—I speak from fairly wide experience—to keep concealed their true objectives which are directed against the very people who are members of that Institute. Is it so very disgraceful that the Institute, by quotation for which it can give chapter and verse, accurately and deliberately describes the published intentions of the Labour Party—published very quietly, and I shall have a word or two to say about that in a moment? I should not have thought that that was a very disgraceful thing to do. Indeed, it seems to me a very natural thing to do. From the point of view of the Institute, of which I am a member, it seems to me a right and proper thing to do.And it is non-political?
I will come to that in a moment.
I should have thought that it was not a party question. If a political party decides to take away the livelihood of a body of men, have those men not the right to protest? What would happen if the Conservative Party decided to try to take away the livelihood of members of a trade union? Would it be very wrong of the members of the trade union to object? Would they not be taking perfectly proper and legal action of they objected? I agree with that part of the speech of the hon. Member for Gloucester in which he said that much more thinking must be directed towards share takeover bids. I do not think that I can go with him the whole way in his suggestion that every share take-over bid-I think that he must have meant every take-over bid of substantial size—must be inquired into by the Board of Trade I am not sure that that is the right method. Nevertheless, I feel that the right hon. Member for Huyton (Mr. H. Wilson) would have been performing a more useful service to the country if he had dealt with the question of takeover bids as fairly and objectively as did the hon. Member for Gloucester rather than giving one of his well-known knock-about turns as the Danny Kaye of the House of Commons. Hon. Members opposite have complained that the Institute of Directors and the Conservative Party have accused them of wishing to take over a large part of industry. Do not let us be squeamish about words. If the Government buy control of a company, that is a form of nationalising it. Do not let us beat about the bush. No amount of talk or humorous monologue such as that which we had from the right hon. Member for Huyton can conceal that it is the Labour Party's intention to take over a few hundred large companies. The right hon. Member himself said so this afternoon. [HON. MEMBERS: "No."] Yes, he did. He went on to indicate the tests which the Labour Party would apply before they were taken over. If it is not the intention of the Labour Party to take them over, why the rigmarole about the tests to be applied? Not only is it perfectly plain, but I have the very greatest doubt of the ability of right hon. and hon. Gentlemen opposite to apply those tests. I doubt their experience and I doubt their knowledge. Indeed, I very much doubt whether, even if they have the experience and the knowledge, they will be able to exercise that judgment objectively. When we hear hon. Members opposite protesting it reminds me of a passage in Shakespeare:Let us remember that it is still Article No. 1 of the Socialist State to nationalise the means of production, distribution and exchange. The economic pundits of the party have decided that this is a good way of doing it. Do not let us have any more hedging and displays of temper with the people who spotlight their intentions. One thing I especially disliked about the speech of the right hon. Member for Huyton this afternoon was the number of half-truths in it. He said, for example, that he had never seen a list of the companies which are to be taken over. The right hon. Gentleman said that the Institute of Directors was the first body to publish such a list. The right hon. Gentleman has been a part-author of all the most recent publications of the Labour Party on policy in this respect. In a document called "Towards Equality", published in 1956, he said that the industrial power of the nation is concentrated in the hands of a few hundred companies. Is the right hon. Gentleman so irresponsible that he put that into a document of which he was part-author without checking up the facts? I cannot honestly believe that the right hon. Gentleman is so irresponsible as that. Of course the right hon. Gentleman has seen the list. Indeed, he was the compiler of it. Secondly—my right hon. Friend the Chancellor of the Exchequer drew attention to this—the right hon. Gentleman outlined the tests which are to be applied before the Government step in. What is their investment policy? Is that wrong? What is their export policy? Is that wrong? The right hon. Gentleman said, "And we shall apply other tests". What a disgraceful phrase that is. It is a blank cheque of the worst description. Again, the right hon. Gentleman was guilty of a half-truth—indeed, he had not time to tell the whole truth—when he referred to the fact that at present local authorities and Lloyds are investing in equities, so why not the nation? Does the right hon. Gentleman not know the difference between investment and control? Is he suggesting that local authorities and Lloyds are seeking to gain control of the companies in which they invest their funds? Those were three examples of deliberate and dangerous half-truths. If a party has to support its policies with half-truths of that kind, the policies which it is trying to foist upon the nation must be poor."The lady doth protest too much, methinks."
On a point of order. Is it in order, Mr. Speaker, to accuse another hon. Member of speaking deliberate half-truths? It must surely be at least half out of order.
I was myself wondering whether it was in order. I came to the same conclusion, that it was certainly half out of order. It would be out of order to say that the right hon. Member for Huyton (Mr. H. Wilson) was deliberately not speaking the truth, so I presume that the vulgar fraction is correct: it is half out of order to say that the right hon. Gentleman is deliberately speaking half the truth. However, I do not think that the hon. Member for Portsmouth, Lang-stone (Mr. Stevens) meant the phrase in an invidious sense of that kind.
I said that the right hon. Gentleman had not time for the other half of the truth, but if you, Mr. Speaker, feel that I have in any way transgressed the traditions of the House of Commons I fully withdraw.
The hon. Member for Sheffield, Park (Mr. Mulley) and the right hon. Member for Huyton referred, as, indeed, the Labour Party does in these publications, to the popular misconception that directors are self-appointing and self-perpetuating and that shareholders' control is virtually non-existent. Hon. Members opposite should tell that to Sir Bernard Docker and hear what he has to say. It only indicates how little experience hon. Gentlemen opposite have of the way in which directors are removed from office the moment they show over a period that they are not conducting their business in what the shareholders deem to be the best interests of the company. It is perfectly true that control of private enterprise companies has changed in recent years. We find institutions, such as insurance companies, pension funds, trade unions, possibly, and unit trusts, acquiring very substantial blocks of equity shares. If those institutions with very large shareholdings feel that the directors are not carrying out their duties properly, out those directors will go. That raises very important issues. It means, among other things, that successful share take-over bids are impossible without the support of those institutions which have so large a shareholding. Therefore, the judgment of the men responsible for the investment policy of these institutions is very important indeed. I echo the thought of the hon. Member for Gloucester. More thought on this subject of share take-over bids is required. The institutions are apt to be rather like trustees. Indeed, in many cases they are in the position of trustees. They are more interested in an immediate good price for the benefit of their policy holders or their pensioners, or whatever they may be, than in the long-term future of an industrial venture. Another fact which should not be forgotten is that the money for a successful take-over bid very often comes from other institutions who will buy only if there are good prospects. It may well be that the solution to this problem will be one of evolution, rather than revolution. It may be that a developing class of investment managers with wide business experience and unbiased judgment is required. I turn to the favourite stalking horse of the party opposite—the capital gains tax. The Opposition accept unreservedly—they have said so repeatedly, and I am sure that I am not guilty of a half truth now, but the whole truth—the minority Report of the Royal Commission on the Taxation of Profits and Income with regard to the capital gains tax. It might be helpful to hon. Members opposite if I recall to their minds paragraph 5 of the dissenting memorandum by Mr. Woodcock, Mr. Bullock and Mr. Kaldor:The Chancellor of the Exchequer, at the tail end of a sentence in which he was dealing with the capital gains tax, introduced the one word "pools". I remember that about three years ago we had a debate on the capital gains tax. I ventured to suggest that it was not exactly a General Election winning cry, "Vote Labour and we will tax your pools winnings". Hon. Members opposite were very cross with me and said, "But there is no intention of taxing pools winnings. It is only these wicked share take-over bidders, people who gamble on the Stock Exchange. They are the chaps we are after. Good luck to the people who win big money on the pools. They are all right." If the party opposite accepts unreservedly—[HON. MEMBERS: "We do not."]—what the minority Report said, that spending capacity is to be the sole test, obviously pools winners are in for a very thin time."In our view the taxable capacity of an individual consists in his power to satisfy his own material needs, i.e., to attain a particular living standard. We know of no alternative definition that is capable of satisfying society's prevailing sense of fairness and equity. Thus the ruling test to be applied in deciding whether any particular receipt should or should not be reckoned as taxable income is whether it contributes or not, or how far it contributes, to an individual's 'spending power' during a period."
The hon. Member has raised a very interesting point about pools winnings, but the pools operate in accordance with the usual principles of taxation, as, for example, the case of pensions. If you pay tax early you do not pay it later. To win on the football pools, one-third of the stake goes in tax before the results on which one bets are even known.
That is a fresh line of argument, though not necessarily very accurate. All receipts by all people have, in the course of circulation, been subjected to one tax or another. But there is this that differentiates pools winnings from most forms of individual receipts. At no stage have they been subject to Income Tax. But the minority Report of the Royal Commission said very clearly that all receipts of this nature should be subject to Income Tax, though not to Surtax.
Furthermore, there was a reservation in the minority Report. It said that for an initial period—and here, Mr. Speaker, is more of what you have taken me to task for calling the half-truth—"this would be limited to profits on the sale of properties, partnerships and stocks and shares." How long would that initial period be? How long would it be before the cry of equity forced a Labour Chancellor to tax pools winnings? There is no question of what the effects of that would be. The Socialists have made it perfectly clear that if they win the next General Election there will be new taxes, and higher taxes. Private enterprise is a constantly evolving process. In recent years we have seen big changes. We have pension schemes for workers and we have profit-sharing schemes for workers—the gas industry was a notable pioneer in profit sharing until the industry was nationalised and that was abandoned. We have consortia of private enterprise engaged in work overseas. It would be a major disaster to accept the creeping paralysis of State take-over bids which, in any case, are abhorrent to the British individualist way of life—[HON. MEMBERS: "Oh."] I should have thought that we were an individualistic nation. If not, then we would not be talking in a free House of Commons today. I think that it has been a great mistake for the House to give a good deal of time today to thinking of ways of stopping British industry playing its part. We should be better employed thinking of ways of helping it still further to improve its very impressive post-war record.7.3 p.m.
The Chancellor of the Exchequer failed to answer any of the case put forward by my right hon. Friend the Member for Huyton (Mr. H. Wilson), and we have now heard the hon. Member for Portsmouth, Langstone (Mr. Stevens) trying to imply that it is part of the Labour Party's policy to tax winnings in football pools. I am concerned with the principle of the take-over bid, and from what we have heard from hon. Members opposite it is quite obvious that they are hiding the facts. Nobody on this side of the House wants in any way to impede any legitimate effort by industry to make itself efficient, successful and competitive.
There has been a cry from the other side of the House that we should give lists of take-overs, but hon. Members opposite are already confused between take-overs and mergers. We have had the example of Trinidad oil. We have had examples of mergers that have been good, but there is not the slightest doubt that there is something sick in British industry at the present moment—as Conservative newspapers, and even members of the Institute of Directors have pointed out—when it has to ask the Government for money to make British industry, which is supposed to be so alert and alive, work. It was said by one of the leaders of the party opposite many years ago that the Conservative Party is a party of great vested interests, and that that is so has been shown by the activities of the Institute of Directors which, I regret to say, has become nothing more than a Tory bucket-shop. I mean that in the full sense of "bucket-shop," because I believe that if the expenditure by industry in the marginal constituencies were examined today it would be found that British industry—through the Institute of Directors, the campaign of Mr. Hurry and in other ways—is spending more there than Parliamentary candidates are allowed by law to spend. We are criticising the present activities of private enterprise because certain of its representatives have decided to enter the political battle. It is no wonder that, many years ago, the present right hon. Member for Woodford (Sir W. Churchill)—before he was a Conservative—called the party oppositeI notice that the hon. Member for Langstone said nothing about the unpatriotic letter, which was before the Bank Rate Tribunal, written by Mr. W. J. Keswick to an associate in Hong Kong. In that letter, Mr. Keswick said:"A well-oiled party machine pouring out sentiment by the bucketful … Patriotism by the Imperial pint."
The letter went on:"Speculative pressure against sterling is very serious indeed … I must say I can see no reason why gilts should go up. My advice, therefore, all round is to sell".
That is the integrity of high finance, but when mines are closed down there is no golden handshake for the colliers. We are told by the Institute of Directors that we want to take away their livelihood, but when thirty-six pits were closed down did members of the Institute suffer? The hon. Member for Lang-stone should not make such absurd points about the livelihood of members of the Institute being in danger. That was a ridiculous, cheap, university debating point. When sterling is in danger, patriotic friends of hon. Gentlemen opposite sell. When we are at war they call to the youth of Britain to defend the country. Most of our people have only one thing to sell, and that is their lives for the freedom of the country. They sold their lives—as did members of the Conservative Party. I am not seeking to make an unfair point there, but I do not want hon. Members opposite to make such cheap debating points as we have heard today. In the Stock Exchange Gazette this week there is a gentleman who flutters under the name of "Magpie". Let us see what he says. He writes:"With regard to the insurance companies I imagine you should continue your policy of switching more into North American bonds and equities. Again it is anti-British and derogatory to sterling, but on balance, if one is free to do so, it makes sense to me."
Let the House note that—the people who matter:"There are odd bedfellows in some of the industrial holdings group. Any take-over bid will simply be valued by the shareholders (the people who matter)"—
The social group in Britain that we call directors represent about 1 in 20 of the population. Last March, the nominal value of their capital was £5,880 million, but the Stock Exchange value was £18,615 million. The type of take-over bid that concerns us, and that concerns every decent right hon. and hon. Gentleman opposite, is the take-over bid that can even bounce the good director out of his job, because in the transition period there is not the opportunity to revalue the property in terms of changed values of money. At times like this, these take-over bids are a kind of bribe to the shareholders, or to some of the directors. While these take-over bids are taking place, we find that in shipbuilding, for instance, the gross surplus per head went up by half between 1951 and 1957. In brewing, in 1957, the gross surplus per head was £1,274 higher than it was in shipbuilding, and we get a more intense effort to get take-over bids and mergers in brewing than in shipbuilding, although shipbuilding is more useful to the community. In brewing, there is money to be made by slick movements on the Stock Exchange. Let us at once completely kill this cheap point about take-over bidders always looking for initiative in the country. Why not take-over bids in heavy industry, in shipbuilding, or in aircraft? Take the case of distribution. The gross margins of the department stores rose from 4s. 11d. in the £ on turnover in 1950 to 5s. 10d. in 1957. Here is something for the take-over bidder, and something too for the honest merger, which sometimes can improve efficiency. All we are asking is that British industry should discipline itself. The department stores make £400 a year gross out of each person employed, and the radio shops make £1,087 a year out of each person employed. Furniture shops make £705 and clothing shops £675. The gravamen of our charge is that take-over bids are not made to secure the stability of British industry, but to create values on the Stock Exchange and force up share values more than anything else, as a sheer gamble. They have not so very much to do with efficiency as with the making of capital gains. I wish to make one other point about expense accounts. Sir Bernard Docker has been mentioned. When the Financial Times published some figures on July 17, 1956, they were an eye-opener to the man in the street. They showed that as chairman of the company he received £3,500 a year, as managing director his salary was £20,000 a year, the contribution by the company to a "top hat" pension scheme was £9,566 a year and his expenses and expense allowances were £11,148, so that that man was therefore regarded as being worth £44,214 to that company. We are asking that this type of expense sheet should be looked into, because 20 per cent. of the motor cars bought to-day are bought on expense sheets. In fact, 25 per cent. of all travel today is travel on expense sheets, and 10 per cent. of all the wines and spirits sold are sold on expense sheets. Do not let us be ridiculous about this. There is a reason for legitimate entertainment expenses, but somewhere the line should be drawn. Hon. and right hon. Gentlemen opposite will know that they can go into any restaurant in the West End and realise that hundreds of the people paying for meals are really living on their expense accounts. We are asking that British industry should discipline itself. Far from us on this side of the House wanting to undermine British industry, all we want to point out is that much that is claimed by the party opposite is due to the world situation. In the Financial Times today the hon. Member for Wolverhampton, Southwest (Mr. Powell) gives the answer, because at the Blackpool Conference it was stated by right hon. Gentlemen opposite that the country was in an economic trough; it was due to world conditions. Let us on both sides of the House be fair about this. There are some influences on the national economy over which neither a Conservative Government nor a Labour Government would have control. Let us face it. Just as a world economic depression can upset the country, so can a world upswing in trade improve our country. The party opposite has been very lucky in that way. Therefore, we are trying to bring to public notice many of the practices of private industry which, we think, if the good name of Britain is to be maintained abroad, should be looked into by whatever Government may be in power."when they ask two questions: Is this a good bid? Can the directors make the shares worth more than the bid price? I have been in the City long enough to know that any other questions are irrelevant."
7.15 p.m.
I have some underlying sympathy with some of the sentiments which have come from right hon and hon. Gentlemen opposite in the course of this debate, including the hon. Member for Leek (Mr. Harold Davies), although he spoke so fast and did not dwell sufficiently on any one point to enable one to catch hold of it and give a clear answer.
At the start of his speech, however, the hon. Member did cast some aspersions on Mr. W. J. Keswick, of Messrs. Jardine, Mathieson & Co., whose honour was completely cleared by the Bank Rate Tribunal. Not only did my right hon. and learned Friend the Attorney-General subject him to close questioning, but also, according to the Report, the present Lord Chief Justice. I do not think that the hon. Gentleman should hark back and reproduce a single phrase out of that document without explaining what subsequently transpired, and explaining that this particular City gentleman, of great integrity and honour, was completely vindicated by that Tribunal. Of course, members of the Labour Party do not like the Bank Rate Tribunal Report. It was one of their "South Sea Bubbles", which exploded in their faces, just as their case, as expressed in the Motion before the House, has been exploded by my right hon. Friend the Chancellor of the Exchequer and will be exploded in the public mind by the winding-up speech tonight. I thought that the hon. Member for Gloucester (Mr. Diamond) was unusually flabby and incoherent in what he said for a man who is an expert in this subject. He wanted the Board of Trade to say what was in the national interest when any company was to be taken over, but in spite of repeated invitations from myself and some of my hon. Friends on this side to adduce some evidence that some of these vast transactions are a disgrace to the nation, and should be looked into by the Board of Trade, he was unable to say what it was. He seemed to suggest that take-over bidders should be required to accept 100 per cent. of the shares. That would seem to me to land everybody in very great difficulty. If we suddenly say that to effect complete control means that one must have 100 per cent. of the shares, the position in law of those who have 51 per cent. of the shares is likely to become very peculiar. The hon. Gentleman went on to say that the workers in the particular factory which he mentioned had made complaints about the compensation given to one of the directors of the firm. I doubt it very much. I have always believed that the Labour Party deliberately injects prejudice into this matter. It tells the workers to complain, and this is a great mistake. I have never known a case in all my experience of workers of whatever kind in industry, in the countryside, in commerce, or in the City of London, where a director or anybody employed by a firm is retired or translated to other activities, objecting, to his being suitably recompensed, provided that he had given honest service during his career and was popular with the staff and the workers. Anxiety exists only inside the Labour Party which, for class reasons alone, injects prejudice into this matter. Finally, the hon. Member for Gloucester said that the Institute of Directors was not serving the nation well because it had invented a list of 600 companies which were supposed to be liable to nationalisation. He suggested that it should be replaced by another Institute of Directors, which, presumably, would do exactly the same thing in looking after its own interests where it felt these were threatened by the Labour Party, and would no doubt again produce a list of companies which it thought to be in jeopardy. Are not these people entitled to defend their interests? They are the managers and controllers of great and small enterprises. I am not a member of the Institute myself, but I can see the way in which its mind works. Are these people not entitled, if they are under a political threat from disappointed and prejudiced members of past Governments, to take all the action they can to defend themselves? Of course they are. A new Institute of Directors, such as the hon. Gentleman wanted, would not take any other action but that which is being taken today. I should now like to say a word about the take-over bid situation. It seems to me that the law of limited liability is fundamentally responsible for this situation, and that unless we depart from that law we shall get these things arising from time to time. Let me assure hon. Members opposite that this is only a transient situation. It will not go on in the future unless the same process that we had in the past is repeated. What is taking place today is the result of the credit squeeze during past years and of the machinations of an individual whom I will mention in a moment. I am quite certain that these takeover bids are due to the past actions of boards of directors who felt it not to be in the public interest, according to the dictates of successive Governments, to allow their shares to rise, to declare the whole of their profits and to distribute lavish dividends. We have a suppressed situation in these firms which is coming to the surface because the Government are now, rightly and properly, allowing free enterprise to have its head, and they are clearing away the mass of controls, regulations and Government exhortations that we have had since the end of the war. These transactions will not go on. I am convinced of that. If they do go on and become menacing in the sense that they become monopolistic, we have the legislation on the Statute Book. The Parliamentary Secretary to the Board of Trade gave the answer the other day. If 30 per cent. of an industry or service is covered by some amalgamation, it is open to the Board of Trade to represent that fact to the Monopolies Commission and for the Commission to take action. When the right hon. Member for Huyton (Mr. H. Wilson) enters the insurance world and produces every kind of bogy, let me tell him this. I happen to be associated with that business and I declare my interest. There are 30 or 35 considerable companies in the insurance world, to say nothing of Lloyds, and the process of take-over bids has scarcely begun. Nobody knows whether it will go any further. But even if it goes to the extent of amalgamating five, six or seven major insurance companies, we shall still be miles away from a situation of monopoly. There is no anxiety in the present situation. Finally on this question of take-over bids, when the right hon. Gentleman was complaining that this was a reward to big businessmen and that the workers had no share in the matter, the answer is what we on this side of the House, and the Liberal Party to some extent, believe in, namely, the more the workers take a share not only in the running of the plant but in the ownership of the plant, by share interests, the better. If they had been so sharing, and these takeover bids had taken place, they would now be enjoying the same benefits, relatively speaking, as the top men. I now come to deal with something which has already been touched on in the debate—and the hon. Member for Gloucester used the phrase—"a sense of social unease". I think that is probably the reason why the Labour Party has seized upon this evidence, which is to some extent trumped up, of take-over bids and general City liveliness. Since the war we have deliberately rewarded business for recreating the prosperity of this country. We have allowed business, to a large extent, to escape from the consequences of taxation. We have allowed people in the world of commerce to live on a plane of existence and to have a standard of living which is a good deal higher than that of their neighbours in the professional world and in the world of the arts and sciences, as well as in military and legal spheres. This may or may not have been done deliberately. It may just so happen that since Schedule D gives an opportunity to business to charge expenses, nothing has been done to correct it, because successive Chancellors of the Exchequer have taken the view that, on the whole, if we are to re-create the national prosperity, and if it is business which does the recreation, it is right to reward those engaged in it. The country is enjoying the highest prosperity it has ever known. I do not subscribe to the view of the Lord Privy Seal that we can double our standard of living again in the next twenty or twenty-five years. Look at the congestion on the roads, in the fields and in the skies. People are now getting comfortable houses and all the appurtenances of life—and in cases where that is not so, it will be so tomorrow. I cannot see in what material terms it will be possible to conduct this great enterprise of doubling our standard of living. I welcome what the Prime Minister said at the great mass meeting on Thursday, that perhaps there was an opportunity for us, having created this enormous wealth, to use it to good advantage amongst our friends and neighbours in the Commonwealth and Empire. Therefore, to some extent we are at the turning point. The politics of scarcity, with which we have been concerned since the war and to some extent between the wars, when there was massive unemployment, have been replaced by the politics of glut. This is a very much more difficult exercise. There is a good deal of heart-searching, not only on the opposite side of the House but on this side, too, as to how the situation is to be dealt with. The Socialist answer is "Equalitarianism. Drag down the business men; they are too rich and are getting away with too much. We will put a swingeing tax on capital gains. Let the Inland Revenue officials run riot through the accounts and see whether the businessman's way of life can be curbed and curtailed." That is the Socialist answer. The answer of the Conservative Party is entirely different. Our answer is equal opportunity for all, not only in the business world but for all, to rise to whatever level of wealth their ability can command, subject to safeguards against the use of monopoly powers. But that equal opportunity does not yet exist. That is what I want to emphasise. It does not exist because of a rather dismal figure whom we buried some time ago, but whose spirit still hangs about us like a cloud and largely affects what is done today. I refer to that fellow "Mr. Butskell". "Mr. Butskell", long dead, a product of both political parties, an eminence grise, still hangs over the Treasury. His blood was composed of the usual corpuscles, red and white, but they had two different names—the red of Socialist doctrinaire prejudice, and the white of Conservative electoral pusillanimity. Half of those in the administrative classes in the country are back to their pre-war standard of living today. Largely, they are those in the business world. The other half are not. Those in the first half, to some extent, are turning a brazen face on those in the other half who have not come up to their level. I believe that this is what underlies the thoughts of hon. Members today, particularly those on the benches opposite. I do not want to be thought in the least backward in my praise of the Welfare State. It is absolutely splendid to go around the country today and see the young men and women earning good wages, well fed, very much better housed, in excellent health—not to speak of the children. Nothing should be done to diminish the opportunity which those people have. But the question arises, "Who is paying for it?" I suppose that the business world would argue that, in the profits from its great companies and in the personal taxation borne by people in the business world, it is paying for it. But the other half, the professional classes, are feeling not only that they are paying for it, but they are suffering for it, too. It is quite extraordinary how much evidence one has of this state of affairs today. I have received letters on the subject from scores of people in my constituency and outside, from people who are too honourable and high-minded to express definite jealousies, but who have a sense of social malaise, a sense of lack of opportunity, a sense that, somehow, Governments since the war, of whichever party, have failed to look after them in their particular situation. I am not thinking particularly of those for whom my hon. Friend the Member for Tynemouth (Dame Irene Ward) always speaks—the people in the small income groups—but they are among the collection of people to whom I refer. Not long ago, I had a letter from a canon in the West Country who had retired. He asked me if I knew of a fund, a church fund or a private fund, which would subscribe £400 to enable him to buy a house. He had come from a cathedral city, after spending a lifetime in honourable and splendid service. He had educated both his sons at the same public school to which he went, but he had been so "done down" by taxation, by inflation, and as a result of being tied up with small family legacies and trusts, that he had no money left. In the second paragraph of his letter he said that, every day, there came into his vestry young men and girls asking him to publish banns of marriage. Having in mind his own situation, where he had practically to do all the housework for himself in these days, he wondered how they would really manage. The constant reply, always the same, was that they had about £50 a week between them. Good luck to them. That is splendid. It seems wonderful to me that the Government, since the war, have been able to arrange, and that society has been able to accept, these comparatively very large incomes for young people when they want to be married. No one wishes to do anything to interfere with or alter that in any way. But it means that there is in society a substantial body of people, when we come to think of the higher administrative cultures of the nation, who feel themselves underprivileged as a result of what is taking place. In their minds, we have a cruel system of taxation, a system of taxation which takes between a quarter and a half of their incomes while they are alive and between a quarter and a half of their capital when they die. That, apart from many other things, has been "Mr. Butskell's" net contribution since the war to what is now taking place. I call upon the Government to put into their manifesto for the next General Election a definite pledge that, over the next four or five years, there will be large reductions in Income Tax, in Surtax and in Estate Duty. It is the only way to redress the differentials which have arisen since the war between the professional classes and the business classes. I use the expression "professional classes". Complaint was made about it the other day by the hon. Member for Gloucester, and I know what he means when he says it is a very easy term to use; but it is a good expression and convenient to describe what I have in mind. It is no use fiddling about. My right hon. Friend the Chancellor hinted today, and quite rightly, that it is no use fiddling about with Schedule E. We shall make an attempt to do what we can later in the Finance Bill, but there is very small money in it indeed. Nobody, apart from right hon. and hon. Members opposite, wants to alter Schedule D. Certainly, the business world and the Conservative world do not want it altered. Therefore, the only way to give relief, it seems to me, is by a substantial reduction in direct personal taxation. Immediately, hon. Members will ask where the money is to come from to replace it. I am quite prepared to think positively about, and to recommend, increases in taxation on expenditure. One subject which I very much hope the Government will look at in the next year or two is the possibility of taxation on home advertising. I cannot go into the detail of it now, but I believe that it would yield a large amount of money, would help the export trade, and introduce a little sense into our daily newspapers, apart from some other beneficial social effects. Another answer, if the money cannot be found, is to borrow for the purpose. It seems absurd that the Government should extract current taxes for long-term capital investment in the way they do. If the market prevents borrowing as a result of the prices which are exacted, then the answer is for the State not to spend on the scale at which it is spending today. In one of his diatribes against the Government, the right hon. Member for Huyton (Mr. H. Wilson) said that he objected fundamentally to the extension of the Welfare State to industry, and I think that he cited the Cotton Bill, now going through the House. There is no sign that the Labour Party opposes the Cotton Bill. Anyhow, it was implicit in what he said that the right hon Gentleman feels that to extend the Welfare State from the individual to large industries which feel themselves to be in some sort of plight at different times is a mistake. If he does think that, I agree with him on that subject. The whole of the right hon. Gentleman's speech in moving the Motion was full of threats. There is to be a capital gains tax on certain transactions, though the details of these transactions have not been thought out by the Labour Party. Until we know what they are, they will make no sense at all to the House or to the country. If the Labour Party is successful at the next General Election, there is to be a Bill requiring political parties to publish their accounts, and the right hon. Gentleman went on to cite the Institute of Directors and like-minded affiliated bodies, associated, as he thought, with the Conservative Party, which, also, should be required to do the same. I should like to know whether the trade unions, while they remain affiliated to the Labour Party, will be required to publish their accounts. [HON. MEMBERS: "They do."] I do not think that they do in that way. The right hon. Gentleman said that the machinery of nationalisation would be used to acquire industries which were deemed to be failing the nation. He said that Parliament would be the judge of that. If it is to be anything like the legislation brought forward in 1945 and 1946 by the right hon. Member for Lewisham, South (Mr. H. Morrison), it will be thought up by the Cabinet or by the National Executive of the Labour Party, and the whole Parliamentary machine will be automatically turned upon it. There would, therefore, be no independent judgment exercised there. I think that the whole business of pursuing industries and services which are deemed to have failed the nation again shows up the lack of comprehension of right hon. and hon. Gentleman opposite of what it is that best serves this community of ours. Their thought, in spite of ten years of failure of nationalisation, are still filled with prejudice, jealousy and dislike of any industry or service which is thriving and profit-making. They cannot get away from the Central European doctrinaire prejudice against capitalism and competitive private enterprise. They are like burglars entering secretly by night upon the thriving and prosperous commercial world of ours which has done so much to improve our standard of living and general world prosperity. Though they may blow open the safes with gelignite, they are bound to leave a great deal of administrative chaos behind in the process. The matter is much more serious now than it was in 1945, when we had a certain corporate obedience in society to the plans and preparations of the central Government. We also had a very large Civil Service, which was trained in collectivist doctrines. It had the "know-how." It was a willing instrument and was standing ready to hand for the implementation of nationalisation. Today, there is no such instrument, or practically none. The public mind is not as prepared as it was. I say to the party opposite, advisedly, that if it attempts again to foist nationalisation and State control upon the country, if it uses an unhappy moment when, perhaps, there is a crisis and the electorate votes for the party opposite for that reason and not for its doctrinaire purposes, if it uses a mistaken vote of the electorate to drive through its fell designs on nationalisation and State control, there will be an administrative breakdown on the most colossal scale compared to which Mahatma Gandhi's civil disobedience campaigning in India will pale into insignificance.7.43 p.m.
I am sure that the whole House very much enjoyed the contribution of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). Although a lot of his sentiments will not win admiration from this side, which he would not in any event expect, he does, we all feel, represent a very genuine point of view which should be heard in these debates. It seems to me, however, that he has a rather distorted picture of how a great many people in our country live. I should very much like to know the vestry to which came the young men and women who proposed to get married and who were earning £50 a week between them.
If one looks at the Commission of Inland Revenue's Report, which divides up national incomes, as far as it can be accurate, because it is based partly on sample collections, it appears to show that in the present year at least 11 million people were in receipt of less than £10 a week and 3 million were in receipt of less than £5 a week. That is a considerable section of the total working population. I therefore feel that either the canon must have misinformed the noble Lord or that the noble Lord misunderstood the canon, otherwise the vestry to which the noble Lord referred must be very exceptional. It might be true in South Kensington, or somewhere like that, but I doubt whether it is true anywhere else. A point to which the noble Lord referred and which deserves consideration concerns the incidence of taxation. One of the reasons for the considerable bitterness, to which I shall refer, about the present tax set-up is that, while it is generally thought that businessmen can often get away with claims in respect of expenses which ought not to be genuine expenses, there are so many people, both manual workers and professional people, who get no concessions at all and whose tax is taken before they receive their salary. Whatever party may form the Government of the future it must ensure that those who are doing constructive work, of whatever kind, as opposed to those whose contribution is very much more difficult to evaluate, should be encouraged by the tax system instead of discouraged as at present. This applies particularly to technical people, research workers, managers and many others. This debate has occurred at a most apposite time, because many people outside are concerned and worried about what appears to be the double standard which is adopted—one for people in the top rank of business and another for everybody else. There is concern about it and comment upon it. Workers in my own constituency who are well represented by many branches of trade unions have told me, both collectively and individually, that they get a little tired of reading in the popular Press and hearing Ministers' speeches about appeals to them not to ask for more wages or leisure time or a greater share in the productivity which they have helped to create, when at the same time they read about people who can go day after day to race meetings in expensive dresses and no one suggests that that is wrong. As workers have said to me, they get fed up with appeals to them not to rock the boat by asking for more cash and then they read, the same day, that the City editor of the Evening Standard has said that just Mr. Clore's bid alone for the shares of Watney Mann increased the value of them by over £9 million in the space of a few minutes. These things do not make sense, and I believe that hon. Members opposite do not realise how much the public are reacting against established speculation and money-for-nothing tricks in the business world. It seems fantastic to me, and I think that it seems fantastic to many, that when ordinary workers ask for a share of the productivity which they have helped to create they are told that the industry cannot afford it. It is even more extraordinary when one considers the defence which the Chancellor of the Exchequer put up this afternoon. I have never heard the Chancellor put forward a more superficial case, and I do not believe his heart was in it; but if the future of British industry is as good as the right hon. Gentleman suggested by the carefully selected and partial figures which he gave, then the case of the workers for a greater share in most industry is more overwhelming than ever. I thought that it was rather curious that the Chancellor should put forward this case in the very week in which the Ministry of Labour published its report which showed that in every month last year there were 450,000 workers without a job, that short-time working had doubled, and that 150,000 fewer workers were now in industry. Although we are all glad that in June there was a reduction in the number of unemployed to 413,000, it still does not destroy the fact that this is the highest figure of unemployed in any June for twenty years. It is also a fact, as anybody knows who looks at the Government's own Economic Survey, that for three years British industry has stagnated. We can see from paragraph 30 on page 12 that the Index of Industrial Production, taking 1954 as 100, was 108 for the fourth quarter of 1955. In the fourth quarter of 1958 it was 107. In the third quarter of 1955 it was 106 and in the third quarter of 1958 it was 105. This does not give any basis for the Chancellor's suggestion that not only is everything right in British industry but that it is doing extraordinarily well, and that it is almost impertinent of us to attack the general way in which British industry is being run. All of us who are honest know that we may be slowly climbing out of a recession, which was intensified in my view by the Government's own financial policies, but the improvement is due to a considerable extent to the fact that world conditions have changed in our favour, particularly last year, by the fall in import prices. In the light of these facts it was unfortunate that the Chancellor, for purely political purposes I think, tried to present this "phoney" prosperity this afternoon. I suppose it was because the subject is one on which the Government and their supporters know that they are vulnerable. In fact, in the last three years, production per man has increased in every European country faster than in this country. Even in France it was up 11 per cent., but in Britain it was up only 2 per cent. These facts must be stated because the Government introduced them, and I believe they were introduced as a political diversion from our main analysis and criticism of some of British industry today. Further, in passing, in reference to the noble Lord, he suggested that this debate will go off in our own faces as he thought the Bank Rate Tribunal had done. I think the noble Lord under-estimates both the public intelligence and interest. Since he mentioned the Bank Rate Tribunal, may I point out that the evidence produced was for many people a revelation of how the City of London works and the crazy way in which we attempt to adjust financial factors, such as the Bank Rate and other things upon which the future of this country so much depends. The public had no idea that such important decisions were considered partly on grouse moors, and that influential people could, because they felt it was their duty, give advice to firms abroad, even though that advice was not in the interest of this country. Do not let us under-estimate the education received by many ordinary people about the way in which the finances of our country are run. That illustration lends a great deal of weight to the argument that there should be a change with the next Labour Government. It is ironical that at the very time when the Institute of Directors has been carrying out its campaign against the Labour Party—which even the Daily Express said was a foolish campaign against the Socialists—we should have had the recent classical example of financial jungle warfare in take-over bids. I am sorry for those who work in many of the industries affected. I am thinking not only of the workers but of the managers and technicians. It must make them feel—certainly it would make me feel—that however hard they work, it is unrelated and irrelevant to what will happen to the industry or to themselves. It must be clear from the extracts quoted by my right hon. Friend the Member for Huyton (Mr. H. Wilson) this afternoon and others, that groups or individuals concerned in take-over bids are interested purely in the profitability of the transaction. No one has suggested that they are interested in anything else. I am not saying that this is dishonourable; I am saying that it does not prove that it is in the public interest or beneficial to society. It seems to me that there are three reasons for this. First, the welfare of the consumers is not the paramount consideration in a take-over bid. Indeed the assets of certain companies may be wanted for other purposes. For instance, it was stated in the case of Mr. Clore's bid for the breweries that he was interested in the value of properties they own as much as in anything else—and these would be used for other purposes. So we have a right to point out, and I hope the public will realise this, that the consumer is the last person to be considered in a take-over bid. Secondly, as I have mentioned, there is little indication from those interested in take-over bids that any consideration will be shown for the worker's welfare. When the staid and superior employees of Harrods petition their own employees' council because they are concerned about their future, that fact gives weight to the point I am making. Thirdly, if one looks at the careers of Mr. Fraser and Mr. Clore, it is obvious that such operations tend to create monopoly conditions. Generally speaking, these do not function in the interests of the public and often not even of the workers in the industry. I think that the general public will feel that it is rather strange when we raise these matters that there is not a protest from the other side of the House about misrepresentation or about the large sum of money spent by the Institute of Directors. We know that the Road Haulage Council has devoted £100,000 to its campaign against public ownership. Mr. Hurry's organisation has apparently spent £300,000 on what is really political work. Yet there is barely a squeak from the other side of the House about the undemocratic nature of this intervention in politics by big business. We are faced with the fact that the other side of the House has rushed to the defence of the established order, and that such protests as we have heard have been halfhearted and extremely vague. As to compensation for loss of office, I referred earlier to the public concern and comment about the double standard of Tory society which seems to operate as between the workers and the top people in industry. I referred to this in connection with taxation. I can refer to it in connection with emoluments and also in connection with compensation for loss of office. As the News Chronicle says, "it is nice work if you can stop it." There is the case of an ex-colleague of ours, a Conservative ex-M.P., who is to be given over £60,000 in connection with a brewery merger. I would be glad, therefore, if the hon. Member for Louth (Mr. Osborne), or any other defenders of big business, would come to my constituency and explain to the workers there the logic and the justification and fairness for this. The News Chronicle tells us that the chairman of the brewery who may get £60,000 is estimated to have had a salary of £10,000 per annum, so he should not be exactly hard up in any event. What is the justification for paying a man in that position at the age of 57, who has worked for a number of years and has earned a high salary, a sum of £60,000 when he is redundant? A worker in my constituency who was getting £15 a week would have to work eighty years before he even earned £60,000. Certainly he would not save that amount, and it would be subject to taxation. I should be glad to hear hon. Gentlemen opposite justify that. I believe that in a democratic society it is impossible to pretend that such a sum is justified. It is part of the old order, and the sooner it goes the better. A worker in my constituency, if he works 40 or 50 years, not only long hours but starting at 7 o'clock or 8 o'clock in the morning, is lucky if at the end of that time he gets a gold watch. The difference between that and £60,000 is much too great. I should also like to refer to the question of expenses. It has been suggested by hon. and right hon. Members opposite that there are some bad cases, but one must not colour the whole position by one bad example. All I can say is that the City editor of the Evening Standard for 16th April, who presumably knows something about this, did not suggest in an article he then wrote that the expenses racket was an occasional one. He said:Then the article ended—no doubt this is a great consolation to workers in my constituency:"It is probably true to say that five days a week, seven out of every ten lunches served in the smarter West End hotels and restaurants are business lunches. They are paid for out of expense accounts. So are eight out of every ten Rolls-Royces and Bentleys bought in London. And scores of town flats and hotel suites besides theatre tickets. Taking a customer and his wife to a theatre—is a reasonable claim in the interests of business. A director, or executive, can usually claim for his own and his wife's tickets, too."
I quote this—and no doubt it may be written partly in an exaggerated style to stimulate interest—because I suggest that it is nearer the truth than the views expressed by hon. Members opposite. The workers have to pay P.A.Y.E. before they get their wage packets, but this sort of thing goes on for business men. It is a double standard and bad for democracy, and I hope that hon. Members opposite will not attempt to defend it. It is curious how society seems to work when small sums of public money are involved. The Government always go to the utmost trouble to prevent any abuse. There are penal Clauses introduced. We all know of the case recently when a widow was sentenced for taking more money from National Assistance than she was entitled to. Yet we never get this attitude of righteous indignation when it is a question of public money for private industry. We have got to the stage at which many hon. Members opposite fail to appreciate that there are some productive activities which are so large that they are beyond the financial ability of many companies to undertake. We know that this is true of aircraft. We have heard the speech quoted this afternoon of the chairman of Vickers and we know that it is true in the case of Cunard's where £25 million to £30 million will be expected to come from the Government. Incidentally, in the past very large sums of money have been paid to shipping companies, and that particular shipping company as well. We have seen advertisements telling the country how remarkably well the private sector of steel is doing, yet the steel industry requires at least £80 million, £50 million of which will go to a private company to be guaranteed by the State. Sir Andrew McCance, the chairman of Colvilles, has said that this development with public money will certainly benefit the profits of his company. I have in my constituency the Fairey Aviation Company which has produced the rotodyne, a remarkable invention, but it is clearly beyond its financial capacity to go on continuing experimenting unless it has Government help. We all agree that there must be some Government help, yet the astonishing thing is that hon. Members opposite are always so concerned if 10s. National Assistance of pension is wrongly claimed or not absolutely needed, and want penal sanction; but when it is a matter of millions of pounds for private industry they want no control over the public's money. The Labour Party realises that industrial processes are now at the stage, even if they are not directly a public service—we do not hear anything about the £100 million profit made by the electricity industry today—that where an industry has to have State financial help there must be some public control and public accountability. That is wise, not only from the viewpoint of managerial efficiency but also from the point of view of the democracy in which we live. I hope, for all these reasons, that the House will recognise, as I am sure the country recognises, that the time has gone when we can leave industry to run entirely on its own, not caring what investment policy or export policy it has, or what sort of code of relations it has with its employees. These things are all linked up with the individual future of our nation and I am glad to think that the Labour Party is determined to see after the next election that responsibility to society shall be shown in some tangible way."In recent years the Inland Revenue has been much more reasonable over 'expenses'. But it still has the power to clamp down hard, if it wanted to. Life for a director, or big business executive, would then become intolerable."
8.6 p.m.
I would gladly go to the constituency of the hon. Gentleman the Member for Hayes and Harlington (Mr. Skeffington) to talk about this matter that he has raised in debate today. I would begin by saying that he and his party in their remuneration of chairmanships of the Electricity, Gas and Coal Boards are already up in the £10,000 class and in drawing expenses on a generous scale.
Nothing like it.
I had a first-class dinner, no doubt at the expense of one of the boards: at least I hope it was at the expense of the board and I hope the chairman drew expenses for himself as well as for me. He had, I know, expenses. If there is one thing I hate, it is the people who are envious and confuse quality with time. One is asked the idiotic question why Montgomery gets a sergeant, a servant, and so on. Can we really allow Montgomery in the middle of a battle, or the Prime Minister, to be so badly off that they must peel the potatoes in their own kitchen, and must answer, to some really important matter, "I cannot attend to this because I am too busy: there is another matter that has to take priority now"?
The whole principle of payment for the top offices is that quality matters there, and the whole principle of payment on the works floor is that time matters there. I am a publisher. I have the greatest respect for my printers, but in essence what do they do? They take very valuable and beautifully clean white paper and cover it with quantities of black and greasy ink. If it is well directed that is a contribution to the world and an addition to knowledge, but if it is badly directed then the paper and the whole of their effort is wasted. I would, therefore, far rather have quality out of one of my editors and time out of one of my printers. That distinction is the fundamental difference which hon. Members opposite will not recognise. Equally they fail to recognise the extent of degree. If the Coal Board, Gas Board, or Electricity Board were to save £10,000 in its chairman's salary it would make practically no difference. Even the extraordinarily big compensation referred to by the hon. Member for Gloucester (Mr. Diamond), spread over the whole of that firm, would not have amounted to more than a day's or possibly a few hours' payment for the whole number of people employed. The reason why we control the National Assistance Board and things of that kind is that although the sums are small they are multiplied by millions. Fortunately these figures are multiplied by nothing. These are individual cases all the time. Running through the whole of the speech of the right hon. Member for Huyton (Mr. H. Wilson) is the anti-capitalist attitude that hon. Members opposite dislike profit and think it wrong.Hear, hear.
I am glad that the hon. Member agrees. The right hon. Member for Huyton started off by saying that there were good take-over bids. He said that they produced better industrial efficiency, better management and better utilisation of capital, and he gave many other euconiums as well. Underlying this praise of the good take-over, I felt, was the right hon. Gentleman's resentment that even in such cases anybody should make money out of the improvement of the existing state of affairs. This resentment even of the good take-over explains, I believe, the fact that neither the right hon. Gentleman nor anybody else on his side of the House, having put down the terms of the Motion, has produced a single example of a bad takeover bid to seek to justify their Motion.
I know that the hon. Member does not mean to misrepresent what I said. I did not attack profits. I did not attack money being made out of one of the good or relatively good kinds of take-over-bids. What I attacked were unearned capital gains which accrue, especially without tax, as a result of financial manoeuvrings. I also attacked in respect of take-over bids those which had nothing to do with efficiency but which were done purely for greater financial utilisation of under-valued assets.
I will gladly give way if the right hon. Gentleman can give a single example of that nature. My complaint and the point I was making is that hon. Members opposite bring forward their Motion concerning what they call the
and do not produce a single case in point. But let us suppose that there are such cases in point. Let us fight the issue on the worst wicket as well as the best. Either it is a good take-over bid, which is socially right, or it is a bad one, which is socially wrong. If it is a good one, businesses A and B both benefit as businesses. I was not here talking about the shareholders. Furthermore, the shareholders who do not sell—who, after all, are the vast majority—remain exactly as they were, except that they have better prospects for the future. They do not get a penny piece out of the merger. Any prospects have to be achieved and lie in the future. The increased so-called values are only paper values. The minority of shareholders who do sell, of both A and B, transfer to other savers their good prospects. In other words, the new shareholders buy the good prospects from the old shareholders who sell. They recoup their investment in cash for other investment or savings and the purchasers invest that amount of money in a company with better prospects by reason of the takeover bid. No one has gained and no one has lost: the purchase and sale have set off the one against the other. If the merger is a bad one, although we have not yet been given such an instance, both A and B businesses lose and the majority of shareholders of A and B who retain their shares also lose, because they are proprietors of the company. If, on the other hand, the shareholders sell, they sell their bad prospects to the new shareholders and it is the new shareholder who will lose. It is as broad as it is long. If it is a gain for one, it is a loss for the other. They balance each other perfectly in either case. All that can be said to have happened in the bad case is that there has been an error of judgment. All lose except those few who sell out. How can one possibly hope to carry on business and investment except with an occasional error of judgment However, within this field, of the take over, in which so much skilled advice and all the facts and figures are available, it is exceptional for any substantial error of that kind to be made. Nearly all the cases are beneficial to businesses, to shareholders, to customers and to the nation. Take British Aluminium as a case in point. That was a case of progress, with both sets of business and of shareholders benefiting considerably in the short and no doubt also the long run. Hon. Members opposite must make up their minds whether they wish to operate in a free economy or a fully-controlled state. There is no half way. It is the free economy which has got us where we are from savagery. If we want eggs or groundnuts, we do not do it through a State monopoly. We expect people to be enterprising and we let them make a profit out of the growing of eggs. Traditionally, ever since William the Conqueror, and even before, we have advanced ourselves and the nation by allowing the man to do his job and to take his profit on it. It is no good having control and price fixing unless there is complete control. A half-way house is no good. It was during the period of the Labour Government's control of prices that prices went up faster than at any other time in our history. Price fixing and control cannot be applied in a free enterprise world. It can be done in Russia, because everything is controlled, but it cannot be done in a world of free enterprise, because if the costs go up, the prices have to go up. It was during the regime of the Socialist Government that more approval stamps were given to rising prices than at any other time in our history. If a real attack is to be made on paper profits of capital values, it should be on the 2½ per cent. "Daltons," because by reducing the rate of interest to 2½ per cent., gratuitously an enormous amount of money was transferred from those who bought that stock with their savings to the people who had already saved. For every halfpenny now being made in terms of a take-over bid, literally millions must have then been made by reason of the lowering of interest rates and consequent increase in values which happened under Socialist Government. Every fixed interest and every other stock rocketed up and transferred money to the existing savers at the expense of the people who were coming along to be the new savers. The mating of two businesses in a take-over is rather like the mating of the heifer and the bull. If one gets a prize bull out of it, one has added to wealth. A first-class price will be obtained at, for instance, the Perth sales. That may be a quick capital gain, but who worries about it? It certainly is not gambling and it has no relationship whatever to a casino. If there is merit in it, the price goes up. If it has no merit, there is no increase in price. The phrase, "It makes sense to me," is absolutely right and correct in a free economy. The real difficulty in that case was that those in the bank knew that the foreigner was selling feverishly and that those "gilts" were to be sold anyhow, by the foreigner if not by one of us. It is the Government's duty to keep money stable. If it fails and if the country is likely to lose by reasons of frantic sales of sterling abroad, it is literally the duty of everybody to see that it is not the foreigner who alone takes out of the British community what is going out anyhow. Exactly the same frantic selling of sterling by the foreigner happened during the devaluation of the £. I put down a Question to the then Chancellor of the Exchequer to ask whether it had been by reason of the fact that he had not given sufficient directions to the Bank of England to use exchange control to stop the enormous losses which were then taking place, or whether the exchange control was not operating. He fairly answered, as was absolutely right, that in a free economy, when we are dealing with the whole world, we are literally powerless to control what happens to sterling abroad, and that such losses are inevitable. Within the field of take-over bids, the status and powers of the shareholders are very real. Somebody mentioned the Dockers case in refuting the claim of the right hon. Member for Huyton that the democracy of the shareholders was all nonsense. But for every case like the Dockers there are hundreds which happen quietly behind the scenes, where, because of a difference of policy, the person who is out of step with the rest of the board quietly disappears in dignified amity without anybody knowing.—[HON. MEMBERS: "Do the shareholders bring this about?"]—Yes, and because the people who go know that the support of the shareholders resides with those who stay to serve them. The Dockers thought that they had the shareholders behind them. That is why they fought the issue. I can assure hon. Members opposite that for every one who goes out with a noise there are hundreds who go out quietly."undesirable developments in private industry, including take-over bids"
I was employed in one of the largest industrial establishments in this country. I was talking not about Sir Bernard Docker, but his father. His father came in, bought a controlling interest in this huge concern, and made thousands of pounds by selling out within a few weeks, while the highly-skilled men in the management who had spent their lives in the industry were placed in a very uncertain position.
That is a completely different issue. It shows the purely anti-capitalist, anti-profit attitude of hon. Members opposite. This question is being dealt with on the basis not of reason, but of emotion and spleen. The right hon. Member for Huyton said that my hon Friend the Member for Louth (Mr. Osborne) was not an intellectual Fabian. At any rate, my hon. Friend has his feet on the ground and has had a great deal of practical experience. I believe that it would not be unfair to retort that the trouble is that the right hon. Gentleman is a Fabian intellectual. It is because of his lack of practice in this matter that he does not know how these things happen.
He has said that by increasing the differential of Profits Tax we should improve industrial relations because of the consequent effect upon wage restraint. That is absolute nonsense, as anybody who has negotiated with trade unions knows quite well. The printing strike which is on at the moment is based largely on the supposition that the employers have got very large profits. It is not when employers have all their profits taken away from them that trade unions are in an easier negotiating position; it is exactly the opposite way round. Hon. Members know that a trade union negotiator makes his point best when he can say, "What with a high Profits Tax and Income Tax, you are paying 15s. in the £. It costs you only 5s. in the £ for every wage increase you make." If there is one thing the trade union negotiator likes it is the ability to pay high wages. Such higher taxation does not, as the right hon. Gentleman alleges, suit his book at all. High taxation is also at the back of the expenses business. With company tax at virtually 10s. in the £ the desire to be economical is largely undermined. The more taxation is reduced the more self-disciplining will take place. Equally, if we were to give the same allowances for Surtax as for Income Tax we would find that "expenses" would decrease substantially. Anybody in business knows that it is only at the highest levels that these expenses facilities are preferred to higher salaries. At the lower levels it is known that the people will look after the money and spend it only if it is really necessary and in the direction which they chose. The right hon. Gentleman also proposes as a solution a capital gains tax. This is not a practical answer to the take over. The question of losses and the findings of the Royal Commission have been mentioned, but no reference has been made to the immense inflationary effect of the capital gains tax. In America it has been found that there is what used to be the dreaded "mortmain". Stocks become no longer available for sale on the market because once bought and having risen they must stay in those dead hands because, for fear of the tax, nobody dares sell them. Everybody holds on to them, and that situation continues until the amount of stock available becomes more and more restricted. This has a great and damaging inflationary effect upon the economy. The real point, however, is that a capital gains tax, whether it be on a take-over or on a large development such as Lord Nuffield's life's work, penalises the good, social developer and not the bad and anti-social one. The right hon. Gentleman may have thought that he had for once a good point when he said that he wanted the nation to "participate in the growth of national wealth." But it already does that. Income Tax is a wonderful equity share in industry and commerce. The Government at present, through Income and Profits Tax, own a 47 per cent. equity in all our businesses; and have moreover a prior charge additionally in many of them by way of Purchase Tax. I am associated with a business which lost £750,000 to the Government in Purchase Tax which it could not collect when the tax was reduced. The Government are thus sitting with a prior charge—in effect, a sales tax—on the increased national wealth, and a 47 per cent. equity tax in the form of Income Tax and Profits Tax on the whole of the equity of British industry. During his speech I noticed the right hon. Gentleman look over his left shoulder all the time at the members of "Victory for Socialism". It is clear that the Motion was put down entirely out of emotional spleen in an endeavour to satisfy some of the Left-wing supporters that his party is not giving up Socialism and is not becoming a capitalist party. He said that it was going further and further along the path of nationalisation which started in 1945. He would not be tied down at all; he wanted a blank cheque for the journey along that path. The right hon. Gentleman said that it was the giant firms that he wanted to go for. There are thousands of firms in the road transport industry, and some of them are very tiny. If size is a criterion and if his measure of a giant firm is to be found in the road transport industry, he is thinking of some very small giants. Besides being small, they must be efficient, because no small firm can operate in Toad transport today unless it is efficient. He then made efficiency a criterion. At the same time the right hon. Gentle- man said that he wants to nationalise the steel industry. If the standard of efficiency which will make firms fail the nation and be subject to nationalisation is the efficiency of the steel industry, there is not a single firm in this country, either big or small, which is efficient.I assume that the hon. Member is speaking out of ignorance. May I make clear that no one has ever suggested that these are the criteria to be applied?
If that is so, any such ignorance is based on what the right hon. Gentleman said. He said he was going to judge what firms were to be nationalised by certain criteria.
I never mentioned giant firms.
The size of the firm is either something which he has written about recently or something he said today. The right hon. Gentleman wishes to operate a policy of nationalisation or extending nationalisation. He is not talking about a system of free enterprise with strong Government control and vigilance, which is the system we have at present.
There are three political parties in this country. Conservative, Socialist and Liberal. The Socialists, who are anti-capitalists, must be realistic. It is nonsense to talk about prostitution if people who are thus attacked try to defend themselves in such a situation. This country will be healthy only if representatives of all three parties can come to my office and say, "We are so fairly operating in your interests, and in the interests of the nation, that we can ask you for a donation." Hon. Members opposite must make up their minds whether they are socialists or capitalists. The fully controlled State, as in Russia, can be seen to work after a fashion: free enterprise has been shown to work well. They must not go on sitting on the fence trying to maintain that they still have their anti-capitalist ideas but are going to run a free-enterprise State. Let them also recognise that under our system of free enterprise with Government vigilance and control, we have seen the peaceful take over of firms which have appeared to fail the nation. We were recently discussing the case of S G. Brown Ltd. and there have been Shorts and other cases. At any time, if it is thought to be in the national interest to take over a firm, we in this House have the power and it has been taken over. That is the case now and that will always be so. What we do not allow is the Government, as well as having a 47 per cent. equity in the whole of the country through Income Tax and Profits Tax, also to exercise a control which is not necessary and damaging.8.32 p.m.
I wish to say to the hon. Member for Bath (Mr. Pitman) that at no point in this debate—at least during the part to which I have listened—and I have missed only one or perhaps two of the speeches—has any hon. Member on this side of the House said that he was against industry making profits. We are all in favour of industry making profits but the profits should be made reasonably. We do not want them built up out of monopoly conditions or any form of exploitation. We desire the profits, or, rather, the profitability, of the private companies concerned to be shared with the customers and workers, which would be in the public interest.
We are not opposed to private industry making profits. That would be absurd. As the hon. Member for Bath said, the trade unions would be in a difficult position in negotiating for higher wages with industries that did not make profits. I hope that whoever replies to the debate for the Government will not go on repeating many of the half-truths thrown out from the benches opposite about profits or anything else. The hon. Member for Bath asked, as have other hon. Members opposite, for evidence of what we on this side considered to be bad take-over bids. It is a matter of opinion whether a takeover is bad in the interests of the workers or the customers or the shareholders or generally in the interests of the nation. I should say that the Trinidad oil takeover was not in the interests of the country. From the little evidence I have, I should say that the Tube Investments and Reynolds Metals take-over of British Aluminium was probably in the interests of the nation. I have no evidence that boot and shoe firms, as the result of the take-over bids, have yet produced improvements in the production or sale of boots and shoes. [An HON. MEMBER: "What about price?"] As one of my hon. Friends has reminded me, there is also no evidence that workers and customers are any better off as the result of the take-over in the boot and shoe industry. The only evidence we have is that the shareholders and financiers who were playing about with the financial aspect of the take-over bid are better off. One can only give a personal opinion about these things in that way. There are only two other points to which I would reply in the speech of the hon. Member for Bath. I am sorry that he is now leaving us.I am sorry.
The hon. Member is staying in the Chamber.
My first concern now is with his suggestion that we say we are going to take over only the large firms. He went on to say that small road haulage businesses must be efficient or they would not be able to remain in business. This raises many very interesting questions. I do not want to go into all of them. I will only say that judging from the condition of many small road haulage vehicles that I see on the road I think that if they were compelled to keep their vehicles up to the standard of repair and maintenance of the bigger firms many of them would have to go out of existence. The sooner we get higher standards on the road the better, because that is one way of cutting down the appalling toll of road accidents. Private ownership in some of these things does not help to cut down road accidents. I could pursue this matter further, but time is getting on. Another matter that the hon. Member for Bath raised had been raised before. It concerns the making of political donations by firms. The hon. Member was quite correct; any political party can go into his office and ask for a donation and he is perfectly free to present it to the Conservative Party, the Socialist Party, the Liberal Party, or to the Scottish or Welsh Nationalists. He may do so to any party that comes along. All we are saying is that the political party that receives the donation should state how much money it receives in donations and how that money is spent. When the contributions come not from individuals, but from firms or trade associations, we suggest that the law which applies to trade unions should apply in their case; or perhaps it would be better to refer to the Industrial and Provident Societies Acts. Take co-operative societies, which are probably the best example. Such a society has, first, to obtain the agreement of its shareholders that it shall make political contributions. The shareholders then decide to which party, and, obviously, it will be to the Co-operative Party. The society has to act under the Industrial and Provident Societies Acts. In its balance sheet every cooperative society that makes a political grant has to show the amount of money that has been spent and how it has been spent. Is there anything wrong in that? Does any Government supporter object to the very strict laws that were passed by Conservative Administrations, affecting the political contributions of trade unions and co-operative societies, being applied also to public and private companies and to trade associations? This is Conservative legislation and we are all in favour of it. We want it, but we want it to be applied fairly throughout the whole of trade and industry. Is there any objection to that, which seems just common sense and common honesty? I am sorry that the hon. Member for Cheadle (Mr. Shepherd) is not here now, because I wanted to praise him. He said that there had been too much denigration of British industry and that we should be proud of its achievements. I thoroughly agree with him. British industry has done tremendous things since the war in the development of such inventions as the jet aeroplane, the development of nuclear power, the manufacture of diesel locomotives and other achievements in heavy industry and chemistry. We are proud of those things and we all should be proud of them. The energy and initiative that have gone into the development of those great enterprises are something to be proud of. I should also like to mention some other industries that have made great progress and done great things since the war. I start off with the electricity supply industry. I do not want to go into detail because time is getting on, but I should point out that the output of electricity in this country has risen three times over what it was pre-war and the cost is just about 50 per cent. above the pre-war cost. There is no other industry in the country with such a record. I could give details about the expansion of the gas industry, but, unless I am challenged, I shall be content merely to say that its record, while not so great in terms of arithmetical expansion as the electricity industry, is a record of which to be proud. There has been a great expansion in gas production and the price has not gone up a great deal. Coal is always a sorry subject for hon. Members opposite. They think that the coal industry is inefficiently run, that miners do not work hard enough and that all the troubles which beset the industry are due to failures and incompetence of the National Coal Board, but the coal industry is another one of which we can be proud. In spite of the large number of rotten pits in which they have to work, British miners have the highest output per man in Europe. They work more shifts a year than most other miners in Europe and the price of British coal is the lowest in Europe. Is that not something to be proud of?Tell us about the exports.
Whose fault is that? Where there are not customers to buy we cannot export coal.
In any case, the hon. Member is quite wrong about this. The coal industry has been exporting a tremendous amount since 1947, but not in the form of coal. It has been in the great industrial expansion which took place in this country in which coal has been converted into other things. We had to use more of it at home—far more than was used in British industry before the war—and the difference has been going overseas in terms of motor cars and other manufactures. Our other public industries are industries of which we can be proud. Does any hon. Member opposite wish to suggest that we ought to be ashamed of our airways corporations? They are far better than some of the airways corporations we have to deal with overseas. While we agree that there is a great deal which is praiseworthy in British private industry, we should agree that all the industries, whether privately or publicly owned, should be assessed accurately and carefully. I was sorry to note that in his speech today this was not the attitude and outlook of the Chancellor of the Exchequer. In a carefully prepared aside, he said, "What a mess the nationalised industries have got into." What kind of mess is the electrical industry in? What kind of mess is the gas industry in? What kind of mess are the airlines in, or the atomic power industry? These are industries of which we can be proud and to smear them in the way the Chancellor did is not entirely honest. When the Chancellor smears these successful industries and suggests that they are in a mess or inefficient, he is smearing the directors, the members of the boards which run these industries, because when mud is flung around in this way some of it is bound to stick to them. They are in charge of the industries and, being public servants, they cannot answer back. It does not require much courage to attack people who cannot answer back. I trust that if we are to follow the lead of the hon. Member for Cheadle, as I wish to follow it, and not denigrate the successful private industries, right hon. and hon. Members opposite will start telling the truth about our nationalised industries. That is not the end of the Chancellor's peculiar references to our present economic situation. He said that production is up on last year. It ought to be. To get the picture straight we ought to know what the position would have been if there had been no regression, deliberately contrived by the Government, which has set back our production. We should all have been better off. The national income would have been higher, the income from taxation would have been higher and many of our present difficulties would not have been with us if our industrial progress had been maintained at the rate which existed until about 1952–53. The Chancellor also said that employment is up. This is not entirely true. What he was trying to say, and what he went on to say, is that unemployment is going down, but it is not true that employment is going up. At the last count there were about 200,000 fewer workers engaged in British industry than a year ago. They are not making their contribution to production, and that is one of the reasons why production is not rising as quickly as we should like. Another peculiar contribution from the Chancellor was that in which he said that things were looking good and that the national income would be rising, but that he wanted wages and prices to remain steady. He wanted wage restraint and price stability. It struck me as rather unusual that he should present our economic situation in this way, because if we are to have wage stability while the total national income is rising, obviously the wage earners will get nothing out of the improvement in the national income. He is suggesting that the level of wages should remain as at present and that the prosperity which arises out of improved production should go to other people. If he does not mean that, he should not ask for wage restraint. It is wrong to ask for wage restraint in those total terms for another reason. The present pattern of wages is completely indefensible. We cannot say to an engine driver, "So that other people should gain added prosperity your wage should remain on the level of that of a London typist." It may be wrong that the typist is getting so much—I do not know; I am all in favour of high wages all round—but it is certainly wrong to suggest that railwaymen should be asked to carry the burden of the unprofitability of the railways, which arises from causes completely outside their control. The pattern of wages ranges from earnings of about £10 to £18 a week. It is a wide range, and it is indefensible to have this wide range of incomes and to ask people to be satisfied with their earnings when, obviously, the workers in the lower-paid industries will continue to press for higher pay. They have every right to do so. Their standards are below average. From my reading of these wage statistics, I suggest that the majority of adult male workers are receiving below the average of £12 a week. That level is too low against the admitted prosperity of British industry. Therefore, if the President of the Board of Trade wishes to repeat the Chancellor's plea that there should be wage restraint, he should place that plea for wage restraint in these general wage conditions. He should tell us whether he wants the engine driver to be satisfied with a typist's wage, whether he wishes those who are below the national average of weekly wages to be satisfied with their situation and whether he wants all the workers to be satisfied with their present status while the general improvements in prosperity which the Chancellor spoke about go on and are distributed to other people. Unless the plea of the Chancellor for restraint is viewed side by side with the proper picture of the wages system, we shall never understand why the workers in many industries are so dissatisfied with their present situation and conditions. There should be a new approach. To some extent politics should be taken out of it. I am all in favour of that. We must look at the wages system in a far more constructive way than we have up to now. I hope that the President of the Board of Trade will help us to see the beginnings of a better approach from the Government to the wages problem.8.25 p.m.
The hon. Member for Sheffield, Hillsborough (Mr. Darling) touched upon many points. I hope that he will forgive me for not following him in all of them. At the end of his speech the hon. Gentleman touched on the very difficult question of wage differential. I am not certain that what he said would be approved by all his hon. Friends. It is a most complex and difficult problem, and I hope that the hon. Gentleman will forgive me for not diving into it at this hour. I have very little time and only one or two short remarks to make. I do not wish to hold the House from the speech that it is expecting from the right hon. Member for Smethwick (Mr. Gordon Walker).
I shall make one or two comments on what the right hon. Member for Huyton (Mr. H. Wilson) said. He was rather below his average form. We had the usual display of a little plastic bulldog when he came to Trinidad Oil and the implication that taxation is really voluntary. I do not find my taxation voluntary. Perhaps the right hon. Gentleman will give me a few tips. What one can always congratulate the right hon. Gentleman upon is his amazing memory for his own jokes. I have always found that beyond all praise. It is very interesting to look at the selection of speakers from the Front Bench opposite in today's debate. We have the right hon. Member for Huyton and the right hon. Member for Smethwick, who were the prime movers in the two most discreditable and unsuccessful smear campaigns ever carried out in the House of Commons—the Bank Rate Tribunal and the sticky labels case, of which the right hon. Member for Smethwick was the hero. It has been found that hon. Members opposite have very little left except smear campaigns. If they are going to have a smear campaign, they had much better use the escaped dons than anyone else on the back benches opposite. There is no doubt that the escaped dons are very good at it. When it comes to public dirt, the right hon. Member for Smethwick has the palm. The smear campaigns of right hon. and hon. Gentlemen opposite are, as I have said, really a last resort, and they are the last resort because of the deep divisions existing on the benches opposite, not only about foreign affairs, but also, of course, about home affairs—Who ran away?
The dons opposite have ceased to believe in nationalisation—they do not want any more of it—but flat-earthers like the right hon. Member for Ebbw Vale (Mr. Bevan) and his friends are determined to go on with it. I must say that hon. Members opposite very much remind me of a sight I once saw in Karachi—a cart that had a horse and a camel hitched to it, both pulling in opposite directions. What the country wants to know is who will win—the horse or the camel?
It really is no good complaining that the Institute of Directors is trying to find out whether the party opposite intends to nationalise industry or whether it does not. It has a perfect right to ask that, in just the same way as every elector in the country has a perfect right to ask it I do not think that anybody listening to the right hon. Member for Huyton today would have had any idea of what he meant. He gave no straight answers to the questions, what, when or why the party opposite would nationalise anything. At one moment of his speech, particularly after an interruption, he appeared to be saying that it was unfair to accuse him of wanting to nationalise any of the 600 companies. He appeared to speak with sincerity—the same incandescent sincerity with which he affirmed to the House that the reason for the Bank Rate tribunal was to protect Miss Chataway from victimisation by the Conservative Central Office—In saying that, the right hon. Gentleman forces me to say what the Lord Chancellor said to my right hon. Friend the Leader of the Opposition and to myself. He said, "Would you have anybody employed in your Central Office who had done such a thing?"
I leave it to the House to judge of the right hon. Gentleman's sincerity.
In some other parts of his speech he appeared to be in favour of the nationalisation of some of those 600 companies. The right hon. Member for Smethwick has a great opportunity before him tonight to clear this matter up. I hope that he will take it. Which are the industries or firms that are letting down the country? If there is none, then the whole policy of the party opposite is nonsense. If there are some, we should have their names and know that they are to be nationalised. But it is utterly dishonest to make a general accusation that industries are letting the country down but not saying what those industries are. Therefore, perhaps, the right hon. Gentleman will let us know what industries and what firms are letting down the nation. The second thing the right hon. Gentleman can do is to help to explain a speech—I think, a wireless performance—by his right hon. Friend the Member for Huyton who, having given a list of reasons why a firm should be nationalised added, as my right hon. Friend the Chancellor has pointed out, the wonderful words "and so on." If we could get a clear and precise definition of what those words mean, we would be getting somewhere. The country has a right to know what industries hon. Members opposite think are letting down the country, and what "and so on" means. If they do not get an answer, they will know that they are being presented with a piece of dishonest and dishonourable buffoonery.9.0 p.m.
The right hon. Gentleman the Member for Flint, West (Mr. Birch) made a carefully scintillating speech and, as was said on another occasion on a grouse moor, "Nigel was very depressing."
There was little attempt, on the whole, with one or two exceptions, on the other side of the House to answer the case made by my right hon. Friend and my hon. Friends from this side. In the main, the reply given to the charges that we made was to try to divert attention from them. The Chancellor—and I trust that he will be back in due course, because I have one or two things to say about his speech a little later—set the tone for the debate, because he did not reply at all. He made a speech which would have been appropriate to a debate on the economic situation, to which we are looking forward and for which we hope the Government will provide the time, but not to the situation that we are debating today, which is the rôle of private industry, which raises very difficult and complex points. That is the subject which we are debating. We have not, as some hon. Members opposite have assumed, made a doctrinaire attack on private industry as such. What we have said is something very different—that private industry, in various ways and in various parts of it, has been falling down on the job that it ought to do. It has a rôle to play, and it has not been doing it properly and fully. [HON. MEMBERS: "Why?"] I will say why. We say that steps should be taken to make it more efficient than it is, more competitive than it is in many parts, and make it more responsible to the national needs. Part of our case is that private industry is distorted and diverted by pursuing objectives which have no relation to the straightforward efficient making of profit and investment. That ought to be the duty of private industry, which is in large part now diverted from that duty and distorted. The major source, or one major source, of this distortion is our tax system, and the most distorting feature in it—and in this respect I agree with quite a lot of what the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) said on other aspects of our taxation system—is that we have no capital gains tax and a very high marginal rate of taxation on income. This creates a premium upon succeeding in converting income into tax-free capital, which very much distorts the operation of industry and diverts industry from the things which it ought to be doing. This is one of the causes of the rash of take-over bids. There are many different kinds of take-over bids, and some of them are useful, but all of them, under our present system, are in some part vitiated, because instead of being inspired by a desire to create greater efficiency and make the concerns work more profitably there is always, and must be at the moment, the idea that there is a chance of making fabulous capital gains. This must enter into every takeover bid, because it brings in an improper motive. There are take-over bids with proper motives, but this brings in improper ones into every take-over bid, and they are all, in part, wrong and vitiated by this means. Certainly—and I do not think that anyone can deny this, including the President of the Board of Trade and the Chancellor—take-over bids have produced certain undesirable consequences in their train. Even if we say that many take-over bids are desirable, they draw some very undesirable consequences in their train. There is, for instance, the fact that a take-over bid which is not followed up can make a very heavy capital gain for the person making the bid, as long as he bought shares in the concern which is being bid for. My right hon. Friend the Member for Huyton gave examples of the tax-free profit which Mr. Clore made with his take-over bid for Watneys, which was not followed up at all. Even worse is what I understand is a new technique, which I believe is called "spiv bidding," where shares are bought with the intention of giving rise to the rumour that there is to be a take-over bid, without any intention of making a take-over bid at all, because that pushes up values and makes tax-free capital gains. I wonder how these things can be defended. The Chancellor said today that we want reasonable restraint in wages, dividends, and so forth. Can he possibly defend this sort of tax-free making of vast capital gains? Will not the Government condemn it, even though hon. Members opposite might hold the view that nothing can be done about it legally? The Chancellor said not one word in condemnation of this sort of tax-free capital profit which is being made by speculative deals. The desire to avoid taxes distorts private industry in other ways. As is well known, there are now large numbers of skilled accountants and lawyers who could be employed in raising efficiency and improving production, but who spend their whole time devising artificial ways of dodging taxes. All this, of course, is part of the profit system as it operates today. It is defended, or, at any rate, not attacked, by hon. Members opposite because anything that makes a profit must be good, and if tax dodging and if those employed giving advice on tax dodging make a profit, that, too, must be good. There is a result here which we as a House should consider carefully. It has resulted in the spread in high places of a certain new sort of dishonesty, cynicism and disregard of public duty. There was a time when we in this country took a pride in paying our taxes. We thought that only foreigners did not. This sort of fiscal immorality is spreading through the country and is doing very great damage to our national integrity. We ought on both sides of the House, regarding it in that light, to consider what we can do about it. The most obvious and socially disturbing form of tax avoidance is the entertainment expenses racket. This really has now reached a point where something has got to be done. I know that it is very difficult to deal with this, but something has got to be done because the total sum now involved is really staggering. There was an article in the bankers' magazine in August, 1956, which calculated, on the basis of official figures, that the total expenditure on business account on consumer-type goods and services could not be less than £500 million a year. That was in 1956 and it would be more now. That is an immense sum. It is a sum which is being partly subsidised by other taxpayers and puts up the general level of taxes by a very considerable amount, because whenever there is an avoidance of tax it forces up the marginal rate since it is necessary to raise taxes from a smaller number of people. Although entertainment tax avoidance is the most spectacular form of this sort of thing, it is not the most expensive, either to the Revenue or to other taxpayers. There are now innumerable tax avoidance devices which lose the Revenue very large sums indeed. There is compensation for loss of office. I think that the Chancellor was very uncomfortable in his defence of this device, and I hope it means that he is thinking of trying to do something about it. He was so uncomfortable that I found it hard to comprehend exactly what he was saying about it. Then there is the use of covenants; there are tricks to avoid death duties; there are the tax-free lump-sum payments on top hat pension schemes, dividend stripping, bond washing and masses of other things of this sort. The Government, although they denounce this sort of thing, play into the hands of this kind of tax dodger by obstinately clinging to this dilatory fashion of trying to cope with it by Clauses in the Finance Bill. This gives the tax dodgers the start they need to make their illicit gains. It is like setting mounted police to catch gangsters in motor cars. It is coping in an old-fashioned and ineffective way with very clever, modern-minded, slick gentlemen who, if they can get twelve or eighteen months start of the Chancellor, can make their illicit gains before it can possibly be stopped. As we have often said on this side, the only counter to it is the speedy stopping of the loopholes. One must outlaw the new devices as one discovers them, not wait until they pile up until the accumulation seems big enough to justify a Clause in the Finance Bill They must be stopped by order or regulation which, within a certain time, has to be ratified by subsequent legislation. Besides the distortions of private enterprise and industry which result from our present taxation system, there are some graver and more deep-rooted defects which should receive careful attention from both sides of the House. One sign of these defects is the declining function of the shareholder. This is really a very serious matter. One of the most colourful recent accounts of what this sort of thing involves was given in the Evening Standard of 4th June, in its report of a meeting of the shareholders in Sears Holdings. It said that Mr. Clore presided over this meetingand went on to say that"less than 12 hours after his fabulous Derby night party",
This meeting was taking place at the time of the bid he had made to take over Watneys. The Chancellor today told us that it was the duty of shareholders to discover the intentions of their companies in takeover bids. But, of course, Mr. Clore does not agree with the Chancellor, and, in these things, what Mr. Clore says is more important than what the Chancellor says. Mr. Clore, in the interests of the shareholders, refused to say a word about the bid which was actually in operation and pending. I must be fair. The shareholders were not altogether without some interest in their company. The Evening Standard goes on to say:"Clore looked a little tired. But he drove through the business at a brisk pace. The meeting was over in 10 minutes flat."
says the Evening Standard—"Then, as people began to pick up hats and umbrellas, a shareholder popped up. 'It is a spreading custom at company meetings', he said, 'to show shareholders a film or give them a day out' … Mr. Clore was asked: 'Won't you consider treating your shareholders to some sumptuous entertainment next year?' 'I will certainly consider the suggestion', he said. And that"—
The real proof of the declining importance of the shareholder is the development of the voteless share. This is something to which hon. Members opposite should give very careful attention. It contradicts the whole purpose and logic of private industry. The theory is that the equity shareholders own and control the company, yet here we have equity shareholders deprived of a vote. We are told a lot nowadays about a share-owning democracy, but it is a very odd sort of democracy when the voters are disfranchised. This is what is happening. The Chancellor said in his speech today that he could not think of anything which we could improve by legislation. I am sure that we ought to have legislation to prohibit the issue of voteless shares. There would not be disagreement about it. It could be done. Although it would not remedy all the defects which we see, it would certainly remedy some of them because, of course, the voteless share is extremely useful in the take-over bid. Very small amounts of voting shares can control very large amounts of non-voting shares. Legislation would really help in this matter, about which we are all very worried. The most sinister aspect of the distortion of private industry is that private industry is now passing into the hands of a very small, close circle, largely hereditary, which is financially, industrially and politically connected. The cat has been let out of the bag by the Institute of Directors. The Institute has done us all one service, for which we are grateful. It has shown everyone that the Conservative Party is the party of the directors. It has shown everyone that the directors and the Conservative Party form a close and privileged clique. That is why the Daily Express, which sees rather more clearly than many hon. Members opposite, has called the Institute of Directors a bunch of gas bags and why the Daily Express has described the Institute's propaganda about the 500 companies as a very foolish campaign. The Institute of Directors is now lavishly spending money in the political interests of the Conservative Party. This, in part, no doubt is due to a lively sense of favours to come, but it is also, in part, a return for services rendered by the Government. Pendennis, in the Observer of 15th May, said that the Institute of Directors"was that."
which is still before us. This is what Pendennis, who presumably informs himself with care—[Laughter.] One does not write this sort of thing in a responsible newspaper without going fairly carefully into it. It may be that hon. Members do not believe what the Institute says, but this is what it has claimed. This is a picture of a naked selfish pressure group, and it is a picture, on the Government side, of an unashamed policy of "pickings for the boys" which has been carried out, according to the claim of the Institute of Directors, year by year by this Chancellor and by his predecessors and in return for which the Institute is now financially backing the Conservative Party. The Government tabled an Amendment which was designed, as the Chancellor used it, to divert attention from the shortcomings, abuses and distortions of private industry, but I should like to ask certain questions of the President of the Board of Trade about it. It claims that Government policy has strengthened the national economy. The Chancellor told us that the Index of Industrial Production in April rose to 110 and he boasted that this was a record, but, as my hon. Friend the Member for Sheffield, Park (Mr. Mulley) said, each year should be a record. If it is not, it either means that we are stagnating or going backwards. To say, "This is a record", does not mean much. It is the rate at which we are advancing which matters. The latest figure of 110 in April means that there has been an advance of four points in four and a half years. That is not a record to be proud of. The Chancellor says that the policies of the Government have improved the balance of payments. Could the President of the Board of Trade tell us how much of the improvement in the balance of payments is due to the movement in the terms of trade, because, unless we know that, we cannot measure the effect of Government policy. It may be that Government policy has had some effect. Clearly, the terms of trade have had a great effect. I wonder whether the President of the Board of Trade could isolate these two things, because otherwise the words of the Amendment are meaningless."claims that the Surtax concessions in the 1957 Budget followed closely the recommendation of the Institute and were the climax to a campaign pioneered in 1954; that it was largely instrumental in securing the introduction of the single rate Profits Tax in 1958; that it was instrumental in getting the rate for controlling-directors' remuneration raised in the 1959 Finance Bill,"
The Amendment goes on to say that the Government's policy
"has made possible the achievement of full employment in conditions of price stability'
The Chancellor gave us the good news that this month unemployment is down to 413,000, but, again, this is not something to be particularly proud of. The figure of unemployment is 148,000 more than it was this time two years ago. What the Chancellor is claiming is that he has now partially cured the unemployment which he himself created. An increase of 148,000 since two years ago is a great deal.
Now, the Chancellor did not even have with him the really important figures about employment. We want to know these. The latest figures I can find—there must be later ones in the possession of the Government—are that at the end of April there were 200,000 fewer at work than at this time the year before.
rose—
I hope to get the figures from the right hon. Gentleman. The real achievement of the Government—
There are 350,000 more employed today than there were in 1951.
That may well be so, but it is no answer. What most of the Government are concerned about is to defend their own policy. The point is that it has induced a shrinkage of the labour force in the country, which is the sole sources of our wealth.
As regards the claims about price stability, could the President of the Board of Trade explain why prices have not fallen with the great cheapening of our imports? This is the question people are asking, and it is no use talking in broad terms about price stability. Imports have cheapened. Prices have not fallen.The Amendment deliberately dodges the real issue before us, the real problem concerning the rôle of private industry in a modern economy. As it seems to me, private industry must cause deep and fundamental distortions in the economy if there is inadequate guidance by the State. There are national needs which private industry, by its very nature, cannot take into account or look after. In conditions of full employment decisions made by private industry must have an effect upon such things as the balance of payments, inflation and the national rate of investment. Private industry, which is making each of its decisions privately, separately, in isolation, has no means of taking account of these things, of the effects of its decisions upon the balance of payments, inflation, and so forth, and if they are not looked after by the State they will go by default. Nobody can look after them or pay attention to them except the State.
The only alternative is the Conservative policy of moderating any dangers of a balance of payments crisis or inflation by moderating the rate of growth and, of course, by depressing investment, too. The present policy of the Government, of a once-for-all expansion, will not solve the problem, because the question still remains: what are we to do when we have got back to the point of full employment and full production? In this matter the Government take a very short-run view. They calculate that they can just about ride out the next General Election before they have to damp things down again. They made the same calculation in 1955. Of course, it was the first time that that trick was tried. It came off, but I do not think that it will come off twice.
The greatest failure in this respect, and one that is of grave significance for the country, is in the rate of investment. The complacency of the Government is tremendous and disturbing and frightening. Other countries are going ahead of Britain as dynamic high investment economies. The contrast with Germany is particularly humiliating—
With even freer enterprise.
Hon. Gentlemen opposite talk a lot about wages putting up prices, but if they would compare Britain with Germany they would see that it is an over-simple explanation. Since 1950, rates of wages have gone up by about the same ratio in Germany and in Britain, but because Germany has had a much higher rate of investment the wage costs per unit of output in Germany have gone up by about one-third of those in this country, and the difference is due to the very high rate of investment.
This is, I submit, the proof of the failure of the Government and private industry and of the relationship of the two. We cannot possibly solve the problem by a continuance of the Government's policies, because it is in the period of this Government that we have fallen behind Germany. It is in this very period in which they have been producing and carrying out those policies.Absolutely free enterprise.
It may be free enterprise, but there is something wrong with Government policy and private industry here if, for eight years, we have been falling behind Germany.
rose—
I will sit down if the President of the Board of Trade does not mind my eating into his time, but I want to preserve his right to get up at the proper time.
If, unhappily and improbably the Conservatives should win the General Election, they would throw to the winds the last few restraints which have kept them from a full-blooded and disastrous Conservative policy. The "pickings for the boys" would become more rampant, more unashamed. Tax avoidance would increase. There would be lavish hand-outs without any control to many private concerns. The profitable parts of public enterprise and public industry would be sold back, in the main, by private treaty. Investment would remain too low and Britain would fall still further behind; but, of course, private profits would remain artificially high, and the Conservatives would remain, therefore, as complacent as they are today. The Conservatives have shown that they can be quite unmoved by the prospect of the sight of Britain falling behind in world competition, so long as they and their friends do well out of it.9.27 p.m.
The significance of this debate was not lost on my right hon. Friend the Member for Flint, West (Mr. Birch) or upon my other hon. Friends. We see the dilemma in which the party opposite finds itself. If the Labour Party does not stick to State ownership, it cannot stick together. Unless it can go into the next election committed to extending the area of nationalisation, it goes in disunited.
Then comes the dilemma. It knows, as well as we do, that nationalisation in all its varieties is very unpopular. So what is it to do? Like all modern aggressors anxious to seize their neighbour's property—[HON. MEMBERS: "Suez."]—the aggressors in that part of the world did exactly what I am now going to describe—when they are not sure of public opinion they turn on a campaign of virulent abuse against the people they intend to rob. Nationalisation being so unpopular, the only hope of the party opposite is to try to make private industry still more unpopular. Hence the party broadcast on Saturday and hence this debate. This campaign, however, is too late. Private industry is doing too well and serving the nation too well. Right horn Gentlemen opposite thought that when they came to the election, first they would be able to accuse private industry of stagnation. That one has gone; production is going up. Secondly, they thought they could sink private industry because there would be a large number of unemployed. That one has failed hon. Members opposite, too, as my right hon. Friend the Chancellor of the Exchequer pointed out in his speech today. I must give the answer which has already been given but for which my right hon. Friend was asked. The April figure for the number employed was less by 204,000, or 1 per cent., than a year ago; but this figure of the number employed always lags about two months behind the unemployment figures. In two months' time, we shall see a different figure. My right hon. Friend gave a very encouraging picture of the economy which was described in the Amendment. The right hon. Member for Smethwick (Mr. Gordon Walker) asked me how I could distinguish the items that made up the improvement in the balance of payments. It is not possible to do so accurately, but I would think that about half last year was due to the fall in import prices and half to the fact that our exports did considerably better than we thought they would. That was due to the financial measures we had taken. The right hon. Gentleman asked why prices had not fallen. The fact is that the fall in the prices of imported materials was more than offset by rises in fuel and transport costs at home and by rises in wages. In fact, stable prices represent more efficient production. The right hon. Member for Huyton (Mr. H. Wilson) said that private industry under a Conservative Government had produced a windfall State from which the masses were excluded. How could he say that, knowing that the standard of life has risen and risen right across the community? Let me give just one example. Here are the figures of expenditure on motoring. In 1951, the public spent on new and second-hand motor cars and motor cycles £65 million and in 1958, £384 million. In 1951, the public spent on the running of all motor vehicles and motor bicycles £139 million and in 1958, £342 million. Clearly, these figures will be increased in 1959. That is not evidence of an economy in which wealth is concentrated in a few hands. The charges brought against private industry this afternoon were that a few people are making too much money out of share deals and that some take-over bids can be presented as a sensational method of doing this. On that and certain other accusations about expenses, we are asked to believe that private industry is not being carried on in accordance with the national interest. We are told that a Labour Government would do something about take-over bids, would introduce a capital gains tax and would assume control over any parts of private industry which, the Socialist Party decided, were failing the nation. In view of the emphasis put upon takeover bids in the course of the debate it might be convenient for me to try to answer the charges made by examining them for a moment. These bids are a well-understood method of changing the control of higher management in a business and of getting under-valued and under-used assets into circulation. There can hardly be any doubt that the national interest demands that we make the best use of our assets. A peculiarity of takeover bids is that they apply only to private industry. Nationalised industries are immune. It is one of the weaknesses of State ownership that once an industry is nationalised it is very difficult to change the management of any section of it. My hon. Friend the Member for Cheadle (Mr. Shepherd) made that very clear. But there are some managements inside the nationalised sector which require to be woken up. In private industry the threat of a take-over bid does that, but it cannot do it in nationalised industries. Do hon. Members opposite really think that there is not a single railway hotel which might be better managed? If there is a hotel which is badly managed in the private sector it is subject to a change of management to the benefit of the public. That is happening all the time. In this problem of modifying the structure of industry to meet a change an important principle must be observed, namely, that the question of who owns the assets is not nearly as important to the economy as the question of how well those assets are maintained. The public is beginning to understand the importance of that principle. That is one reason why nationalisation is unpopular.In that case will the right hon. Gentleman state the Conservative Party attitude to the nationalisation of steel? The only question in dispute there is the question of taking back ownership without interfering with the management. The management, under the Iron and Steel Board, has been the same in both cases. It is merely a question of ownership. Will the right hon. Gentleman explain his argument in that connection?
We have not the slightest confidence that if the shares were taken back into public ownership the management would not then become a politically-run affair.
But the most powerful reason why nationalisation is so unpopular is that the consumer cannot effectively criticise what is going on, as he can in private industry. He may feel that something has gone wrong, but now that he owns the business he cannot get at it. He cannot make his wishes heard as he could when it did not belong to him. Private industry is subject both to effective criticism by the consumer and to the take-over bid. There are two kinds of take-over bids. There are those which are successful and lead to amalgamation. I have searched for evidence of whether any of the takeover bids which have been made have led to damage either in the assets or the employment of the companies taken over. In this debate hon. Gentlemen opposite have been challenged to give one instance of a company which has been taken over and which suffered. Only at the end of the debate did the hon. Member for Sheffield, Hillsborough (Mr. Darling) cite Trinidad Leaseholds. I believe that to be quite untrue. It is true that the owner is now in America but to say that the staff and the employees have suffered and that the amount of money now being invested in the wells and refineries is less is certainly not so. The hon. Member also mentioned Sears Holdings, the shoe amalgamation brought about by Mr. Clore. On all the evidence we have in the Board of Trade—I have no acquaintance with Mr. Clore except a nodding one—[Interruption.] I wish to be fair to this gentleman. On all the evidence we have, the companies which amalgamated have done considerably better since.The right hon. Gentleman referred to the evidence at the Board of Trade. Has he read the evidence of retail margins, published by the Board of Trade last week, showing that in the retail footwear trade the margin has gone up from 24 per cent. in 1950 to over 30 per cent. in 1957? Is that what he means when he says that Sears have done well?
What I mean is that the price of shoes compared with other articles of general necessity in the clothing field have kept low—[HON. MEMBERS: "Oh."]—compared with other articles in the clothing field.
The other kind of take-over bid is the one which fails—and some of those bids deserve to fail because they are made without due regard to the strength of the company aimed at or to the loyalties of those employed, and it is the manner of making those bids, which usually fail, that we do not like. But I must say this about many of the bids that fail. It is not fair to say that they do no good. The bid for Watneys was mentioned, but the important thing is that the bid for Watneys served notice on all the brewery boards that they must make the best use of their assets—[HON. MEMBERS: "Hear, hear."] It cannot be in the national interest that assets should be unused—[HON. MEMBERS: "Hear, hear."]—well, whenever the election comes and right hon. Gentlemen opposite attempt a takeover bid for the Government I think that, though it will fail, it will do us good and help us in our third term of office. Then it is said that take-over bids raise the value of shares in one or both of the companies and that some people can make too much money out of this operation. A rise in equity prices has taken place all over the world because of adjustments to the change in the value of money and the very heavy volume of new investment, and if only a few people benefited from that great appreciation it might be something to condemn. But the fact is that the appreciation in Stock Exchange values has not been cornered by a handful of crafty speculators. Directly or indirectly, millions of people are sharing in the rising value of assets in industry. The better the management the better the prospects for the shareholders, the workers and the consumers. When private industry is doing well all of them benefit; those who work, those who spend, and those who save. No family in this country is likely to get any richer by being part owner in a nationalised industry. [Interruption.] Do the Opposition think the public prefers being taxed to pay the losses of the nationalised industries—[Interruption.]—or buying—[Interruption.]—£80 million was the loss on the railways—[Interruption.]—rose—[Interruption.]—
Order. There is far too much noise. Too many hon. Members are endeavouring to talk at the same time. [Interruption.] Order. I ask the House to behave with greater decorum. In this place silence does not mean consent, whatever it may mean in other places. Sir David Eccles.
If the Opposition—[Interruption.]—
On a point of order. I distinctly heard the right hon. Member for Huyton (Mr. H. Wilson) say to my right hon. Friend the President of the Board of Trade, "That was a deliberate lie".
I never said anything of the kind, Mr. Speaker. [HON. MEMBERS: "Oh."] All I did was to ask the right hon. Gentleman to name a single industry which the taxpayer had to subsidise.
That explanation disposes of the matter. I repeat my previous injunction. I hope that the speech of the right hon. Member the President of the Board of Trade will now be heard in peace. Sir David Eccles.
The taxpayer has to find the money for the loans for the deficit on the railways—[HON. MEMBERS: "Oh."]—I wish to repeat: which do the Opposition think the taxpayer prefers; to be able to buy a refrigerator out of the profits of private industry or to be taxed to pay the losses on the nationalised industries? [Interruption.] Every time the value of one of the shares quoted on the Stock Exchange improves, every time share values—
On a point of order. The President of the Board of Trade has made a very serious allegation, that the taxpayer has to bear the losses of the nationalised industries.
There is no point of order at all in that, although it may be a point of debate. There is nothing in that for me. Sir David Eccles.
rose—
rose—
Order. It is not a point of order.
May I ask you a question, Mr. Speaker? How can you say, "It is not a point of order", when you do not know what my point of order was?
I heard the hon. Gentleman object to a statement made by the President of the Board of Trade. That is not a matter for me. Hon. Members frequently make statements in this House to which other hon. Members object.
My point of order is that the President of the Board of Trade has made an allegation and I ask you, Mr. Speaker, if you will see that the accounts of the nationalised industries are published so that we may see whether the taxpayer is having to shoulder any of the burden.
That is really a point of debate, as the hon. Member must know. It is not a question for me.
What I was saying was that every time a share value goes up it is not only the individual shareholders who benefit, but some pension fund, some unit trust, some insurance company which gains and all the millions of policy holders and members gain also. What really infuriates hon. and right hon. Members opposite is that anyone should make big money at all. It is a strange thing that they dislike it when someone makes big money, but they do not mind at all when they win it. If an untaxed gain is due to luck on the football pools or the Irish Sweep, no Socialist objects. One understands why. If one does not win the prize because of bad luck it is no personal disgrace, but on the question of saving and investing and making money, brains come in—[HON. MEMBERS: "Oh."]—and failure is a reflection on the loser. Jealousy, not money, is the root of the Socialist objection.
My hon. Friend the Member for Bath (Mr. Pitman) said very well that men who get to the top deserve considerable rewards, and so they do. What is the worth of these rare and uncommon men who get to the top and make something big happen, or prevent a big mistake? I ask hon. and right hon. Members opposite, what do they think it would have been worth in the national interest to pay a man who would have strangled the groundnut scheme at birth.rose—
What is the point of order?
The President of the Board of Trade asked the Opposition a question. I am prepared to answer it.
Not tonight. Sir D. Eccles.
rose—
rose—
The hon. Member must keep his seat as the Minister has not given way.
The answer is, a quarter of the cost of Suez.
rose—
Any more questions?
Order. For the House to make all this noise is no way to behave.
All that we have heard from hon. Members opposite today is nothing but a smokescreen to cover up the fact that they have to go on with nationalisation. The right hon. Member for Huyton gave a description, a catalogue, of the crimes for which, if the Labour Party is returned to power, it would think it right to take over any firm it chooses. I think that that list of crimes will finish any little respect which the right hon. Gentleman may have had in some industrial quarters, for what he was saying is, in the words of the little poem in "Alice in Wonderland,"
Division No. 150.]
| AYES
| [9.59 p.m.
|
| Abse, Leo | Collick, P. H. (Birkenhead) | Hale, Leslie |
| Ainsley, J. W. | Corbet, Mrs. Freda | Hall, Rt. Hn. Glenvil (Colne Valley) |
| Albu, A. H. | Craddock, George (Bradford, S.) | Hamilton, W. W. |
| Allaun, Frank (Salford, E.) | Cronin, J. D. | Hannan, W. |
| Allen, Arthur (Bosworth) | Crossman, R. H. S. | Hastings, S. |
| Allen, Scholefield (Crewe) | Cullen, Mrs. A. | Hayman, F. H. |
| Awbery, S. S. | Darling, George (Hillsborough) | Healey, Dennis |
| Baoon, Miss Alice | Davies, Ernest (Enfield, E.) | Henderson, Rt. Hn. A. (Rwly Regis) |
| Baird, J. | Davies, Harold (Leek) | Hewitson, Capt. M. |
| Balfour, A. | Davies, S. O. (Merthyr) | Hilton, A. V. |
| Bellenger, Rt. Hon. F. J. | Deer, G. | Hobson, C. R. (Keighley) |
| Bence, C. R. (Dunbartonshire, E.) | de Freitas, Geoffrey | Holman, P. |
| Benn, Hn. Wedgwood (Bristol, S. E.) | Diamond, John | Holmes, Horace |
| Benson, Sir George | Dodds, N. N. | Houghton, Douglas |
| Beswick, Frank | Donnelly, D. L. | Howell, Charles (Perry Barr) |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Dugdale, Rt. Hn. John (W. Brmwch) | Howell, Denis (All Saints) |
| Blackburn, F. | Ede, Rt. Hon. J. C. | Hoy, J. H. |
| Blenkinsop, A. | Edwards, Rt. Hon. John (Brighouse) | Hughes, Cledwyn (Anglesey) |
| Blyton, W. R. | Edwards, Rt. Hon. Ness (Caerphilly) | Hughes, Emrys (S. Ayrshire) |
| Boardman, H. | Edwards, Robert (Bilston) | Hughes, Hector (Aberdeen, N.) |
| Bottomley, Rt. Hon. A. G. | Edwards, W. J. (Stepney) | Hunter, A. E. |
| Bowden, H. W. (Leicester, S. W.) | Evans, Albert (Islington, S. W.) | Hynd, J. B. (Attercliffe) |
| Bowles, F. G. | Evans, Edward (Lowestoft) | Irvine, A. J. (Edge Hill) |
| Boyd, T. C. | Fernyhough, E. | Irving, Sydney (Dartford) |
| Braddock, Mrs. Elizabeth | Finch, H. J. (Bedwellty) | Isaacs, Rt. Hon. G. A. |
| Brockway, A. F. | Fitch, A. E. (Wigan) | Janner, B. |
| Broughton, Dr. A. D. D. | Fletcher, Eric | Jay, Rt. Hon. D. P. T. |
| Brown, Rt. Hon. George (Belper) | Foot, D. M. | Jeger, George (Goole) |
| Brown, Thomas (Inoe) | Forman, J. C. | Jeger, Mrs. Lena (Holbn & St. Pncs, S.) |
| Burke, W. A. | Fraser, Thomas (Hamilton) | Jenkins, Roy (Stechford) |
| Burton, Miss F. E. | Gaitskell, Rt. Hon. H. T. N. | Johnson, James (Rugby) |
| Butler, Herbert (Hackney, C.) | George, Lady Megan Lloyd (Car'then) | Jones, Rt. Hon. A. Creech (Wakefield) |
| Butler, Mrs. Joyce (Wood Green) | Gibson, C. W. | Jones, David (The Hartlepools) |
| Callaghan, L. J. | Gooch, E. G. | Jones, Elwyn (W. Ham, S.) |
| Carmichael, J. | Gordon Walker, Rt. Hon. P. C. | Jones, Jack (Rotherham) |
| Castle, Mrs. B. A. | Greenwood, Anthony | Jones, T. W. (Merloneth) |
| Champion, A. J. | Grenfell, Rt. Hon. D. R. | Kenyon, C. |
| Chapman, W. D. | Grey, C. F. | Key, Rt. Hon. C. W. |
| Chetwynd, G. R. | Griffiths, David (Rother Valley) | King, Dr. H. M. |
| Cliffe, Michael | Griffiths, Rt. Hon. James (Llanelly) | Lawson, G. M. |
| Clunie, J. | Griffiths, William (Exchange) | Ledger, R. J. |
"'I'll be judge, I'll be jury,' said cunning old Fury;
'I'll try the whole cause, and condemn you to death.'"
That is the present position of Labour Party policy in regard to private industry. It intends to make the accusation, to hold the trial and to condemn each victim one by one.
I think it right at the end of the debate that I should give just one friendly warning to the Labour Party. If it does not turn its back on State ownership the country three times running will turn its back on the Labour Party.
rose in his place, and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the words proposed to be left out stand part of the Question:—
The House divided: Ayes 254, Noes 316.
| Lee, Frederick (Newton) | Paling, Rt. Hon. W. (Dearne Valley) | Strachey, Rt. Hon. J. |
| Lee, Miss Jennie (Cannock) | Paling, Will T. (Dewsbury) | Strauss, Rt. Hon. George (Vauxhall) |
| Lever, Harold (Cheetham) | Palmer, A. M. F. | Stross, Dr. Barnett (Stoke-on-Trent, C.) |
| Lever, Leslie (Ardwick) | Pargiter, G. A. | Summerskill, Rt. Hon. E. |
| Lewis, Arthur | Parker, J. | Swingler, S. T. |
| Lindgren, G. S. | Parkin, B. T. | Sylvester, G. O. |
| Lipton, Marcus | Paton, John | Symonds, J. B. |
| Logan, D. G. | Peart, T. F. | Taylor, Bernard (Mansfield) |
| Mabon, Dr. J. Dickson | Pentland, N. | Taylor, John (West Lothian) |
| McCann, J. | Plummer, Sir Leslie | Thomas, George (Cardiff) |
| MacColl, J. E. | Price, J. T. (Westhoughton) | Thomas, Iorwerth (Rhondda, W.) |
| MacDermot, Niall | Price, Philips (Gloucestershire, W.) | Thomson, George (Dundee, E.) |
| McInnes, J. | Probert, A. R. | Thornton, E. |
| McKay, John (Wallsend) | Proctor, W. T. | Timmons, J. |
| McLeavy, Frank | Pursey, Cmdr. H. | Tomney, F. |
| MacMillan, M. K. (Western Isles) | Randall, H. E. | Ungoed-Thomas, Sir Lynn |
| MacPherson, Malcolm (Stirling) | Rankin, John | Usborne, H. C. |
| Mahon, Simon | Redhead, E. C. | Vlant, S. P. |
| Mallalieu, E. L. (Brigg) | Reid, William | Warbey, W. N. |
| Mallalieu, J. P. W. (Huddersfd, E.) | Reynolds, G. W. | Watkins, T. E. |
| Mann, Mrs. Jean | Rhodes, H. | Weitzman, D. |
| Marquand, Rt. Hon. H. A. | Robens, Rt. Hon. A. | Wells, Percy (Faversham) |
| Mason, Roy | Roberts, Albert (Normanton) | Wells, William (Walsall, N.) |
| Mellish, R. J. | Roberts, Goronwy (Caernarvon) | Wheeldon, W. E. |
| Mendelson, J. J. | Robinson, Kenneth (St. Pancras, N.) | White, Mrs. Eirene (E. Flint) |
| Messer, Sir F. | Rogers, George (Kensington, N.) | White, Henry (Derbyshire, N. E.) |
| Mikardo, Ian | Ross, William | Wigg, George |
| Mitchison, G. R. | Royle, C. | Wilcock, Group Capt. C. A. B. |
| Monslow, W. | Short, E. W. | Wilkins, W. A. |
| Moody, A. S. | Silverman, Julius (Aston) | Willey, Frederick |
| Morris, Percy (Swansea, W.) | Silverman, Sydney (Nelson) | Williams, David (Neath) |
| Morrison, Rt. Hn. Herbert (Lewis'm, S.) | Simmons, C. J. (Brierley Hill) | Williams, Rev. Llywelyn (Ab'tillery) |
| Mort, D. L. | Skeffington, A. M. | Williams, W. R. (Openshaw) |
| Moss, R. | Slater Mrs. H. (Stoke, N.) | Williams, W. T. (Barons Court) |
| Moyle, A. | Slater, J. (Sedgefield) | Willis, Eustace (Edinburgh, E.) |
| Mulley, F. W. | Smith, Ellis (Stoke, S.) | Wilson, Rt. Hon. Harold (Huyton) |
| Neal, Harold (Bolsover) | Snow, J. W. | Winterbottom, Richard |
| Noel-Baker, Francis (Swindon) | Sorensen, R. W. | Woodburn, Rt. Hon. A. |
| Noel-Baker, Rt. Hon. P. (Derby, S.) | Soskice, Rt. Hon. Sir Frank | Woof, R. E. |
| Oliver, G. H. | Sparks, J. A. | Yates, V. (Ladywood) |
| Oram, A. E. | Spriggs, Leslie | Zilliacus, K. |
| Orbach, M. | Steele, T. | |
| Owen, W. J. | Stewart, Michael (Fulham) | TELLERS FOR THE AYES:
|
| Padley, W. E. | Stonehouse, John | Mr. Popplewell and Mr. Pearson. |
| Paget, R. T. | Stones, W. (Consett) |
NOES
| ||
| Agnew, Sir Peter | Bromley-Davenport, Lt.-Col. W. H. | du Cann, E. D. L. |
| Aitken, W. T. | Brooke, Rt. Hon. Henry | Duncan, Sir James |
| Allan, R. A. (Paddington, S.) | Brooman-White, R. C. | Duthie, W. S. |
| Alport, C. J. M. | Browne, J. Nixon (Craigton) | Eccles, Rt. Hon. Sir David |
| Amory, Rt. Hn. Heathcoat (Tiverton) | Bryan, P. | Eden, J. B. (Bournemouth, West) |
| Arbuthnot, John | Bullus, Wing Commander E. E. | Elliott, R. W. (Ne'castle upon Tyne, N.) |
| Armstrong, C. W. | Burden, F. F. A. | Emmet, Hon. Mrs. Evelyn |
| Ashton, Sir Hubert | Butcher, Sir Herbert | Errington, Sir Eric |
| Astor, Hon. J. J. | Butler, Rt. Hn. R. A. (Saffron Walden) | Erroll, F. J. |
| Atkins, H. E. | Campbell, Sir David | Farey-Jones, F. W. |
| Baldock, Lt.-Cmdr. J. M. | Carr, Robert | Fell, A. |
| Baldwin, Sir Archer | Cary, Sir Robert | Finlay, Graeme |
| Barber, Anthony | Channon, H. P. G. | Fisher, Nigel |
| Barlow, Sir John | Chichester-Clarke, R. | Fletcher-Cooke, C. |
| Barter, John | Churchill, Rt. Hon. Sir Winston | Forrest, G. |
| Batsford, Brian | Clarke, Brig. Terence (Portsmth, W.) | Foster, John |
| Baxter, Sir Beverley | Cole, Norman | Fraser, Hon. Hugh (Stone) |
| Beamish, Col. Tufton | Conant, Maj. Sir Roger | Freeth Denzil |
| Bell, Philip (Bolton, E.) | Cooke, Robert | Galbraith, Hon. T. G. D. |
| Bell, Ronald (Bucks, S.) | Cooper, A. E. | Gammans, Lady |
| Bennett, F. M. (Torquay) | Cooper-Key, E. M. | Garner-Evans, E. H. |
| Bennett, Dr. Reginald | Cordeaux, Lt.-Col. J. K. | Gibson-Watt, D. |
| Bevins, J. R. (Toxteth) | Corfield, F. V. | Glover, D. |
| Bidgood, J. C. | Courtney, Cdr. Anthony | Glyn, Col. Richard H. |
| Biggs-Davison, J. A, | Craddock, Beresford (Spelthorne) | Godber, J. B. |
| Bingham, R. M. | Crowder, Sir John (Finchley) | Goodhart, Philip |
| Birch, Rt. Hon. Nigel | Crowder, Petre (Ruislip—Northwood) | Gough, C. F. H. |
| Bishop, F. P. | Cunningham, Knox | Gower, H. R. |
| Black, Sir Cyril | Dance, J. C. G. | Grant, Rt. Hon. W. (Woodside) |
| Body, R. F. | Davidson, Viscountess | Grant-Ferris, Wg. Cdr. R. (Nantwich) |
| Bonham Carter, Mark | D'Avigdor-Goldsmid, Sir Henry | Green, A. |
| Bossom, Sir Alfred | Deedes, W. F. | Gresham Cooke, R. |
| Boyd-Carpenter, Rt. Hon. J. A. | de Ferranti, Basil | Grimond, J. |
| Boyle, Sir Edward | Dodds-Parker, A. D. | Grimston, Hon. John (St. Albans) |
| Braine, B. R. | Donaldson, Cmdr, C. E. McA. | Grimston, Sir Robert (Westbury) |
| Braithwaite, Sir Albert (Harrow, W.) | Doughty, C. J. A. | Grosvenor, Lt-Col. R. G. |
| Brewis, John | Drayson, G. B. | Gurden, Harold |
| Hall, John (Wycombe) | Low, Rt. Hon. Sir Toby | Renton, D. L. M. |
| Hare, Rt. Hon. J. H. | Lucas, Sir Jocelyn (Portsmouth, S.) | Ridsdale, J. E. |
| Harris, Frederic (Croydon, N. W.) | Lucas, P. B. (Brentford & Chiswick) | Rippon, A. G. F. |
| Harris, Reader (Heston) | Lucas-Tooth, Sir Hugh | Roberts, Sir Peter (Heeley) |
| Harrison, A. B. C. (Maldon) | McAdden. S. J. | Robinson, Sir Roland (Blackpool, S.) |
| Harrison, Col. J. H. (Eye) | Macdonald, Sir Peter | Robson Brown, Sir William |
| Harvey, Sir Arthur Vere (Macclesf'd) | Mackeson, Brig. Sir Harry | Rodgers, John (Sevenoaks) |
| Harvey, John (Walthamstow, E.) | McLaughlin, Mrs. P. | Roper, Sir Harold |
| Harvie-Watt, Sir George | Maclay, Rt. Hon. John | Ropner, Col. Sir Leonard |
| Hay, John | Maclean, Sir Fitzroy (Lancaster) | Russell, H. S. |
| Head, Rt. Hon. A. H. | McLean, Neil (Inverness) | Sandys, Rt. Hon. D. |
| Heald, Rt. Hon. Sir Lionel | Macleod, Rt. Hn. Iain (Enfield, W.) | Scott-Miller, Cmdr. R. |
| Henderson, John (Cathcart) | MacLeod, John (Ross & Cromarty) | Sharples R. C. |
| Henderson-Stewart, Sir James | McMaster, Stanley | Shepherd, William |
| Hesketh, R. F. | Macmillan, Rt. Hn. Harold (Bromley) | Simon, J. E. S. (Middlesbrough, W.) |
| Hicks-Beach, Maj. W. W. | Macmillan, Maurice (Halifax) | Smithers, Peter (Winchester) |
| Hill, Rt. Hon. Charles (Luton) | Macpherson, Niall (Dumfries) | Smyth, Brig. Sir John (Norwood) |
| Hill, John (S. Norfolk) | Maddan, Martin | Soames, Rt. Hon. Christopher |
| Hinchingbrooke, viscount | Maitland, Cdr. J. F. W. (Horncastle) | Spearman, Sir Alexander |
| Hirst, Geoffrey | Maitland, Hon. Patrick (Lanark) | Speir, R. M. |
| Hobson, John (Warwick & Leam'gt'n) | Manningham-Buller, Rt. Hn. Sir R. | Spence, H. R. (Aberdeen, W.) |
| Holland-Martin, C. J. | Markham, Maj. Sir Frank | Stanley, Capt. Hon. Richard |
| Hope, Lord John | Marlowe, A. A. H. | Stevens, Geoffrey |
| Hornby, R. P. | Marples, Rt. Hon. A. E. | Steward, Harold (Stockport, S.) |
| Hornsby-Smith, Miss M. P. | Marshall, Douglas | Steward, Sir William (Woolwich, W.) |
| Horobin, Sir Ian | Mathew, R. | Storey, S. |
| Horsbrugh, Rt. Hon. Dame Florence | Maudling, Rt. Hon. R. | Stuart, Rt. Hon. James (Moray) |
| Howard, Gerald (Cambridgeshire) | Mawby, R. L. | Studholme, Sir Henry |
| Howard, John (Test) | Maydon, Lt.-Comdr. S. L. C. | Summers, Sir Spencer |
| Hughes Hallett, Vice-Admiral J. | Medlicott, Sir Frank | Sumner, W. D. M. (Orpington) |
| Hughes-Young, M. H. C. | Milligan, Rt. Hon. W. R. | Taylor, Sir Charles (Eastbourne) |
| Hurd, Sir Anthony | Molson, Rt. Hon. Hugh | Taylor, William (Bradford, N.) |
| Hutchison, Michael Clark (E'b'gh, S.) | Moore, Sir Thomas | Teeling W. |
| Hutchison, Sir James (Scotstoun) | Morrison, John (Salisbury) | Temple, John M. |
| Hyde, Montgomery | Mott-Radclyffe, Sir Charles | Thomas, Leslie (Canterbury) |
| Hylton-Foster, Rt. Hon. Sir Harry | Nabarro, G. D. N. | Thomas, P. J. M. (Conway) |
| Iremonger, T. L. | Nairn, D. L. S. | Thompson, Kenneth (Walton) |
| Irvine, Bryant Godman (Rye) | Neave, Airey | Thompson, R. (Croydon, S.) |
| Jenkins, Robert (Dulwich) | Nicholls, Harmar | Thorneycroft, Rt. Hon. P. |
| Jennings, J. C (Burton) | Nicholson, Sir Godfrey (Farnham) | Thornton-Kemsley, Sir Colin |
| Jennings, Sir Roland (Hallam) | Nicolson, N. (B'n'm'th, E. & Chr'ch) | Tiley, A. (Bradford, W.) |
| Johnson, Dr. Donald (Carlisle) | Noble, Comdr. Rt. Hon. Sir Allan | Tilney, John (Wavertree) |
| Johnson, Eric (Blackley) | Noble, Michael (Argyll) | Turner, H. F. L. |
| Jones, Rt. Hon. Aubrey (Hall Green) | Nugent, Richard | Turton, Rt. Hon. R. H. |
| Joseph, Sir Keith | O'Neill, Hn. Phellm (Co. Antrim, N.) | Tweedsmuir, Lady |
| Kaberry, D. | Ormsby-Gore, Rt. Hon. W. D. | Vane, W. M. F. |
| Keegan, D. | Orr, Capt. L. P. S. | Vaughan-Morgan, J. K. |
| Kerby, Capt. H. B. | Orr-Ewing, C. Ian (Hendon, N.) | Vickers, Miss Joan |
| Kerr, Sir Hamilton | Osborne, C. | Vosper, Rt. Hon. D. F. |
| Kershaw, J. A. | Page, R. G. | Wakefield, Edward (Derbyshire, W.) |
| Kimball, M. | Pannell, N. A. (Kirkdale) | Wakefield, Sir Wavell (St. M'lebone) |
| Kirk, P. M. | Partridge, E. | Walker-Smith, Rt. Hon. Derek |
| Lagden, G. W. | Peel, W. J. | Wall, Patrick |
| Lancaster, Col. C. G. | Peyton, J. W. W. | Ward, Rt. Hon. G. R. (Worcester) |
| Langford-Holt, J. A. | Pickthorn, Sir Kenneth | Ward, Dame Irene (Tynemouth) |
| Leather, E. H. C. | Pike, Miss Mervyn | Watkinson, Rt. Hon. Harold |
| Leavey, J. A. | Pilkington, Capt. R. A. | Webbe, Sir H. |
| Leburn, W. G. | Pitt, Miss E. M. | Webster, David |
| Legge-Bourke, Maj. E. A. H. | Pott, H. P. | Whitelaw, W. S. I. |
| Lennox-Boyd, Rt. Hon. A. T. | Powell, J. Enoch | Williams, Paul (Sunderland, S.) |
| Lindsay, Hon. James (Devon, N.) | Price, David (Eastleigh) | Williams, R. Dudley (Exeter) |
| Lindsay, Martin (Solihull) | Price, Henry (Lewisham, W.) | Wills, Sir Gerald (Bridgwater) |
| Linstead, Sir H. N. | Prior-Palmer, Brig. Sir Otho | Wilson, Geoffrey (Truro) |
| Llewellyn, D. T. | Profumo, J. D. | Wolrige-Gordon, Patrick |
| Lloyd, Rt. Hon. G. (Sutton Coldfield) | Ramsden, J. E. | Wood, Hon. R. |
| Lloyd, Maj. Sir Guy (Renfrew, E.) | Rawlinson, Peter | Woollam, John Victor |
| Lloyd, Rt. Hon. Selwyn (Wirral) | Redmayne, M. | Yates, William (The Wrekin) |
| Longden, Gilbert | Rees-Davies, W. R. | |
| Loveys, Walter H. | Remnant, Hon. P. | TELLERS FOR THE NOES:
|
| Mr. Heath and Mr. Legh. |
Question put, That the proposed words be there added:—
Division No. 151.]
| AYES
| [10.10 p.m.
|
| Agnew, Sir Peter | Astor, Hon. J. J. | Baxter, Sir Beverley |
| Aitken, W. T. | Atkins, H. E. | Beamish, Col. Tufton |
| Allan, R. A. (Paddington, S.) | Baldock, Lt.-Cmdr. J, M. | Bell, Philip (Bolton, E.) |
| Alport, C. J. M. | Baldwin, Sir Archer | Bell, Ronald (Bucks, S.) |
| Amory, Rt. Hn. Heathcoat (Tiverton) | Barber, Anthony | Bennett, F. M. (Torquay) |
| Arbuthnot, John | Barlow, Sir John | Bennett, Dr. Reginald |
| Armstrong, C. W. | Barter, John | Bevins, J. R. (Toxteth) |
| Ashton, Sir Hubert | Batsford, Brian | Bidgood, J. C. |
The House dividend: Ayes 314, Noes 253
| Biggs-Davison, J. A. | Hare, Rt. Hon. J. H. | Maitland, Cdr. J. F. W.(Horncastle) |
| Bingham, R. M. | Harris, Frederic (Croydon, N. W.) | Maitland, Hon. Patrick (Lanark) |
| Birch Rt. Hon. Nigel | Harris, Reader (Heston) | Manningham-Buller, Rt. Hn. Sir R. |
| Bishop, F. P. | Harrison, A. B. C. (Maldon) | Markham, Major Sir Frank |
| Black, Sir Cyril | Harrison, Col. J. H. (Eye) | Marlowe, A. A. H. |
| Body, R. F. | Harvey, Sir Arthur Vere (Macclesf'd) | Marples, Rt. Hon. A. E. |
| Bossom, Sir Alfred | Harvey, John (Walthamstow, E.) | Marshall, Douglas |
| Boyd-Carpenter Rt. Hon. J. A. | Harvie-Watt, Sir George | Mathew, R. |
| Boyle, Sir Edward | Hay, John | Maudling, Rt. Hon. R. |
| Braine, B. R. | Head, Rt. Hon. A. H. | Mawby, R. L. |
| Braithwaite, Sir Albert (Harrow, W.) | Heald, Rt. Hon. Sir Lionel | Maydon, Lt.-Comdr. S. L. C. |
| Brewis, John | Henderson, John (Cathcart) | Medlicott, Sir Frank |
| Bromley-Davenport, Lt.-Col. W. H. | Henderson-Stewart, Sir James | Milligan, Rt. Hon. W. R. |
| Brooke, Rt. Hon. Henry | Hesketh, R. F. | Molson, Rt. Hon. Hugh |
| Brooman-White, R. C. | Hicks-Beach, Maj. W. W. | Moore, Sir Thomas |
| Browne, J. Nixon (Craigton) | Hill, Rt. Hon. Charles (Luton) | Morrison, John (Salisbury) |
| Bryan, P. | Hill, John (S. Norfolk) | Mott-Radclyffe, Sir Charles |
| Bullus, Wing Commander E. E. | Hinchingbrooke, Viscount | Nabarro, G. D. N. |
| Burden F. F. A. | Hirst, Geoffrey | Nairn, D. L. S. |
| Butcher, Sir Herbert | Hobson, John (Warwick & Leam'gt'n) | Neave, Airey |
| Butler, Rt Hn. R. A. (Saffron Walden) | Holland-Martin, C. J. | Nicholls, Harmar |
| Campbell, Sir David | Hope, Lord John | Nicholson, Sir Godfrey (Farnham) |
| Carr, Robert | Hornby, R. P. | Nicolson, N. (B'n'm'th, E. & Chr'ch) |
| Cary, Sir Robert | Hornsby-Smith, Miss M. P. | Noble, Comdr. Rt. Hon. Sir Allan |
| Channon, H. P. G. | Horobin, Sir Ian | Noble, Michael (Argyll) |
| Chichester-Clarke R. | Horsbrugh, Rt. Hon. Dame Florence | Nugent, Richard |
| Churchill, Rt. Hon. Sir Winston | Howard, Gerald (Cambridgeshire) | O'Neill, Hn. Phelim (Co. Antrim, N.) |
| Clarke, Brig. Terence (Portsmth, W.) | Howard, John (Test) | Ormsby-Gore, Rt. Hon. W. D. |
| Cole, Norman | Hughes Hallett, Vice-Admiral J. | Orr, Capt. L. P. S. |
| Conant, Maj. Sir Roger | Hughes-Young, M. H. C. | Orr-Ewing, C. Ian (Hendon, N.) |
| Cooke, Robert | Hurd, Sir Anthony | Osborne, C. |
| Cooper, A. E. | Hutchison, Michael Clark (E'b'gh, S.) | Page, R. G. |
| Cooper-Key, E. M. | Hutchison, Sir James (Scotstoun) | Pannell, N. A. (Kirkdale) |
| Cordeaux, Lt.-Col. J. K. | Hyde, Montgomery | Partridge, E. |
| Corfield, F. V. | Hylton-Foster, Rt. Hon. Sir Harry | Peel, W. J. |
| Courtney, Cdr. Anthony | Iremonger, T. L. | Peyton, J. W. W. |
| Craddock, Beresford (Spelthorne) | Irvine, Bryant Godman (Rye) | Pickthorn, Sir Kenneth |
| Crowder, Sir John (Finchley) | Jenkins, Robert (Dulwich) | Pike, Miss Mervyn |
| Crowder, Petre (Ruislip—Northwood) | Jennings, J. C. (Burton) | Pilkington, Capt. R. A. |
| Cunningham, Knox | Jennings, Sir Roland (Hallam) | Pitman, I. J. |
| Dance, J. C. G. | Johnson, Dr. Donald (Carlisle) | Pitt, Miss E. M. |
| Davidson, Viscountess | Johnson, Eric (Blackley) | Pott, H. P. |
| D'Avigdor-Goldsmid, Sir Henry | Jones, Rt. Hon. Aubrey (Hall Green) | Powell, J. Enoch |
| Deeds W. F. | Joseph, Sir Keith | Price, David (Eastleigh) |
| de Ferranti, Basil | Kaberry, D. | Price, Henry (Lewisham, W.) |
| Dodds-Parker, A. D. | Keegan, D. | Prior-Palmer, Brig. Sir Otho |
| Donaldson, Cmdr. C. E. McA. | Kerby, Capt. H. B. | Profumo, J. D. |
| Doughty, C. J. A. | Kerr, Sir Hamilton | Ramsden, J. E. |
| Drayson, G. B. | Kershaw, J. A. | Rawlinson, Peter |
| du Cann, E. D. L. | Kimball, M. | Redmayne, M. |
| Dunoan, Sir James | Kirk, P. M. | Rees-Davies, W. R. |
| Duthie, Sir William | Lagden, G. W. | Remnant, Hon. P. |
| Eccles, Rt. Hon. Sir David | Lancaster, Col. C. G. | Renton, D. L. M. |
| Eden, J. B. (Bournemouth, West) | Langford-Holt, J. A. | Ridsdale, J. E. |
| Elliott, R. W. (Ne'castle upon Tyne, N.) | Leather, E. H. C. | Rippon, A. G. F. |
| Emmet, Hon. Mrs. Evelyn | Leavey, J. A. | Roberts, Sir Peter (Heeley) |
| Errington, Sir Eric | Leburn, W. G. | Robinson, Sir Roland (Blackpool, S.) |
| Erroll, F. J. | Legge-Bourke, Maj. E. A. H. | Robson Brown, Sir William |
| Farey-Jones, F. W. | Lennox-Boyd, Rt. Hon. A. T. | Rodgers, John (Sevenoaks) |
| Fell, A. | Lindsay, Hon. James (Devon, N.) | Roper, Sir Harold |
| Finlay, Graeme | Lindsay, Martin (Solihull) | Russell, R. S. |
| Fisher, Nigel | Linstead, Sir H. N. | Sandys, Rt. Hon. D. |
| Fletcher-Cooke, C. | Llewellyn, D. T. | Scott-Miller, Cmdr. R. |
| Forrest, G | Lloyd, Rt. Hon. C.(Sutton Coldfield) | Sharples, R. C. |
| Foster, John | Lloyd, Maj. Sir Guy (Renfrew, E.) | Shepherd, William |
| Fraser, Hon. Hugh (Stone) | Lloyd, Rt. Hon. Selwyn (Wirral) | Simon, J. E. S. (Middlesbrough, W.) |
| Freeth, Denzil | Longden, Gilbert | Smithers, Peter (Winchester) |
| Galbraith, Hon. T. G. D. | Loveys, Walter H. | Smyth, Brig. Sir John (Norwood) |
| Gammans, Lady | Low, Rt. Hon. Sir Toby | Soames, Rt. Hon. Christopher |
| Garner-Evans, E. H. | Lucas, Sir Jocelyn (Portsmouth, S.) | Spearman, Sir Alexander |
| Gibson-Watt, D. | Lucas, P. B. (Brentford & Chiswick) | Speir, R. M. |
| Glover, D. | Lucas-Tooth, Sir Hugh | Spence, H. R. (Aberdeen, W.) |
| Glyn, Col. Richard H. | McAdden, S. J. | Stanley, Capt. Hon. Richard |
| Godber, J. B. | Macdonald, Sir Peter | Stevens, Geoffrey |
| Goodhart, Philip | Mackeson, Brig. Sir Harry | Steward, Harold (Stockport, S.) |
| Gough, C. F. H. | McLaughlin, Mrs. P. | Steward, Sir William (Woolwich, W.) |
| Gower, H. R. | Maclay, Rt. Hon. John | Storey, S. |
| Grant, Rt. Hon. W. (Woodside) | Maclean, Sir Fitzroy (Lancaster) | Stuart, Rt. Hon. James (Moray) |
| Grant-Ferris, Wg Cdr. R. (Nantwich) | McLean, Neil (Inverness) | Studholme, Sir Henry |
| Green, A. | Macleod, Rt. Hn. Iain (Enfield, W.) | Summers, Sir Spencer |
| Gresham Cooke, R. | MacLeod, John (Ross & Cromarty) | Sumner, W. D. M. (Orpington) |
| Grimston, Hon. John (St. Albans) | McMaster, Stanley | Taylor, Sir Charles (Eastbourne) |
| Grimston, Sir Robert (Westbury) | Macmillan, Rt. Hn. Harold (Bromley) | Taylor, William (Bradford, N.) |
| Grosvenor, Lt.-Col. R. G. | Macmillan, Maurice (Halifax) | Teeling, W. |
| Gurden, Harold | Macpherson, Niall (Dumfries) | Temple, John M. |
| Hell, John (Wycombe) | Maddan, Martin | Thomas, Leslie (Canterbury) |
| Thomas, P. J. M. (Conway) | Vickers, Miss Joan | Williams, Paul (Sunderland, S.) |
| Thompson, Kenneth (Walton) | Vosper, Rt. Hon. D. F. | Williams, R. Dudley (Exeter) |
| Thompson, R. (Croydon, S.) | Wakefield, Edward (Derbyshire, W.) | Wills, Sir Gerald (Bridgwater) |
| Thorneycroft, Rt. Hon. P. | Wakefield, Sir Wavell (St. M'lebone) | Wilson, Geoffrey (Truro) |
| Thornton-Kemsley, Sir Colin | Walker-Smith, Rt. Hon. Derek | Wolrige-Gordon, Patrick |
| Tiley, A. (Bradford, W.) | Wall, Patrick | Wood, Hon. R. |
| Tilney, John (Wavertree) | Ward, Rt. Hon. G. R. (Worcester) | Woollam, John Victor |
| Turner, H. F. L. | Ward, Dame Irene (Tynemouth) | Yates, William (The Wrekin) |
| Turton, Rt. Hon. R. H. | Watkinson, Rt. Hon. Harold | |
| Tweedsmuir, Lady | Webbe, Sir H. | TELLERS FOR THE AYES:
|
| Vane, W. M. F. | Webster, David | Mr. Heath and Mr. Legh. |
| Vaughan-Morgan, J. K. | Whitelaw, W. S. I. |
NOES
| ||
| Abse, Leo | Gaitskell, Rt. Hon. H. T. N. | Mann, Mrs. Jean |
| Ainsley, J. W. | George, Lady Megan Lloyd (Car'then) | Marquand, Rt. Hon. H. A. |
| Albu, A. H. | Gibson, C. W. | Mason, Roy |
| Allaun, Frank (Salford, E.) | Gooch, E. G. | Mellish, R. J. |
| Allen, Arthur (Bosworth) | Gordon Walker, Rt. Hon. P. C. | Mendelson, J. J. |
| Allen, Scholefield (Crewe) | Greenwood, Anthony | Messer, Sir F. |
| Awbery, S. S. | Grenfell, Rt. Hon. D. R. | Mikardo, Ian |
| Bacon Miss Alice | Grey, C. F. | Mitchison, G. R. |
| Baird, J. | Griffiths, David (Rother Valley) | Monslow. W. |
| Balfour, A. | Griffiths, Rt. Hon. James (Llanelly) | Moody, A. S. |
| Bellenger, Rt. Hon. F. J. | Griffith, William (Exchange) | Morris, Percy (Swansea, W.) |
| Bence, C. R. (Dunbartonshire, E.) | Hale, Leslie | Morrison, Rt. Hn. Herbert (Lewis'm, S.) |
| Benn, Hn. Wedgwood (Bristol, S. E.) | Hall, Rt. Hn. Glenvil (Colne Valley) | Mort, D. L. |
| Benson, Sir George | Hamilton, W. W. | Moss, R. |
| Beswick, Frank | Hannan, W. | Moyle, A. |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Hastings, S. | Mulley, F. W. |
| Blackburn, F. | Hayman, F. H. | Neal, Harold (Bolsover) |
| Blenkinsop, A. | Healey, Denis | Noel-Baker, Francis (Swindon) |
| Blyton, W. R. | Henderson, Rt. Hn. A. (Rwly Regis) | Noel-Baker, Rt. Hon. P. (Derby, S.) |
| Boardman, H. | Hewitson, Capt. M. | Oliver, G. H. |
| Bottomley, Rt. Hon. A. G. | Hilton, A. V. | Oram, A. E. |
| Bowden, H. W. (Leicester, S. W.) | Hobson, C. R. (Keighley) | Orbach, M. |
| Bowles, F. G. | Holman, P. | Owen, W. J. |
| Boyd, T. C. | Holmes, Horaoe | Padley, W. E. |
| Braddock, Mrs. Elizabeth | Houghton, Douglas | Paget, R. T. |
| Brockway, A. F. | Howell, Charles (Perry Barr) | Paling, Rt. Hon. W. (Dearne Valley) |
| Broughton, Dr. A. D. D. | Howell, Denis (All Saints) | Paling, Will T. (Dewsbury) |
| Brown, Rt. Hon. George (Belper) | Hoy, J. H. | Palmer, A. M. F. |
| Brown, Thomas (Ince) | Hughes, Cledwyn (Anglesey) | Pargiter, G. A. |
| Burke, W. A. | Hughes, Emrys (S. Ayrshire) | Parker, J, |
| Burton, Miss F. E. | Hughes, Hector (Aberdeen, N.) | Parkin, B. T. |
| Butler, Herbert (Hackney, C.) | Hunter, A. E. | Paton, John |
| Butler, Mrs. Joyce (Wood Green) | Hynd, J. B. (Attercliffe) | Peart, T. F. |
| Callaghan, L. J. | Irvine, A. J. (Edge Hill) | Pentland, N. |
| Carmichael, J. | Irving, Sydney (Dartford) | Plummer, Sir Leaslie |
| Castle, Mrs. B. A. | Isaacs, Rt. Hon. G. A. | Price, J. T. (Westhoughton) |
| Champion, A. J. | Janner, B. | Price, Philips, (Gloucestershire. W.) |
| Chapman, W. D. | Jay, Rt. Hon. D. P. T. | Probert, A. R. |
| Chetwynd, G. R. | Jeger, George (Goole) | Proctor, W. T. |
| Cliffe, Michael | Jeger, Mrs. Lena (Holbn & St. Pncs. S.) | Pursey, Cmdr. H. |
| Clunie, J. | Jenkins, Roy (Stechford) | Randall, H. E. |
| Collick, P. H. (Birkenhead) | Johnson, James (Rugby) | Rankin, John |
| Corbet, Mrs. Freda | Jones, Rt. Hon. A. Creech (Wakefield) | Redhead, E. C. |
| Craddock, George (Bradford, S.) | Jones, David (The Hartlepools) | Reid, William |
| Cronin, J. D. | Jones, Elwyn (W. Ham, S.) | Reynolds, G. W. |
| Crossman, R. H. S. | Jones, Jack (Rotherham) | Rhodes H. |
| Cullen, Mrs. A. | Jones, T. W. (Merloneth) | Robens, Rt. Hon. |
| Darling, George (Hillsborough) | Kenyon, C. | Roberts, Albert (Normanton) |
| Davies, Ernest (Enfield, E.) | Key, Rt. Hon. C. W. | Roberts, Goronwy (Caernarvon) |
| Davies, Harold (Leek) | King, Dr. H. M. | Robinson, Kenneth (St. Pancras, N.) |
| Deer, G. | Ledger, R. J. | Rogers, George (Kensington, N.) |
| de Freitas, Geoffrey | Lee, Frederick (Newton) | Ross, William |
| Diamond, John | Lee, Miss Jennie (Cannock) | Royle, C. |
| Dodds, N. N. | Lever, Harold (Cheetham) | Short, E. W. |
| Donnelly, D. L. | Lever, Leslie (Ardwick) | Silverman, Julius (Aston) |
| Dugdale, Rt. Hn. John (W. Brmwch) | Lewis, Arthur | Silverman, Sydney (Nelson) |
| Ede, Rt. Hon. J. C. | Lindgren, G. S. | Simmons, C. J. (Brierley Hill) |
| Edwards, Rt. Hon. John (Brighouse) | Lipton, Marcus | Skeffington, A. M. |
| Edwards, Rt. Hon. Ness (Caerphilly) | Mabon, Dr. J. Dickson | Slater, Mrs. H. (Stoke, N.) |
| Edwards, Robert (Bilston) | McCann, J. | Slater, J. (Sedgefield) |
| Edwards, W. J. (Stepney) | MacColl, J. E. | Smith, Ellis (Stoke, S.) |
| Evans, Albert (Islington, S. W.) | MacDermot, Niall | Snow, J. W. |
| Evans, Edward (Lowestoft) | McInnes, J. | Sorensen, R. W. |
| Fernyhough, E. | McKay, John (Wallsend) | Soskice, Rt. Hon. Sir Frank |
| Finch, H. J. (Bedwellty) | McLeavy, Frank | Sparks, J. A. |
| Fitch, A. E. (Wigan) | MacMillan, M. K. (Western Isles) | Spriggs, Leslie |
| Fletcher, Eric | MacPherson, Malcolm (Stirling) | Steele, T. |
| Foot, D. M. | Mahon, Simon | Stewart, Michael (Fulham) |
| Forman, J. C. | Mallalieu, E. L. (Brigg) | Stonehouse, John |
| Fraser, Thomas (Hamilton) | Mallalieu, J. P. W. (Huddersfd, E.) | Stones, W. (Consett) |
| Strachey, Rt. Hon. J. | Ungoed-Thomas, Sir Lynn | Williams, David (Neath) |
| Strauss, Rt. Hon. George (Vauxhall) | Usborne, H. C. | Williams, Rev. Llywelyn (Ab'tillery) |
| Stross, Dr. Barnett (Stoke-on-Trent, C.) | Viant, S. P. | Williams, W. R. (Openshaw) |
| Summerskill, Rt. Hon. E. | Warbey, W. N. | Williams, W. T. (Barons Court) |
| Swingler, S. T. | Watkins, T. E. | Willis, Eustace (Edinburgh, E.) |
| Sylvester, G. O, | Weitzman, D. | Wilson, Rt. Hon. Harold (Huyton) |
| Symonds, J. B. | Wells, Percy (Faversham) | Winterbottom, Richard |
| Taylor, Bernard (Mansfield) | Wells, William (Walsall, N) | Woodburn, Rt. Hon. A. |
| Taylor, John (West Lothian) | Wheeldon, W. E. | Woof, R. E. |
| Thomas, George (Cardiff) | White, Mrs. Eirene (E. Flint) | Yates, V. (Ladywood) |
| Thomas, Iorwerth (Rhondda, W.) | White, Henry (Derbyshire, N. E.) | Zilliacus, K. |
| Thomson, George (Dundee, E.) | Wigg, George | |
| Thornton, E. | Wilcock, Group Capt. C. A. B. | TELLERS FOR THE NOES:
|
| Timmons, J. | Wilkins, W. A. | Mr. Popplewell and Mr. Pearson. |
| Tomney, F. | Willey, Frederick |
Main Question, as amended, put and agreed to.
Resolved,
That this House endorses the policy of Her Majesty's Government of encouraging free enterprise industry which has strengthened the national economy, improved the balance of payments and the strength of sterling and has made possible the achievement of full employment in conditions of price stability thereby raising the general standard of living and rejects all proposals to extend the area of State ownership of industry as inimical to the best interests of the nation.
Potatoes
10.22 p.m.
I beg to move,
Perhaps it might be convenient, Mr. Speaker, if we were to discuss at the same time the next Order, the Potatoes (Protection of Guarantees) Order, 1959.That the Potatoes (Guaranteed Prices) Order, 1959, dated 5th June, 1959, a copy of which was laid before this House on 10th June, be approved.
Yes.
Both these Orders are made under the Agriculture Act, 1957, and relate to the new guarantee arrangements for potatoes which will apply for the 1959 and subsequent crops.
The main Order gives effect to the change which my right hon. Friend announced in the House on 30th June last year. Briefly, the new arrangements substitute for the purchase of surplus potatoes on Government account arrangements that assure a minimum return to the industry as a whole, related to the requirements of potatoes for human consumption. A guaranteed price for such potatoes will be determined each year in the light of the conclusions reached after the Annual Review. If in any year the average price received by producers for potatoes for human consumption is less than the guaranteed price, then the deficiency will be made good from Exchequer funds. In Great Britain the amount due will be paid to the Potato Marketing Board to use as it thinks fit for the benefit of producers. The system we are replacing was, of course, originally designed to meet conditions in which the Government wanted a surplus of potatoes as an insurance against shortage of other foods. Farmers were directed to grow potatoes in areas and on land where potato growing would not normally be an economic proposition. It was a corollary of this system that the Government should undertake to buy any surplus for which the grower could not find a market. The guarantee arrangements for many other commodities, for instance, livestock and cereals, were changed following decontrol to meet the changed conditions. But the basic features of the potato guarantee arrangements remained unaltered when the Potato Marketing Board was revived in 1955. The Government have come to the conclusion that they must now introduce a guarantee system for potatoes more suited to present-day conditions and the needs of a freer economy. This new system will introduce greater flexibility in marketing and give growers more incentive to produce the type of potatoes demanded by the consumer, and to improve grading and standards generally. Moreover, we expect that the needs of the market rather than arbitrary regional and seasonal support prices will become the prime influence on the pattern of production. In addition, we are satisfied that the new system will greatly reduce the scope for fraud and other malpractices. I realise that many growers are concerned about the abolition of the individual guarantee, but the policy of budgeting for large surpluses has ended and with it the prime justification for undertaking to buy from each individual grower all his surplus potatoes. Moreover, in the final analysis the individual guarantee is dependent on the continuation of State responsibility for trading in some form or other. On the other hand, there is no foundation for the criticism that the new guarantee is lacking in value. While it is true that surplus potatoes not required for human consumption will no longer be covered by the guarantee, the Government have taken account of this by increasing the guaranteed price. The farmers' unions have agreed that the higher guaranteed price of £12 14s. per ton is equivalent to the lower price of £11 9s. per ton under the support price system. The income of the industry as a whole will be supported by the Government. The new system takes proper account of the existence of a producer marketing board in Great Britain. The Board has an important part to play in the operation of the guarantee and I am confident that it will rise to the challenge of its increased responsibilities. I should now like to deal briefly with the details of the main features of the Guaranteed Prices Order. Article 3 provides for the determination each year of a guaranteed price per ton for potatoes sold for human consumption. The estimation of the quantity of potatoes sold for human consumption in each year and the average price received by producers for such potatoes is dealt with in Article 4 of the Order. The detailed arrangements for calculating what is referred to as the "annual quantity" and the average price have been worked out in consultation with the producers' representatives. I should mention that for the 1959 crop year only, while the new machinery is running in, the annual quantity will be estimated at 3,809,000 tons. This arrangement has been made following representations by the farmers' unions and the Potato Marketing Board and was announced in the White Paper on the last Annual Review. The payment of any deficiency is provided for in Article 5 of the Order. Article 6 enables the Minister to make a contribution towards the Board's administrative expenses, while Article 8 deals with the special arrangements necessary for Northern Ireland. The second Order is the Potatoes (Protection of Guarantees) Order, which comes into force on 1st August. This, as its title suggests, is intended to safeguard the new guarantee arrangements. It follows the general pattern of similar Orders for other commodities in making provision for records to be kept by traders and for other matters so that Ministers may satisfy themselves and the House that public money has been properly expended. We have discussed these provisions with the trade associations concerned, and I should like to take this opportunity of thanking them for their co-operation. I have endeavoured briefly to give the House some indication of the reasons why the Government have found it necessary to make these changes. The two Orders under discussion provide the machinery for giving effect to the Government's decision, and I feel confident that they will commend themselves to the House.
10.28 p.m.
We are grateful to the Parliamentary Secretary for explaining the Orders and telling us, I think rightly, that there has been some tightening up here. We certainly welcome that. No one could be satisfied with the system that operated before under which there was, I gather, considerable opportunity for fraud.
There is a change from the system which operated under the 1955 Order. It is a change from guaranteed prices under the 1955 Order to a system of deficiency payments, as I understand it, now to be made to the Potato Marketing Board under the arrangements set out in Order No. 983. No hon. Member would pretend that the old system resulted in securing a desirable system, certainly not from the consumers' point of view. In 1958–59, the shortage of potatoes was such that imports were licensed as early as October last year, and prices were, said the Ministry, under the 1955 Order, unduly high. In 1957–58 prices to the consumer reached the highest level recorded in our history. In 1956–57—a year of glut—prices rocketed at the end of the glut year. In 1955–56 prices of potatoes were double those of the previous control year. This was apparently a case of Tory freedom working. They had been released from control, and prices had doubled in the short space of a year. That is not too bad for Tory freedom working. I cannot say that the consumers were very happy about this aspect of its working. I admit that the yield was below average in three of the four years I have mentioned. Potatoes had to be imported and shortage inevitably affected prices paid to the foreign exporter and by the home consumer. Not only have high prices been paid for imports during this period; Questions have been asked in the House, especially by my hon. Friend the Member for Erith and Crayford (Mr. Dodds), which pointed to the fact that some imported potatoes were badly diseased, but this was a slip-up on the part of the Ministries responsible for the importation of these potatoes. The fact that all these things happened makes it clear that the system provided under the 1955 Order led to the production of less than adequate quantities of home-grown potatoes at reasonable prices, which was something at which the Ministry must have been aiming. The question which the House must ask itself before approving these Orders is whether the system provided for by the Orders will operate any better. Certainly this question is being asked by one of the organised bodies of potato consumers, namely, the Federation of Fish Friers, which is now extremely anxious about the chip end of its delectable dish. It is anxious that the Orders should ensure a reasonable supply of potatoes which will not force the price of its product too high. It seems to be asserting, first, that under this system of guarantees to the Potato Marketing Board it will be in the interests of the Board and the producers to plan for shortage; secondly, that this is being done by the quota system, which has been fixed by the Board on such a basis that if every grower plants his full quota and the yield per acre is equal to the average of the last few years, the total harvest will provide only just sufficient potatoes for home consumption. The Federation figures it out that on the basis of the quota fixed by the Board at 685,000 acres, plus an estimated 50,000 acres for unregistered producers, the overall figure of 735,000 acres will yield a surplus to estimated requirements of 48,000 tons, but only if the yield averages 8 tons per acre. If the yield is below that by 0·1 tons per acre, instead of a surplus of 48,000 tons there will be a shortage of 25,500 tons. The average yield over the last seventeen years is 7·3 tons. On that figure there would be a deficiency of 319,500 tons, and that is considerable. I agree that we ought not to have that figure. We ought to have a higher figure per acre based on improved methods of production, but I doubt whether we shall get eight or more tons per acre over the next ten years or so, unless we are very lucky. The third point made by this organisation is that it is certain that the full acreage quota will not be planted because of the fear of growers that they will be left with potatoes which they cannot dispose of in the event of an above the average year. It also believes that the overall effect will be to weight the scales in favour of a potato shortage, leading inevitably to an increased dependency on imports at prices dictated by the demand in our home market. It is understandable that the foreign potato grower should reap a rich harvest in such conditions which will be produced by this system over the years. These are points put by an interested and knowledgeable body of consumers and I believe that they demand an answer. I understand that the Board issued a statement to producers in which it states:That clear statement by the Potato Marketing Board supports the view of the Federation of Fish Friers, that shortage of the home product is the ideal to be aimed at by the Board and by the potato producers, and by the Government, as I understand it. The greater the shortage the higher the price and the lower the guarantee payment by the Government to the Board. So the shortage suits three sets of people, but it does not suit the consumer, if the same thing is to happen to prices as happened under the 1955 Order in some of the years I mentioned. I am a supporter of the marketing board idea, but I have grave doubts about a producers' marketing board operating within a deficiency payments scheme for a product such as potatoes, where the product per acre varies so greatly from season to season. I want to see the home producer get a fair price for his product, but also I want to see the housewife get a square deal, a good, well-marketed article, at a just price and free from the soil in which it was grown. In devising their schemes it is the duty of the Government always to have that ideal in mind, but I doubt whether these schemes will achieve it by a long chalk."In the interests of all producers the Board's constant aim must be to ensure, as far as we can, that the market price is reasonably remunerative to them and that the risks of producing this costly crop are reduced to a minimum. Even a small surplus may greatly depress prices. It is important to note that the biggest surpluses are not more than about a quarter of what the market needs and will pay reasonable prices for. If a buyer wants four tons and he is pressed to take five tons by an over anxious seller, price cutting will set in. The industry will find that it will get less for five tons than it would readily have got for four tons."
10.40 p.m.
I hope that the House will not think that I need to apologise for making very largely a constituency speech tonight. The Isle of Ely, my constituency, has about 4,500 holdings of which 4,000 are under 100 acres. I think it worth remembering that from these 4,500 holdings we get a very large potato acreage, between 38,000 to 40,000 acres a year. If one totals the whole potato acreage of the country that will be found to be about one-fifteenth of the total. Therefore, I think I am entitled to say a few words on this subject tonight.
I am rather surprised that there are only two hon. Members on the benches opposite in addition to the hon. Member for Derbyshire, South-East (Mr. Champion) with one hon. Member below the Gangway. If the concern registered among the growers is such as was expressed by the hon. Member for Derbyshire, South-East, one would have thought there would at least be a few in the ranks of Tuscany to share it. When the change in the guarantee was announced it caused a great deal of concern in my constituency and many regretted the passing of the old individual guarantee. My hon. Friend the Joint Parliamentary Secretary made clear in his opening speech why the Government felt able to make that change. No longer is there the necessity of war to produce the extra filling which potatoes provided when there was shortage of meat. There have been certain cases involving fraud, but it is only fair to the growers to say that in those recent cases it was not growers who were prosecuted. Perhaps the hon. Member for Derbyshire, South-East does not realise quite what it costs to grow potatoes.I do.
The most conservative figure I have been able to arrive at in my constituency is £85 per acre. Let us look at what that means in the light of the Price Review and the 254s. a ton, which is the adjusted price per ton for the total tonnage of potatoes required for human consumption based on the guarantee which was paid when it was on an individual grower basis. On the average over the period 1946–56, at 7·4 tons per acre that makes a return of just over £93 per acre. It means a margin of just over £8. How long will the. Government wait before they invoke Article 7 of Order No. 983, which reads as follows:
It is conceivable that in a surplus year the price of potatoes might fall as low as £8 a ton and not £12 14s. How long has the price to run at that level before the Minister makes up his mind, "with the consent of the Treasury," that there a guarantee will be payable at the end of the year That is the crux of the working of this Order and of confidence in the industry. If he allows it to run for a considerable period that will involve producers in very considerable loss. Suppose prices fell to about £8 per ton. That would give them a return of just over £60 per acre, instead of £85 which it costs them to produce. If the Government delay too long in stepping in to make an advance on the eventual guarantee, the Board will be in considerable financial difficulties very quickly. A yield of an extra ton an acre produces about 1 million tons of extra potatoes on the market. It could easily ruin the Board if we get, as it sometimes happens we do, a considerable increase in the average yield per acre. In the Isle of Ely, over the ten years from 1946 to 1956, the average yield has been 89 tons per acre, which is the highest in the country. There are few others which run into the eights. I see my hon. Friend the Member for Holland with Boston (Sir H. Butcher) sitting on my right. His constituency has a figure of 86, along with the Soke of Peterborough. The Isle of Wight, I think, comes between the Isle of Ely and those two counties with 8·8. The average for the country is 7·4. My demonstrating how high is the average yield in the Isle of Ely and the Fenland counties and some of the others—Shropshire is high, too—shows why some of my constituents are a little anxious about this matter. I should be doing less than my duty to them if I did not air some of their anxieties. My belief is that the scheme is a great deal better than the one originally put up by the Ministry to the industry. If I understand the history of the matter aright, what happened was that certain people in the Ministry thought that the right sort of scheme for going on to a basis of collective guarantee would be on an acreage payment basis. That met at once with a howl of opposition throughout all the potato-growing areas, because they know how the acreage payment system was abused during the war by some of the counties which were not so experienced as they in this matter. All too often during the exigencies of war the acreage payment was applied to the total acreage of potatoes grown without any regard to the number of potatoes or rows in each acre. Certainly, we do not want a repetition of that. I think it is true of the whole of the Fenland, at least, that any suggestion of a return to that system was greeted with absolute horror. Therefore, the Board itself put up the essence of this scheme. There was, however, the one big difference between the Government and the Board that the Board wanted two accounting periods and the Government wanted only one. The reason why the Government wanted only one should, I suppose, please all the taxpayers, because if there were to be two accounting periods the Government could not possibly be assured that the charge on the Exchequer would not be greater than if there was only one; and the Board could not give that guarantee. It is, however, right to say—the Board has been a little reluctant to say it—that this scheme in essence is the Board's alternative to the acreage payment scheme. That should be known. The principal point of disagreement now, I understand, between the Government and the Board is simply the one matter of whether there should be one or two accounting periods. I dare say the Government are quite right, after consultation with the Treasury, in saying that there should be only one accounting period. If they are right in saying that, however, they must be a little more ready than they have expressed themselves as likely to be to make an advance out of the guarantee if the Board starts getting into financial difficulties, which it may well do. The Board's reserves are about £1,500,000. This could be mopped up in a few weeks if it once had to start buying potatoes. The growers will say that they are going to operate a riddle if there appears to be a surplus, and I should like to know how high it is visualised that it will go. If it goes to two inches there will be uproar. I personally have always liked the small potato rather than the big one. Some of the housewives like the big potato, though I cannot understand why. It is a matter of personal choice, but a great many edible potatoes are produced at sizes below two inches in diameter, and my feeling is that a lot of very good potatoes will be wasted if the riddle goes as high as that. The Board also says that it may start buying up, and may hold certain potatoes to see whether they will be needed for human consumption, and, if they are not, it will then dispose of them. I think this has got to work itself out, like the F.M.C. had to, but it will take a year or two, and maybe the Government will be lucky this year, when there will be a lightish crop. But I want to see the Board assured of finances to enable it to give the industry stability and to give growers long-term confidence. I see that the hon. Member for Reading (Mr. Ian Mikardo) has turned up, I suppose to represent the consumers of Reading, but I see him grinning at the thought of me trying to look after some producers for a change. I believe that potatoes are a rather special commodity, and that one cannot play ducks and drakes with them at the Annual Review as easily as one can with some other commodities. They are the next most important commodity to bread, and therefore we must enable the industry to assure us, as much as possible, of what is required. This has been given as 3,800,000 tons. We had high tonnages in the past; they were up to over 8 million tons in 1948, or thereabouts, and recently they have been running around the 5 million mark. But there is going to be a surplus, and it would be nice to know a little more of what is in the Government's mind about the handling of that surplus in the future. One or two other matters are also worth bearing in mind. The Minister came down to Cambridge in April, and at the request of one of my leading constituents gave an answer on this matter. This is the agreed statement which was issued afterwards:"Subject to such terms and conditions as the Minister, with the consent of the Treasury, may prescribe, the Minister may for the purposes of Articles 5 and 6 hereof make available by way of advance such sums as he may from time to time think fit."
It will not be easy for the Minister or the Board to decide when that is going to be, but I hope we shall hear something from my hon. Friend on that matter tonight. It is also worth bearing in mind that Order No. 984 keeps in being quite a number of the more bureaucratic features of the old guarantee system, but the guarantee is rather different. There is a good deal of sacrifice of liberty by the grower in agreeing to meet these various requirements in that Order. I am not saying it is wrong that he should have to do that, but it is worth remembering that he has not the individual guarantee in the future that he had before. I hope that this Order will not be used in quite such a vigorous way as it had to be used often in the past to implement the individual guarantees. That is not to say that proper records should not be kept, but I draw attention to Article 6, which reads,"Speaking at the Agricultural Conference arranged by the Eastern Province of the Conservative and Unionist Association on Saturday, 18th April, the Minister of Agriculture, the Rt. Hon. John Hare, O.B.E., M.P., said that as soon as it became clear in any year that there would definitely be a deficiency payment, he would be prepared to make an advance payment out of the guarantee to the Potato Marketing Board".
That, on top of any rights which the Board may have, could be regarded as the sort of treatment to be expected if there were an individual guarantee, but it is not quite so necessary when it is a collective guarantee which in some years may not involve the Treasury in paying any of the taxpayers' money to implement the guarantee. I detest subsidies and production grants, and what I should like to see much more is an adequate price at the end and a proper tariff policy for agriculture in this country. This is not the moment to debate that at great length. All I would say is that imports are of some relevance in this context. It is asking a lot to ask the Potato Marketing Board to do its job properly if it has no say whatever about imports. There was a nasty slip-up three years ago when the Board was not properly consulted, everything was done in a panic, the market was thrown wide open, a lot of rubbish was brought into the country and certain merchants had their fingers burned. They thoroughly deserved to have them burned. The last time that imports were permitted it was done in consultation with the Board and eventually a sensible date and a sensible price was decided for the imports. I should like an assurance tonight that this kind of consultation will continue and if possible be improved. I know that some of my hon. Friends will not agree with me, but I strongly take the view that in the long term it would be very much better to make those who have to control the home growers also responsible for importation. I know that the Government feel that this is a Government duty and that no one else could take this great decision, but if we expect certain bodies in this country to be responsible for supplying a basic commodity universally required by the citizens, it is hardly fair not to give them any responsibility at the same time for imports. If they know that there is a light home crop, how can they arrange adequate liaison to ensure that the foreign supplies available are regulated and brought into the country at the right time? There is always the danger that there will be a war between the Marketing Board and the Government over the matter. I know that I speak without unanimous support from this side of the House, but I feel that in the long term we must think out our importation policy all over again, because that policy can ruin any work which the Potato Marketing Board has been able to do under the Order. The Government have thought out the Order carefully and in principle have accepted the Board's recommendations, but I feel that as the Board develops and becomes established—it may not be ready to do this yet—the Government may well find that it would be far better to make the Board responsible for imports, too. There would have to be certain regulations."Any authorised officer of the Minister may at all reasonable times enter upon land used for the production, storage, grading, packing or sale of potatoes and may require the production of books, accounts and records relating to the purchase and sale of any such potatoes and may inspect and take samples of any potatoes found upon land so used."
Order. We cannot discuss imports on this Order.
Since the hon. Member has been good enough to suggest that my presence is due to an interest in the consumer—and it is an interest in the 120,000 consumers in Reading—may I put a short question to him? If the Marketing Board controlled not only home production but also imports, who would look after the interests of the consumer?
Mr. Deputy-Speaker, you have already suggested that I have, perhaps, said enough on import policy, but I think that we have to work out the whole of our importation policy again, and I believe that we will have to introduce further Orders, beyond this, to ensure proper importation. The Board is facing a difficult job. I hope that it will succeed in it. I believe that the growers want it to succeed, but I still say that the crux of Order-working is sound importation policy combined with a readiness on the part of the Government to step in to ensure that the Board is not broken by lack of funds in a surplus year.
11.0 p.m.
My constituency neighbour, my hon. and gallant Friend for the Isle of Ely (Major Legge-Bourke) has spoken so fully on the subject that I hardly think it necessary to trespass on the time of the House further than to say that I wish the Order well—as put forward by my other constituency neighbour, the Joint Parliamentary Secretary.
I want to impress on the Government, however, the difficulty of the Board's task at the present time. The potato crop is always a worry and—let us face it—it always has been. During the war, we never knew whether there would be a slump or a glut, and the same situation is likely to arise in the future. There are two things that I regard as essential if the new scheme under the Order—which on the whole is a considerable improvement on the one it supersedes—is to succeed. First, when the first sales of the new ware crop take place, they must take place at a fair figure. If the market is overloaded, the prices will become un- duly depressed and will set the pattern for the rest of the season. It is at that moment that the Board must be able, and willing, and courageous enough to go in as a buyer at support prices. If that is not done, we shall run into intolerable trouble for the rest of the season. It can be done without loss to the Board, and without any loss at all to Government funds, but the Ministry must have the courage, if the Treasury is unwilling to make proper advances to the Board, to let this House know, so that the Treasury can be livened up a bit, because of all reactionary bodies the Treasury is quite certainly the worst. It is dilatory, it is slow, it is mean, and we rely on my hon. Friend to make quite sure that it is kept up to the importance of moving quickly and of placing adequate funds at the disposal of the Board. The second point is that it is no good expecting to do too much in the regulating of this crop by means of a riddle. I think that to operate a riddle with anything as high as 2 in. mesh would be a very great mistake, and that 1⅝ in. or 1¾ in. is as much as could properly be expected in this first year. And we must certainly not think, as we have done in earlier times, of taking from the top of the riddle the overweight potatoes. There is nothing else for me to say except that the Board must be in a position, with sufficient funds, to operate the Order. If it does that, it will be able to assure a substantial and good price to the producer. It must be realised that the price paid to the producer is a comparatively small part of the price paid by the consumer, having regard to transport and marketing costs. I think that the Order may go very well ahead.11.5 p.m.
The hon. Member for Derbyshire, South-East (Mr. Champion) has suggested that the system may plan a shortage. He was speaking from the point of view of the consumer. I am not at all certain—I have doubts, too—that the new system may not be planning a shortage from the producers' point of view.
Potato growing is a very uncertain occupation. First of all, there is the enormous variation in yield, ranging, as it does, from 6½ tons to 8½ tons to the acre. Secondly, it is a very expensive crop to grow. My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) mentioned £85 an acre as the cost of growing potatoes. In Scotland we cannot grow potatoes at that price. It is nearer £100, and even over. This may be because we have to boost up the crop with artificial fertilisers in our shorter growing seasons than exist in England. As I have said, it is a very expensive crop to grow, and if we are not going to get some certainty of a reasonable return, farmers will not grow them. There may well be a shortage of potatoes at the producers' end. Yet we should be able to produce enough for our own consumption. There is no reason why we should not provided that the system is right. I know there were faults in the old system, but I should like to emphasise what my hon. and gallant Friend the Member for the Isle of Ely said, that it was not the producer who was "doing down" the country. It was the dealer, and the individual guarantee worked in his interests. It has been said that there was a shortage in four out of the last five years, but that has not been the fault of the producer. It has been the fault of the weather. In the 1955 crop there was a considerable surplus; at the producer's end the price went down during that year, although at the end of the season the price to the consumer rose. Now we have an entirely new system which does not guarantee the producer anything. If there is an Exchequer subvention at the end of the year it will not go to the producer. It will go to the Board. The object of that subvention is to keep the price high enough, bearing in mind the consumer, so that the producer can have a reasonable return. As has already been said, the difficulty is coming, not at the end of the season, but at the beginning. I do not see, under this system, any way in which the ascertained difference between the guaranteed price and the market price can be discovered until the end of the season. There is a deficiency payment for oats, payable at the end of the season, after the difference between the guaranteed price and the actual price has been ascertained. It is only in years when there is obviously going to be a large deficiency payment that the Government make an advance payment for part of the expected deficiency. That happened with oats. Here the Board want the money at the beginning of the season, but the Government will not be able to say in October that there will be a deficiency by the end of the potato year in July. I do not see how they can, because anything may happen. That is one of the difficulties of this scheme that I do not like. First, there is no guarantee to the individual producer, and secondly I do not see how the Board can fulfil its duty to the producer in the early months of the season in enabling second earlies and the early main crop to be sold in such a way as to get proper marketing for the benefit of the consumer throughout the season. What will happen if there is no guarantee and the Government do not decide to give a subvention to the Board? Farmers will try to hold them up; they will keep them. They will try to hold on until the price is known. That is not what I call orderly marketing. What I want to see is a system based on a fair price to the producer, and a fair supply at a fair price to the consumer throughout the season. I fear that, as a result of the new system, since there can be no knowledge before the end of the year of what the deficiency will be, it will not be possible for the Government or the Treasury to give an advance under the relevant Article of Order No. 983 in time to save those who may have to sell early because they want the cash from their crops. I shall not vote against these Orders tonight, but I have considerable doubts about whether they provide the right answer to this extremely difficult problem. I am not at all sure that, in a year or two, we shall not have to return to the individual guarantee system, tied up as much as one likes to avoid fraud, because I feel that, to provide for a stable future, with confident production over the years to serve the consumer in an orderly market, the system of individual guarantee, sooner or later, will prove to be the only answer. While being prepared to acquiesce in these Orders tonight, I am not sure that they will work in the way the Government think they will or will give the producer, at all times of the year, a real chance to produce in an orderly manner and to market his produce in an orderly market for the benefit of producer and consumer alike.11.12 p.m.
I shall not address my remarks to the merits of the Orders. I wish to call attention to what I regard as an extremely dangerous and loose piece of drafting in one of the Articles in the Potatoes (Protection of Guarantees) Order. My hon. and gallant Friend the Member for the Isle of Ely, Major Legge-Bourke) referred to the encroachments on the liberty of the subject which are necessary at times in schemes of this kind, but it is important, I think, that the House should look at the matter carefully when such provisions are embodied in a Statutory Instrument.
The Article to which I wish to refer, and about which I hope that my hon. Friend the Joint Parliamentary Secretary will give an assurance, is Article 4 of Statutory Instrument No. 984, the Article which requires the grower-salesman, merchant, and so on, to provide certain information. He is to provide that information in accordance with notice served upon him saying what information is required. The information required, according to the Article, relatesIt is not restricted in any way to purchases or sales in which that person may be concerned. He may, under the wording of the Order, be called upon by the notice to give information about any purchase or sale of potatoes. In fact, he might be called upon to give information about what his neighbour had been doing, or something like that. The Article is extremely loosely worded and unnecessarily wide I ask my hon. Friend to give an assurance that the notice which will be served under the Order will not require a grower-salesman, licensed merchant, registered grower-salesman or merchant to give information on any subject other than purchases and sales in which he himself is concerned. It has been a puzzle to me how this Article could have been so loosely drafted. If we have that assurance from my hon. Friend, I think we might let it go through this time, with the hope that the Department will, on some future occasion, be a little more careful in the drafting."to the purchase or sale of potatoes as may be specified in such notice".
11.15 p.m.
We have had a very full debate on this Order and I will do my best to reply to the main points which have been raised.
The hon. Gentleman the Member for Derbyshire, South-East (Mr. Champion) raised a number of those points; among them were some which, at times, made me wonder whether his main concern was fear of shortage or of surplus. However, what he and other hon. Members have said does call attention to the difficulties, with a crop of this nature, in planning what production shall be. I think that there is little doubt that producers, in the main, are trying to get a fair balance, but weather beats them on a number of occasions. There is not much justification in the fears expressed by, I think he said, the fish fryers, that there has been a deliberate attempt to keep down production below what is required. The fact is that the quota acreage which the Board has set is substantially above the figure which he quoted. I think that his figure was 685,000, but the correct figure is 740,000 acres, which is in excess of what planting was last year.Does that include the 50,000 acres for the unregistered producers? If it does, then our figure is near.
No; I am not trying to deceive him. It is definitely a higher figure, and average production, which was given by my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) as 7·4 tons per acre, gives a considerably higher figure than the hon. Member for Derbyshire, South-East has in mind. There should be adequate supplies. The weather has been abnormal in three out of four years and it has brought about freak circumstances; but it is the concern of the Board to see that adequate supplies do come forward.
Here, I should like to take up briefly the one contentious point which the hon. Member made. He said something about "Tory freedom working in doubling potato prices in twelve months" but I suggest that it is not a very good line to take when the cost-of-living index is going down and not up.And import prices are going down as well.
I think that housewives are fairly satisfied with the position as it is, but I will not get drawn at this hour on to party points; in any event, they are a little wide of the Order which is under discussion.
My hon. and gallant Friend the Member for the Isle of Ely, in a thoughtful speech, put forward a number of points. I concede that the position warrants the anxiety which has been expressed; a very real anxiety it is, and it was right and proper that he should have expressed it. I can tell him that this has been a most difficult decision to take in the matter of potatoes and I think that it is evident from what has been said tonight that it was necessary if we really were to get the Potato Marketing Board working effectively and functioning properly as a marketing board, that we should have a different system from that under which we have operated in recent years. The difficulty was to find a suitable alternative. As my hon. and gallant Friend says, the basis of this scheme was revised to meet the suggestions by the producers themselves and we are trying to operate a scheme which we think is fair and just; and, in doing this, we have to make provision for the problems which arise with this particular crop. I have been asked by hon. Members about the provision of finance to the Board, especially in regard to the difficulties that might arise at the beginning of the season. It has been suggested that money should be made available to enable the Board to purchase stocks of potatoes at that time. This point was considered very carefully by my right hon. Friend, but it would be well-nigh impossible to give any indication or guarantee in advance that that could be done. What we must do is to relate any payment we make to the position that will obtain over the year as a whole and, as I said in reply to my hon. Friend the Member for Gainsborough (Mr. Kimball) on a previous occasion, the Board has been assuredBeyond that I cannot go. I repeat that my right hon. Friend is always ready and willing to see the chairman of the Board at any time on any matter, and if the chairman wishes to discuss problems of this sort when the difficulty arises my right hon. Friend will be only too glad to listen to any representations made to him. By and large, I think that the way to tackle the situation at the beginning of a season is, in the first place, to rely on the use of the riddle. I have taken note of what has been said on this point. The Board must feel its way in this matter, and I shall not dictate to it what size of riddle it should operate. The men on the Board are practical men, and they will do what they think is best. This is not something entirely new; it was operated before the war, when there was no guarantee arrangement, and it did not operate too badly then. My hon. Friend called attention to the provisions in Order No. 984 and suggested particularly that Article 6 was taking away a good deal of the freedom of producers, and that they were giving up a good deal. To get this scheme they were having to subject themselves to a good deal of control. The Order is in very similar terms to that relating to other guaranteed price commodities, such as fatstock and cereals. This is no new departure, and I do not think that in operation farmers will find it at all onerous. The extent to which it will be utilised will, I hope, be small. But in cases of this sort there must be some such provision as this, so that we can see that there is no abuse. My hon. Friend the Member for Holland with Boston (Sir H. Butcher) was able to evoke cheers from all over the House with his statement, "Down with the Treasury." That is usually a fairly popular line to take. But he will not expect me to endorse wholeheartedly all he said. I can assure him that the Government as a whole are responsible in this matter and will take note of all the comments which have been made about the need to see that adequate funds are provided, as and when we can see that there is justification for them. My hon. Friend the Member for Crosby (Mr. Page) raised a point which the Select Committee on Statutory Instruments took up. I am sorry if we incurred my hon. Friend's displeasure. In Article 4 the offending words to which he has referred were:"that immediately it is clear that a deficiency payment will be due over the year as a whole, an advance payment will be made."—[OFFICIAL REPORT, 5th May, 1959; Vol. 605, c. 195.]
My hon. Friend said that those words were too wide in their application, and might have no relation to the particular purchases of the person concerned. If my hon. Friend will continue to read that Article, he will see that it goes on to say:"such information relating to the purchase or sale of potatoes …"
I suggest to my hon. Friend that it would be unrealistic to expect him to produce the books and records of someone else, so they must surely refer to the potatoes with which he is concerned. Therefore, while I take note of his strictures, and we will endeavour to comply with his wishes in the future, I think that if this is read as a whole, it ties up; certainly, there is a clear indication that it is only in relation to his own transactions that he is responsible so that I hope my hon. Friend will feel that the matter is not so serious as he suggested. I apologise for taking up so much time. We have had a lengthy debate and I hope that after what I have said the House will be willing to pass these Orders."every such licensed grower-salesman, licensed merchant, registered grower-salesman and registered merchant shall produce on demand by any authorised officer of the Minister such books, accounts and records as may be necessary to verify the information."
Question put and agreed to.
Resolved,
That the Potatoes (Guaranteed Prices) Order, 1959, dated 5th June, 1959, a copy of which was laid before this House on 10th June, be approved.
Potatoes (Protection of Guarantees) Order, 1959, dated 5th June, 1959 [copy laid before the House 10th June], approved.—[ Mr. Godber.]
Fertilisers
11.26 p.m.
I beg to move,
This Scheme extends for another year, from 1st July, the payment of contributions towards the cost of nitrogenous and phosphatic fertilisers. As it is in almost identical terms with that of last year, except that there is an amendment to the rate of sulphate of ammonia because of the slightly higher nitrogen content, I will move the Motion formally. I shall, however, be happy to answer any inquiries and I hope that my course of action will not be regarded as a discourtesy to the House. I think it would be more convenient to do it in that way.That the Fertilisers (United Kingdom) Scheme, 1959, a draft of which was laid before this House on 13th May, be approved.
11.27 p.m.
I have no objection to the Parliamentary Secretary taking that course and I have no intention of taking up an undue amount of time at this late hour. But it would be wrong if the House allowed this Scheme to go through formally. After all, this authorises the expenditure of £28 million. That is £1¼ million more than we were spending last year. We cannot regard that increase as a flea-bite. Someone has to act as watchdog over the taxpayers' money.
In 1951–52, the fertiliser subsidy was running down to a rate of about £8 million. Now, with the lime subsidy, which we shall be discussing later in the week, we have a subsidy of £38 million, which represents an expenditure in one year of more than the cotton industry will be receiving in five years. This is of particular importance to farmers because it comes off the prices which farmers receive as a result of the Price Review determination. I am always surprised that more attention is not paid to the subsidy. It is a puzzle to know who benefits most by this considerable sum, the farmers or the manufacturers. I do not expect any reply to this, because the odd thing is that we have this expenditure of £28 million without any costings at all. On the face of it, the manufacturers do not do badly. Fisons have been paying 15 per cent. for a considerable time and I.C.I. seem to have been in a similar position. We know that this industry has been the subject of inquiry by the Monopolies Commission. The industry has been inquired into for about three years now and I understood that a report is about due. I expected the Joint Parliamentary Secretary at least to comfort us by saying that we should be receiving the report very soon. It is a highly unsatisfactory position to be in, paying £28 million by way of subsidy to an industry which has been the subject of inquiry by the Monopolies Commission for three years. The situation is even more unsatisfactory than that. I have raised the question of the Fertilisers and Feeding Stuffs Act, 1926. It was conceded before the war that this matter should be revised, but nothing has been done. One complaint is that there is over-charging for the mixing and bagging of fertilisers. Again, that is in an industry which is receiving £28 million in subsidy a year. I have pressed the Board of Trade to inquire into the duty on sulphate of ammonia, which is at the rate of £4 a ton, and I understand that is being inquired into by the Board of Trade. Surely this is an unsatisfactory position. Here is an industry receiving the benefit of a protective tariff of £4 a ton and, at the same time, being subsidised by the taxpayer. If the objective is to reduce fertiliser prices, it would be a greater advantage to allow the import prices to affect price here. I do not blame the Joint Parliamentary Secretary for not trying to explain this, for it would certainly be very difficult to decide where the major benefit of this subvention goes, but if one looks at the records of the big companies largely responsible for the production of fertilisers, one sees that they are doing extremely well, not unaided by the taxpayer. There could be greater competition, but the Government so far have done their best to avoid extending competition. If we turn to the purpose of the Scheme, we recognise that it is laudable enough. It is to encourage the increased use of fertilisers, but, nevertheless, are we satisfied that an expenditure of £28 million is justified? It is not sufficient to say that this is laudable; a subsidy of £28 million for coal might be advantageous. There is a very great argument for a price incentive to get coal moving, so it is not sufficient to say that the objective is laudable. We have to satisfy ourselves that this considerable expenditure of money is in fact serving this purpose. The position is that the British farmer today is well behind most European countries in the use of fertiliser. On the latest O.E.E.C. tables he comes eighth. In spite of the expenditure of £28 million, Britain is below the Netherlands, Belgium, Iceland, Germany, Norway, Denmark and Luxembourg; and a very bad eighth at that. We are below countries making an insufficient use of fertilisers. If we compare ourselves in this table with countries similar than ourselves we find three are using twice as much and two are using three times as much. Indeed we are using a quarter of the rate used by Japan, a third of that used by the Netherlands, and half as much as is used by West Germany. One might say that these figures justify the use of the subsidy, but unfortunately, the case is not made at all because not only are we behind those other countries in the use of fertilisers, but we have lagged behind most European countries in the rate of increase of their use in past years. If we consider any other test—for example, whether this subsidy aids the fertiliser industry and whether it has aided production—we find a negative result. To test ourselves against Western European countries, we find again that we lag behind Western European countries not only in the rate of increase of the use of fertiliser, but in the expansion of the fertiliser industry. This is not surprising, because this is an industry which at least bears the appearance of being monopoly-ridden. If we take the price, which is our main concern as this is a Scheme to provide a subvention to the farmer against our present prices of fertiliser, I concede at once that over recent years the price has been fairly steady. The gross price of fertilisers has not moved remarkably. This means, however, only that we bear comparison with most other Western European countries, and no more than that. I suspect that one of the factors which has kept the price steady may well have been that the industry has been a subject of inquiry before the Monopolies Commission. That is usually a salutary discipline. If we compare our price position with Western European countries, we come out of it badly. I take merely a couple of examples. If we ignore the subsidy, superphosphate in this country is higher priced than in any country in Europe, except, possibly, Greece and Turkey. Some nitrogenous fertilisers have been cheaper in Denmark without a subsidy than they are here with a subsidy. Certainly, this has happened over the past two or three years. If we make a valid comparison and compare the use of subsidised fertilisers with the use of non-subsidised fertilisers—we know, as the question is occasionally raised in the House, that potash is not subsidised because it is imported—we find that no case can be made for the subsidised fertilisers, because the use and the rate of increased use of potash bear comparison with the subsidised fertilisers. There is no markedly different pattern. I am not against the use of a subsidy to encourage the use of fertiliser. This is done by two or three other countries and there are several different ways in which aid is given through other means than a direct subsidy. I urge upon the House, however, that if such an enormous sum as this is given, the House must be satisfied that it is serving its purpose. We really cannot be carelessly open-handed in this way in aiding private enterprise. Here is an industry whose affairs are subject to an inquiry by the Monopolies Commission. At the same time, this is a subsidy that goes steadily up. One and a quarter million pounds is such a flea-bite that the Joint Parliamentary Secretary does not deign to mention it. We are entitled to demand that we should be satisfied that this money is properly spent, particularly as it is money which comes out of the Price Review and if it were not going in a fertiliser subsidy, would go in a direct price incentive. I always thought that this Government of all Governments were in favour of the price incentive. This method, however, is blunting it. We are entitled to be satisfied that a large sum like this is properly administered. Whoever heard of over £28 million being spent by the Government without any costings inquiry and without any inquiry to satisfy the taxpayer that the money is properly spent? There has been no inquiry to satisfy ourselves that this expenditure is serving its purpose. Steps, for example, have been taken in Holland to ensure that the use of fertilisers is encouraged and properly applied, and I would ask what we are doing compared with the Dutch advisory service. If we are spending £28½ million, it is worth spending a good deal by publicity, advisory services, and so on, to ensure that we are taking other less expensive steps to increase the use of fertiliser. Above all, we should ask ourselves how other countries have managed to achieve all this and have, in fact, a better record than us, without spending £28 million. It is surprising that we have such a lax Government and such lax producers that they have never inquired into these things, and it is remarkable that the N.F.U., I believe, still has no fertiliser committee. But this is coming off the price which the farmer receives for his produce. This is a matter about which we can be dispassionate; it comes out of the Price Review, but affects directly both the farmer and the taxpayer, and we cannot go on allowing these subsidies to run to heights which were unimaginable a few years ago. Who ever thought then that we should be discussing a subsidy of £28½ million for fertilisers, or £38 million is one considers the lime subsidy as well? What evidence have we that this money is not going largely to aid the fertiliser manufacturers? What evidence we have surely points the other way. We have a monopoly-ridden industry which is increasingly supported at the taxpayers' expense, which is showing less initiative and enterprise than corresponding industries in other countries, and the farmer finds that he is getting less and less direct incentive. The Government and the producers should seriously discuss this matter, and before we discuss a similar Scheme again we should be assured that the Government will hold a full inquiry and review.
11.42 p.m.
The hon. Member for Sunderland, North (Mr. Willey) was a trifle unfair to me when he said that the additional £1¼ million was such a flea bite that I did not mention it. I said I was only too happy to respond to any points, but, as I knew that we were all waiting to hear him I did not go into it then.
We anticipate that the cost this year will be about £28½ million, which, I agree, is a considerable sum of money. But this subsidy, like others we have been discussing recently, is directed as a production grant, which we believe is very valuable in the farming cycle, in that money is brought in at the beginning. This is particularly helpful to small producers. We have stepped up our production grants deliberately as a policy over the years. It is true that, coming out of the Price Review as they do, they must be taken as part of the Price Review settlement and, therefore, must affect the end price product. We think that that is the right kind of policy. The hon. Member made a fair point about these fertiliser subsidies, regarding the report of the Monopolies Commission. I had hoped that we should have received it by now, but my hon. Friend the Parliamentary Secretary to the Board of Trade made a statement on 23rd June in which he said that it was hoped to receive it before the end of July this year. So it will be coming out very soon, but we have not yet seen it and must await what it has to say. The hon. Member had one or two harsh things to say about Fisons and I.C.I. He seems better advised on their profits than I am, but I noticed that I.C.I.'s profits went down by £10 million last year, which is not an indication that they were making a good deal more money out of fertilisers. The hon. Member made one or two rather damaging comparisons between our practice and European practice. I have one or two figures, from the Annual Report of the O.E.E.C. last February, for some countries, and these make me a little puzzled by the hon. Member's reference to nitrogenous fertilisers. He compared our figures with those for Denmark. The figure from that O.E.E.C. document is that the cost per long ton of plant nutrient, which is a complicated formula, is £95 5s. l0d. in Denmark and £100 14s. 3d. in the United Kingdom, before deduction of subsidy. After deduction of subsidy the figure is down to £57 16s. 1d.It depends on the point of time at which the comparison is made. The hon. Member knows that the Press have reported that there have been occasions on which the Danish unsubsidised price has been below the British price.
I was taking the latest figures. I was not aware that that has been the case in recent years, certainly not in the last two years. The price is now very much lower in this country, with the subsidy.
I agree that comparisons with phosphatic fertilisers show that the unsubsidised U.K. price is higher than that in most European countries, but I was dealing with nitrogenous fertilisers, where that is certainly not the case. In the O.E.E.C. figures there are four countries where the price at present is higher than in the U.K. This indicates that there is not such a wide disparity. We must wait to see what the Monopolies Commission Report reveals. I do not think that there is evidence to suggest that the fertiliser industry is taking unfair advantage of this subsidy. As far as the subsidies stimulate demand, the fertiliser industry benefits, but we have no evidence available as yet—I say "as yet" advisedly, because we are awaiting the report—that unfair advantage is being taken of the subsidies, which are provided for the farmers and which are a definite part of the Price Review. The hon. Member spoke of the increase in the use of fertilisers in other parts of Europe. There has been a considerable rise in the consumption of nitrogen and potash in this country over the last seven years. The consumption of nitrogen has risen from 230,000 to 340,000 tons of plant nutrient, which is an increase of nearly 50 per cent. The hon. Member referred to steps to encourage greater consumption and to the Dutch advisory service. Our N.A.A.S. does a lot of work in this connection, through testing soil and advising on the need for fertilisers. This has proved helpful and it is being extended all the time. It deals with the greater use of fertilisers where the need is proved. Some of the other figures which are sometimes quoted in this matter are a little doubtful because much depends on the types of land which are brought into the estimations. If we were to include all our rough hill grazing it would give a very false impression. I assure the hon. Member and the House that we are very anxious to see that the fertiliser subsidies are properly used. We want to continue to stimulate the increased use of fertilisers in this country. We want to see the farming community getting the best advantage from them. In these, as in other production grants, we are trying to assist farmers to obtain more economic production, which is the whole object of the production grants which we are discussing. I hope that with that explanation the House will be willing to pass the Scheme.Question put and agreed to.
Resolved,
That the Fertilisers (United Kingdom) Scheme, 1959, a draft of which was laid before this House on 13th May, be approved.
Industry, Kent
Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Hughes-Young.]
11.50 p.m.
The field is now restricted to men of Kent and to Kentish men. The time for debate is limited, but I want for a few minutes to touch on what is, perhaps, a less exciting aspect of industry than that with which the House has been dealing today. I must, first, say what I do not want to do. I emphatically do not want to challenge the right of any other area in Kent to get what industry it can. I am not desirous of drawing to my part of Kent anything that anyone else has or wants to get, but the Board of Trade policy for industry in Kent affects every part of the county, including the town of Ashford. That is why I am raising the general subject of Government policy about industry in Kent.
Nor do I want, and I can assure my hon. Friend the Parliamentary Secretary of this, to be particularly critical of the Board of Trade's policy. The Board of Trade has an extraordinarily difficult job. It has to balance many factors, and it cannot set up industry anywhere. All it can do is to steer industry. To say to the Parliamentary Secretary that we want this or that is to misunderstand and to misinterpret the function of the Board of Trade. Nevertheless, I think that this rôle of steering is very important, and can be a very significant aspect of Government policy. It is important to all those who can be steered—the industrialists—and it is very important to those at whom they can be steered—the towns and areas. It is important that they should all know the mind of, as it were, the man at the wheel, and that is really what I seek tonight. I want to give my hon. Friend a chance to tell us what is the mind of the Board of Trade on the question of locating industry in this, in some ways, rather singular County of Kent. Incidentally, how much of this debate will get into print in the county I do not know, but I hope that it will be put on record in some form. The county poses a number of problems. When it comes to siting certain industries, defence affects, or has affected policy here, although I cannot see why it should today. Again, industry there has reached the end of, at any rate, a chapter. Kent also has seaside resorts that present a special problem, and it also contains the town of Ashford, which is my main concern. Although my hon. Friend may not think that we have problems comparable with those that concern his Department in other parts of the country, there are two aspects of our industrial future that concern us. The first is the policy relating to our receiving overspill from London, and the second is the future of the Ashford railway works. Dealing, first, with the overspill question, perhaps I may be allowed to preface my remarks by making my own position quite clear. I do not think that I can humbug my hon. Friend about this, but the process of decanting Londoners to expanding towns, to which this Government gave countenance in the 1953 Act, has not my personal support, and never has had. In the first place, it creates enormous problems for the receiving authorities, which are not all equipped to receive the overspill population. Further, it has very little bearing on London's over-population, because the magnetism of commerce, and of commercial offices being put up in London pulls in population as fast as it can be decanted; and only a decade after overspill arrangements were started by the London County Council is that authority talking of taking more serious action to restrict commercial development. I have a council, democratically elected, which wants overspill, and which before its election made its views abundantly clear to all concerned. My job is to assist the council in every way to carry out its democratically appointed task. It is clear that if we are to make a success of overspill in Ashford, incorporating large numbers of people from London, it must be placed on a solid industrial basis. In my view, the Board of Trade and the Ministry of Housing and Local Government have not always worked closely hand in glove in this matter as one might wish. I am not being critical about that. Fundamentally, they have not the same aim. One Ministry is thinking in terms of housing and population, and the other is thinking of industry and where it is needed. Perhaps my hon. Friend the Parliamentary Secretary will be able to tell me where, among the hosts of other priorities, the subject of expanding towns comes on the list. If an engineering works wants an industrial development certificate for Ashford, or any other prospective expanding town, does the Board of Trade say, "We would sooner you went to a Development Area, or to Lancashire, or to the seaside," or, "We would sooner you went anywhere but South-East England" Where do we stand? My hon. Friend must accept it from me that a number of industrialists and local authorities are not as clear on this as they ought to be. Expanding towns are not an academic exercise. Government money is involved here, with housing, utilities and the rest, and it is important that the Board of Trade policy should be more closely geared to this question than it has been. The second aspect on which I want to touch, and which is a bigger anxiety, is the future of the railway works at Ashford, it has been the industrial hub of the town for a century. Indeed, it is a town within a town. I am not pretending that Ashford is singular in having one major industry on which it depends. Many towns are similarly situated and many of them, indeed, have industries which, in the nature of things, are having to change and even close down. I am not suggesting that we have a particular distinction in this respect, but it matters very much indeed to Ashford. These works are approaching a decisive point in their existence. Decisions are about to be reached by the British Transport Commission and the Ministry of Transport, but the consequences may have something to do with the Board of Trade, and I will explain why. These works employ large numbers of men, and, indeed, generations have regarded them as the future career for their sons. Not only breadwinners but whole families are dependent upon them. These works began in Ashford long before 99 out of 100 factories were thought of in Kent. I have not attempted to find out what is to be done about these works. If I were to ask I should probably be told in confidence, and that would be of no use to my constituents. At one time I understand the run-down date was given as 1963, and I have since heard that it has been accelerated to 1960. I think that proposal has been under discussion, even if it has not been finally resolved. That is far from being offset by the developments in connection with the electrification of the railway. I have given the consequences some thought. I have concluded that it would be wrong simply to fight the decision based not only on local but national considerations. That would seem to me to be what I would call branch line tactics. If the British Transport Commission, after due consultation with the unions, which I believe they are doing, comes to a certain decision, broadly speaking those of us interested in British Railways have got to accept it. I am one of those who believe that British Railways are in their present straits, to some extent, not for want of political interference, but because of it. I shall not follow that road now. It is, however, my job to anticipate the consequences of these things, and it is part of my hon. Friend's job, also. My hon. Friend may say—I hope he will not—that he knows nothing about the Ashford works and he cannot anticipate any decision there. Anticipation, in certain cases, is nine-tenths of the job. It takes a great deal of time and much preliminary work to fill the gap in a town the size of Ashford. The time to arrange for work to be there is now, not when the notices go up in the shops and grass begins to grow in the tracks. I want the Board of Trade and others concerned to have good notice of the problem, and I want the Government to make the relevant decisions now about industry going to Kent. In general, there is a big undecided problem as to what obligation the Government have in respect of all redundant industries, be they cotton, coal, or anything else; but, generalities apart, the Government have a distinct obligation here. The Government of which I was a member took the decision, I freely admit, to refuse permission to Rolls-Royce in 1955 to set up a works in Ashford. Had that works gone there, these problems would not now arise. I shall not discuss that decision now, but the consequences of it must be borne in mind. They are certainly remembered in Ashford. We are entitled to ask that any industries which are considering going to Ashford will be in no way discouraged. Is there any embargo on any industry possibly going there, and, if so, on what categories? It is important to Ashford and to all prospective industrialists to know where they stand. Moreover, if men are willing to buy and prepare industrial land, will they be allowed to fill it? That is really the point. How is this rather negative instrument, the Board of Trade industrial development certificate, wielded in this county? To put the matter in perspective, I realise that to every part of the country industry is an attraction. Most people want it, and they are prepared to specify the kind of industry they want. Industry is no longer established in large industrial centres. It is disposed all over the country. Every town can find a use for it. Some people think that it is the Government's job to find it. I have said that that is not my view. I am reminded of what Bob Hope said angrily to the cat when he fell over it, "from now on, you will have to catch your own mice." We are willing and able to catch our own mice. We are not asking the Board of Trade to do it, but the mice should be free to run our way if they feel inclined; and we want to be assured that they will not be lured elsewhere with bits of Board of Trade toasted cheese. I am looking to my hon. Friend, from other side of the Medway, for his assurance.12.4 a.m.
I am grateful to my hon. Friend the Member for Ashford (Mr. Deedes) for allowing me this opportunity to intervene for a few minutes. My hon. Friend the Parliamentary Secretary will agree that in the Medway towns we have had very considerable cause for concern about our industrial future there because of the announcement that certain naval establishments are to be removed from the area. The dockyards of Chatham have been, of course, the biggest single industry in Kent for many years. It was felt that the removal of the naval establishments created the possibility that the dockyards also would be abolished or greatly curtailed.
There has been great satisfaction in the Medway towns now that the Chatham Dockyard's future has been assured. But the very fact that Sheer-ness Dockyard was closed had certain implications for employees in Chatham Dockyard, because undertakings were given that established personnel would be transferred from there and unestablished personnel in Chatham Dockyard would probably have to go on the labour market. It was with a very great deal of satisfaction that the efforts of my hon. Friend the Civil Lord of the Admiralty were observed this week-end; efforts which, it would appear, look as if they will be successful in bringing very worth-while industry to Sheerness—the future of which is of such great concern to my own area. Yet there has been running through the minds of many people in Kent some apprehension as to where exactly my hon. Friend stands in relation to the county planning authority. I say this because recently we have had difficulty in Gillingham in getting planning authority for certain industries which wish to come to the town; and, in this connection, I would cite particularly the new factory which is projected by Bowaters. That organisation wishes to construct a factory on 13 acres of War Department land which is shortly to be relinquished. The Department stated that it was putting up this land to public auction; but that was more than two months ago. This company will construct a factory employing more than 500 people, but it is still waiting to purchase the land. I hope that my hon. Friend will say tonight that he is in "cahoots" with the county planning authority in the matter of industry in the Medway towns and that he will have consultations with the Secretary of State for War to see whether there can be a speeding up of the sale of this land by public auction so that it can be put to the purpose which we need—the building of a factory which will bring employment to the area.12.8 a.m.
My hon. Friends the Members for Ashford (Mr. Deedes) and Gillingham (Mr. Burden) will not need to be told by me that the ventilation of any problems concerning the County of Kent will receive a sympathetic hearing from me. We each represent a Kent constituency and live in the county and I should be very sorry if there was any conflict between the interests of the county and the Government's policy on the distribution of industry. I assure my hon. Friends that no such conflict exists and that our general approach—one agreed, incidentally by both sides of the House—is the right one.
Our broad approach is that there is too great a concentration of industry in the south-east of England. What we should like to see is the expansion of the economy in the north and west of England, in Wales and in Scotland, while something of a halt is called to expansion in the south-east. The general pattern can be seen from the unemployment figures for May—the latest month for which complete figures are available—which show that in Kent the total of 2·1 per cent. was actually lower than the national unemployment figure of 2·2 per cent.; and considerably lower than that for Wales, where it was 4 per cent., and Scotland—4·5 per cent.—and Merseyside, with 4·8 per cent.; or Northern Ireland with, alas, 8 per cent. This, however, is only the broadest picture. There are some areas in Kent, for example, Herne Bay and Whitstable, with an unemployment figure of 5·8 per cent., and the Isle of Thanet, where we are anxious to see new industry going and where we consider giving inducements under the Distribution of Industry Acts for industry to do so. These are places where there is high unemployment, particularly in the winter months and where more all-the-year-round employment, especially for men, is sorely needed. I would have added the Isle of Sheppey but for the welcome news which the Civil Lord gave the House on Friday about the sale of the Sheerness Dockyard as a centre for engineering production. Since the Distribution of Industry Act of last year came into operation, 21 firm and eligible applications have been received for Government assistance for projects situated in those areas in Kent. So far four applications have been approved and 12 are still under consideration. At the other end of the scale there are places, including some in my own constituency, where the introduction of new industry might prove an embarrassment. In these places we should normally refuse an industrial development certificate for any new project which required a significant amount of labour. We do not operate this control rigidly or bureaucratically. If a firm already in one of these places wants an extension to improve its layout, or needs a new warehouse or canteen, we do not interfere with that at all; it is only buildings that will make new demands on the available labour that we do not allow. But in between these two types of place—the D.A.T.A.C. places, on the one hand, and the centres of low unemployment, on the other—there are parts of the county where we look at each project on its merits. My hon. Friend the Member for Ashford is, of course, particularly concerned for Ashford. I should not be frank if I said that in present conditions we should encourage a firm to go to Ashford. Unemployment in the town in June is only 0·7 per cent., or half the national average, and he will appreciate that our efforts of persuasion must be concentrated on places with unemployment above the national average and not on places where it is well below it. But, as I have said, we do try to operate our policy flexibly and sensibly, and we should certainly not pursue it to the point of preventing legitimate expansion which could not take place elsewhere. If a firm from, say, the Midlands or Yorkshire applied to set up in Ashford it would probably get a dusty answer. But if a firm already in the south-east region, with a moderate labour requirement, wanted to go to a place like Ashford, and satisfied us that it could not go to an area with high unemployment, we should look sympathetically at its application. There are no hard and fast rules, and we try in each case to see what best accords with the national interest. I have been describing our distribution of industry policy in relation to Ashford as it stands at present. Despite what my hon. Friend says, we do co-operate closely with the Ministry of Housing and Local Government in trying to get fresh industry into new towns or towns with an overspill agreement so that there is work available to match the increasing population. My hon. Friend has, very properly, spoken of Ashford as a potentially expanding town. I can assure him that if Ashford's present negotiations with the London County Council are satisfactorily completed and an overspill agreement is reached we shall be very ready to assist by encouraging London firms, which are unable to move to an area of high unemployment, to consider the possibilities of going to Ashford. I am told that the present proposals are for the provision of more than 4,000 dwellings to accommodate 15,000 people over a period of fifteen years. This, together with the natural increase of population, will mean that Ashford will grow to more than one-and-a-half times its present size, and that should give it a more diversified industrial structure and make its prospects for full employment brighter than they are now—that is, of course, if the industrial development parallels the increased housing. That development, at any rate in the long-term, bears very much on the danger, about which my hon. Friend is so naturally concerned, of unemployment arising as a result of the discharge by British Railways of some of their staff. We are well aware that this threat does exist; it is an inevitable consequence of the modernisation programme of British Railways, which will eventually result in the disappearance of the steam locomotive. I understand that British Railways at present employ about 3,500 people in Ashford. But it is only the locomotive works, employing about 1,300 workers, in which redundancy is threatened. These works were provisionally scheduled for closing by the end of 1960, but I understand that this date is now under review by the British Transport Commission. I cannot give my hon. Friend any definite information as to the phasing of the closing of these works which will eventually emerge, but the Commission will do what it can to cushion the effects of redundancy by offering alternative employment where suitable jobs are available in the area. As my hon. Friend has mentioned, there are plans for the establishment of new electric train repair and inspection sheds in Ashford. We and the Ministry of Labour will do everything possible to ensure that those who become redundant will find alternative employment either in other works in the district or as a result of the introduction of new industry. There are altogether at present new projects in prospect in the Ashford area which are expected to provide about 1,000 new jobs, including 400 for men. I share my hon. Friend's anxiety that we should not reach a position where we have a sudden and marked increase in unemployment but should take steps in anticipation to ensure as far as we can a smooth transition for these workers to other employment. As I have said, we at the Board of Trade will do all in our power to match the increase in population which will follow if the overspill agreement is made with the London County Council by an attempt to steer appropriate industries to the Ashford district. May I say a word about the point raised by my hon. Friend the Member for Gillingham. We all appreciate that the largest employer in Gillingham and the Medway towns as a whole is the dockyard, where about 13,000 people are employed. The future of the dockyard appears secure despite the abolition of the Nore Command and the closure of a number of naval establishments in the area. Total redundancies from this closure are expected to be about 1,300, excluding any redundancies which may arise from the transfer of established workers from Sheerness to Chatham. A number of these redundancies may well be absorbed by firms which acquire the relinquished naval premises. One firm, William Palfrey, Ltd., which recently acquired the Medway Barracks and Naval Gunwharf at Chatham, expects to employ 500 workpeople. In addition, there are 13 projects for which I.D.C.s have been issued and which, together, are expected by the firms concerned to provide a further 1,750 new jobs, of which 1,250 are for men and 500 for women. The percentage of unemployment in Gillingham has gone down from 1·9 per cent in May to 1·5 per cent in June. I can assure my hon. Friends that we are watching the position in the Medway towns closely and that we shall do all we can to see that the present situation does not deteriorate. As a man of Kent and a Kentish man, I should like to steer as many new industries as possible to this area, but I must have regard to the less fortunate parts of England where there is a greater unemployment rate than we have in the fair County of Kent.Question put and agreed to.
Adjourned accordingly at seventeen minutes past Twelve o'clock.