DEFENCE CONTRACTS BILL

HC Deb 12 December 1957 vol 579 cc1447-538

Order for Second Reading read.

4.5 p.m.

The President of the Board of Trade (Sir David Eccles)

I beg to move, That the Bill be now read a Second time.

This Bill is concerned primarily with the use in defence contracts of "know-how." "Know-how" means, broadly speaking, technical information which is not the subject of a patent or registered design. It may be the product of just as much experiment and development work as a patented invention and may be, in the popular sense, just as much a discovery or invention. But the owner does not publish his results, nor seek the privileges of a patent.

The main object of the Bill is to revoke certain emergency powers at present possessed by the Government and to substitute limited but permanent powers enabling "know-how" to be used for defence purposes.

I ought perhaps to explain to the House why I am the sponsor of a Bill about defence contracts. The reason is that the Board of Trade is concerned with the Patents Act, 1949, and the Registered Designs Act, 1949, which are amended by the Bill and is also responsible generally for questions of industrial property, of which "know-how" is today an important part.

The Bill revokes the Orders made under Section 49 of the Patents Act, 1949, and under paragraph 4 of the First Schedule of the Registered Designs Act, 1949.

Mr. Charles Royle (Salford, West)

On a point of order. May we have your guidance, Mr. Speaker? Is it right that expressions like the one the right hon. Gentleman is using should be permitted in the House? Is not "technical information" a good phrase and preferable to "know-how," which one regards as slang?

Mr. Speaker

It is quite in order. The choice of Members' language rests with themselves, so long as they obey the rules of order. I have no power to act as a censor of English in the House. I have heard many a slang expression used in the past.

Mr. Eric Fletcher (Islington, East)

Further to that point of order. May I draw your attention, Sir, to the fact that there is not a single word in the Bill or in the Explanatory Memorandum about "know-how" and yet the Minister has said that that is what the Bill is all about?

Sir D. Eccles

I supposed that hon. Members would expect of a Second Reading speech an explanation of what the drafting of the Bill means. Hon. Members opposite cannot be familiar with industry, or they would know that "know-how" is now a current term accepted in contracts and, indeed, in courts.

The two Orders which we are revoking enable the Government during an emergency to authorise the use of patented inventions and registered designs for a wide variety of purposes. When the Orders are revoked, the Government's powers will be limited to the right to authorise the use of such inventions and designs for the services of the Crown only.

Secondly, the Bill revokes Regulation 3 of the Defence (Patents, Trade Marks, etc.) Regulations, 1941, under which the Government can authorise the use of "know-how" in any Government contract. For those emergency powers we propose the substitution of more strictly defined permanent powers.

In the first place, amendments are proposed to the Patents Act and the Registered Designs Act. Under those Acts, the services of the Crown, for which patented inventions and registered designs may be used, include the supply of arms to an ally for his defence. They do not include the supply of arms to an all if the order is placed by another ally under the arrangements usually known as offshore purchase. Nor do they include the supply of arms to forces acting under the authority of the United Nations.

Cases of this kind arise out of developments in international relations which were not foreseen when the Patents Act and the Registered Designs Act were passed. The amendments necessary to bring the Government's powers into line with modern conditions are made in Clause 1.

The rest of the Bill deals with "know-how". The permanent powers now proposed in Clause 2 were recommended by an independent—

Mr. R. J. Mellish (Bermondsey)

On a point of order. I have often heard you deprecate the fact that Members constantly read their speeches, and you have often urged that this practice should be discontinued, Mr. Speaker. Why is it not possible for the same stricture to be applied to Ministers? We now have the position where the Minister is keeping so strictly to his brief that he dare not look up in case he does not know where he is when he looks down again. He is also using a phrase which is not quite usual. Cannot we have a Minister who knows his brief sufficiently well to be able to look up at us occasionally and at least to say, "Hello"?

Mr. Speaker

I have made it clear that a Minister introducing a Bill, or the Leader of the Opposition making a considered statement of his party's policy, is exempt from the usual strictures which are applied to Members reading their speeches. As to the language used, I cannot add to what I have said except to remind the hon. Member that the slang of yesterday is very often the current English of today.

Mr. E. Fletcher

Will you say, Mr. Speaker, whether it is in order for a Minister to read a speech that is unintelligible?

Mr. Speaker

I think that it is in order for a Minister to be furnished with a copious note of what he wishes to say.

Sir D. Eccles

The rest of the Bill deals with "know-how". The permanent powers now proposed in Clause 2 were recommended by an independent committee of inquiry, the Howitt Committee, whose Report was published in June, 1956.

The typical case with which we are concerned is that where a manufacturer wishes to undertake a defence contract and already has in his possession "know-how" which it is essential he should use to carry out the contract. But he is embarrassed by the various restrictions and obligations included in the commercial terms on which he may use that "know-how". For example, an agreement of this kind commonly limits the uses to which the "know-how" may be put.

The would-be contractor may, therefore, find that use of the "know-how" in question is either impossible—

Mr. Harry Randall (Gateshead, West)

On a point of order. Do not you agree, Mr. Speaker, that the constant use of the word "know-how" is now becoming a matter of constant repetition?

Mr. Maurice Orbach (Willesden, East)

And irritation.

Mr. Speaker

Hon. Members must allow the President of the Board of Trade to proceed in his own language, which is quite in order.

Sir D. Eccles

The trouble is that hon. Members opposite who pretend to know about industry know practically nothing about technical information.

Mr. Orbach

Since when has the right hon. Gentleman ever worked in a factory?

Sir D. Eccles

Since just before the war.

The would-be contractor may find that the use of the "know-how" in question is either impossible under his agreement with its owner or is subject to conditions which would be unreasonably onerous on the Department placing the contract. There must be power to break through restrictions of that kind in the interests of national defence. This we must do, but since it means interfering with ordinary commercial arrangements the Government have a duty to see that stringent safeguards are provided for the parties to these arrangements.

The House will know that an Inventions and Designs (Crown Use) Bill was introduced in another place in 1953 and was subsequently withdrawn during debate—[HON. MEMBERS: "Why?"]—thus providing hon. Members opposite with another proof of the usefulness of the other place.

The 1953 Bill was criticised as objectionable to industry because it covered Government contracts generally, and not merely defence contracts, and because it included a power to require the disclosure of "know-how" to a Government Department and to third parties. In subsequent discussions with industry, the Government undertook to drop these provisions, neither of which is included in the present Bill.

Industry, nevertheless, considered that the whole subject, including the question whether the Government should have the powers at all, should be referred to a committee, and my predecessor accordingly appointed the Committee under the chairmanship of Sir Harold Howitt.

I should like to take this opportunity of thanking the Committee for the way in which it discharged its task. The Committee recommended that the Government should have the powers, but subject to a number of safeguards. With a modification to which I shall refer later, the Government accepted these recommendations, and have, in the light of further discussions with industry, sought to cover them in the Bill.

Clause 2 gives the Government the power to authorise the use of "know-how" in contracts for the supply of defence materials.

The Howitt Committee emphasised the importance of a narrow definition of defence, and the definition of defence materials which is given in Clause 6 is the result of discussing with industry the Committee's recommendation. Defence materials are to comprise, first, articles which are not only required by the Armed Forces or for Civil Defence, but are also designed and adapted for those purposes and, secondly, components of those articles or goods required by the Ministry of Supply or Admiralty to produce, maintain or repair those articles.

I believe that anyone who studies the Report of the Committee will agree that this definition implements its recommendation in letter and in spirit.

I now come to the point on which we have accepted the Committee's Report, with some modification. The Committee recommended that the power to give authorisations to use "know-how" should be exercised only at the highest level in Government Departments. This we accept completely, and here I am speaking for my right hon. Friends who, under Clause 6, are the competent authorities to give authorisations.

They recognise that the inclusion in standard contract terms of an authorisation under Clause 2 would not be satisfactory. They agree that each case must be considered very carefully.

The Committee also proposed that the legislation should require the Minister or the permanent head of his Department to certify that he personally had considered the particular case. That is the suggestion which has not been implemented. We do not think that the exercise of the powers should be limited by Statute to a Minister personally, or that it would be right, in a matter of this kind, to single out one class of officials from others.

My colleagues are, however, anxious that there should be no misunderstanding as to the importance they attach to the views which have been expressed to us on this matter, and they have asked me to give an assurance that in normal times the decision to issue an authorisation will be made by the Minister personally. I want to stress this point, so that any fear that authorisations might be issued without proper consideration will be removed.

The Bill, as I have said, gives no power to compel a manufacturer to disclose "know-how" to a Government Department or a third party. Clause 2—and in this we are again following the Howitt Committee's recommendation—includes a specific disclaimer of such a power. All that we are asking is the right to authorise a contractor to break his agreement restricting the use of "know-how" and rely on the Government to compensate the person from whom he has the "know-how."

Clauses 3 and 4 are concerned with the safeguards. Under Clause 3, before an authorisation is given a contractor can have three months to negotiate with the owner of the "know-how" a new agreement enabling him to use it for the defence contract on terms acceptable to the Government. If the contractor fails to secure this by ordinary commercial negotiations the Government can issue an authorisation under Clause 2; and in that case the Government has to notify the owner of the "know-how" and any other party who appears to have an interest.

There is only one exception to this procedure, and that is where it would be prejudicial to national security if the existence of contracts for certain defence materials were to be revealed to the owner of the "know-how". I should expect such cases to be very rare.

Under Clause 4, the owner or other interested party may claim compensation from the Government, and, in default of agreement, any dispute about the compensation or its amount can be referred to the High Court. Apart from that, the authorising Department can be challenged in the court on whether it has exceeded its powers under the Act in issuing an authorisation at all. In these two Clauses we have taken into account the recommendations of the Committee and of industry as to the safeguards.

I do not think I need detain the House longer on the other Clauses. The Bill is a revised, and, in the view of the Government and, I hope, of industry, a much improved Measure, containing those limited minimum permanent powers necessary even in peace time for the efficient production of articles required for defence. The Howitt Committee's Report and the advice of industry have enabled the Government to introduce a Bill which does not seek more powers than are necessary and which also provides adequate safeguards against the misuse of those powers. I therefore ask the House to give it a Second Reading.

Mr. A. J. Irvine (Liverpool, Edge Hill)

Before the right hon. Gentleman concludes, may I ask him whether he will deal with this question? Clause 1 of the Bill provides for an extension of the use of patented inventions in countries abroad. Is it not important that the House should be told whether, in the legislatures of allied countries, there is now being initiated reciprocal or equivalent legislation?

Sir D. Eccles

That is only a very narrow point. It really relates to the case where the United States places an order for weapons to be manufactured in the United Kingdom for delivery, let us say, to one of the N.A.T.O. Powers. At present, we have no power to require the use of patents or registered designs in that particular case. If, in fact, such offshore purchases are being made in other countries for the defence of third countries, I would expect that those other countries would take similar powers to those for which we are asking today.

4.23 p.m.

Sir Frank Soskice (Newport)

I am sure the House is grateful to the President of the Board of Trade for having taken us so mellifluously through the terms of his brief. As he read it, I could not help wondering how much he would have been able to tell us about this Bill if he had not had his brief before him.

I must confess that I am a little discouraged in being about to put the many questions which I desire to put to him, and my discouragement is not lessened by the answer which the Minister has given to my hon. Friend the Member for Edge Hill (Mr. A. J. Irvine). My hon. Friend asked the President, on Clause 1, what the situation was with regard to reciprocity. My hon. Friend wanted to know whether, for example, in the United States, there are some provisions in their legislative system requiring that "know-how" and patents shall be made available in the same way in which this Bill seeks to make them available to various countries in Clause 1.

It really is no answer for the right hon. Gentleman to say that that is a narrow point. It is not a narrow point. Nor is it sufficient for him to say simply that he would assume that that is the case. As the right hon. Gentleman pointed out, it is his Department which is responsible for the Bill, and it is not an answer to my hon. Friend to say that the right hon. Gentleman assumes that the answer is, "Yes." It is his responsibility to see that it is "Yes." It is his responsibility, in introducing legislation of this sort, to see that this country and its interests, for which he is responsible, are not placed at a disadvantage vis-à-vis other countries.

If that is to be a sample of the kind of answer we are to get to the various points which we want to raise, I feel that we will have some hesitation in coming to the conclusion—if we do—that we can give the Minister the support for which he asks.

Sir D. Eccles

I think that the right hon. and learned Member for Newport (Sir F. Soskice) is making a bit much of this. It is not that these patents are to be made available to any manufacturers in any foreign countries. As he knows, it concerns the case where a British manufacturer receives an order for the supply of weapons to one of the N.A.T.O. countries. If the N.A.T.O. country pays directly to Britain with its own money, we have the right to require the use of patents. It is only when the bill for the arms is paid by the United States that we need this extension. It is not something which makes available to foreign countries British patents and registered designs which they do not have now. It depends entirely on who pays the bill for the guns, or whatever it may be.

Sir F. Soskice

I am obliged for that intervention. I have read the Bill, and I assure the right hon. Gentleman that it provides that if the Government wish to supply, pursuant to treaties made with foreign countries, war materials for the defence of those countries, or, indeed, of other countries with which they are in treaty, British manufacturers have to make available to the Government their patents and their "know-how" for the purposes of the manufacture of those arms.

What my hon. Friend was asking, and what the President has not answered, is this: in similar circumstances, would an American manufacturer have to make available to the American Government his patents and "know-how" for the purpose of the supply of war materials overseas, pursuant to offshore purchases or under any other arrangements? It is not a small or a narrow point, but a point which we think the right hon. Gentleman has a responsibility to elucidate. It is his responsibility to see that if we in this country make "know-how" and patents available for the purposes of supplying other countries—which is the case, I assure the right hon. Gentleman, under the terms of his own Bill—other countries receiving the advantages which the Bill provides shall reciprocate them, so that we shall get similar and reciprocal advantages in the terms of their legislation.

If the right hon. Gentleman is unable to answer the question, I very much hope that the Minister who is to wind up the debate will be able to give us an answer. Have there been any negotiations with a view to these reciprocal arrangements, or is the Minister proposing to initiate any such negotiations? If I leave the point at that stage, it will be in the hope that in due course we shall receive an answer.

Mr. B. T. Parkin (Paddington, North)

The Bill is presented by the President of the Board of Trade, supported by the Minister of Supply and an hon. Lady representing the Home Office. It seems to be a very strange way of supporting a Bill to absent themselves from the Chamber when it is debated. Would it be possible for these other hon. Members to be informed that the President of the Board of Trade finds himself in some difficulty, so that they might come along here? It might facilitate the course of the debate if we could get answers from the Minister of Supply which we cannot get from the President of the Board of Trade.

Mr. Deputy-Speaker (Sir Charles MacAndrew)

Was that a point of order? I cannot answer it.

Mr. Mellish

This matter is important, Mr. Deputy-Speaker. My hon. Friend has asked a question to which it is very doubtful whether we are to have an answer which would help us in the course of the debate. Are we not to have that answer before my right hon. and learned Friend the Member for Newport (Sir F. Soskice) goes on to the main part of his speech?

Sir F. Soskice

I think I can answer my hon. Friend. It certainly seems, at the stage which the debate has now reached, that the answer is "No". I can only express the hope that my hon. Friend and other hon. Friends will stress this matter again and again, because we attach very great importance to this question. If we cannot get an answer, that is a matter which goes against the credit of the Government. If we do not, we shall do our best to press the matter; and I hope that my hon. Friends will think it right that that should be done.

Passing from that point, Clause 1 of the Bill, so far as I understand it, simply provides the machinery for treaties providing for offshore purchases, for the equipment of United Nations police forces, and so on. Since it is merely a machinery provision, I feel that we on this side of the House would, to that extent, have no objection to it. We should certainly wish to scrutinise Clause 1 very much more carefully and with very much more hesitation if the Clause had anything to do with the initiation of policy. We do not approve of many of the treaties which Her Majesty's Government have entered into, and we do not like their foreign policy at all. But this is simply a machinery provision; it enables treaties entered into to be implemented, and upon that basis we accept it.

In general, we think that it is desirable that the public purpose, the public good, should be forwarded so far as possible by making available for its furtherance private skills and private property, subject to proper safeguards. Clause 1 does that, and, to that extent, we approve it. As I say, we approve it as not entrenching upon the questions of policy about which we are in sharp conflict with Her Majesty's Government.

Although we find ourselves, to the extent I have indicated, approving the purpose of Claus 1, I am bound to say that I am very disappointed at the Government's attitude about the scope of the Clause altogether. We are very much concerned at Government have chosen to give it. It seeks simply to extend to extend the definition of for the services of the Crown an expression used in Section 46 of the Patents Act, 1949. As the President of the Board of Trade has already told us, a previous edition of the Bill was introduced in another place in 1953. The right hon. Gentleman referred to the fact that that Bill had been withdrawn, using words which I thought were a little unfortunate, saying that the fact that a Government Measure had been withdrawn indicated the usefulness of another place. If the other place procured the withdrawal of most of the Government Measures we have seen during the life of this Parliament, we should be very ready to endorse his description of its activities. In this particular case, however, we think that his description of what the other place did was quite wrong. I will explain why.

The Bill which was then introduced was far wider in the definition which it adopted of the public purpose which was to be achieved by the use of private patents and private "know-how." I have before me the terms of that Bill. When it was introduced in another place, the purposes for which patents were to be made available was not described merely in the terms of Clause 1 of that Bill as the supply of war material overseas". It went very much further than that, embracing the provision of drugs, medicines or appliances required by the Minister of Health for supply to patients under Part II of the National Health Service Act, 1946. It covered a number of similar purposes. It contained similar provisions with reference to Scotland, with reference to the requirements of the Minister of Pensions and National Insurance for supplies to patients in Northern Ireland, and it related also to the supply of equipment for the purposes of the Fire Services Act. Indeed, it embraced a wide range of purely civil purposes which we on this side regard as of at least equal importance with the defence purposes at present embodied in this very truncated Bill.

The first question I have to put to the Government is this. Why has the Bill been limited by the total omission of any reference, for example, to the Health Service and the other purposes I have enumerated? It comes to the House after the supposedly benevolent activities of another place, completely shorn of half its useful purposes and limited simply to the provision, as I read it, of war materials. This applies both in relation to the use of patents provided for under Clause 1 and also in relation to the use of "know-how" provided for under Clause 2.

The noble Lord who cordially commended that original Bill on Second Reading in the other place indicated that the reason for the reference in the terms of Clause 1 of the earlier Bill to the Health Service and the cognate services to which I have referred was that there was some doubt as to whether the words for the services of the Crown which are used in Section 46 of Patents Act, 1949, were wide enough to embrace the Health Service and other services. He made it perfectly clear, as I read his speech, which was a clear and lucid one, that it was the desire and intention of the Government that Section 46 of the Patents Act, 1949, which was the original section making these patents usable for those purposes, should, beyond a peradventure, extend to include things like the Health Service and other services.

The noble Lord, in commending the Bill in the other place, referred, for example, to the provision for hearing aids for hospital patients. He referred to the provision of artificial limbs for hospital patients and pensioners. He referred to the creation and production of communications equipment for the fire brigade services. He was at pains to point out that it was the intention of the Government that there should be no doubt that, under Section 46 of the Patents Act, 1949, the Government would be able, in their production, to use patents which were helpful in the production of those commodities. It immediately springs to mind that what he said with regard, for example, to hearing aids would have almost equal application to the very expensive proprietary medicines which are used for the purpose of the Health Service.

Why have these things been dropped overboard? Is it because the President of the Board of Trade has now been advised that there is no doubt that the words for the services of the Crown are wide enough to include all those things? I do not know whether the right hon. Gentleman can give an answer now. Is it the intention of the Government that those words should include the Health Service and the production of that sort of thing for the Health Service? If the President of the Board of Trade feels able to tell us what are the intentions of the Government to which he belongs, I will willingly give way to him.

Hon. Members

Answer.

Sir F. Soskice

I really do not want to be unduly persistent about this, but I feel, if I may say so with great respect to the President of the Board of Trade, that he ought to be able to tell us here, on the Floor of the House of Commons, in introducing the Measure, whether it is the desire of the Cabinet of which he is a member that the words in the Act of 1949, for the services of the Crown". are to be construed as being wide enough to include production for the Health Service. Has he now been advised that there is no doubt that they do include the Health Service, or are we really to proceed with the further consideration of the Bill knowing that the President of the Board of Trade has no idea whether they do include the Health Service and other services, and, furthermore, has no idea whether the Government to which he belongs desires that they should, or, indeed, has no idea of whether he himself desires that they should? If the right hon. Gentleman would like to answer, I will certainly give way to him.

Mr. Denis Howell (Birmingham, All Saints)

Perhaps he could ask the Attorney-General.

Sir F. Soskice

With great respect to my hon. Friend, this is a matter for the President of the Board of Trade. It is for the right hon. Gentleman to be able to tell the House whether he wishes that, to save expenses in the production of proprietary medicines, patents and "know-how" should be available for use by the Government. If he does not know, we can but mark with some displeasure the fact that he seems to be very inadequately instructed as to the purposes of his own Bill, and pass on to the consideration of some other aspect of it.

I am bound to say that we are profoundly disappointed at the response we have had up to the moment and that we shall maintain a completely open mind as to whether we can support the Government in giving the Bill a Second Reading.

Mr. Mellish

On a point of order. This is the beginning of what we hoped would be a reasonably short debate, although it is a very important matter. The debate may be completely abortive if what my right hon. and learned Friend says is correct, that is to say, that the words in the 1949 Act are sufficiently wide to give the assurance we require. Our discussion might be brought very quickly to an end if a conclusive answer to this question could be given. We must have that information to debate this matter properly. Is there any way in which you, Mr. Deputy-Speaker, can get it for us from the Government Front Bench?

Mr. Deputy-Speaker

Although I should like to see the debate brought to an end as soon as possible, I cannot make Ministers speak if they do not wish to speak.

Mr. Mellish

It is scandalous. We cannot get on with the debate if the Minister does not give us the information.

Mr. Parkin

Why not ask some of the other right hon. and hon. Members whose names appear on the Bill?

Sir F. Soskice

You have pointed out, Mr. Deputy-Speaker, that you cannot force the President of the Board of Trade to speak and it does not look as though anybody else can force him to do so. Indeed, he cannot even force himself to speak, because he does not have the information at his disposal. It is not a matter on which he should have to send for information from his officials in the Official Box. He should know this information. If he is unable to answer, the only inference we can draw is that the Government, for some purpose of their own, have deliberately desired to omit provision for the Health Service. If that is the situation, I should like to ask the President of the Board of Trade one or two other questions.

Mr. H. Hynd (Accrington)

My right hon. and learned Friend will not get an answer.

Sir F. Soskice

I am sure of that.

I should be grateful if the President of the Board of Trade would be so good as to have before him, if he has it available or if the experts in the Official Box can supply him with it, the text of the Bill of the former President of the Board of Trade, the right hon. Gentleman who is now the Chancellor of the Exchequer. If the right hon. Gentleman looks at Clause 1 he will see that I have correctly cited its effect. I am ready to give all possible time to the right hon. Gentleman. I will willingly digress to some other topic while the missing copy of the Bill is searched for. If it cannot be found, perhaps I had better remind the President of the Board of Trade of what it contained.

Clause 1 provided that these patents were to be usable for the purposes of the Health Service. Obviously, Clause 1 must have been inserted as the result of mature deliberation by the Government. I suppose that the original Bill must have passed, in the ordinary way, through Cabinet committees. It then must have had the approval of the Cabinet. I will not ask for the contents of Cabinet papers, but surely the Bill must have been placed before the Cabinet by the present Chancellor of the Exchequer, who must have given adequate reasons to induce the Cabinet to include that Clause in the Bill.

I suppose that those reasons must, for example, have indicated a saving in cost to the Health Service if "know-how" and patents could be made available for the production of proprietary medicines, together with all the other savings and advantages which might accrue for the purpose of perfecting that Service and otherwise, and which induced the Government to include that provision in Clause 1 of the Bill.

As I have stated, not only did the Government include it but the noble Lord who recommended it to the other place went so far as to say that he was anxious to remove doubt as to whether those provisions were included. That was the whole point; their Lordships wanted to be certain of it. Will the President of the Board of Trade be so good as to refer again to his brief and tell us what were the motives that actuated the Government at that time in including the Clause in the Bill? They cannot have done it simply because of a whim. They must have done it for a set purpose and with adequate reasons. One of those reasons must have related to the saving in cost to the Health Service.

I should like the President of the Board of Trade to state those reasons. He must know them, or at least he ought to know them. When he has stated them I should like him to tell us in what sense these reasons have subsequently become invalid. If they were reasons which commended themselves to the Government in 1952 or 1953, when the introduction of the Bill was being considered, what has subsequently falsified them? Has it been found that the anticipated expense would not have been saved? What were the reasons which actuated the Government which are now shown to be invalid?

I very much hope that when this debate is wound up we will be put in the position of being able to follow why the Government, having first done what we would very much like to see them do, namely, made this provision for the Health Service, have now thought fit to exclude it. I feel sure I am right in saying that, just as in my own case so in the case of my right hon. and hon. Friends, this is a consideration which will greatly influence them in making up their minds whether they should vote for the Second Reading of the Bill.

The President of the Board of Trade does not look any more responsive than he was before, but I hope that in due course, when the question has had time to mature, we shall be placed in possession of the information which we certainly look for to enable us to make up our minds about it.

I hope that the Government are not trying to take refuge behind the report of the Howitt Committee. I join with the right hon. Gentleman in expressing thanks to the three members of that Committee, one of whom, a member of my own profession, is personally known to me. I have the highest regard for his judgment. But this is not a matter of the judgment formed by those three gentlemen. It is a matter of political judgment to be decided on far wider considerations. The question for political judgment is this: is not the improvement—the perfection—of the Health Service, which is so important for the country, to be raised to a level equivalent to that of defence purposes to which the Bill is at present limited?

After all, the Howitt Committee pointed out that "know-how", as it is called, is very widespread in industry. Many industrialists, instead of taking up a patent as they might have done before now, keep their "know-how" secret, keep it to themselves. Let me cite from page 1 of the Report of the Howitt Committee: we have been given evidence that industry now relies to an increasing degree on detailed information, such as working drawings, models, designs, technical records, and details of workshop practice, which is either unpatentable or is not in practice patentable. There is a wide reservoir of knowledge and skill which, subject always to proper safeguards to make the position fair as between the private industrialist and the Government, should, so far as possible, be put at the disposal of the Government not for the limited purpose simply of producing defence materials, but for a far wider and more important extended purpose as was the case in the terms of the previous Bill, namely, to include the various social purposes, as I would broadly describe them, which I have enumerated. I can only say that it is regrettable that Clause 2 has now been limited equally with Clause 1 simply to the production of defence materials.

I have read carefully the debate in another place and I know that I would be ruled out of order if I sought to give the text of what was said by noble Lords during that debate. I think, nevertheless, that it is within the bounds of order to cite in summary form the conclusions which actuated them in asking the Government to withdraw this Bill. One circumstance which moved them was that the 1953 Bill, as originally framed, in dealing with the technical information, or "know-how", to which I have been referring, contained provisions that a person in possession of "know-how" should, subject to a criminal penalty, be bound to disclose that "know-how" if he was required to do so by a Government Department. It was that particular provision which, if I correctly summarise the effect of the debate, moved noble Lords to ask for the rejection of the Bill. That provision is not now in the Bill.

I am not saying that it should or should not be in the Bill—probably an amended and more qualified provision should be substituted for it—but I should like to ask the President of the Board of Trade: without any such provision, where are the Government? Are they not almost powerless to have made available for them this vast amount of accumulated scientific knowledge which, subject to the proper safeguards, should be made available for these necessary social purposes which I have indicated?

The situation turns upon Clause 2 (2). I have tried to analyse what the effect of that Clause is, I have written it out, and I think that I correctly summarise its effect in these terms. What the Clause provides in dealing with agreements to restrict the disclosure to the Government of "know-how" is this. So much of any agreement as restricts disclosure of terms of that or any other agreement shall be of no effect in relation to a disclosure to a competent authority of information required by that authority to enable it to identify restrictions or obligations from which the person to whom the authorisation is given is relieved or discharged.

Will the President of the Board of Trade, or the Minister who is to wind up the debate, please tell me what that really means, and what is the use of it to the Government? Does not it leave the Government wholly unprotected in the face of barriers which will prevent them getting at this "know-how" in order to make sure that it is made available for the public service?

In relation to the provisions which the Government have now omitted from the terms of this Bill, I should like to ask exactly the same question as the one I asked in relation to the provisions which have been omitted from Clause 1. I am now talking about Clause 2. This provision, which was objected to in another place, was in the Bill when it was originally presented to another place. Presumably, the Government must have had reasons for inserting it in that Bill. Why are those reasons invalidated? Did not they put those provisions in the Bill because they felt that without some such provision Government Departments would be virtually powerless to see to it that "know-how" was made available for the Health Service, for which that particular Bill provided, or for the more limited purposes now envisaged in the Bill?

I would like to ask the Minister to explain the sort of situation that he envisages. What is the good of Clause 2 in this truncated form? Is it not essential that there must be, perhaps not so drastic a provision as in the original Bill, at least something to enable a Government Department which wants to have access to, and to make use of for public purpose, this valuable "know-how", to have disclosed to it its character and identity, obviously, of course, under safeguards? Clearly, it should not be disclosed to rival industrialists.

I ask the Government whether, in cutting that provision out of the Bill, they have really not almost completely frustrated its purpose. The Bill not only contains that very involved formula which I read out, and which I find it very difficult to unravel, but goes further and, in specific terms, prevents disclosure of any technical information to a Government Department. It prevents disclosure to a Government Department and to third parties. I quite agree that it should not be disclosed to rivals, but surely it can, with safety, be disclosed to Government Departments, and Government Departments can be enjoined against disclosing it unlawfully to other persons who may be in competition with the owner of the technical information.

This Bill is a very sorry edition of the Bill which was introduced in 1953. I think that it is a somewhat new experience for us on this side of the House to seek to commend a Measure of the present Chancellor of the Exchequer. I hope that right hon. Gentlemen and hon. Gentlemen opposite will forgive me, because I do not mean it in any offensive sense when I say that we on this side of the House nearly always think that Measures introduced by the right hon. Gentleman are short-sighted, ineffective, perverse, mischievous and obtuse. I have merely tried to indicate in measured language the feelings that we have.

On this particular occasion. I hope that the Chancellor will feel considerably comforted and encouraged when, as I think will be the case, one after another of my hon. Friends gets up and commends the Measure which he, when he was President of the Board of Trade, introduced in another place. I think that he was right then and that the present President of the Board of Trade is misconceived and wrong. What he has done is to refer this to three gentlemen, and he has taken refuge behind their report. I respectfully submit to him that this is really a matter for which he is responsible and in relation to which the report to which he refers can be of very limited assistance either to hint or this House.

This is a matter for wider political judgment, and the political judgment which I would ask the President of the Board of Trade to adopt is that this is a sort of Measure which should be widely phrased and not narrowly phrased. If it is justified in the public interest to use patents owned by private people and "know-how" owned by private industrialists for the purpose of defence, equally it is justifiable, always subject to safeguards to make the position fair as between the private industrialists and the Government, that they should equally be available for this far wider and more extended purpose to which I have drawn attention.

I shall listen with interest to the reply which I hope we are to have later, so that I may be able to make up my mind. I believe that what I have to say for myself is the feeling which will be entertained by my right hon. and hon. Friends who will certainly desire to follow me in the debate if they are fortunate enough to catch the eye of Mr. Deputy-Speaker.

4.57 p.m.

Mr. W. R. Rees-Davies (Isle of Thanet)

I rise to put one or two specific matters to the President of the Board of Trade, or to my hon. Friend when he comes to reply, on a Bill which, I think, is important. It is an important Bill because it seems to me that it is the beginning of what might be the forerunner of a lot of legislation in this field in the years ahead. I think that in five or ten years' time we may find a great deal of pressure to move still further into the realms of private contracts, and it may not always be that we shall have a Government so dependable as the present Government. That being so, we are now engaged in what, at first sight, is a small Measure, but a Measure which may, as I say, be the forerunner of further legislation in what is essentially a practical field.

It seems to me that modern industry is not making very much use of patents at the present time, and I think that as the years go by, with international trade growing and expanding, it may well be found that people will rely on the secrecy of their contracts rather than upon the use of patents. If that is so, it clearly behoves us to be careful as to exactly where we are going in this Bill.

I support the Bill in its general nature for several reasons. First, I think that a really admirable feature of it is that it is indeed time that we got rid of the Defence Regulations and got their general content in a proper Act of Parliament. That, I think, will command the support of all in the House. This is a good opportunity to debate this matter. The Bill will go through Committee, unlike the Defence Regulations in the old days, and we shall see precisely what we are laying down for the future. It is also clearly right that the powers contained in this Bill, at least for the next year or two, should be limited to defence requirements, and clearly right that there should be this period of negotiation of three months contained in the Bill. It is also clearly right that it should not require the power of disclosure of private contracts at this stage, although in years to come that may be overridden.

There are two or three points specifically about which I am concerned, though I admit that I have not given the Bill the detailed and careful consideration that I should have liked to have given it, and I have not discussed it with those who are engaged in industry. I want to put the first point to the Minister. My right hon. Friend himself raised it fairly in his opening speech. I am inclined to think that Sir Harold Howitt and the other two members of the Howitt Committee are right and that the words "competent authority" should be strictly construed.

I am not content with an assurance from any Government Department or any Minister—because that never binds anyone in the future—that authorisation will be considered at a high level. In these days, when we may have rapid changes of Ministers or even a change of Government, there should be a clearer definition in the Bill than the present definition of "competent authority". Nor do I think that this is a Committee point. The Bill is one which may well be the forerunner of future legislation.

I invite the President of the Board of Trade to give careful thought to the question whether, if the Minister himself is not to certify, there is any other means of having somebody at a high level being actually defined in the Bill as having that power. The party opposite has very different ideas from ours, and in this particular field they are horrible ideas. I exclude the right hon. and learned Member for Newport (Sir F. Soskice), because I know him well in another sphere, and I am sure that he would deprecate the misuse of such power.

There are, however, Ministers who have delegated to their civil servants far too wide powers to make decisions of one kind or another. Those who have been concerned with town and country planning and questions of compensation know that time and again decisions have been taken at quite a low level in Ministries, of which the Minister knows nothing whatsoever, and those decisions have had the greatest impact.

Mr. D. Howell

On a point of order. I am a new Member, but I thought it was the practice in the House that Ministers had full responsibility for everything in their Departments. Is it in order, therefore, for an hon. Member to allege that Ministers who are responsible for their Departments do not know what is going on in the Departments and to put the blame on civil servants who are not in a position to defend themselves?

Mr. Deputy-Speaker

The hon. Member for the Isle of Thanet (Mr. Rees-Davies) did not say that. He said that in future it might happen.

Mr. Parkin

I hope the hon. Member for the Isle of Thanet (Mr. Rees-Davies) was not referring to the Minister of Defence, who said as late as this afternoon that he did not believe in negotiating but left it to his officials.

Mr. Deputy-Speaker

I thought the hon. Member for the Isle of Thanet was talking about what might happen in the future under this Bill.

Mr. Rees-Davies

I know that hon. Members opposite want their jollying in this matter, but I thought I was making a very serious point. We know quite well that in the Ministry of Defence, and certainly in the Ministry of Supply, it is quite impracticable for the Minister to have personal knowledge of each contract. The Howitt Report is very definite on this matter. It states in paragraph 23 (A) The Ministry of Supply agree—indeed assert—that they would expect the powers to be exercised only in comparatively few and exceptional cases. The general reasonableness and patriotism of commercial men, their own commercial interests, and the provisions for renegotiation before any authority could be issued would in all normal cases ensure that fair and mutually satisfactory arrangements could be made without recourse to the use of the over-riding powers. If that is so, and it is also the case that the Ministry of Supply will handle these matters, it would seem that a Minister, or at least a Permanent Under-Secretary or somebody of as high a level as that, should be the person to give the necessary certificate that he had investigated the matter.

I may be wrong, but I know of no precedent of a definition in which a civil servant, or at least his post, is named. Nor do I know of one which requires that a civil servant must be of a certain level. It might be unwise to adopt that course. If so, I should prefer to play for safety and arrange for a certificate by the Minister, rather than override the views of the Howitt Committee. This is a point which might be ventilated in Committee after the whole matter has been thoroughly investigated.

The second point is another matter on which I am not wholly clear. I am not at all sure whether Clause 2 (3) gives powers for what would be unnecessary retrospective operation. The subsection says: An authorisation given for the purposes of subsection (1) of this Section may apply to things done before as well as after the date on which it is given. I do not know whether that is intended to provide for retrospective operation or not. I should very much like an explanation of that part of the Bill. If it is really intended to enable somebody who has made a mistake in the Ministry to use powers which he ought not to use to put himself in the right, then, to put it quite bluntly, I am agin' it. On the other hand, there may be an explanation which I may not have understood or appreciated properly.

The Bill should be welcomed, because everything that we can produce to remove these provisions from Defence Regulations and to bring them before the House and, if possible, to clarify them should demand the support of the whole House. We are moving into an era in which, to some extent, industry must accept that it should be at least asked and possibly required to disclose some of its confidential information. In a period in which Japan and Germany and other countries—and I say this without disrespect—are out to "pinch" our patents and information and to use them in a world in which the international rule of law is quite useless as a protection, it is important that the Government should be given additional powers and that those powers should be most carefully utilised.

The word "know-how" has been criticised. It is, broadly speaking, defined in Clause 2 (7). It covers pot only processes but, of course, information of all kinds. The sort of example I have in mind is the case of one of my own constituents. I do not propose to disclose the facts and the names, because this was confidential information. My constituent supplied to the Air Ministry certain drawings and a model for the purpose of tendering for a contract. The drawings and model got into the Department and, unfortunately, some of the design was copied by somebody else who then sent it back to another contractor to tender for the contract, admittedly by mistake.

As a result, the "know-how" in that case was passed to somebody else who tendered for the contract and secured it, to the detriment of my constituent. The matter was wholly and properly investigated. My constituent is satisfied and the Air Ministry is satisfied that there was a mistake, but the important point is that there are a great many confidential drawings and designs. Sometimes some of them are very similar, or perhaps show some slight improvement here and there as between one competitor and another, but they constitute information which is obviously of great assistance to our Government and to other Governments in deciding the best design for a defence contract.

It is obviously important that these decisions should be taken at a high level, for the following reason. If they are taken at a low level there may be two different members of the same Department, one in one part of it, another in another part, engaging quite properly in their business with a contract and not appreciating what the other is doing, as happened in that case. That is another reason why I would like to see this Bill ensure that only those in a really high position in the Ministry have the power to be able to certify. In that case we could be sure that there was no overlapping and that such mistakes did not arise to the detriment of the commercial men we want to encourage to trust their information to the Government.

Mr. E. Fletcher

Would the hon. Gentleman not agree that there is nothing in the Bill which would prevent the kind of mischief to which he has referred, namely, of confidential information being passed from one contractor to another?

Mr. Rees-Davies

I entirely agree. I was only using that case as an illustration. I believe that what we want to do through this Bill is to encourage a reasonable climate in commercial men so that they will pass on information to Government Departments in the sure knowledge that they can trust them. Therefore, this Bill should provide all possible safeguards to that end.

I used that illustration to show that at too low a level these mistakes happen even in the best-conducted Departments. I did not give that illustration because I was seeking to criticise the Air Ministry for having done something terrible; it was just something which might happen even in a gigantic commercial firm. It does happen, and therefore I invite the President of the Board of Trade to pay the greatest possible regard to these safeguards, so that we may get the utmost co-operation from commerce and trade in what I regard as a most important field.

5.12 p.m.

Mr. R. J. Mellish (Bermondsey)

There was one thing said by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) with which I agree. He said that there were certain aspects of this Bill which showed the fundamental difference between his party and mine, and I will deal with that primarily in my speech.

I must first make reference to what was an appalling Second Reading speech made by the President of the Board of Trade. The right hon. Gentleman had a brief which he could not have read until he put it on the Dispatch Box. He stuck his nose into it and read it. He did not understand it. He has been asked simple, elementary questions affecting the Bill, and he has been unable to give a single answer. The right hon. Gentleman knows no more about the Bill now than when he started, and from the point of view of debate I regard this as a shocking example of a Minister introducing an important Bill.

There is one thing to be said for the right hon. Gentleman, that when we become the Government of the day—as we shall in the not far distant future—whoever on these back benches is given a job to do on the Front Bench opposite could not do a worse job than the President of the Board of Trade has done today. The hon. Member for the Isle of Thanet was here and he knows that the Minister has not been able to answer a single question.

One fundamental question was asked and, as the President of the Board of Trade has had time to study it, I will ask it again. The question is whether the 1948 Act gives security as regards trade in these matters; in other words, whether the Crown has certain rights under that Act to demand certain information. We desire that to be in the Bill. We have not had an answer to that question and, apparently, we are not likely to get one.

There was an inquiry held consequent upon the 1953 Act regarding the powers of the Crown to authorise the use of unpatented inventions and unregistered designs in connection with defence con-tracts. I have the Report of that inquiry in my hand, and there are fundamental points in it which must be quoted here. We find in paragraph 15 on page 6 of the Report of the Committee of Enquiry on the Powers of the Crown to Authorise the Use of Unpatented Inventions and Unregistered Designs in connection with Defence Contracts the following: It is clear that our national resources of trained personnel are inadequate to enable us in this country to cover the ever widening field of complex technical development. Further, our physical resources, such as research laboratories and technical institutions, are also inadequate. Paragraph 16 states: For the most part, no doubt, it is the larger British companies who have agreements dealing with these technical matters, and it can be assumed that they will act, not only intelligently but with regard to the national interest. Nevertheless, it may well happen that at the time when an agreement is entered into, its ultimate possibilities In respect of Government requirements are not foreseen or even contemplated. Finally, there is this comment: Additionally, the national interest must be protected against the unscrupulous and the avaricious. The 1953 Act, which was promoted in another place, did just that with a number of important matters. As a result of the debate in the other place, vicious opposition was expressed by certain private vested interests. Anyone who wants to find out if that is true should read the report of the debate. This opposition was expressed openly and frankly on behalf of certain private vested interests which did not want the power of the State to take away any secret information that might be in their possession. They did not want anything removed from them from which they were making a private profit.

We had all the old stuff put out about the freedom of the individual being attacked as opposed to the interests of the State. Eventually, after a short debate, the noble Lord Woolton, on behalf of the Government, rose and moved the Motion, "That the debate stand adjourned." He saw the opposition coming from people like my Lord Balfour and others, he realised that they were touching interests which were fundamental to the party opposite. They were actually going to pass legislation in 1953 which would compel some of the best supporters of the party opposite to divulge information, so the noble Lord moved that the debate stand adjourned.

It is scandalous that four years afterwards we have this innocuous Bill which has taken the guts out of the 1953 Act and which has made sure that the vested interests concerned are no longer affected. Let us look again at the Report of that Committee, Cmd. 9788. I must say that this is a bright paper. The Committee of Enquiry met on ten occasions and received both written and oral representations from organisations. Whom did they meet? The Ministry of Supply, the Chartered Institute of Patent Agents—I bet they were good—the Federation of British Industries, the London Chamber of Commerce, the National Union of Manufacturers, and the Trade Marks, Patents, and Designs Federation. There is a nice collective body of vested interests. These are the people who, no doubt, would have suffered financial reverse if the 1953 Act had gone through in its original form.

What happened is that, having discussed the matter with these gentlemen who are good friends of the Tory Party, we have the Bill which is now presented for Second Reading—

The Parliamentary Secretary to the Ministry of Supply (Mr. W. J. Taylor)

A mischievous speech.

Mr. Mellish

It is a mischievous Bill. I am prepared to give way to the Parliamentary Secretary if he wants to interrupt. [HON. MEMBERS: "Get up."] He has not said anything yet. If the hon. Gentleman expects me to make a speech in favour of this Government, he is making a mistake. It is a shocking Government, and I would like to get rid of it tomorrow, if not today.

Mr. Rees-Davies rose—

Mr. Mellish

No, I am not willing to give way for the Parliamentary Secretary to the Ministry of Supply. The fact is that this Bill has come four years after the 1953 Act, which was originally promoted to do one thing. Here I agree with the hon. Member for the Isle of Thanet, that the Defence Regulations which are not required should go, and those which are necessary should be embodied in an Act of Parliament. We do not want any emergency powers of this kind. We want to know where we are, with an Act of Parliament giving the Crown sufficient authority. If there are emergency regulations which are not required, let us get rid of them. That is fair enough.

The one criterion to be adopted must surely be the national need. Unfortunately, the Government will not accept that. Why is it that in the original Act the Ministry of Health was given certain protective powers in respect of drugs? The Parliamentary Secretary to the Ministry of Supply said that I am mischievous. Perhaps, with his great knowledge of these matters, he will tell me why the Minister of Health was given certain power in 1953 to obtain secret knowledge about drugs to meet the national need but in this Bill is not given that power? If he will answer that, I will give way to him. Apparently he does not wish to do so. That is the sort of Government we have. They are paid for not knowing any answers. It is money for false pretences.

The position now is that a person can be in possession of knowledge which would benefit humanity as a whole and the Bill will allow him to make all the private profit he wants out of it. There is to be no power to acquire the knowledge to meet the national need. That is where the hon. Member for the Isle of Thanet and myself disagree. I say that such a position is wrong. If certain information would benefit the country as a whole, the State should have the right to acquire it. The hon. Member for the Isle of Thanet does not want that. I would say this to him: I have always argued that there is danger in a bureaucracy. There is a danger of certain people getting power which they should not have. It is important that we should devise machinery to try to prevent much of that. We must write into the Bill certain compensation Clauses for those people who have this information taken from them.

Mr. Rees-Davies

If a company in this country has some valuable secret information through which a process could be commercially exploited, then if there is a danger of the company being forced by the Government to produce this information, will it not sell it overseas? Is it not far better to get the co-operation of traders?

Mr. Mellish

I am surprised that that is the sort of commercial mind with which the hon. Member is dealing. If such a person is prepared to sell the information overseas in order to get more money out of it, what sort of a man is he?

Mr. Sydney Silverman (Nelson and Colne)

Does my hon. Friend recall a piece of evidence given in another place last week in which a director of a powerful financial company wrote to his agents in London telling them to take certain steps and adding the immortal sentence, "It is anti-British, but it makes sense"?

Mr. Mellish

I suppose it would be out of order for me to refer to anything which has happened at Church House, but I must say that part of that is a sorry story.

I object to the fact that the Bill gives no power to compel a manufacturer to give this or any other Government certain inventions and designs in certain fields. The Ministry of Health is one. The Government are always bitterly complaining about the cost of the National Health Service, particularly about the cost of proprietary drugs. I should have thought that here was a great opportunity for us to acquire some of these drugs for the nation. If they are of such importance, we could manufacture them on the basis of the needs of the people and not on the basis of how much private profit is to be made by certain people. We should consider what is the profit to the whole nation.

That is the fundamental difference between the hon. Member for the Isle of Thanes and myself. He talks about his commercial friends. I intend nothing personal here, but, frankly, some of them are no credit to his party or to anybody in Britain. As far as I can judge, the Bill has been devised to help such people as that. It is a protection of the so-called rights of private property.

I have said before and I say again that all this stuff and nonsense about private freedom which we hear from the Conservative Party makes me sick, because when we consider the creation of a property-owning democracy we realise that no one has done more harm and damage to such a concept than the crowd sitting on the benches opposite. They have almost destroyed private house ownership in this country by their high interest rates. I will not develop that, because I should be out of order.

Talk about defending private individuals and private property and the right of a man to own his own home, and talk about the right to prevent the State from interfering in any way, comes ill from hon. Members opposite. What a lot of nonsense it is. The truth is that the Government have not the guts to govern. They have not the courage to do the sort of things which they ought to do as a Government for the protection of the people as a whole.

By contrast, my right hon. and learned Friend the Member for Newport (Sir F. Soskice) made a brilliant speech. Of course he knew what the Bill was all about, which is much more than can be said for the President of the Board of Trade. Towards the end of his speech, my right hon. and learned Friend said that we might divide against the Bill. I hope that we shall. I hope that we shall vote against the Second Reading, and I certainly hope that we shall put down sufficient Amendments in Committee, which I hope will be on the Floor of the House, to give the Bill some of the powers and strength which the 1953 Act had.

We on this side of the House should draw a lesson from the activities surrounding this Bill. No party has ever defended its true friends more than has the Conservative Party. It has defended the few who have the money and the few who have the vital interests. When we in the Labour Party obtain power, which I hope will not be far distant, we shall know that we, too, have a duty—a duty to protect the mass of the people who, I hope, will be our friends at the next election.

5.27 p.m.

Mr. John Cronin (Loughborough)

I think it is generally accepted, certainly on this side of the House, that the President of the Board of Trade today made a very disappointing speech. The brevity of his speech and his lack of explanation on obvious and essential points seemed to be a very casual way to; treat the House. It is surprising that the President should behave in this way, because on other occasions and in moving other Second Readings we have had very clear and lucid speeches from him.

One wonders whether his performance today was due to inefficiency or whether there was some sinister purpose behind it. Is the President deliberately adopting an attitude of unreasonable taciturnity because he wishes to conceal facts from the House? That may well be the purpose. When one realises the antecedents of the Bill, one cannot help feeling that some colour is lent to this theory.

As my hon. Friend the Member for Bermondsey (Mr. Mellish) pointed out, the 1953 Bill was dropped under curious circumstances and clearly on account of the intervention of vested interests. Is it not possible—and this is a rhetorical question—and is it not almost certain that the President has adopted this very unhelpful attitude simply because he is concealing parts of the Bill which have been forced upon him by the interests which normally activate his party? That may well be the explanation.

My right hon. and learned Friend the Member for Newport (Sir F. Soskice) expressed great disappointment that the provisions of the 1953 Act which related to drugs, appliances and similar articles which come under Part II of the National Service Act have been dropped from the Bill. All hon. Members are aware that the cost of drugs in the National Health Service is reaching exorbitant proportions. Anyone who reads the Ministry of Health Report will find that there has been an increase of £7 million in this year alone. Here we have a comparatively simple way of reducing those costs, but the Government propose to take no action at all. They have dropped those essential provisions which were contained in the 1953 Act.

One also wonders why even more general provisions have not been introduced into the Bill. I have no doubt that my hon. Friends will move Amendments in Committee to make sure that those additional provisions are introduced. For instance, there are no powers to ensure that provisions are made for protecting the maintenance of public supplies and services of an essential character—arrangements which, of course, were made with the original emergency provisions. There is no provision of a general nature, such as existed in the emergency regulations, to make sure that the resources of the community as a whole are made available and are used in the best possible manner. It would be very simple to write those matters into the Bill. As the hon. Member for the Isle of Thanet (Mr. Rees-Davies) very rightly pointed out, if they are not included in the Bill there must be some future legislation to extend the powers.

I have various questions to which I should like the Parliamentary Secretary to apply himself. First of all, how is the compensation to be assessed for a continuing future loss? That is something which the Government will find rather difficult. When a person who finds himself aggrieved by the provisions of the Bill wants to obtain compensation, how will it be calculated in future years? Is it to be assumed that inflation is to proceed at the present very high rate? It seems quite possible that there may be substantial injustice done to aggrieved people.

Will the Parliamentary Secretary tell us if he is to get co-operation from those foreign countries that derive benefit from this Bill? That is an extremely important point. Foreign countries may well use a defence invention for entirely civil purposes, and that would put us to a very serious disadvantage. Again, how are small firms to come out of this? Are their rights to be protected by the Bill? It provides for an appeal to the High Court, but that often involves enormous cost. How is a small firm to cope with that situation, and are we really certain that the present Government, so tender to the large industrial organisations, will adopt a similar attitude to the small firms? I very much doubt it.

Notice taken that 40 Members were not present;

House counted, and 40 Members being present—

Mr. Cronin

Are we really certain that the small firms will have the protection to which they are entitled?

It seems rather unfortunate that one of the principal reasons that have made this Bill necessary has been that our national resources of trained personnel are inadequate to enable us to cover the ever-widening field of technical development. In other words, one of the purposes of the Bill is to obtain the use of what is known as "know-how" from overseas. Another is to obtain the use of physical resources from overseas.

I think my hon. Friends will agree that one of the most serious defects in the present Government's policy is that we have not adequate research facilities, or the technical institutions necessary to provide them. One hardly needs to refer to the fact that there is a grave lack of trained personnel in industry. This, of course, is not helped by the Government's very poor handling of the educational situation, and one sees no prospect of improvement in the future.

Mr. D. Howell

Would not my hon. Friend agree that, after the President's performance this afternoon, it would seem that the right hon. Gentleman is hardly qualified to pass the 11-plus examination?

Mr. Cronin

The President's performance has, of course, been lamentable, showing a complete lack of respect for the House. There was a touch of arrogance about it, directed not just to this side but also to his own hon. Friends. I am surprised that they tolerate it. There were hon. Gentlemen opposite who, quite clearly, were taking an intelligent interest in the Bill, and one could see the disappointment in their faces because of the gross lack of elementary technical information of his subject shown by the right hon. Gentleman.

Another important point which needs investigation is this rather arbitrary period of three months given to firms or interested individuals in which to negotiate. We all know that three months may often be a very inadequate period of time in which to make enough inquiries and to have available sufficient information to bring to negotiations. Can arrangements be made to extend that period, if necessary? It seems a most elementary piece of fair play which those affected by this Bill are entitled to expect.

I come now to the question of Ministerial consideration before action is taken under the Bill. One must face the fact that this Bill will make some sweeping changes in the constitutional rights of individuals. I think it is absolutely essential that, before such action is taken, approval should be given on the personal consideration of the Minister concerned or, if he is not available, that of the permanent head of his Department. The Howitt Committee takes a very strong stand on this. In paragraph 24 it says: In order to ensure, as far as may be, that the Crown's decision to override the terms of a commercial agreement, freely and voluntarily entered into, is not made lightly or irresponsibly or without due consideration, we recommend that it should be a condition of the validity of the exercise of the powers in any particular case that a certificate should be given, either by the Minister or the permanent head of the Department concerned, that he personally has considered the particular case and is of opinion that it is fair and reasonable that the powers should be exercised to the extent and in the manner set out in the certificate. The Howitt Committee has made a very strong case that this should be a matter for direct action by the Minister concerned or, at least, by the permanent head of the Department, and the President of the Board of Trade, in his light and somewhat frivolous speech, made no real case to dispute that recommendation. As my hon. and learned Friends will no doubt confirm, there is nothing new about this. There are certain court cases in which an affidavit has to be obtained that the Minister himself has given consent when information is kept by the Crown from the court for security or other reasons. There is nothing new about it, and I think we should certainly insist that the Minister himself should intervene in these matters personally.

This is rather an unfortunate Bill, but it does contain a core of utility—I hear my hon. Friend the Member for Paddington, North (Mr. Parkin) say that I am using very moderate language. I can sympathise with his feelings. In many ways it is a very inferior Bill, and, quite naturally, feelings as to its inferiority have been inflamed by the frivolous speech of the President. One of the most essential Ministerial qualifications—tact—has been conspicuously lacking, and I think that it is an extraordinary illustration of the good manners of my right hon. and hon. Friends that we have used language of such moderation and courtesy.

As I was saying, this Bill contains gross faults and defects, and these defects will have to be stripped right down in Committee. My hon. Friends and I will have to produce a mass of Amendments and will have to give the Bill very careful study. The Committee stage will certainly take a considerable time. I hope the Parliamentary Secretary has prepared himself and will gird his loins, because he has a long and arduous journey before him. We have the greatest respect for the Parliamentary Secretary. He has always treated us with courtesy and urbanity, and he speaks with great knowledge, but we feel that he will be taxed to the utmost of his powers to cope with the Committee stage of the Bill, because the Bill will he stripped down to a mere skeleton and completely replaced.

Mr. A. E. Cooper (Ilford, South)

Would the hon. Gentleman inform the House the object of this nonsense which is being carried out on the benches opposite?

Mr. Parkin

The hon. Member for Ilford, South (Mr. Cooper) has only just entered the Chamber.

Mr. Cronin

I am so glad we had that intervention, because it shows what a marked contrast there is between the courtesy with which we behave on this side of the House and the somewhat boorish behaviour we have come to expect from the less responsible back bench Members on the other side.

Mr. Orbach

It also shows that there is a Tory back bench Member present.

Mr. Cronin

I am sorry the hon. Member for Ilford, South (Mr. Cooper) should have made that intervention, because normally we expect a much higher standard of conduct from him.

I apologise if this interruption has lengthened my speech. Returning to the main substance of this Bill, there is no doubt that in Committee we shall have to alter the Bill. I hope that the President of the Board of Trade and the Parliamentary Secretary will be prepared to swallow their pride and make reasonable and sensible concessions so that we may place a really useful piece of legislation on the Statute Book.

5.43 p.m.

Mr. B. T. Parkin (Paddington, North)

There is one provision in the Bill which we would all agree to be accurate, including the Parliamentary draftsmen. I refer to Clause 6 (1), which says that "competent authority" does not include the President of the Board of Trade.

I wish to refer to the protest I made earlier about the fact that it is stated on the front of the Bill that this Measure is supported by the Minister of Supply and by the hon. Lady the Joint Under-Secretary of State for the Home Department. Surely we have been treated with very scant courtesy in view of the absence of representatives of these Ministries, except for the Parliamentary Secretary to the Ministry of Supply, who was just able to make a rude interjection without removing his feet from the Table. If he is saving his knowledge for a later stage of the debate, we shall be grateful.

The Government have forced us to agree to a suspension of the Rule, from which one would gather that they expect a somewhat long discussion on the Bill. I had, therefore, expected that one Minister after another would be intervening to expound what the Bill means in the terms of their Departmental responsibilities. We have not even had an exposition of the Bill. We do not know what the Bill involves in terms of the Departmental responsibilities of those Ministers who are absent. We have no more idea than when we came in exactly how this Bill alters the very complicated operation of, for instance, the Ministry of Supply.

One of my chief objections to this Bill is that it relates to the only part of the complicated measures which were taken at the beginning of the war to deal with the problems of industrial production to sustain the war effort, which the Government are prepared to retain. It is a very odd situation that over the years the Government have been steadily and insidiously dismantling the mobilisation of the resources of private capital, which was undertaken in the national interest and which was one of the conditions insisted upon by the Labour Party before accepting the mobilisation and conscription of human beings. That is the historical background to this Bill.

When private property and resources were mobilised there was a whole series of enactments at the beginning of the war, and private capital and interests have been at these enactments ever since trying to nibble them away. Finally, they have been able to nibble away the most important part of those enactments. The astonishing thing is that here is a Tory Government wanting to put this Bill permanently on the Statute Book. I am surprised that they did not introduce a Bill for a limited period until they have had time to think it out. One would have thought that this was one of the matters which would appear among the expiring laws for reconsideration every year.

Conditions have altered completely since 1939 when these devices were introduced. Of the wide range of problems raised by the Bill, not least in importance is the problem of what constitutes defence material. We have nowadays a situation in which, for defence purposes, an enormous range of articles is purchased or adapted for the use of the armed forces or their allies. Only the other day, the Minister of Supply, covering up inadequacies in other respects, was telling us about experiments with composition-soled boots for the Army, and we understand that this is to be followed by Terylene socks.

Will the Parliamentary Secretary to the Ministry of Supply, if the President of the Board of Trade does not know, tell us what happens in terms of this Bill with the manufacture of Terylene and its use by the forces? Does it mean that someone else is instructed to make Terylene socks according to the formula at present used by Imperial Chemical Industries, or does it mean that Imperial Chemical Industries will have to supply Terylene on special terms? What does it mean when our envious allies in N.A.T.O. learn about the equipment of the British Army?

Mr. Rees-Davies

The hon. Gentleman is treating us to an interesting dissertation on what is a proper definition of defence material. Will he tell us whether the defence material that he has in mind relates to the definition of "defence" in this Bill or whether he is referring to a later Measure on the Order Paper, the Maintenance Orders Bill?

Mr. Parkin

So far as I can understand that befuddled intervention, I think it is an imputation on my intentions in connection with the Bill which we are now discussing. The Rule is suspended. For my part, I had thought that the second Bill to which the hon. Gentleman referred would go through. We observed the clownish antics of his colleagues in the Committee corridor last Session when important matters dealt with by the next Bill on the Order Paper were being decided under the procedure governing Private Members' Bills, and I should have thought that the less he said about that the better.

May I now proceed with my examination of this Bill? I was trying to find out what the Ministry would be willing to tell us about the process of using one particular technical process. I took the simple one of Terylene socks. We have been told about that. What happens when the Greek Army wants Terylene socks? It has heard about the British Army, and soon we shall have to supply Terylene socks to the Greek Army. In Clause 1 of the Bill there is ample provision for a Government Department to sell them off, if they do not like them— … to sell to any person any articles made in the exercise of the powers conferred by this section which are no longer required for the purpose for which they were made. We had enough trouble over the disposal of surplus war materials in the years after the last war—

Mr. Orbach

What a racket!

Mr. Parkin

What a racket indeed.

Let us remember that then the Continent of Europe was littered with American motor vehicles which had been sold for low prices, and, strangely enough, there appeared to be a lot of gentlemen ready to sell spares for those vehicles. It was a very well-organised business. The international repercussions between the allies at this stage are very frightening, and obviously not the same as was in the minds of Members of Parliament who had more serious things to think about at the time when we embarked on the fighting of a war and when we were almost alone. But now it is sixteen years after. Have not the Government made any progress? Is it not right to discuss this matter now in a wider sense?

I do not now propose to use a hypothetical example of what constitutes defence material. If it was, I might be accused of inventing scare stories. The example I am about to give can hardly he believed, but it is true. It will be recollected that at the time of the Korean War there was in this country a very sharp price rise over a whole range of articles, caused by a rise in international prices and the prices of raw materials and commodities. At that time I was engaged in the furniture trade. In the up- holstery trade a very important ingredient is something called coconut fibre. It comes from Ceylon. Some coconuts have straight wigs, and these are used for making door mats, and some have wigs which are curly, and these are used in the upholstery trade. By means of certain processes and "know-how" it is possible to put the kink into a straight-haired coconut—this is one of the "believe it or not" stories.

An American gentleman arrived in Ceylon and bought the whole crop of coconuts. As a result, the Board of Trade had to raise the price of retail furniture in this country by 33 per cent., and that was at the time of price control. That happened because the American believed that the possession of a year's crop of coconut fibre from Ceylon was essential for the defence of his country. That is something which has already happened. The possibility of what might happen in future is quite fantastic. I will not develop the point, because I am much more concerned about the part of this Bill dealing with civil defence.

When the Home Secretary came into the Chamber this evening I hoped that he would deal with the matter, but he stayed only for a moment. I think that the right hon. Gentleman was brought in only by the bell which announced a count, but I thought that we might have a contribution from him about civil defence. The Government have a plan to evacuate 12 million people, including nearly all my constituents, in the case of an emergency. According to the latest information from Paris, and from the technical advisers to the Prime Minister, that evacuation has to take place in fourteen minutes. Up to now the Home Office has produced no plan. We can only suppose that it is relying on somebody's secret patent. I hoped that this matter would be developed to a certain extent tonight. One searches round for information about the development of civil defence. The Minister of Health is responsible for a certain section of operations for civil defence. Why is not the right hon. Gentleman present? There is no prospect of his colleagues telling us—

Mr. Deputy-Speaker

Even were the Minister present, if he started to reply to the hon. Gentleman I should rule him out of order.

Mr. Parkin

Well, Mr. Deputy-Speaker, I hope to be able to persuade you that the activities of the Minister of Health in fact come within the ambit of this Bill.

I have read the Report of the Ministry of Health for this year, and I hope that the Parliamentary Secretary to the Board of Trade will read it on some occasion. He will find that on page 141 there is a reference to, Supplies of Equipment for the Civil Defence Services. It starts off, rather mournfully, Owing to the need for economies in Government spending, purchases during the year were restricted. So much for the citizens of Paddington and civil defence. The reference goes on: … A small programme of research and development continued and among the items considered was a light-weight stretcher with fibre-glass poles. What on earth is the Minister of Health doing with a little "empire" within his Department dealing with fibre-glass poles to make a special kind of stretcher for civil defence purposes?

If these experiments come to anything, will the Minister explain whether they are being carried out in consultation with people who have the "know-how" about fibre-glass poles? What does the Minister of Health know about fibre-glass poles? I suppose that the right hon. Gentleman has to go to someone who makes them, either under a patent or by technical "know-how". Suppose his researches lead to the discovery that it would be a useful kind of stretcher to use in all Departments of the Health Service. What do we know about the use of patents and "know-how"? Do we say that we shall have to pay more for the fibre-glass poles if they are to be used for ordinary accident and stretcher cases and less if they are to be stored for civil defence? What sort of nonsense is this, where the scientific research and development of the country is divided up into these little compartments.

I have given these simple examples because I hoped that it would be within the intellectual capacity of the Parliamentary Secretary to reply to me.

Mr. Cooper

The hon. Gentleman has given us as an illustration a case involving fibre-glass poles. May I declare an interest and say that I know something of that industry because I earn part of my living through it? There are no patents by which—

Mr. Deputy-Speaker

We cannot have a debate on fibre-glass poles.

Mr. Parkin

I should, of course, never find myself in disagreement with you on a question of order, Mr. Deputy-Speaker, but I am sorry to have to disagree with you on the question of the desirability of a debate on fibre-glass poles. I will leave that matter, but were I not able to make my point with that one example of something which is produced by technical "know-how", I should be tempted to traverse the whole range of the patents involved in the production of the Britannia aircraft. That was developed from an aircraft sponsored by the Government—the Brabazon—at a cost of £14 million and sold for £50,000. That was a scheme sponsored by the Government out of money raised by taxation for military purposes. However, such a course would rather complicate and prolong my speech, and as there is no prospect of a reply from the Minister of Supply I must leave that for another occasion.

Surely this is not the moment to introduce a provocative and weak Bill of this kind and announce that the Government do not know where they stand in their research and development policy or their defence policy or their relationship with their allies? Things were different a few years ago when we had to get what we could in the way of support from our allies and in the way of defence material. It would have been understandable had the Minister of Supply then said, "We are not in a position to ask for reciprocal agreements." But not to talk about reciprocal agreements tonight is completely unrealistic.

What do we get in return for making available to our allies all the "know-how" of British industry? Today the position is not that we have to depend on the United States of America. Today the United States is in the front line and is asking us to put ourselves in the front line instead and to accept a short-range weapon which they are to produce. We are being asked to be good enough to use that weapon in order that we shall suffer from any retaliation and save them from attack by the long-range weapons to which they have no reply.

That is a very different international situation. If the President of the Board of Trade knew what he was talking about and if the Minister of Supply had any drive, they would put the Bill back into the pigeonhole and start negotiating with our allies on reciprocal exchange of patents and technical "know-how", and they would not come back until they had a comprehensive scheme.

We shall no doubt, have a long discussion on the Bill in Committee. I hope that the Minister responsible will recognise—and I hope it will be pressed—that, in so far as the Bill concerns a matter of sovereignty in our relationship with our allies, it is of constitutional importance and the Committee stage ought therefore to be taken on the Floor of the House—if the Bill is not withdrawn now, as it ought to be.

6.1 p.m.

Mr. Eric Fletcher (Islington, East)

There was an interesting controversy a little while ago between my hon. Friend the Member for Bermondsey (Mr. Mellish) and my hon. Friend the Member for Loughborough (Mr. Cronin) as to whether the lamentable speech made by the President of the Board of Trade in moving the Second Reading of the Bill was due to incompetence and ineptitude, as my hon. Friend the Member for Bermondsey thought, or to a calculated and deliberate attempt, as my hon. Friend the Member for Loughborough thought, to conceal information from the House. Both my hon. Friends—and indeed every other hon. Member who has spoken—were unanimous in condemning the speech as totally inadequate and almost contemptuous in its disrespect of this House. Therefore, it is not unnatural that some explanation of it should be sought.

I prefer to take the charitable view. I cannot believe that the President of the Board of Trade is so incompetent and inept as to have made that speech without having read the Bill and without having understood his brief. I cannot believe that it was anything but deliberate, on a par with the policy of the Government, of which we have had occasion to complain in the past, of deliberately keeping vital information from the House. On this matter The Times newspaper has commented: Keeping the Commons in the dark seems to be becoming a habit of Mr. Macmillan's Ministry. This is bad. I am sorry to say that I think there is a sinister purpose behind it. Surely there is some explanation. I have not re-read the Act of 1953 or the debate in another place, but I have heard the speech of my right hon. and learned Friend the Member for Newport (Sir F. Soskice). Surely it is a matter of some significance that this truncated Bill should be introduced at this time.

I ask myself, what is the explanation? There is not a single reference in the Queen's Speech to the Bill, although the Gracious Speech was introduced only a matter of six weeks ago. There could have been no intention at that time to introduce the Bill. What has happened between that event six weeks ago and today which has made this Bill suddenly necessary and has caused the President of the Board of Trade to introduce it with a speech which seems to be a masterpiece of inadequacy and camouflage?

I do not think it is difficult to see what has happened; there has been a significant change in international relations. There have been discussions between the Prime Minister and President Eisenhower. There is to be a meeting of N.A.T.O. in Paris next week for the purpose, as it now appears, of introducing radical and far-reaching changes in national policy. There is talk in the air of interdependence and of a pooling of sovereignty, with regard to the Armed Forces of the Crown, but the Prime Minister and other Ministers have not deigned to give the House information on these matters.

One thing is obvious. If there is truth in the rumours, the Bill would he necessary to implement the process. If there is no truth in the rumours, the Bill would not be necessary. It has not been sufficiently stressed hitherto that one of the most remarkable features of the Bill, which is a significant departure from the Measure of 1953 and from the recommendations of the Howitt Committee, is that under the Bill the Government will not only be able to use patented inventions and technical information for the purpose of Her Majesty's Government, but will be able to convey that information to other countries, to foreign Powers.

The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll) indicated dissent.

Mr. Fletcher

Let me quote from the Minister's own Explanatory and Financial Memorandum. At the end of the first page it refers to … articles designed or adapted for the use of armed forces and required for the armed forces of the Crown or for supply to allied countries for their defence or the defence of other allied countries, or to the United Nations, and components of such articles … We are under an obligation to scrutinise the Bill very carefully. That duty is particularly incumbent upon us when we get such an inadequate explanation as we have had this afternoon from the Minister. What is the primary object of the Bill? The President of the Board of Trade did have the decency to admit that the naked and unashamed object is to authorise breaches of contract, which we are being asked to sanction. It might he one thing to say that that would be legitimate in the interests of the defence of this country, but no explanation has been given to us why it is necessary in the interests of the defence of other countries.

That brings me to the point about reciprocity which was mentioned by my hon. Friend the Member for Paddington, North (Mr. Parkin). Could the Parliamentary Secretary tell us, whether, as has been suggested, the Bill is brought forward as part of some international arrangement that there should be mutual arrangements between this country and allied countries? If there has been any such international arrangement, which I doubt, have adequate arrangements been made for reciprocity so that British interests may not suffer?

If, on the other hand, the Bill is not brought forward as part and parcel of some international arrangement but is unilateral by Her Majesty's Government for the benefit of foreign Powers, we are entitled to ask the Minister whether adequate steps have been taken for the protection of British interests as against those of other countries. The Government have a notoriously bad record in their dealings with allied countries in financial matters. We know how they have had the worse of the bargain with the West German Government over the contribution by the Germans toward the maintenance of British Forces in Germany. If adequate steps had been taken some years ago we should not be in the dismal position in which we are today. The Germans are making less than their proper contribution at a time when German economy is expanding and, thanks to the present Government, our own economy has received a set-back. That is only one illustration. I think our commercial relations with the United States in regard to the interchange of defence expenditure and so forth leave a great deal to be desired.

I am very concerned to see the provisions in the Bill which extend not only to the defence of this country but to the defence of other countries, without, so far as I can see, any adequate provision for compensation. May I remind the right hon. Gentleman that there is nothing whatever in the Howitt Committee Report to justify this? It is pertinent to observe, so far as the Board of Trade places any reliance on the recommendations of the Howitt Committee, that that Committee's Report said, in paragraph 17, that it came to its conclusion: … only after considerable reflection—that the balance of argument is in favour of the Government being given by permanent legislation … what they want. In view of that, it is all the more necessary for us to see that there are all proper safeguards written into the Bill.

Apart from those to which I have referred already, like my hon. Friends I attach very considerable importance to these unusual powers being given in each individual case only on the recommendation of a Minister of the Crown As my hon. Friend the Member for Paddington, North pointed out, it is very curious that from the definition of "competent authority" the President of the Board of Trade is omitted. That can lead only to the inference that these powers are to be delegated. We do not know how far down the scale they are to be delegated. It is said that there is some constitutional point involved in making legislative provision for a certificate of the Minister to be given. I do not take that view. If there were anything in that argument I think it would be effectively disposed of by the quotation from Lord Simon, then Lord Chancellor, giving the decision of the House of Lords in the Thetis case of Duncan and Campbell.

This is a bad Bill. I have no enthusiasm about it at all. If it is given a Second Reading I believe it will require very considerable amendment in Committee. I hope that before much further progress has been made with it we shall get a really clear and honest explanation from the Government as to the motives which have caused them to introduce it at this stage.

6.14 p.m.

Mr. Denis Howell (Birmingham, All Saints)

I am grateful for the opportunity of speaking about this Bill, which I regard as an exercise in the entrenchment of capitalism in this country. When I read the Bill, when I read the Report which preceded it last year, and when I read the debate in another place in 1953 I was alarmed. I think it right and proper that this House should properly debate the provisions of the Bill.

Contrary to the impertinent intervention of an hon. Member opposite who suggested that we were not interested in this Bill, I would say that we are very much interested in it. I cannot think of a Bill having been introduced into this House since I have been here which has authorised the expenditure of so much public money with so little control. I always thought it was one of the great principles of this House that where public money was to be expended in any way at all there should be the maximum amount of Parliamentary control over it. That, primarily, is what the Bill is about.

As my right hon. and learned Friend the Member for Newport (Sir F. Soskice) said, in a brilliant speech, the 1953 Measure was much wider and did not concern itself only with defence but with matters concerning the National Health Service and education. I find it rather illuminating that this Government are prepared to do this sort of thing and not to sanction large sums of public money being spent and authorise the selling of "know-how," as the President put it, except in matters of defence. I find that an interesting psychological phenomena. It is the sort of thing we can expect from hon. Members opposite that where matters of defence are concerned they are prepared to go to limits to which they are not prepared to go, in time of peace, in order to use the same methods to improve the health, education and wellbeing of the people of this country.

I find that an extremely illuminating psychological process to which I object very strenuously. I do not apologise in this Chamber for being a Socialist. My conception of Socialism is that the whole of the resources of the State should be used for the benefit of the whole community. I think the Bill is a disgraceful chapter in the history of this Government. They have been forced by the backwoodsmen of another place to take away the 1953 Measure, which was eminently sensible and was commended to noble Lords in a brilliant speech by Lord Mancroft. They were unable to hold the hordes at bay and now, four years later, they bring this anaemic version before the House.

As my hon. Friends have mentioned, there are international complications. Recently the Foreign Secretary has proposed new arrangements at the International Court at The Hague because the old arrangements did not suit this country. That is as it may be and it would be out of order to follow that topic in this debate, but it is not out of order—indeed it is extremely pertinent—to ask whether countries to whom we are to sell armaments and defence materials under this Measure are prepared to make a complete exchange upon a similar basis of the "know-how" and technical information which they possess. If other countries are not prepared to do that. I submit that it is outrageous that the British taxpayer should be asked to provide large sums of public money in order that the results of confidential technical information—for which, thank goodness, British scientists can continually keep us in the van of world opinion and development—may be given to other countries without a proper system of reciprocity.

In another place, Lord Mancroft told us in December, 1953, that under the terms of the Regulations we had supplied aeroplanes to France, Norway, Denmark and Venezuela and had supplied tanks to Belgium, Holland and Egypt. We know what happened to the tanks we supplied to Egypt. I should have thought that unhappy chapter in British military and diplomatic history would cause us to ask for far more information than we have yet been given. According to Lord Mancroft, under the terms of this Bill we could supply Centurion tanks to Egypt. They would be provided by the British taxpayer, the British scientist and British industry, but we should have as little control over what happened to that military equipment when it had left our shores as we have had in the past.

I regard that as a very sorry business. I am amazed that only one or two hon. Members opposite are here today. I should have thought that we could have expected to see large numbers present of those who have worked up synthetic indignation and who call themselves the Independent Conservative group. Surely we could reasonably expect to see them here in order to defend British interests on a matter of vital importance.

Mr. Mellish

And the Liberals.

Mr. Howell

One never expects the Liberals to be present unless a by-election is pending and all the by-elections are over for the time being. No doubt we shall see them back again when another such event occurs.

I do not want to trespass on the time of the House but I am tempted to read the whole of the speech which Lord Man-croft made, because it was a brilliant exercise in what was necessary for the public good. It was a first-class speech. Indeed, I have read it three times today; I could hardly believe that the noble Lord had made such a first-class speech. I will content myself with quoting one or two of his statements. As reported in column 772 of the OFFICIAL REPORT of the House of Lards, Lord Mancroft said: It is becoming increasingly the fashion in industry to keep industrial processes secret, and to rely on such agreements and the Copyright Act to protect new inventions and methods of production, rather than to take out patents in relation to them. Later, referring to powers given by the Defence Regulations, Lord Mancroft said: These enable a Secretary of State, the Admiralty, the Board of Trade, or the Minister of Supply, if it appears to them necessary, in the interests of the defence of the realm or otherwise in the public interest, to give directions to any person requiring him to furnish to any specified person or authority such information relating to any invention, design or process as may be specified in the directions or demanded of him by that authority or person. That gives in far better language than any which I could use what I consider to be the public good in this matter. But that is not the position now, and I regard that fact as extremely serious. I draw the attention of the House to Clause 2 (6) which reads: Nothing in this section or in any authorisation given thereunder shall be construed as authorising the disclosure to a competent authority or any other person of any technical information to which this section applies in contravention of any agreement. In commending that to the House this afternoon, the President of the Board of Trade used words which I wrote down; he said that this was a "specific disclaimer". That was the language which he used.

Where does this take us? These are legal matters but we have to apply lay minds to them. The Government have always had the power to require the use of information in any secret or patented agreement for the purposes of the Crown. I think we all agree that that is right. We have to bear in mind that we are dealing with the provision of a large amount of public money in defence matters, particularly for the provision of tanks, aeroplanes and ships. We may also be dealing with the provision of nuclear energy, hydrogen bombs and inter-continental ballistic missiles. As I understand it, the Government have always had the power, if there are any secret or patented agreements in these matters, to require their use for the purposes of the Crown.

Under the 1953 Bill they could go further. Where the taxpayer was paying the piper, they could not only insist that any patented agreement or patented process which could be used economically in the public interest should be so used, but they could see that it was used and could demand what the President of the Board of Trade referred to as the "know-how" of that process. That was the previous position. If any giant industrial combine, such as a chemical or an engineering combine, had one of these secret or patented processes, we could say, "We want that process used for the benefit of the defence of the realm and we will pay adequate compensation to the inventor."

That was fair enough. The 1953 Bill also said not only that the process should be used, but that the Government were entitled to know the technical details of that process and all about it. Under Clause 2 (6), the Government specifically exclude themselves from ever knowing the technical details of these secret and patented processes which, in the main, are being developed as a result of the expenditure of a large amount of taxpayers' money. I think that this is an extremely serious matter, because we all know that in this country it is not open to any firm to manufacture defence weapons. No firm can freely manufacture defence weapons on this scope and scale. It can manufacture them only for the purpose of the defence of the country, and this is done directly or indirectly with public money.

If public money is used during the research or production work and, as a result of its expenditure, new processes become known, I submit to the House that since those processes have been built up with the use of public money it is a scandalous state of affairs that the Government should specifically say that in no circumstances can they be disclosed to any servant of Her Majesty's Government. I hope the House will agree with my contention, and I am sure that my hon. and right hon. Friends will agree with it.

With modern weapons and with all that 20th century science conjures up in our minds, we could have a situation in which the Government obtained the weapons by these means but, because they did not know all about the processes, were unable properly to use the weapons. That would create a very serious state of affairs. If an emergency occurred and we had large numbers of very involved weapons requiring a considerable amount of technical knowledge, it would be a serious state of affairs if the State were provided with the weapons but not with the means of knowing how to deal with them, if they went wrong in action.

I hope that the Minister will deal with these very serious matters when he replies to the debate. When we look at the Defence Estimates, we see the enormous sums of money which the country is spending on defence. I can only repeat what I said earlier: indeed. I can think of no better word. In my opinion, it is an absolute scandal that while this large amount of public money is spent on these new processes the Government are specifically excluding themselves from knowing all about the weapons which the taxpayer is providing.

I want to read another passage of Lord Mancroft's speech, as reported in column 774. He said: Although it is realised—and I emphasise this—that this is a wide power for a Government Department to possess, these two Departments feel that the existence of this power, and its use, or the possibility of its use, may be necessary for them in carrying out their function of supplying the Armed Services, and they are positive that, without it, vital information might be withheld from them. Not only is it necessary where a person is unwilling, for his own purposes, to divulge information, but also where he is under a contractual obligation not to do so, and would, but for the existence of this power, feel himself bound not to break his contract by divulging it. It will he clear that the power is necessary during a war. But since its main use must be in the development of a new piece of equipment, it must equally be necessary in peace time when it is our object, by providing the forces with the best equipment to give them the strength to prevent war. Lord Mancroft was commending these powers to their Lordships. He was saying that two Government Departments specifically requested these powers. In fact, he said that these powers were included, At the specific request of my right hon. Friends the First Lord of the Admiralty and the Minister of Supply,… It is an extremely peculiar situation that in 1953 the First Lord of the Admiralty and the Minister of Supply said that it was essential for the defence of the realm and for making equipment for the Armed Forces even in time of peace that we must have these powers, and they were specifically included in the Bill at their request; yet in 1957 the same Government deliberately exclude themselves under Clause 2 (6) from having the powers. I think the House is entitled to an explanation. Lord Mancroft could not have been more forthright and specific had he chosen any other form of language.

I think it is fair to say that the President's opening speech was so nebulous and uninformed that it meant nothing intelligible to hon. Members. I do not know whether the President is taking any interest, but could he at any rate ensure that his hon. Friend, when he winds up, tells us why these powers, which Lord Mancroft specifically said had to be included in the 1953 Bill, at the request of the First Lord of the Admiralty and the Minister of Supply, are specifically excluded from this Bill? I think that that is a fair enough request to make in all conscience.

Lord Mancroft stated other things which could be provided under the 1953 Bill. They are his examples, not mine. He said: … during the war, vitamins were imported and manufactured to fortify foodstuffs, for supply to the public."—[OFFICIAL REPORT, House of Lords, 1st December, 1953; Vol. 184, c. 769–74.] Then he mentioned concrete sleepers. Even the railways have been involved. Coal cutters for the collieries and refrigerators in certain circumstances are also mentioned. It seems to me that none of us on this side will disapprove of these powers being used for those purposes. If Lord Mancroft could commend them in another place in 1953, why are they specifically excluded in 1957?

I want to refer primarily to matters outside defence in the original Bill and which, in my view, should be in this Bill. As has been mentioned, the Inventions and Designs (Crown Use) Bill, 1953, could be used for the production of drugs, medicines and appliances required, first, by the Minister of Health for supply to patients under Part II of the National Service Act; secondly, for the Secretary of State for Scotland for the same purposes; and, thirdly, to the Minister of Pensions and National Insurance also for the supply of appliances to injured persons and to pensioners. This is a very serious matter.

When we consider the drugs bill, we have spent on drugs alone in the general practitioners service in 1957–58 an estimated figure of just under £4 million. In the hospital service the expenditure is going up at such an alarming rate that even the Government are disturbed, and they appointed, I think, two Committees to look into the cost of drugs and provisions. No wonder the expenditure has risen from an actual expenditure in 1955–56 of just under £15½ million on drugs, dressings, medical and surgical appliances to an estimated expenditure in 1957–58 of just under £18 million. That is an increase of £2½ million in twelve months on the provision of drugs, dressings, medical and surgical appliances in the Health Service to hospitals. We know that that is because of the amount of proprietary drugs being used.

As far as I can understand from reading the Guillebaud and other Reports on this matter—not very satisfactory Reports, in my view, but they have to a certain extent investigated it—this colossal expenditure is due to the fact that, quite rightly, doctors are prescribing new antibiotics and other drugs. I refer to this matter because it was specifically included in the 1953 Bill, but is not included in this Bill. I urge that the provision which the Government have taken out should be put back.

The cost of these drugs is so high that the Government had to pay the manufacturers of these proprietary medicines and drugs without any knowledge of the "know-how" or technique or the costing. We know that none of these drugs would be used were it not for the Government's activities in the National Health Service. The druggists and pharmacists supplying these preparations are doing it because they are financed almost exclusively out of the public purse.

It is right in these circumstances, and indeed essential, that the Government, if they are to check the rise in the cost of drugs, should be able to find out the "know-how" and make-up of these drugs and make sure whether or not the taxpayer is being properly charged, whether these items are properly costed and whether this amount of money, running into many millions, is to a certain extent wasteful and extravagant. I should have thought that the Government would retain these powers which would have entitled them to have the "know-how". They could have gone to the druggists and said, "You are now getting somewhere in the region of £20 million a year for the provision of drugs for the National Health Service. We want the 'know-how' and to be able to check your costs and see that the taxpayer is not being fleeced." That is the story today. The Minister is deliberately excluding from this Bill the provisions in the 1953 Bill.

I will conclude now because I know that other hon. Members wish to speak in the debate. It seems to me to be an extremely sorry business indeed. If I may say so, it is a serious business, too. In 1953 the bastions of private enterprise came to the Lords, and in spite of an excellent speech by Lord Mancroft, their Lordships could be so forthright in their opposition to the Bill that the noble Viscount, Lord Woolton, had to be fetched from an outside engagement to withdraw the Bill from further consideration in another place. It is a lamentable business. A Committee has looked into these practices, as a result of which we have now another Bill. But we have not had one word of justification for the present changes in the Measure which was considered in another place four years ago. It seems to me to be so regrettable that it should be pressed to a Division.

I must confess that when I first looked at it, I thought that the Bill would be something on which both sides would agree. I suppose, after suitable explanation, we might still agree on it, but the fact is that at twenty minutes to seven tonight, after several hours of debate, we have not been given one iota of information which would entitle us to make up our minds one way or the other. We can go only on the evidence, completely unanswered, contained in a number of speeches from this side of the House.

I hope, therefore, that my right hon. and learned Friend will think very carefully before advising us not to press this matter to a Division. If we have no more information than we now have, I do not see how we can avoid a Division, in view of the criticisms of the way in which the Government are throwing away millions of £s of public money without proper explanation.

6.41 p.m.

Mr. Sydney Silverman (Nelson and Colne)

I think that I have heard every speech in this debate, with one rather important exception. I did not hear the speech made by the President of the Board of Trade. I apologise for that, but from the references made by my hon. Friends to that speech, I gather that the fact that I did not hear it is not likely to do the right hon. Gentleman any injustice or me any harm. It appears to have been a speech that qualified the President of the Board of Trade for a new Ministerial title. From now on he will be the "Secretary of State for Don't Know How". I say that only on the assumption that the references of my hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell) are right.

If they will forgive my saying so, I regard my hon. Friends' astonishment at the character of this Bill as a little naïve. The inadequacies, the things it leaves out, the things it does not say, and the things it does not do—these are of the very essence of the fundamental issues that divide the Conservative Party from the Socialist Party.

In order to see what is the purpose of the Bill, one has only to turn to paragraph 2 in page 1 of the Howitt Report. That paragraph reads: Our enquiry is concerned with Government contracts… And then this sentence: It is obviously important that firms undertaking such contracts should be able to make use of the best technical knowledge and experience available to them. Nobody has any quarrel with that. The House is united that, for those purposes, the Government should be able to command all the resources of our country—everything we have, including all our technical skill, and all our industrial and scientific secrets. We are all in favour of pooling, of not standing on individual rights of property, or ownership or privilege. We are all in favour, at any rate, for this limited purpose, of pooling all that, and of using it for the defence of the freedom and sovereignty of our country.

My hon. Friends sometimes fail to see that when Conservatives, and Conservative Governments, adopt that principle they are making a very considerable ideological sacrifice, because they are conceding the whole of the Socialist case. They say "When our need is greatest—away with all the sacred rights of private property, away with private enterprise, away with competition, away with leaving everyone free to make what he can and to do what he likes with his own". When the nation's interests are at stake, the Conservative Party is ready to concede that the only way to deal with the situation is public ownership, public control, public direction, whatever individual sacrifices are involved.

Some of my hon. Friends have been talking of the history of the Bill and have been going back to 1953. Let us not go back to 1953. We must go back much further—to September, 1939, when we passed, in one afternoon, through all its stages—I think in both Houses of Parliament—the Emergency Powers (Defence) Act which gave the Government—a Conservative Government, there was not then a Coalition Government—full and complete powers with not a voice raised against it. If it is right when the interests of the country are at stake in war, why is it wrong in peace?

The Conservatives are, at any rate, prepared now to take one further step. Except for the Defence Regulations they have never, in peace time, been prepared to do anything about this even for defence purposes. They are now prepared to do something. I agree with one hon. Gentleman opposite when he said that one thing that we can all be agreed about is that it is a very good thing to scrap all Defence Regulations passed in war-time conditions, and, instead, to incorporate them in an Act of Parliament which can be scrutinised in all its stages through Parliament, including the Committee stage, and subject to all the powers of amendment and addition.

They are prepared to make it statutory for defence purposes, but, even then, as my hon. Friends have pointed out, they are very nervous and hesitant about it. They have wrapped this Measure round with so many safeguards as almost—as my hon. Friend the Member for All Saints pointed out—to defeat their purpose. Nevertheless, let us give them credit for attempting, where the necessity is, to take the right view; that the State must take control of national resources and apply them in the interests of the community.

Before I come to my second point—and I do not intend to occupy the attention of the House for very long—one thing rather surprises me. I said that, so far, we had all been ready to adopt this course in order to defend the sovereignty, the freedom and the independence of our country. But, Mr. Speaker, this is really the astonishing part of the Bill. Our sovereignty, independence and freedom are not in danger from our potential enemies, or neutrals. They are in most danger now from our allies.

It would be out of order to attempt to anticipate, and still more out of order to attempt to discuss, anything that may happen in Paris next week, but, without going to Paris next week, let us look at the terms of the Bill. Let us look at Clause 1: The following shall be substituted for subsection (6) of section forty-six of the Patents Act, 1949… What do we substitute? For the purposes of this and the next following section 'the services of the Crown' shall be deemed to include—

1. (a) the supply to the government of any country outside the United Kingdom, in pursuance of an agreement or arrangement between Her Majesty's Government in the United Kingdom and the government of that country, of articles required—
1. (i) for the defence of that country; or
2. (ii) for the defence of any other country whose government is party to any agreement or arrangement…"

Not content with that, paragraph (b) includes something much wider, namely, the supply to the United Nations—and it does not stop there; it goes on to say: or to the government of any country belonging to that organisation, in pursuance of an agreement or arrangement between Her Majesty's Government and that organisation or government, of articles required for any armed forces operating in pursuance of a resolution of that organisation or any organ of that organisation. What does this mean? It means that the powers which the Government are taking under the Bill will place at the disposal of any of our allies, or any N.A.T.O. country, whatever industrial or scientific secrets the Government obtain by the operation of the Bill—which can include some very important industrial ones.

In my lifetime we have fought two world wars. All sorts of reasons have been given why one or the other or both were fought, but one reason which is given, which is common to both of them and to all protagonists of them, is that we were fighting in order to prevent the domination of Europe by Germany.

Western Germany is now a member of the North Atlantic Treaty Organisation. Under the Bill industrial secrets may come into the possession of the Government, who may be compelled by the Treaty, and empowered by the Bill, to hand them over to Germany. What safeguards will there be that these secrets will be used in Germany purely for military purposes and in the service of the armed forces? After two successful wars to prevent Germany from dominating Europe, who, at the moment, is dominating Europe? It is the country that lost both the wars. And here are the Conservative Government and the Conservative Party departing from all their private enterprise principles and adopting Socialist principles for this limited purpose, in order to increase the ability of our industrial competitors to compete with us.

I do not understand it. The Clause must have been put in for some purpose. It must have the results that I have mentioned. The very Bill which gives the Government power, and the treaty which may put them under an obligation to use the power for these purposes, get rid of the very limited, narrow, and few socially beneficent purposes which the 1953 Measure could have conferred upon this country.

The other general point which I wish to make is that if it is right that the Government should be able to command all these powers for military purposes, even in peace-time—and, a fortiori, in war—why in the world should not the Government have the same powers to defend the interests of this country in every other respect? Under what principle should we stop there? We are not really in danger. There is no man alive who believes that we are in serious or imminent danger of military attack. I am not saying that there may not be an ultimate danger, or that there may not have been a danger in the past, but nobody seriously believes that there is any urgent danger now, whatever may have brought about the change.

If we are in any danger, we are in danger in other ways. It is because in so many other parts of the world, whatever their economic or social systems may be, expansionist economies are going ahead, full of life and vitality, pioneering, growing and expanding. And we are boasting today because our trade deficit was reduced last month. To what point?—to the point at which the Conservative Government found it when my right hon. Friends were defeated in the last General Election. It is the smallest trade deficit for seven years. That takes us right back to the days of the Labour Government.

It means that for seven years we have been getting worse and worse and worse. While everydody else has been going forward we have been going back. While everybody else has been buoyant and progressive, we have been frustrated and ineffective—and all that the Government can find to do at this time of day is to weaken our position by allowing our friends to gain control of some of our country's resources and to hand them over to our competitors, in the name of freedom and independence.

That is the situation. I do not find it funny. The right hon. Gentleman would do well to make some small effort to understand what he is doing before he finds anything comic in those who are trying to explain the position. He might have prevented all this if he had explained his Bill at the beginning. But he thought that he could get the Bill through on the nod. He cannot. The principle involved is a sound one, but I am not prepared to vote for it if it is to be limited to this purpose and used in this way. If we are going to have Socialism, let us have it for constructive purposes and not merely for those of world-wide catastrophe.

6.57 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)

We have had an interesting and wide-ranging debate, marred only by the unnecessarily offensive remarks made about my right hon. Friend and his speech, which were quite undeserved. I shall not go over the remarks; I merely refer to them in passing.

At times I almost thought I was listening to the Second Reading debate of the 1953 Bill and not the present one, but I realise that hon. Members were deprived of debating the earlier Bill and it was understandable that they should wish to make some reference to its Clauses when discussing this Bill.

Mr. D. Howell

I hope the hon. Member will tell us why the Government have departed from the earlier Bill.

Mr. Erroll

I shall satisfy the hon. Member on that point if I can.

I want to refer to one or two of the general issues raised by hon. Members opposite, because if I can satisfy them on two of the major points it may make my explanations of points of detail somewhat simpler.

Nearly every speaker referred in one way or another to Clause 1(1), which includes, as a definition of "the services of the Crown", the supply to allied countries of articles required for the defence of other allied countries. Perhaps a convenient name for this would be the reciprocity point. I would point out, first, that this is nothing very new. The inclusion of such services has been recognised for many years and was enshrined in the 1949 legislation. All that we are doing here is making two small extensions to the existing practice, the two small extensions being, first, to include as allies any force of the United Nations and, secondly, to enable what are called offshore purchases to rank for these facilities. Therefore, these two small extensions really do not make very much difference.

Hon. Gentlemen have quite rightly pointed out that here is a big issue of principle—the question whether we are giving away something and whether we ought not to be getting something in return. We must remember what it is that we are making available. We are simply making available to our allies some of the results of our defence research, and manufacturing information. It is important that we should do all we can to help our allies, because we want strong allies, not weak ones.

If it is a matter of complaint about off-shore purchases, surely it is only to our advantage that we should do all we can to encourage the United States of America, in particular, to place off-shore orders in Britain rather than in other countries, other things being equal. This is a small but nevertheless a definite additional inducement to countries to place their off-shore orders in Britain rather than in other countries which do not have the same facilities.

Having said that, I recognise the point which several hon. Members have made in asking if this is not the time to raise the whole question of reciprocity. What about patents, defence information and unpublished manufacturing information available in other countries? Were we being accorded equal rights and facilities? Hon. Members may like to know that there is at present a N.A.T.O. Committee studying the whole question of the interchange of this information, and we will naturally follow the proceedings of this Committee with the greatest interest.

It is inevitably slow and complicated work, because, as hon. Members will realise, patent law differs from country to country, and this is an extremely complicated branch of the law. It is inevitably a slow process in trying to achieve developments of this sort, however desirable.

Now I should like to turn to the question which I think was raised in one form or other by every hon. Gentleman opposite who has spoken—the question of the extent of the services of the Crown. Here we must distinguish between patents and unpublished manufacturing information. In the case of patents and registered designs, it has always been the case that the Crown could have the use of these patents in return for granting the privilege of the patent to the patent holder. It is then a question how far such services of the Crown can go. For example, patent provisions covering the services of the Crown might include hospital equipment for use in hospital, but it is questionable whether it would include the supply of appliances or equipment for use in the home, and not on State premises. There is no exact definition and no absolute dividing line, and borderline cases would have to be tested in the courts.

I might mention in passing, and I think it would be of interest to hon. Gentlemen opposite, that Section 1 (1, b) of the 1953 Act mentioned drugs particularly, which I think was a matter raised by the right hon. and learned Member for Newport (Sir F. Soskice). We were informed subsequently that that subsection might not, in fact, cover the services of the Crown, and, therefore, in its form at that time it was not as watertight as the right hon. and learned Gentleman may have imagined.

Sir F. Soskice

I am very much obliged to the Minister for his careful reply. May I point out that the purpose of the wording of the 1953 Act was expressly declared by the noble Lord who moved the Second Reading to be to put beyond doubt the very doubts which the Minister says now exist? I want to know why the words which remove the doubt have themselves been removed.

Mr. Mellish

Now the hon. Gentleman is in trouble.

Mr. Erroll

It will not be for the first time, either, will it? I can only say that we thought we were right in 1953, but when we had another look at it we found that we had not got it entirely correct.

Mr. Frederick Mulley (Sheffield, Park)

Surely, his noble Friend in another place also referred to the question of gas masks, which he thought were to be dealt with by the same provision which is now excluded? Gas masks are a civil defence possibility. Are they to be covered by the present Bill or not?

Mr. Erroll

I would say almost certainly yes. Civilian gas masks, to which I assume the hon. Gentleman refers, would certainly appear to be articles designed or adapted for use for one of the purposes defined in the Civil Defence Act, 1948.

Mr. Frederick Willey (Sunderland, North)

Before the hon. Gentleman leaves that point, will he deal also with the point about communications equipment?

Mr. Erroll

I am still in the middle of my own point, and if I may be allowed to complete it, I will be very glad to deal with that of the hon. Gentleman.

I was explaining the position regarding patents and registered designs where the use in the service of the Crown has always been a relatively wide use. In the case of "know-how", on the other hand, we have in this Bill, as a number of hon. Gentlemen have pointed out, restricted it to defence purposes only. Several hon. Members have suggested that this was a wrong thing to do, and the hon. Member for Loughborough (Mr. Cronin) quoted the Howitt Report. I think it would be only fair that I should quote it in support of our reasons for doing what we did. The reason why we are limiting it to defence purposes was not because the Howitt Committee only took evidence from the imposing list of bodies mentioned in the Appendix to its Report, but because it would have been a great disadvantage to Britain if we were to impose too wide a use of "know-how" in a manner which the hon. Gentleman would not like to have happened.

Several hon. Gentlemen opposite have referred to backwardness in the sphere of technical work and science, which I would not myself accept, but if that is so, of course, there is a great advantage to Britain in making "know-how" agreements with the United States and benefiting from their "know-how". We were very impressed with the suggestion in the Howitt Report, and with what we have been told elsewhere, that American manufacturers may be reluctant to conclude "know-how" agreements with British manufacturers if there was a danger of the "know-how" being used for purposes other than defence.

The same argument applies where we are ahead of other countries and where a British licensor licenses a foreign licensee for strictly limited purposes and then finds the agreement had been broken by the foreign Government, which would then be able to quote back at the licensor the precedent established by the British Government. I suggest that we should be in danger of losing far more than we would gain if we were to extend the "know-how" provision as it stands to full use covered by Crown use of registered patents and designs.

Mr. Mulley

Will the hon. Gentleman deal with another point which puzzles me? He has said that the Government are following the recommendations of the Howitt Report in not extending this Bill beyond defence. If we look at some of the paragraphs of that Report, and also consider the terms of reference of the Howitt Committee, we find that the Committee had no power to consider wider use. Its terms of reference were— To consider and report

1. (i) whether the Crown should have permanent powers to authorise the use, in connection with defence contracts, of unpatented inventions and unregistered designs"

and so on. If the Howitt Report does deal with this point, as I agree it does, it deals with the point rather improperly. It could not take evidence on this point, because it is not within its terms of reference.

Mr. Erroll

Nevertheless, I think that the paragraph which I hope the House will permit me to quote is quite strong on the subject. Paragraph 14 (e) says: The extent to which overseas owners of technical information might be deterred from allowing its use to British manufacturers if the Government's powers under the Defence Regulations, however much modified, were made permanent. The Committee regarded that as a serious risk which should be taken into account. In all the circumstances, therefore, we decided that the use of "know-how" should be restricted to purely defence purposes.

Mr. Mellish

Does the Minister realise that the speech he is now making makes absolute nonsense of what the noble Lord, Lord Mancroft, said when presenting the 1953 Bill, because he argued quite differently then?

Mr. Erroll

He was speaking about a different Bill, which does make a difference I should have thought.

I should like now to turn to several points of detail, some of which were raised by the right hon. and learned Gentleman the Member for Newport. The right hon. and learned Gentleman referred to Clause 2 (2), and he wanted to know what it meant. I think I can satisfy him about that. What those rather complicated four or five lines really do is to try to cover the difficult situation that, if we were to have an absolutely complete prohibition of disclosure of terms of agreements, Government Departments would not be able to make any progress at all because, until they knew something of the nature of the agreements, they could not see what is really holding matters up. If the right hon. and learned Gentleman would look at those five lines again, in the light of the explanation I have tried to give, he will, I think, see the purpose of them.

The right hon. and learned Member for Newport and the hon. Member for Birmingham. All Saints (Mr. D. Howell) referred to use and asked why disclosure should not be included also, at least to Government Departments, as the right hon. and learned Gentleman suggested. There is really no point in disclosing un-published manufacturing information to Government Departments, because they would not, in fact, be using it. It is of value only to somebody who is manufacturing and, since the Government Departments concerned would not be engaged in manufacturing the products to which the use of the manufacturing information is related, there would really be no purpose in disclosing it to them.

My hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), in what I thought was an excellent and helpful speech, referred to authorisation. This is, of course, a point which very much exercised the Howitt Committee and which, naturally, we ourselves have considered very carefully. He would argue in regard to this question of how far one should delegate, for an assurance that only the Minister should personally sign. In a rather light-hearted moment, the hon. Member for Paddington, North (Mr. Parkin) referred to the exclusion of my right hon. Friend the President of the Board of Trade from the list of competent persons in the definition Clause of the Bill. Perhaps I might deal with that point straight away. My right hon. Friend is not included in that list because the Board of Trade is not a Defence Department and would not, of course, be concerned directly with "know-how" agreements relating to defence contracts. That is the only reason why he is not included. I am sure that we all enjoyed the hon. Gentleman's lighthearted intervention on that point.

For Parliament to lay down rules as to the extent of delegation in respect of any particular executive action, however important the matter may be, would surely detract from the full responsibility of the Minister. We felt that it would be far better, therefore, not to lay down particular rules although, as those hon. Members who listened to my right hon. Friend's opening speech will know, my right hon. Friend did indicate to the House that his own right hon. Friends concerned would like him to give an assurance that, in normal times, decisions as to the giving of an authorisation will be made by the Minister personally. We attach great importance to that as a means of reassuring industry and making sure that the powers which we hope the House will grant will not be used too widely.

My hon. Friend the Member for the Isle of Thanet wondered whether Clause 2 (3) was merely a device to protect civil servants. It is not. It is, in fact, a device to protect a licensee who, because of his desire to help the country, gets on with the job before negotiations are finally concluded and who might be held liable by the licensor for being in breach of the agreement which was to be altered by the competent authority.

Turning now to another of the remarks of the hon. Member for Paddington, North, he referred to Terylene socks and fibre-glass poles. As far as I can judge, after having only a short time to examine that particular case, I would say that the question of "know-how" in the manufacture of fibre-glass poles would be relevant only if the poles were specially designed or adapted for use in civil defence. If they were ordinary poles, there would be no question of using the agreements.

Mr. Parkin

I am much obliged to the hon. Gentleman for trying, at short notice, to answer the point, but can he see the difference between a stretcher which is used in civil defence and a stretcher which is used in an ambulance going to any accident in the City of London?

Mr. Erroll

I should like to see the stretchers first and then try to point out the difference.

The hon. Member for Loughborough referred to our attitude towards the small man. Our attitude to the small man is that he has the same rights and opportunities as the large firm. The interests of the small firm are taken care of by a number of trade associations, of course, some of which made representations to the Howitt Committee. The hon. Gentleman referred also to the period of three months. There must be some period, and, if he would read the subsection, he will I think, that it is a minimum of three months. The subsection provides: At the expiration of such period, not being less than three months beginning with the date of the service of the notice, as may be specified therein, no agreement…". In other words, the licensor and licensee have three months in which to try to reach a fresh agreement which will be satisfactory to the competent authority. If, at the end of three months, they have made no progress, the competent authority may step in, subject only to the reservation that if they decide earlier on no agreement they can say so in writing, which will enable the competent authority to get started straight away.

The hon. Member for Loughborough referred also to compensation. The criteria for the assessment of compensation are very clearly set out in the Bill in the latter part of Clause 4 (1). If we were to try to go into the detailed point which he made now, we should be transgressing the time of the Committee, a Committee which I hope will not be so arduous as he himself suggested that it would be.

Sir F. Soskice

I really do not want to harass the hon. Gentleman, but may I go back to Clause 1 and a question I asked him previously? As I understand it, he has conceded that the wording which the Government have now chosen has reintroduced the ambiguity and doubt about which Lord Mancroft was apprehensive. Having reintroduced the doubt, can the Minister now tell me whether it is the Government's desire that the Health Services should be included in the phrase "for the services of the Crown" or should be excluded? He has made it doubtful. Which does he want? Does he want the Services included or excluded?

Mr. Mellish

Trouble again.

Mr. Erroll

Not this time; I think that I have it right this time. The position as regards patents is quite clear. "Know-how" is limited to defence contracts. It is perfectly possible for the position to be clarified, when necessary, by reference to the courts. In any event, the Ministry of Health does not experience difficulty in placing its contracts for the supply of items for the Health Service and is quite satisfied with the present arrangements.

Sir F. Soskice

I must press the hon. Gentleman about this. The position about patents is not clear. The Minister himself earlier admitted that it was not clear and was doubtful. He said so earlier in his speech, when I pointed that out and asked why he had reintroduced the doubt. The only answer he could give was that he was in trouble. Does he not want the health services to be included in the Clause dealing with patents, or does he want them to be excluded? Can the Minister now be so good as to indicate that he will accept an Amendment in the Committee stage making clear what the Government want, if they know what they want?

Mr. Erroll

I understand that it is not necessary, but I think that the right thing to do would be to table an Amendment at the appropriate stage in Committee, when we can discuss it in rather more detail.

Mr. Willey

Will the hon. Gentleman give way?

Mr. Erroll

No; I have given way a great deal already. If I have omitted the communications point raised by the hon. Member, I think the question is whether they are "designed or adapted" for use for the Services. That is the operative phrase.

Mr. D. Howell

On a point of order. We are discussing the question of the provision and supply of commodities for the Health Service. The Minister has invited us to put down Amendments on this specific point in Committee. Can you advise the House, Mr. Speaker, whether under the Long Title of the Bill Amendments such as the Minister now invites us to put down would not be out of order?

Mr. Speaker

I could not give a decision about Amendments, which I have not seen, in Committee, over which I have no control. That will be a matter for the Chairman of the Committee. He could not come to a judgment upon them until he saw the Amendments.

Mr. Erroll

I have tried to reply to the many interesting points which have been raised by hon. Members this afternoon. I hope that we shall be able to have a Second Reading of this modest but, I believe, useful and valuable Bill.

7.23 p.m.

Mr. Niall MacDermot (Lewisham, North)

Like my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), I had intended to begin with an apology to the President of the Board of Trade that I was unable to be present to hear his opening speech on the Bill. Like my hon. Friend, however, I have been given to understand by my hon. and learned Friends that there is, perhaps, little ground for apology as the right hon. Gentleman's speech was exceedingly unilluminating on the subject matter of the Bill.

The Parliamentary Secretary, who has just replied to the debate, regarded that as a flippant allusion. I can only say in commenting on his speech that in the short time I have been in this House I never recall hearing a winding-up speech from the Government which so utterly failed to deal with any of the serious points raised in debate and which showed such a complete lack of comprehension and understanding of the subject matter of the Bill and of the points raised in the debate.

Some of us are a little mystified why the Bill has been introduced at this time. Perhaps, when one looks at the history of the Bill and its 1953 predecessor, the explanation is that the Government are bringing it forward now to bolster up their case on the need for the reform of the constitution of the other Chamber. The position is that there was introduced a very commendable Bill—not perfect in every detail, but commendable in its general principles—four years ago in the other place.

Mr. S. Silverman

Will my hon. Friend expand the point very slightly and tell us how the addition of life Peers to another place would have affected the matter one way or another?

Mr. Speaker

That would be out of order. I advise the hon. Member not to accept that invitation.

Mr. MacDermot

I accept your advice, Mr. Speaker.

A much more comprehensive Bill was introduced four years ago with the purpose of substituting on a permanent basis power for the Government to replace powers which were necessary for them during the war and which have been found necessary to be continued and perpetuated after the war and for the future. That Bill was heavily attacked by the backwoodsmen in another place. The result was that the Government withdrew the Bill and appointed a Committee to study much more limited proposals. The present Bill is based upon the recommendations of that Committee. Let us get it clear that what the Bill is primarily concerned with is the protection of the public purse. The Bill is to enable the Government, when making contracts with firms for the production of goods required by the Government, to obtain them at a favourable price.

The way in which that is done is by giving powers to the Government to authorise the contracting party to use patented or licensed rights which they have in breach of their existing contracts; and if the Government do that, they then, in the absence of agreement, have to refer to a tribunal the amount which is to be paid for the use of those rights. That, of course, gives the Government power to compel the party with whom they are negotiating to act reasonably and to offer these services at a reasonable price.

The first matter which disturbs many of my hon. Friends on this side of the House is to understand why the powers originally taken under the 1953 Bill for the whole realm of Government service are now being limited in scope to powers for use for the production of defence materials. The Parliamentary Secretary, when seeking to reply to this argument a moment ago, made two points. He first referred to the recommendations of the Howitt Report. As was indicated in interjections by some of my hon. Friends, that cannot be an argument in support of this action, because the Howitt Committee was limited by its terms of reference to studying the question in relation to defence contracts. It is true that the Committee went outside its terms of reference and made recommendations for limiting these powers in other spheres than defence contracts.

The one argument which the Minister has put forward in his support—it is, perhaps, our major objection to the Bill—is to say that it would be detrimental to our interests to extend it beyond the realm of defence contracts, because, for example, an American manufacturer might be reluctant to enter into an agreement with a British manufacturer giving him rights concerning technical "know-how", and so on, if he thought that the result would be that the British Government would later use their powers to compel the use of that information for other than defence purposes.

If that is a valid argument, it is a valid argument in respect of defence contracts.

Mr. Erroll

We have accepted that.

Mr. MacDermot

The hon. Gentleman says that the Government have accepted it for defence, but why accept it for defence and not for health drugs? What is the difference in principle? Are armaments manufacturers more public-spirited in this respect in America than the manufacturers of antibiotics which have been developed in America? Surely, we are believed to be dealing here with hard-headed business men.

I do not believe that this is a valid objection at all. I do not believe that this is really the ground for the Government limiting the legislation to defence contracts. I think that the reason they have limited it, is the reason for the objections raised in the debate on the 1953 Bill in another place; namely, it was said that the whole of this principle of compelling the use of the secret "know-how" and technical information is an infringement of the whole principle of the sanctity of contract.

Therefore, it is said, that principle ought to be limited and confined only to the absolute minimum necessary. The Government consider that the absolute minimum necessary is the use of it for weapons of war and destruction, and that any other kind of public purpose, any other kind of Government use or Government service, is something which is unnecessary, which they can dispense with but for which, if necessary, the Government can pay the higher price, the market price.

Let us make no mistake that the higher price, the market price, is the price for which the inventor or the manufacturer with the technical "know-how" is holding out. It may be a quite extravagant and excessive price. If there is one sentence in the Howitt Report with which we can all agree, it is the sentence at the end of paragraph 16: Additionally, the national interest must be protected against the unscrupulous and avaricious. If the national interest is to be protected against the unscrupulous and avaricious in respect of the manufacture of guns, bombs, rocket weapons and so forth, why is it not to be protected in respect of the manufacture of antibiotics, of hearing aids, and of appliances for limbless pensioners? These are the matters which are being excluded by the confining of this Bill, unlike the earlier Bill, only to defence purposes.

We have had no satisfactory explanation or argument on this at all and, as my hon. Friend the Member for Nelson and Colne pointed out, the difference here in the approach to this question is an admirable example of the difference in approach of our attitude to questions of the national interest by hon. Members on the other side and on this side of the House.

The second major matter which disturbs me and many of us on this side of the House in respect of the cutting down of the provisions of the 1953 Bill relates not to Clause 2 but to Clause 1, and particularly to this matter which was contained in the 1953 Bill of the use of these powers in relation to the production of drugs, medicines or appliances.

Here again, the Minister in dealing with this matter a few minutes ago, showed an astonishing incomprehension of the subject matter of the 1953 Bill. He said in answer to my right hon. and learned Friend the Member for Newport (Sir F. Soskice), a moment ago, that the position in relation to patents is quite clear. The position in relation to patents is precisely the position that is unclear. The provision in the 1953 Bill proposed that the powers exercisable in relation to a patented invention under section forty-six of the Patents Act, 1949…shall include power to make, use, exercise and vend the invention—(b) for the production of drugs, medicines or appliances required—(i) by the Minister of Health for supply to patients under Part II of the National Health Service Act… Therefore, the provision which is now being excluded related solely to an Amendment of the Patents Act and it had nothing to do with "know-how" or technical information. This was concerned with patents themselves.

Lord Mancroft, in presenting that Bill in another place, explained that the reason that that was being put in was that there was doubt concerning the provision which had existed in the Patents Act legislation ever since 1907, when that legislation first began, namely, that the Crown had the right to use patented inventions for the purpose of the service of the Crown. There was doubt whether that phrase would include the manufacture of goods required by the Minister of Health for the National Health Service.

Our belief and our fear is that the reason that was omitted was not because anything has happened to clear up that doubt—and we have not been told that anything has happened to clear up that doubt—but because the Government have yielded to pressure from industry to limit and confine these rights and powers to the narrowest possible limits. It is for that reason that this Bill—the whole Title of it has been changed, because the earlier Bill was the Inventions and Designs (Crown Use) Bill—is now limited to purely defence contracts.

Now, because the activities of the Minister of Health under the National Health Act could not be said to have anything to do with defence contracts, we find the whole matter dropped and left out. We are still left with the question: do the Government believe, or not believe, that the powers that exist under the Patents Act to use inventions for the services of the Crown will cover these powers to use them for the purpose of the National Health Acts?

The next point which the Minister sought to deal with in his reply, deals with the question of disclosure. He was dealing with the question: why not permit disclosure at least to Government Departments? His answer, again in my submission, showed a complete misunderstanding of the position. His answer, as I noted it, was that there was no point in doing that as the information would be of value only to the manufacturer, and a Government Department is not a manufacturer.

If that were the truth, how did the provision for disclosure ever come to exist in the 1953 Bill, which it did? The 1953 Bill provided expressly and positively that which this Bill deliberately and expressly excludes. Again, Lord Mancroft in his speech explained the reason why this provision was included in the 1953 Bill. He said: It is, however, possible that the Department may not have the technical information necessary to use the invention, and the persons in possession of the information may not be willing to divulge it. The only power which can overcome this difficulty—and it is recognised by the Government to be an extreme power to be used sparingly—is one to require a person in possession of the information to divulge it…At the specific request of my right hon. Friends the First Lord of the Admiralty and the Minister of Supply, this power is now made permanent but in a very modified form."—[OFFICIAL REPORT, House of Lords, 1st December, 1953; Vol. 184, c. 773.] In other words, four years ago the then Minister of Supply and the then First Lord of the Admiralty were making a specific request for power to command this information and disclosure of this information to them.

Now we are told that the power is quite unnecessary and that they never required it at all. May we be told why they made that specific request, referred to by Lord Mancroft four years ago, and what had they in mind? What has happened since to make them change their minds? If it was necessary for them then to have the information in order to use the inventions, why is it not necessary now?

Again, we see on looking at the Howitt Report that this was one of the recommendations which they made outside the terms of their reference. It appears in page 12 of the Report.

It is quite evident to us on this side of the House that the change in form of the Bill, compared with the earlier Bill, is the direct result of the pressure which has been brought to bear on the Government by representatives of industry, who want to ensure that, at whatever cost to the public purse, their own bargaining power in relation to the Government shall remain unchanged, and who are determined that they will submit to restriction or limitation of these powers solely on the question of the manufacture of armaments. We believe this to be entirely unsatisfactory and we consider that, as the Government have already withdrawn and reconsidered the Bill once, they should do so again and bring it again before the House with a competent explanation of its provisions.

7.40 p.m.

Mr. Frederick Willey (Sunderland, North)

Unlike my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), I have not been present throughout the debate, and I must apologise to the House. My absence has not been because of any dereliction of duty. It so happens that one has unavoidable public duties and cannot always attend a debate which one is anxious to attend. But having heard part of the debate, I am gravely disturbed. I am grateful to the Parliamentary Secretary to the Board of Trade for the pleasant and charming way in which he replied, but I speak only of the manner of his speech. The content was very disappointing. He made no effort to answer the points that had been raised.

I begin with a generalisation, and this is really what disturbs me most about the Government. In the examination of any problem, they are bound to begin by taking a view which accords with the public interest. They do that as reasonable people, with experience in and out of office over the past decade. Having done that, they immediately begin to retreat. I should like to give an illustration or two, of which I have had unfortunate experience.

We know that, following the precedent set by the Labour Government, the Conservative Government were prepared to improve conditions affecting clean food. They promoted a Bill in another place, just as the 1953 Bill was promoted in another place. During its passage, the Bill was not withdrawn but emasculated. We on this side of the House had to protest vigorously and try to improve the Bill, but we found that, having set off with good intentions, subject to pressures which are very influential in the Conservative Party, the Government had to change their views.

There is another example, and again I am unfortunately a victim of this change of attitude. Not so long ago the Government declared their policy on the moderate concentration of slaughterhouses. Viscount Tenby declared himself in favour of it on behalf of the Government. Now, we on this side of the House are resisting the Government because they are going back on the declaration which they made. Again it is because they have been sorely tried by the pressures of vested interests.

We are in the same difficulty over this Bill as we were in the two examples which I have given. The Government can say to some degree, "We are acting in the public interest," but we must not he precluded from saying at the same time, "You are not acting sufficiently in the public interest, or as far in the public interest as you yourselves originally determined. We are shocked, when it is an issue of public and private interests, that you invariably give way to private interests after having declared your good intentions."

One very unfortunate conclusion that must be drawn is that we have a weak-kneed Government and that, while we are faced with difficult conditions, the sooner they get out the better. In all these instances, and I could have given a score, the Government have declared their policy and then gone back on it. That is a very bad thing for any Government to do, but this is what they have done.

The reason for it can be found in the Howitt Committee's Report, which says in paragraph 4: The Bill met with strong opposition and was withdrawn. The Bill met with opposition stronger than the Government. In other words, influential private interests were stronger than the interests serving the public interest within the Government; and a Government who do not know their own mind having been exposed. How can the Government give a lead to the country in the difficulties that we are facing? This is a serious matter.

Another matter of which I have been complaining on other occasions is that when the Government are forced by pressures within their own party to change their mind they seek refuge in a committee report. I do not believe in Government by committee. I believe in a Government of Ministers who will stand at the Dispatch Box and defend their policy and not say, "A committee inquiring into this has come to a conclusion different from our own." If the Government change their policy they should say so and themselves give the reasons.

This case is worse than that because, as has been pointed out, the Howitt Committee have no alternative but to recommend as it recommended because of its terms of reference. The change of policy was in the terms of reference given to the Committee. To do that sort of thing is to fail to accept the responsibility of office. If the Government were withdrawing the 1953 Bill and adopting a changed policy they should have come to this House and not to another place and said, "We have been knocked about by the big fellows in the City and we are changing our minds." It was not necessary to have the Howitt Committee. That Committee could not advise the Government on this very point of reconsideration, because the Government had already decided to give way and had limited the committee's terms of reference.

The Government can claim the moderate virtue that they could have done worse than they are doing. There is no great virtue in that in this age. The Tories could have frightened us if they had wished by telling us how they behaved in the 1930s, but all that is not relevant to the conditions in which we are living today. The Government could say that they have not ignored the public interest as much as they ignored the distressed areas, for example. But surely today we should start with the assumption that both political parties put the public interest first. But if we say that, we must say that the disappointing thing about the Bill, and the thing which grievously disturbs me, is that we have had an open, patent recognisable, abandonment of the public interest.

This is germane to the situation which faces us at this moment. When I hear my hon. Friends talking about the limited definition which must be given to "defence materials," I think about the worry and concern that are shaking the American people. They are concerned over Sputnik I and Sputnik II. Is either a "defence material" or is it a civilian project? The very argument that is being threshed out in the United States is the very point with which we are concerned here.

We know that Marshal Zhukov was not the only Defence Minister to get the sack. We know that the Secretary for Defence in the United States got the sack because he divided and separated civilian development from development for defence purposes. He said that he would not pay eggheads for telling him why the grass was green. For making that remark he has been sacked. We cannot divorce any longer civilian development from defence development, but this is just what the Government are trying to do at this very moment.

This is not a doctrinaire matter. I have gone to the United States and not to the Soviet Union for my illustration. I have shown that, at this moment when our Government are trying to restrict their powers and to limit the public interest, the classic home of private enterprise is showing, on the contrary, that the public interest must override private interest, not only in the straightforward defence sector but in the civilian sector also.

For that reason, I was also concerned when my attention was drawn to what Lord Mancroft said in another place during the Second Reading debate on the Inventions and Designs (Crown Use) Bill. I will remind the House again of what he said: Secondly, to the permanent power to make, use and exercise inventions, there is added by Section 49 the power to 'vend' or, in plain English, sell them. Under these powers, during the war, vitamins were imported and manufactured to fortify foodstuffs for supply to the public. And, if by mentioning this fact I am not seriously endangering the prospects of the Bill, let me remind your Lordships that under these powers, similarly, dehydrated potatoes were manufactured and supplied to the long-suffering public. There were a variety of ways in which these powers were exercised. Concrete sleepers have been supplied for railways, coal cutters for collieries, and even refrigerators for council houses."—[OFFICIAL REPORT, House of Lords, 1st December, 1953; Vol. 184, c. 769.] I do not wish on this occasion to say anything about the vitamins or the potatoes, but I do want to say something about the other matters mentioned by Lord Mancroft, because it is particularly relevant at the present time. Why did Lord Mancroft mention concrete sleepers? Because civilian work was done in the Royal Ordnance factories. Because there was some suspicion about the development of concrete sleepers. After all, this was investigated among other things, by the Select Committee on Estimates. Why did his Lordship mention coal cutters for collieries? Because these were not solely manufactured by private interests. Work was carried out by private interests in conjunction with the Royal Ordnance factories. Again, let us take refrigerators. Why did his Lordship mention refrigerators? It was not because of a mere whim or fancy, but because refrigerators were built not only by private enterprise but also in the Royal Ordnance factories. In other words, these matters were mentioned by Lord Mancroft as practical examples of what happens if civilian work is done in Royal Ordnance factories.

What has the Minister of Supply said? He recently said that he will consider the taking on again of civilian work by the Royal Ordnance factories. Together with some of my colleagues, I met the right hon. Gentleman to discuss our own Royal Ordnance factory at Birtley. The right hon. Gentleman was good enough to assure us that he would certainly consider the possibility of taking civilian work into the Royal Ordnance factories, if it proved necessary. Why, if that is so, do we have at this very moment a renunciation of the powers which the Government sought in the 1953 Bill? Has the Minister of Supply been consulted about this? If he has, did he express any dissatisfaction or disappointment? Did he say, "This will prejudice me and make unreal the assurances I am giving that civilian work will be undertaken in Royal Ordnance factories? That is a very essential point.

In parenthesis, may I say that I think there should be an inquiry into the development work done on defence material in Royal Ordnance factories and used outside by private interests. But this is something rather different. I am now on the straight-forward point that if the Ordnance factories are to revert to this work, why is the Government at this moment trying to abandon the powers they were seeking in 1953?

I say this, hoping that a third Minister who will wind up the debate—I thought that the Parliamentary Secretary to the Board of Trade was in error in describing his speech as the winding-up speech—will give us an explicit assurance. I hope we shall get an undertaking that this will be put back, to show that the Government are in earnest in talking about the reintroduction of civilian work into the Royal Ordnance factories, if that be necessary.

There were other points about which the Minister's reply was most unsatisfactory. My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) mentioned West Germany, and I thought that he made a legitimate point when he asked what assurances we were to have that the information they receive will not be used by the West Germans for civilian purposes. Again, this is very important today. In certain respects we are being out-competed by West Germany. Oddly enough, that is not by reason of any technological or scientific advantage. The Germans are very disturbed because they cannot compete with us in that respect owing to the ravages suffered by their scientific and technical manpower. They are competing with us by paying lower wages. That is the reason for the competitive advantage enjoyed by West Germany.

In a situation where we are being out-competed because of the lower standard of living in West Germany, the Minister cannot give us any assurance. I am not surprised that my hon. Friend should express concern, representing as he does a constituency which is vitally affected by such questions. People in my own constituency did not want to be out-competed by a country which has a lower standard of living and which is receiving much technical "know-how" from us. I expected the Minister to treat that point seriously and give us an assurance that we should get an absolute guarantee that there would be no use of such information for civilian purposes. When we came to the question of reciprocity, what did the Minister say?

Mr. Parkin

The Minister said nothing.

Mr. Wiley

He did say something. He said, "We are discussing it at N.A.T.O." Why not wait until the end of those discussions before taking this present action? We had a disappointing time at the end of Questions when we tried to probe the Minister of Defence about N.A.T.O. I could not understand whether the right hon. Gentleman discusses the matter, whether he does the negotiating, or whether officials do it all on our behalf. But it is very disturbing when we can get no greater assurance than that the issue of reciprocity is being discussed in N.A.T.O., and we have nothing more, no further guarantee given to the House, when hon. Members are disturbed over this matter.

The Minister would not give way to me when I wished to ask a question about the intentions of the Government during the Committee stage. As he would not give way, I will ask my question now, if I can secure the Minister's attention. When the Minister assured us that this matter could be raised in the Committee by way of Amendment—I refer to the question of the National Health Service—I gather that he said no more than that the Opposition could put down an Amendment. I wish him to give an assurance that the Government will put down an Amendment. If the right hon. Gentleman is merely telling us that we can put down an Amendment he is giving us no assurance at all. I gathered from his remarks that we had no protection at all, at any rate with regard to appliances used in the home, and it is these appliances in which we are particularly interested.

There has been talk and discussion about deaf aids. We all know the difficulties about these appliances. It is on this very point regarding the deaf, the maimed and the crippled, that the Minister will give us no assurance at all. Having heard the criticisms made by my hon. Friends, I believe that we have received no satisfaction at all from the Government and I hope that at any rate we shall receive a proper reply from the Government Front Bench before we allow this Bill to go to a Committee.

8.0 p.m.

Mr. Frederick Mulley (Sheffield, Park)

I reinforce the plea that my hon. Friends have made for a further reply. I am sure the House will give leave for it from either the President of the Board of Trade or the Parliamentary Secretary. I apologise to the President of the Board of Trade that I was not, through service on a committee, able to be present to hear his speech at the beginning of the debate. I heard the Parliamentary Secretary, who was unable to deal with the very substantial points that had been put by my hon. Friends.

I make no apology for carrying on the debate. I am not doing so in order to delay debate on the Measure which is to be discussed after this one has been dealt with, but because I wish to discuss the merits of the Bill. The Bill to follow is undoubtedly important, but the one before the House now is of enormous magnitude. The Howitt Committee's Report, to which reference has been made, speaks about millions of public money being at stake. One has only to glance at the Bill to see, as the Parliamentary Secretary admitted in a reply, that the whole question of our relations with N.A.T.O. and so on are involved in it. Surely the Government do not expect the House to let a Bill of this character through more or less on the nod because they want to put other business through today.

Why not wait until we know more, as we hope we eventually shall, of the negotiations at N.A.T.O. that are shortly to take place. We ought to know from the Government why the Emergency Regulations under the 1949 Act have already expired. They expired on Tuesday of this week. What is the position in this matter? We are entitled to be told much more, not only about the Bill but how it is that a very different Bill has to be considered from the one which was withdrawn in the House of Lords.

We notice that the Second Reading debate in the House of Lords was merely adjourned. I spent a little time looking into the further proceedings, but I could find no explanation why the adjourned Second Reading debate was not continued. I do not want to weary the House with a long quotation from those proceedings. My hon. Friend the Member for Sunderland, North (Mr. Willey) quoted Lord Mancroft who moved the Second Reading on that occasion. My hon. Friend could see no reason why the Government agreed to the withdrawal of the Bill. Unfortunately my hon. Friend did not read sufficiently far down the paragraph from which he quoted. I found these significant words: On Thursday, in the calm and cool after the Division had been taken on the subject of television, your Lordships heard my noble and learned Friend the Lord Chancellor ask the House to agree to certain extensions of these Orders in Council."—[OFFICIAL REPORT, House of Lords, 1st December, 1953; Vol. 184, c. 769.] The timing of the Second Reading debate on the Inventions and Designs (Crown Use) Bill in the House of Lords in the same week that there was a certain amount of bother about commercial television might be the underlying reason why the Bill was so easily withdrawn. My present design and purpose is to persuade the Government that there is as strong an opposition to the present Bill as there was in the House of Lords on that occasion when the Government changed their mind so quickly.

It is most extraordinary. There was a relatively short debate which was adjourned, as far as one can understand from the record, because a further debate was to follow. The Government set up the Howitt Committee. It was given terms of reference which had already decided the main question at issue. It had to consider only whether the Crown should have permanent powers "to authorise the use of defence contracts". The Government have already taken that decision. Since the President of the Board of Trade is in charge of the Bill, may I remind him of what he said about Committees in his enthusiasm at becoming a Minister shortly after 1951. He was speaking in reply to a short debate on the brick industry on 14th March, 1952, and he said: We do not need a committee to look into this question. That is rather the kind of method which our predecessors used—I will not say to shift responsibility, but to deal with these things. My opinion is that the Ministers responsible for these industries should do the thing themselves, and if they do not do it properly they will have to be got rid of. That is the proper way to run the country, and not by committees."—[OFFICIAL REPORT, 14th March, 1952; Vol. 497, c. 1892.] I have had cause to reflect that before we get rid of a Bill which, in the right hon. Gentleman's own words, is the product of one of the Committees which he so much despises, it might be better to go back to the original Bill which was no doubt produced by the Minister on that occasion. The right hon. Gentleman might also reflect during the remaining hours of this debate on some of the other Committees which he has been concerned with and which he has set up since 1952.

Now I would refer to the Parliamentary Secretary's reply. We were delighted with the charm and the light-hearted manner with which he dealt with the matter, and were extremely impressed with his light-hearted reference to the Minister of Health. He tried to deal with the very substantial point which my hon. Friends had made, saying he thought the Minister of Health was quite satisfied that everything was all right. In view of what has happened in this House and in the National Health Service over the last few weeks, can the Parliamentary Secretary really accept the bland assurance of the Minister of Health that things are satisfactory? The Minister of Health told us at that Box that there was no dissatisfaction or trouble in the National Health Service, despite the fact that we were getting letter after letter from our constituents who are employed in the Service. The Minister seemed to attach no importance to that at all.

I appreciate that this is not quite a point of order that can be dealt with by yourself, Mr. Deputy-Speaker, or Mr. Speaker, but the Minister admitted earlier that it is a point of very great substance. A Government spokesman assured us that when the Bill goes to Committee we shall be able to move Amendments to make sure that Clause 1 applies to the Health Service. The Parliamentary Secretary thinks that it can be done, but he is not sure. He suggested putting down Amendments to clarify the position.

That is not quite enough. The Government come here with all the best legal advice, and with the assistance of Parliamentary draftsmen, and they ought to know whether an important service like the Health Service is covered by the Bill. Several of my hon. Friends are anxious, and I share their anxiety, to know whether or not we shall be ruled out of order on Amendments that might go further than the very restrictive nature of the Long Title. Before we go any further we ought to have some ruling on this point.

I want to refer to the effect of the Bill on the civil and military aircraft industry, in which I know the Parliamentary Secretary has some considerable personal interest because of his experience at the Ministry of Supply. The industry is in great difficulty. The Minister of Supply told us recently that in the present year there was to be a reduction of 9 per cent. in the orders for military aircraft. We are all clear on the point that the Bill would deal with the cases which arise from Government military contracts.

It is the opinion of people in the aircraft industry that the civil side of the industry has been able to carry on and develop only as a result of the military contracts. There have been suggestions from leading people in the industry that there will have to be—[Interruption.] This is a serious point on which we might have the attention of the Parliamentary Secretary. [HON. MEMBERS: "Order."] This is a matter which affects the lives of the people of this country and millions of pounds of public money. I warn the Government that if they make a habit of treating the House with discourtesy we shall see that they have long hours in which to reflect on how they should approach a matter of this magnitude. It may well be that they will regret sitting there tonight, trying to jump the gun by an early reply, and trying to avoid the point at issue.

I had intended to make a very brief speech, but the temptation to go on at length is great, although I do not wish to do so because I know that many of my hon. Friends are interested in the Bill which is to follow. It is asking a lot of back benchers that they should spend many hours here because they, unlike a Minister, cannot walk in and make a speech whenever they please. I have sat in this House for days and not been called. I submit to the Leader of the House, who I know has the well-being of back benchers at heart, that he might reflect on these matters and sometimes bring them to the attention of his colleagues. If we spend a long time in this House, as we are doing tonight when we might be elsewhere, it is because we recognise that in this Bill there are vital matters of principle at stake.

I hope we shall not go away tonight without some reply to some of the points which have been raised. I particularly call attention to a sentence in the Howitt Report, on which the Government rely so much. The Report says: It is clear, however, that in view of the magnitude of the Ministry's contracts the savings would be likely to run into some millions of pounds per annum. The best the Committee could find as a case against the Inventions and Designs (Crown Use) Bill, which was withdrawn in another place, was that industry said it was wrong in principle for the Government to take any action which resulted in the overriding of, or interference with, commercial agreements freely negotiated. We have a clear issue there. Have the Government a responsibility to save millions of pounds of taxpayers' money? We have often to suffer speeches from the benches opposite about how money should be saved and taxation reduced, yet tonight there is practically no one on the benches opposite when millions of taxpayers' money are at stake.

The Government are prepared to override that clear public interest by reference to the case for industry that it is wrong for the Government to interfere with commercial contracts. That raises a very great point of principle. I will not go into it now as there may be other occasions on which one may go into detail on these matters, but clearly there is a case of principle. If public money is provided for research, as it has been provided in the aircraft industry, should people be able to gain an advantage by keeping that information, keeping patents and research paid for by public money, and turning them to their commercial advantage? That is the clear case we have at issue. It is not at all clear to me that the important "know-how", working drawings, and designs which are of major importance in the aircraft industry will be covered by the Bill.

Often, the distinction between the military and the civil side of the aircraft industry is difficult to draw. We know there is great difficulty in defining what are defence contracts. A great deal of the Howitt Report is devoted to that problem. I suggest to my hon. Friends that today not only have we had a most serious indication of the attitude of the Government to the public interest and large sums of public money, which we shall remember when hon. Members opposite are on this theme of saving taxation, but we have seen a complete and utter surrender to a few speakers in another place—another place which represents nobody and which by Act of Parliament has no right to concern itself with taxation matters. A few speeches in that place are sufficient to make the Government run away, to set up a Committee without proper terms of reference and to bring in this Bill, which they expected to get through on Second Reading in a few minutes, or at worst in a few hours.

The Explanatory and Financial Memorandum is significant. When a Bill like this is based on a Committee's Report, it is customary to direct the attention of hon. Members to the Report, but there is no reference in the Bill to the Howitt Report, although it is a Command Paper. I think the Government were trying to get this thing through the House without hon. Members knowing what was at stake at a time when they were unaware of its history. Both in their manner of dealing with the debate and their attempt to get the Bill through without properly explaining and defining it, the Government have been less than courteous to the House.

8.16 p.m.

Mr. Maurice Orbach (Willesden, East)

I regret that I have to continue this debate, in view of the very late hour and the fact that some of my hon. Friends also want to speak in this very important discussion. I have listened to most of the speeches which have been made and I intervene only because I think the Leader of the House ought to know something of the character of the debate we have had from this side of the House.

The debate was opened by a speech from the President of the Board of Trade, a speech which lasted twelve minutes. Those of us who were in the House at the time noted that of that twelve minutes, about eight were taken up by points of order. Only four minutes were devoted to telling this House the details, or making some sort of explanation, of an important Bill containing a number of Clauses which, as my right hon. and learned Friend the Member for Newport (Sir F. Soskice) pointed out, are written in most abstruse language. That language was difficult to understand for such a highly qualified member of the bar as he is, and most difficult for a mere layman like myself to appreciate. That was particularly so when, sentence by sentence, the speech was interspersed with language which is uncommon to this Chamber and, in fact, uncommon in British industry. I doubt whether one could pick up any dictionary in common use in our primary schools, technical colleges, secondary schools, grammar schools or public schools and define what the words "know-how" really mean. The last man in the world to be able to define it to this House was the President of the Board of Trade.

I regret that I have to make this personal attack on the right hon. Gentleman because I have the highest regard for him. I always thought him a very debonair gentleman, but the last thing one should do is to treat the House in such a debonair manner on this important issue. Hon. Members on this side of the House have demonstrated how important this Bill is. My hon. Friend the Member for Paddington, North (Mr. Parkin) went to great length to give us some of the history of the Measure we are about to enact—I hope, however, it will be withdrawn unless it is amended—from the stage when emergency measures were introduced to assist the nation at a time of great peril. It was obvious to all hon. Members listening to him that we were dealing with very grave constitutional issues and with matters affecting our industry and the life blood of the British economy.

Questions were directed to the Minister which might have been answered very simply, in which event he would have cut short the debate by two or three hours. The fact that they were not answered is an affront to the House. I do not suggest that the right hon. Gentleman does not know the answers. The probability is that, like many other hon. Members, he is very much overworked and, with the wide field which he covers, it is perhaps a little too difficult for him to grasp every detail. Nevertheless, this is an important Bill and it is not a matter which the right hon. Gentleman can deal with in four minutes, saying "You must accept or reject it. In any event, we have the big battalions outside and we can call them in to put the Bill through".

The Bill raises the whole question of our foreign relations. I will not discuss them, but I want to tell the Leader of the House that he, too, is to blame here because one of the sponsors of the Bill is one of his Joint Under-Secretaries. Why was she not here to discuss the grave measures of civil defence and what arrangements are being made for the necessary technical processes to be available to the Government?

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler)

My hon. Friend the Joint Under-Secretary of State was here for a considerable time and took an interest in the debate. I have been here for part of the time. There is no intention of treating the House with any discourtesy about the question of civil defence.

Mr. Orbach

I was absent from the Chamber for only about an hour while I saw a deputation, and during the time I was present no Joint Under-Secretary of State to the Home Department was present. Only four Members were on the Conservative benches. The President of the Board of Trade and his colleague were here, as was a Whip and the hon. Member for the Isle of Thanet (Mr. Rees-Davies). The only speech we have heard from the other side of the House, with the exception of that from the Minister, was the speech of the hon. Member for the Isle of Thanet, who attacked the Bill.

Mr. Willey

And he is not here for the reply.

Mr. Orbach

He may well return for the reply. In any case, he was courteous enough to listen to some of the speeches made by my hon. Friends.

I want to deal with only one part of the Bill and that is the part which is missing from it and which was in the 1953 Bill. Although this has been touched on by other hon. Members, it has by no means been stressed sufficiently. It is the part relating to technical processes, inventions and designs being available to the Ministry of Health. This is no laughing matter and no matter which we can brush aside. It may not be within the knowledge of the President of the Board of Trade, but the Minister of Health sends many circulars to hospital management committees and governors of teaching hospitals telling them about the rising costs of drugs, appliances and dressings and appealing to them, week after week and month after month, to conduct all kinds of investigations to see why the costs are rising.

They are rising for a very simple reason, which is that the technical processes are available only to individual firms. Although the need for curing the helpless and the sick exists, we do not take advantage of these technical processes on a national scale. The 1953 Bill would have made it possible for the technical processes owned, controlled and known by individual firms in the chemical industry and by firms dealing with the manufacture of surgical appliances, surgical equipment and dressings to be available to the Crown. This Bill cuts that provision out. Why? What is the reason?

Mr. Mellish

The Government will not answer that question.

Mr. Orbach

From £3 million to £5 million more a year are being spent on this item in the National Health Service, and every hospital management committee in the country has received circular after circular in the past two years appealing to them to cut down the amount of drugs they are using. Minister after Minister has risen to speak on the subject. Last year they made all kinds of feeble statements about the lack of poliomyelitis vaccine in this country. Why? Because only one firm was making this vaccine and because the Crown could not exercise its authority to take over the technical processes in order that dozens of other firms might make it or that we might make it ourselves so that every child in this country, not only certain children, could possibly have the menace of poliomyelitis removed.

Mr. Mellish

That is very well said.

Mr. Orbach

The same comment applies to cortisone and the antibiotics. The costs keep rising as the demand rises. If this Bill included, as the 1953 Bill included, the necessary authority, the Minister of Health would have full power to ask that the technical processes of one firm, such as the Glaxo Laboratories, should be available to others. We in the hospitals could make these drugs ourselves and we could cut down the great expense in the Health Service and at the same time give a better service. If the Minister cannot withdraw himself—that is up to his bosses—he should withdraw the Bill.

8.27 p.m.

Sir D. Eccles

Perhaps I may reply, with the leave of the House.

The debate has been very interesting, but I hope hon. Members understand that the normal practice when moving the Second Reading of a Bill is to address oneself to the Bill and not to a Bill which is not before the House. That is what I did.

The hon. Member for Willesden, East (Mr. Orbach) has raised an interesting point, to which I should like to reply, about the National Health Service. I am informed—and I will check this information because of the interest shown by the House—that at present there is no difficulty in getting hold of the "know-how" about drugs. I understand that the Minister of Health feels that the ordinary commercial arrangements which can be used are best. [HON. MEMBERS: "No."] I am merely seeking to explain the other arguments. If we had the power which hon. Members opposite would like us to have, I do not think we should get other countries to make "know-how" agreements with manufacturers in the United Kingdom. They would say, "Under an Act of Parliament the information which we have contracted to give to United Kingdom firms might be taken away from our licensee and handed to somebody else".

Mr. Mellish

These are not good reasons.

Sir D. Eccles

The hon. Member is entitled to say that these are not sufficiently good reasons, but we have looked at the matter carefully and we think that on balance it is better not to have these powers.

Mr. Mellish

Why was it thought right to have these powers in 1953? Will someone explain the difference between the position in 1953 and the position now? That is what we asked at 4 o'clock.

Sir D. Eccles

I will give the reason to the best of my knowledge. The wartime controls and all the experience of the war were still very much in the mind of people when they first considered the matter. Now we have moved further into peace-time conditions. [HON. MEMBERS: "Oh."] Perhaps hon. Members will allow me to give the reason, which I think is the correct reason. It is now found not to be a good thing to have these compulsory powers because, in general, "know-how" is being exchanged very much more between countries. With that explanation, I think we can take a decision on the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).