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IS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT

Page 426

Printed for the Cabinet. October 1949 '

SECRET

C.P. (49) 211

19th October, 1949

CABINET

Copy No.

31

IRON AND STEEL BILL

MEMORANDUM BY THE MINISTER OF SUPPLY

The Cabinet, on a number of occasions, have considered the date on which the Iron and Steel Bill should be brought into operation. The last decision, taken on 27th July, 1949 (C.M. (49) 49th Meeting, Minute 4), was that considera- tion by the House of Commons of the Lords' amendments should be deferred until after the Summer Recess, so that the legal position and the alternative courses open to the Government might be more fully examined.

2. The position reached before the recess was that the Lords were insisting only on that group of amendments which postponed the operation of the Act to 1st October, 1950, and the vesting date till 1st July, 1951. The formal reason given by the Lords is-

Because they consider that the Bill should not come into operation until the electors have had an opportunity of expressing their opinion upon it."

3. The Bill provides for the transfer on 1st May, 1950, or such later date as may be determined by order of the Minister. We have now to decide in the light of the stand taken by the Lords whether-

(a) to do nothing;

(b) to invite the Commons to consider again the Lords' amendments and to advise the House to stand firm on 1st May, 1950, as the Vesting Day. (Either (a) or (b) would mean that at the end of this Session the Bill would, for the purposes of the Parliament Act, have been rejected for the first time); or

(c) to invite the Commons to offer an alternative with a view to enabling the

Bill to receive the Royal Assent this Session.

4. My colleagues will desire to bear in mind some of the practical considera- tions involved. They are mainly :-

(a) It will, in fact, be impossible to effect the transfer on 1st May, 1950. This date was originally inserted on the assumption, which we were bound to make, that the Lords would pass the Bill by July of this year. We shall be forced to admit publicly before long that 1st May, 1950, has been rendered impracticable.

(b) It is advantageous to get the Iron and Steel Bill on to the Statute Book before the end of this Parliament. Otherwise much time will be lost in again passing the Bill through the two Houses in the newly elected Parliament. In the interests of the industry the transfer to public ownership should be made as quickly as possible. Even the present period of suspense is injurious.

(c) For the Iron and Steel Bill to become law under the amended Parliament Act, it would be necessary, for the technical reasons set out in the Appendix to this memorandum, to contemplate a session which puls 37733 Page

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Page 427dbe97 1st May, 1950. This means they a short session of about six weeks, running presumably to the end of February 1950, during which little other business would be possible. The alternative is a somewhat longer session running to the end of April, by which time the Army Act and the Finance Act, and possibly other measures, would either have to have been passed or start afresh in a new session beginning in May 1950-and this would be virtually impracticable,

5. We can therefore stand firm on our present position, declare that the Lords have no right to overrule the decisions of the Commons on a matter such as this, and that we will not compromise with their unconstitutional demand that the nationalisation of this industry should be postponed until the Electorate has given us a second mandate to proceed.

6. The alternative, which I prefer, would be to admit the realities of the situation and invite the Commons to delete the date 1st May, 1950, Vesting would then be at such time within 18 months of the Royal Assent as the Minister may decide. In explaining our action we would say that we had been forced into it by the unjustifiable attitude of the Lords who, moreover, by insisting on delay are irresponsibly inflicting damage on the British iron and steel industry. We would say, however, that in view of the impracticability of now effecting a transfer by 1st May, 1950, the Government feel that it would be misleading to retain that date in the Bill, or to take any action for the appointment of å Corporation before the general election: but it is the Government's intention, if re-elected, to implement the Bill as soon as possible thereafter.

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7. Subject to any views which the Lord Privy Seal may express, I assume, in view of the reasons given by the Lords for insisting on their amendments quoted in paragraph 2, that the Bill would then be accepted by them, and the Act would be on the Statute Book without invoking the Parliament Act with its awkward repercussions on next year's programme.

Ministry of Supply, W.C. 2,

19th October, 1949.

G. R. S.

APPENDIX

1. If the transfer date in the Iron and Steel Bill is not amended this Session, and the Parliament Act procedure is invoked, the technical reasons which may make it necessary to bring next Session to an end before 1st May, 1950, are as follows.

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2. The Iron and Steel Bill must, when it is sent up to the House of Lords next Session, be identical with the Bill as it left the Commons this Session with only such alterations as are certified by the Speaker of the House of Commons to be necessary owing to the time which has elapsed since the date of the former Bill, or to represent any amendments which have been made by the House of Lords in the former Bill in the preceding Session." Unless, therefore, the Speaker will certify that the substitution of a later date for 1st May, 1950, is necessary owing to the time which has elapsed since the date of the former Bill, the new Bill will have to keep 1st May, 1950. It is quite possible that the Speaker will certify this, but it would be unwise to rely on him doing so.

3. The reasons for doubting whether the Speaker would certify the amend- ment as necessary are--

(a) that the power of postponing the date of transfer by order means that, so long as the Bill becomes law before 1st May, no difficulty will arise;

(b) that the Bill may become law before 1st May, 1950, and indeed that it Page 427lergies within the power of the Povernment by bringing next Session to an end before 1st May, to secure the passage of the Bill

before that date.

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4. Assumage that the Speaker will not certify the ameagent 209 the a97e as a necessary one, there is the possibility that the House of Lords would accept an amendment substituting a different date for 1st May, 1950, but it would be necessary to obtain a firm understanding in advance before parliamentary business had reached a stage in which it would be difficult for the Session to be brought to an end before 1st May. Otherwise the Opposition might take advantage of the Government's embarrassment.

5. If the new Bill is not amended either as the result of the Speaker's certificate or an understanding with the Opposition, it will be necessary for it to become law before 1st May, 1950, because it is not clear that the power of substituting a later date could be exercised retrospectively. If it could not be so exercised, the transfer provisions would be inoperative, and in this cardinal respect the Bill would be nonsense.

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