DEBATE ON THE ADDRESS [SECOND DAY]

HC Deb 28 October 1959 vol 612 cc242-364

Order read for resuming adjourned debate on Question [27th October]: That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. Question again proposed.

Mr. Speaker

I think that it is probably for the convenience of the House that I should say what I believe to be the intention and the wish of the House with regard to the grouping of topics in the current debate. The Question before the House, of course, will still remain the main general Question, and hon. and right hon. Members will get much more information from the newspapers than they get from me, because I can only say what I understand.

I understand that the desire of the House is that tomorrow's debate shall be a foreign affairs debate, that today's debate and Friday's debate should be on general topics, and that the debate shall be continued on Monday and Tuesday. What then happens on those two days, respectively, will depend upon the Amendments and the selection of them, and I think that I had better wait until I have seen them before I say any more.

4.13 p.m.

Mr. Marcus Lipton (Brixton)

It is perhaps not inappropriate, in the light of the discussion which has just taken place on procedure, that the debate on this Motion should today be resumed by a back-bench Member of this House. It so happens that when the House adjourned last night I was beginning to say that for many people the main problem, the most urgent problem and the most distressing problem, is that of housing.

There are no figures to show how many people are on the housing lists of local authorities, but when the National Housing and Town Planning Council issued a questionnaire to 500 local authorities not very long ago, it emerged that there were some 750,000 people on the waiting lists of these 500 local authorities which cover about one-half of the population of England and Wales, excluding Scotland. It is possible, therefore, to estimate that 1 million to 2 million people are on housing lists in England, Wales and Scotland and are waiting to be rehoused by their respective local authorities.

There are 160,000 people on the waiting lists of the London County Council. There are more than 100,000 people on the waiting lists of the City of Glasgow. In these circumstances, it is right, I think, that attention should be drawn to the very difficult situation which faces at least 1 million of our fellow citizens at the present time—a situation which shows no sign of being resolved in the immediate future.

All that the Gracious Speech says about this is that: New house building will be maintained at a high level and the slum clearance campaign will continue. We can judge the value of that promise only by what has happened in the past. We recall that, in 1952, 193,000 council houses and flats were completed, but in 1958 that figure had dropped to 140,000. It is also, I think, beyond question that the plans of local authorities generally, irrespective of the political party in control of those local authorities, have been hindered by two principal factors, namely, the high interest rates that now have to be paid, and. secondly, the abolition of the standard subsidy.

On the subject of the high interest rates, I will not weary the House with figures, but I ask the House to remember that high interest rates affect not only people waiting to be rehoused by local authorities, but also a substantial number of people who are attempting to buy their own houses through building societies. It is rather surprising that the building societies, which are the largest moneylenders at the present time, reserve to themselves the right to alter the rate of interest at any time without any reason to suit their own convenience, and the borrower from the building society is placed in that position right from the outset. That is a practice which even the most disreputable hire purchase company would not follow, because not even the most disreputable hire purchase company would allocate to itself the right and have the nerve to claim the right to alter the rate of interest during the period of the agreement covering a particular purchase.

As regards the abolition of the standard subsidies, that, of course, has grievously affected the operations of local authorities, because in 1952 the standard subsidy was £26 14s. per annum per house and it is nothing now. The cost of a three-bedroom council house in 1954, which was £1,381 approximately, necessitated an expenditure over a 60-year period of £3,481 in repayment of capital and interest. In 1957, the same kind of house cost £1,489 to build but required a repayment of capital and interest of £6,144.

I come to the effect of the Rent Act. When that Act was introduced, we drew attention to the fact that it represented a broken pledge on the part of the Government, which said in 1955, or gave the impression, that there would not be any tampering with rent control. I shall not deal with that point now, because I want to be brief. I would, however, remind the House that when the Rent Act was introduced one of the inducements held out to hon. Members was that within a period of 12 months or so after the passing of the Act the demand for accommodation and the satisfaction of that demand would be fairly evenly balanced and that within 12 months of the passing of the Act people who wanted accommodation would be able to find it very much more easily and the position would be much more fluid.

I need not remind hon. Members that that expectation was not fulfilled. That Minister is still Minister of Housing and Local Government. He said in the House that in various parts of the country the need for new houses had been substantially met. When I asked him to indicate which parts of the country he meant, he refused to answer. As far as I can gather, and especially in London, the need for new houses has certainly not been met and is unlikely to be met for a very considerable time.

The only effect of the Rent Act has been to put more money into the pockets of the landlords and, moreover, to put more public money into the pockets of the landlords. As a result of the Rent Act, the National Assistance Board has had to increase the supplementary grant to recipients of National Assistance to cover the increase in rents. All that we have been able to discover from the Minister of Pensions and National Insurance is that the average grant is about 5s. to 6s. a week. The one thing which he refuses to say is what is the total amount involved. How much is the National Assistance Board paying every week to the poorest section of the population to enable them to pay their increased rents? I hazard a guess that it must be anything from £25,000 a week to £50,000 a week. I quote that figure to show that one of the effects of the Rent Act has been the diversion of public funds into the pockets of landlords of tenants who are in receipt of National Assistance.

It is clear that the Rent Act has started the biggest property boom that this country has even seen. The tenants of Dolphin Square are not the only people who do not know who their landlord is. The people of Brixton and other parts of London have suffered from that problem for many years, and I have brought to the attention of the House on more than one occasion the housing racket operated by mystery landlord Brady and then by limited companies registered in Dublin and operated by the same people, Mr. Arthur Bertram Waters, and others, who have been operating under the Brady nom-de-plume.

My complaint against the Government is that they could have declared all these properties forfeit to the Crown under the statute of mortmain and could have obtained possession of those properties without having to spend a single penny on their acquisition. Unfortunately, the Government did not exercise that legal right, as they could have exercised it had they wished. I suppose that was because the properties were dilapidated or because they were reluctant to avail themselves of the powers under the statute of mortmain to become the possessors of property owned by private landlords of the most dubious character.

As a matter of fact, the Irish companies have now reappeared in a new disguise, and I take this opportunity of warning people in London that if they receive demands for arrears of rent from Various Tenancies Limited or associated companies operating from Vauxhall Bridge Road or from the old Brady office in 10A, Electric Avenue, Brixton, they will know that, in respect of the properties concerned, the landlords now attempting to collect the arrears of rent are the same group of shady people who operated this racket years ago.

I turn to derequisitioning, which must be completed by 31st March next. The principal effect of that has been to compel local authorities, particularly in the London area, to buy all those properties still requisitioned but which have to be derequisitioned by 31st March, otherwise the people living in those requisitioned properties would have nowhere else to go. It would be interesting to find out how many millions of pounds—I am not exaggerating when I talk of millions of pounds—the present Minister of Housing and Local Government has sanctioned by way of loan authority to local authorities in London and elsewhere for the purpose of buying property which will have to be derequisitioned by next March.

All I know is that the Lambeth Borough Council, the authority with which I am most intimately acquainted, has had to borrow £1,400,000, with the approval of the Minister of Housing and Local Government, to buy those properties, some of them with less than three or four years to run on an expiring lease. The local authority has no option, because otherwise there would be nowhere for these tenants to go. For that reason the local authorities in London, and possibly elsewhere, have had to buy these properties, with the encouragement of and at the instigation of the Minister, because there is no other way of dealing with the problem.

It is ironical that the present Minister of Housing and Local Government had to apply pressure upon the Conservative-controlled Wandsworth Borough Council, who did not want to go in for this kind of property purchase, to persuade them to buy requisitioned property of this kind. It is also ironical to think that as a result of the way in which this derequisitioning process has had to be carried out, the present Minister of Housing and Local Government has made a substantial contribution towards the municipalisation of rented property, at least in the London area.

The housing problem has been aggravated in several London areas and some provincial towns by colonial immigration. In December, 1954, I asked the Government to convene a conference of the local authorities affected in this way, but that suggestion was turned down. In the early part of 1955 the Lambeth Borough Council sent a deputation to the Colonial Office on the subject. We pointed out that the question was one for solution at a national level and should not be left to the sorely strained and inadequate resources of the local authorities principally concerned. No result was achieved by those representations and the Lambeth Borough Council had to content itself with deploring the lack of concern shown by the Government.

I mention all these points merely to show that the private landlord system is unable to meet the needs of people who want to rent houses at a reasonable rent. The Government have hampered the efforts of local authorities to cope with this problem, and in my submission pressure will have to be maintained until the Government accept the principle that housing must be regarded as a social service and not merely as a golden opportunity for property speculators and profiteers.

4.28 p.m.

Mr. Harold Wilson (Huyton)

In accordance with the guidance which you were good enough to give us a few minutes ago, Mr. Speaker, I want to make it clear that although my own remarks this afternoon will deal mainly with economic issues, that is not intended to preclude any other hon. Member from raising any issue which you consider to be in order.

I note that the Chancellor of the Exchequer is not due to speak today. I hope that this does not mean that he is being relegated to a back seat, as he was in the election. At the same time, I should like to express a welcome to the new President of the Board of Trade. While I have deep and serious differences with him on policy grounds, I have always felt, if I may say this without embarrassing him, that for a long time he has been the most under-valued member of a Government in which the degree of over-valuation is considerable. I may claim that I have some knowledge of his Department, and over the years I have come to know the right hon. Gentleman, and on the doctrine of horses for courses, I welcome his promotion. This does not mean a safe conduct for him in debates on the policies which he advocates, but I know that I am speaking for all hon. Members when I wish him well.

I should like the right hon. Gentleman to give an assurance that his assumption of what he will find to be heavy Departmental responsibilites will not mean that he will be less assiduous in pursuing the European Free Trade concept which has been so much associated with him.

I turn now to some points raised in the Gracious Speech. First, we have the Government's pantechnicon statement that they will: strive to maintain full employment, together with steady prices, a favourable balance of payments and a continuing improvement in standards of living based on increasing production and a rising rate of investment. One could not have it fairer than that. After four years of holding down production, they have committed themselves for as long as it lasts to increasing production, and even to a rising rate of investment. I remember the Prime Minister at the Dispatch Box a few months after the last General Election wringing his hands, saying that it was all no good, production must be held down and investment, public and private, must be stopped. We remember how the Prime Minister almost began his career as Chancellor of the Exchequer by scrapping the investment allowances.

That was the theme as Chancellor succeeded Chancellor. Right up to a year ago it was still the policy that production and investment had to be held down. Hon. Members opposite trooped into the Division Lobby only just a year ago to vote against the scandalous notion that we should be encouraging investment by restoring investment allowances. Only just over a year ago the Chancellor was still saying that this country was not strong enough to give this necessary incentive to capital investment.

However, I compliment the Government on managing to stand before the electorate as reformed characters. They convinced enough of the voters that they had succeeded in combining stable prices with full employment and rising production. It was the theme song of the election addresses of hon. Gentlemen opposite, and particularly of the Prime Minister's speeches and broadcasts. I am sorry that the Prime Minister is not here. I should have liked to have reminded the House of that most moving broadcast—" Carry on with the good work, Derry. It is full employment, is it not, Iain?" and all the rest of it. It was all very touching and moving, though I must say that what moved me most was the interview which the Prime Minister gave to the Daily Mail just before polling day. The little bit I am about to quote was actually missed out of the London edition, and I have no doubt: that the man who wrote it got the sack. This is what he said: The man who had drunk so many pints of beer on his election tour now reflectively sipped a glass of sherry. How the poor man had suffered in the interests of democracy. Mr. Macmillan leaned back in his chair and glanced up to the oil painting of Walpole. It is not Gladstone any more, we notice. Then the Prime Minister is reported as saying: For the last two years we have hit the jackpot. We have pulled off a double, the double of full employment and steady prices. … It is damned good, you know. That was the Prime Minister.

Since every other hon. Member opposite spoke in the same terms, it is right that we should examine this claim, because it has a bearing on the Government's ability to carry out their economic aims in the future. After seven years of rising prices, after seven years with bigger increases in prices than in almost any other country in the world, prices have certainly been stable for the last year. However, as the House knows, the main factor making for stable prices was the fall in import prices. I do not think that any hon. Gentlemen will question that. The factor making for stable prices was the fall in import prices. The Chancellor of the Exchequer will agree with that.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)

indicated dissent.

Mr. Wilson

The Chancellor does not agree with that. I am surprised that he does not, because I am quoting his own words from the Budget speech. He said: The main factor making for stable prices in 1958 was the fall in import prices".—[OFFICIAL REPORT, 7th April, 1959; Vol. 603, c. 46.]

Mr. Amory

The right hon. Gentleman could quote very much more from the same speech.

Mr. Wilson

The right hon. Gentleman also said, referring to stable prices: The most important factor here undoubtedly was the benefit which we had received from lower import prices."—[OFFICIAL REPORT, 7th April, 1959; Vol. 603, c. 30] That was perfectly fair. I wonder how many hon. Gentlemen opposite were frank enough to admit that during the General Election campaign. I wonder if the Chancellor of the Exchequer admitted it, because he seems to have been converted from his Budget view some time during the election. So much for one of the Government's election claims.

What of their other claim about the improvement in our balance of payments last year, which alone enabled the Government a few months before the election to drop their dismal policies of 1957—the credit squeeze, the cuts in housing and the social services, the cuts in investment, the 7 per cent. Bank Rate and the policies which were, month by month, swelling unemployment figures, not to mention all that the Chancellor was able to do in his pre-election Budget?

Their claim has been that all this was made possible by their success in restoring the balance of payments last year. That is the claim on which the Tory Party fought the election. The Prime Minister hardly made a speech without saying that it was wise Tory stewardship that had brought about this restoration of the balance of payments position and that, as a result, they were able to drop all those policies which, if they had not dropped them, would have brought very serious unemployment.

That was their claim. Once again, let us examine the facts. There has been some doubt about what the balance of payments surplus was in 1958 because since the election the Chancellor has revised the figures and has reduced them. The right hon. Gentleman has revised them downwards to the tune of £100 million.

Mr. Amory

Not since the election, but during it.

Mr. Wilson

I have no doubt that the right hon. Gentleman was very busy during the election. I think that they were made available to the public since the election. Nevertheless, I shall not make too much of a point about that, because I am well aware that the President of the Board of Trade will be only too ready in his speech to tell us how valuable will be the surplus achieved in the first half of this year.

In view of the Chancellor's habit of revising these figures downwards by £100 million, I warn the House that too much attention should not be paid to the right hon. Gentleman. Whatever the figure might or might not be, I am sure that again I shall carry hon. Gentlemen opposite with me when I repeat that the whole of the improvement in the balance of payments position last year was due to the fall in import prices. I do not think that the Chancellor of the Exchequer will query that statement. The whole House, hon. Gentlemen opposite included, will agree that the improvement in our visible trade last year was £189 million, but the saving in imports due to the windfall reduction in import prices was £336 million. Therefore, in real terms there was not an improvement, but a worsening of £147 million compared with the previous year. No hon. Gentleman can deny those figures, and this time the Chancellor of the Exchequer has not been rash enough to try to do so.

If hon. Gentlemen opposite do not deny those figures, if they have to admit that the whole improvement in the balance of payments position was more than explained by the reduction in import prices, the whole of the Tory Party's election claim falls to the ground, because the whole improvement in the economic position over the last year is due to that windfall gain. Indeed, on their own showing their ability to solve the country's economic problem in the future depends on the assumption of a continuing improvement in the terms of trade. At the moment all the trends are in the opposite direction.

The Prime Minister said yesterday that in this debate we should face the problems of the future. I am sorry that he is not here now, because if he were I should ask him, if we could just persuade him to spare a moment from his breathless rush to the Summit, to consider where the present economic position is leading us. Production certainly is up markedly on last year, as the Prime Minister told us. About time, too.

Even so, in this boom which is going on now all over the world the United Kingdom is lagging behind. Taking this year against last year, Western Germany, the Netherlands, Norway and Italy can all point to increases in industrial production two to three times as much as in this country. The United States and Canada have done still better than most of Western Europe.

Yet with production even today only 10 per cent. above what it was in 1955, ominous signs are already developing. The Federation of British Industries tells us that half the firms in the country are already pressing against the ceiling of capacity. Exports in the first nine months of this year were less than 3 per cent. above the same period of last year. Imports were nearly 7 per cent. above the same period of last year. As my right hon. Friend the Leader of the Opposition pointed out yesterday, there is the increased demand for imported sheet steel which will now make itself effective when the American strike is over. Yet all this has been happening at a time when we have, so far, had no sign of any real revival in industrial investment. Indeed, investment in new plant and machinery has fallen. The only revival we have had in industrial investment has been in publicly-owned industry.

What is going on at the present time is a consumer-goods boom based largely on hire purchase—and I want to ask what happens if the hopes expressed in the Gracious Speech do materialise and if capital investment rises? Are we to have yet another Chancellor at that Box with all the dismal tale of restrictions and cuts that we had in the last capital investment boom?

We are all glad to see the Home Secretary in his place, and I would like to join in what my right hon. Friend said earlier when wishing him all happiness in the events of the last week or two. Indeed, since none of us has had any opportunity in advance, I am sure that, for once, the right hon. Gentleman will not object if the expression of good wishes from this side of the House is deemed to have effect retrospectively to 19th October.

Nevertheless, the Home Secretary, at least, will realise the dangers of an increase in capital investment being super-imposed on a very buoyant consumer-goods boom. That was the complaint of the 1956 Economic Survey. He will remember—I do not think that he will ever forget—the bitter comments of the present Prime Minister, on becoming Chancellor, on the Home Secretary's action in allowing this to happen. That being so, I wonder whether the Government, with this pious prayer for increased capital investment on their lips, are not, in their hearts, praying that the boom in capital investment will not develop.

If they are honest about it, they will recognise that this vote-winning consumer-goods boom, this vote-winning hire-purchase boom of theirs, has created a situation in which the country cannot face the increase in capital investment that is so urgently needed. And I wonder whether the Government now are themselves rather hoping against hope that the capital investment boom of which they speak will not materialise.

But if it does not materialise, how will the country stand the ruthless pace of world economic competition? I do not think that anyone will deny the electoral popularity of refrigerators and washing machines, but with Germany, Japan and the Soviet Union increasing their basic capital equipment in so purposeful and remorseless a fashion, can we survive if we fail to get a big increase in capital investment? I hope, therefore, that we shall hear from the Government how deeply they feel about the need to increase capital investment, and how they intend to achieve it. After all, when there was 15 per cent. to 20 per cent. unused capacity in British industry eighteen months ago, it was this Government—and this Chancellor—which rejected our demand for measures to stimulate capital investment, and which, finally panicked by rising unemployment, embarked on the hire-purchase boom.

I should like to ask the Government this as well. If they cannot rely on a series of windfall reductions in import prices—and if they could it would impoverish our customers and, in time, hit our exports—if they cannot rely on falling import prices to keep prices down, how do they intend to ensure that expansion does not, as in 1955, under the present Home Secretary, degenerate into inflation? Their answer, of course, will be that we must have wage restraint. That will be their answer if there is any danger of the present boom developing into inflation and, with great respect, I put it to them that they cannot run that one again.

It must be remembered that one of their election planks was the claim that over the last four years wages have risen more than prices. On 21st September last, the then Minister of Labour-now Colonial Secretary—proudly claimed that under the Tories wages had risen more than prices, and that was given as a reason for voting Conservative. But the credit for increased wages lay, not with the Government, but with the wicked trade union leaders. Increased wages were achieved, not because of the Government but in spite of them; because the whole strategy following the 1957 crisis was to create such a paralysis in the supply of money that wages could not be increased without creating unemployment. It is fair to say that there has not been a major speech by any Chancellor since the last election in which the need for wage restraint, the need to keep wages down, has not been stressed—yet, during the General Election, they said that they had put wages up.

There is another reason why they cannot fall back on the gambit of wage restraint. During the election they have all preached the doctrine of the free-for-all, the unqualified laws of supply and demand, every man for himself—not planning but the doctrine of greed, of naked economic power, and the "Damn you. Jack" philosophy.—[Interruption.]—Hon. Members opposite would not have been here in such numbers had they not been successful in preaching that philosophy—

Mr. E. H. C. Leather (Somerset, North)

A tribute to the British electors.

Mr. Wilson

No, it is a tribute to the propaganda of right hon. Gentlemen opposite.

We have seen this same theme exemplified by the wild scenes in the City since 8th October—the vast capital gains, and this discounting of expected future profit. Are the trade unions and their members alone to be denied a share in this scramble? After all, the Prime Minister tells us that we are now one nation. If we are—and I always take the Prime Minister's pronunciamentos in the same spirit of sincerity as that in which they are uttered—I think that the trade unions will get from that statement that if it is all right for the gentlemen in the City to be scrambling on this scale for their own benefit they are themselves under no compulsion to listen to what the Chancellor has to say about wage restraint.

We are all one nation, and in that spirit—as one nation—may I express a welcome to the Chancellor's removal of the £100 limit on travel allowances? I should like to thank him on behalf of the old-age pensioners in my constituency who, very conscious of the fact that they are members of one nation, are looking forward to spending even longer in the South of France this winter than they did last.

Looking at this Tory prosperity—which, I freely concede, won them the election—what amazes me is how brittle and vulnerable right hon. Gentlemen opposite conceive it to be. "You have never had it so good—but the whole edifice will fall like a house of cards if you so much as suggest that we are prosperous enough to pay the old-age pensioners a bare minimum for subsistence." Government supporters may have had some success in suggesting that the country could not afford better provision for pensions, education and housing, but how defeatist that suggestion was.

Nobody will quarrel with our estimate, made in this House, that if, over the next four years, this country can achieve a rate of expansion only equal to that achieved over the last four years by the rest of Western Europe, the national income in 1964 will be £3,500 million more than it is today. Nobody will deny that that would supply a social dividend capable of paying several times over for the cost of the programme we put forward. And that estimate, that this country should increase production only as much as the rest of Western Europe has done, is not asking much.

It is asking only that we should do as well as the Italians, as the Belgians, the French and the Germans. It is not asking much—but it is far more than the Government have achieved. It is not much to ask—but what rather upset me was the Chancellor's reaction. He did not query the figures I have just given—I do not think that he has ever done so—but he suggested during the election that this country could not achieve the steady increase in production required. I wonder if that is still his view. If it is, it is a striking repudiation of the Home Secretary's pledge to double the standard of living in twenty-five years, because that demands, year by year, just that increase in production that we postulated.

I do not propose to deal at length with the other electoral extravagances of right hon. Gentlemen opposite. The temptation is great, but I will not deal with such things as the Prime Minister's assertion that a determined drive against tax avoidance would yield only £250,000. After all, the then Chancellor admitted in the last Parliament that the dividend-stripping racket was costing £12 million a year. Nor do I want to go into any detailed argument about the various estimates of the yield from a capital gains tax which, in the United States, yields 2,000 million dollars a year.

Nor, again, will I deal in detail with the sanctimonious horror at the suggestion that we could not remove Purchase Tax from essentials because it would cost £90 million a year. Coming from the Government which, in three successive Budgets, reduced business taxation by £150 million a year, this seems extremely hypocritical. After all, the present Chancellor in the pre-election Budget this year reduced Purchase Tax by £81 million a year, and no one thought of calling that an election bribe. It is not a question of not being able to afford a reduction like this, but a question of priorities. Their priority has been a reduction in business taxation, as I said, of £150 million in the last three Budgets—reductions in the taxation on dividends. We would have given a higher priority during those years to such remissions of taxation on essentials, as we have made clear year after year. Indeed, the Home Secretary will probably remember losing several nights' sleep because of the arguments that we had on this issue in 1955.

Despite the temptation, I will turn from these election arguments, always recalling the Prime Minister's advice—and how much I regret his absence today— to turn to the future, and in particular, to that part of it mapped out in the Gracious Speech. We have been promised— a Bill to strengthen the present law relating to building societies. We welcome that. The Minister of State, Board of Trade, whose shuttle-like motions from the Board of Trade to the Treasury and back are beginning to leave us dizzy, will remember from his past experience as a Board of Trade Minister how we pressed for this legislation, and how unforthcoming he was then. The Government also promise an inquiry into the working of the Companies Act, and here again we welcome any sinner that repenteth.

Members of the previous Parliament will remember how, because of the ominous development of irresponsible take-over bids, we pressed for an inquiry into them last June, and I should like to remind the House of what I said: I also suggest that there is a strong case for a Departmental inquiry into the whole working of these take-over bids. That has been very much canvassed in more responsible quarters in the City, and I suggest that the President of the Board of Trade ought by this time to have appointed a full-dress inquiry into the whole question of the methods and the practice, and the effects, economic and social, of take-over bids."—[OFFICIAL REPORT, 29th June, 1959; Vol. 607, c. 42.] The Government refused, and the Chancellor went out of his way to defend take-over bids, and suggested that on balance they had been beneficial to this country. The then President of the Board of Trade, whose departure from that office we welcome with pleasure, only qualified by our concern for the future of education in this country, would not look at the suggestion.

It was, in fact, only the fear of electoral defeat that moved right hon.

Gentlemen. It was not because they had suddenly come to share our views about these things that they decided on an inquiry. It was because of the spectacular case which developed during the election, when the prospective bidder could not put up the cash. That whole case is now sub judice and I can say nothing as to the details. All I can say is that the Prime Minister's conversion on this question certainly does not impress me.

After all, the Prime Minister was the central figure in the most ignominous take-over bid of the lot—the Trinidad oil deal. He sees nothing wrong in working-class or middle-class tenants being called upon to pay extortionate rents following the Rent Act, and spiv after spiv lining his pockets with the proceeds of these squalid deals. This was Tory freedom, and it was this Government which created the conditions in which it could flourish, refusing even to tax the unearned gains produced by this system. The Prime Minister's attitude to this question is that he will move only when something goes wrong. It is like the man who is not against crime, but only against being found out.

I turn from that to the much publicised Bill which has been presented today to replace the Distribution of Industry Acts. We shall study the Bill, and we shall welcome anything which helps to deal with the problem of unemployment, locally or nationally. Those of my hon. Friends who represent areas of high unemployment will be concerned to measure, not its paper effectiveness, but the will of Ministers to work the powers they are being given. After all, this Government inherited from us the Distribution of Industry Act, as amended and worked by us. It was used by Labour Ministers vigorously, together with the powers of building licensing, and, as a result of that use, we can, I think, rightly claim to have brought new life and new hope to areas which had been written off as derelict by previous Tory Governments.

But for seven years the Distribution of Industry Act had remained a dead letter. Under a Labour Government, 30 per cent. of all the new factory work was provided in the Development Areas. Under the Conservative Government, the figure fell to less than half that rate.

Even up to February of this year, they were refusing a factory extension to a major exporting firm in a Development Area in my own constituency, because, of course, they had not been willing to restrict industrial development elsewhere. Forty per cent. of all the new jobs created by new factory building after 1951 were in the South-East. Ministers may have wished to deal with the local problem of unemployment, but they were unwilling to strike by restricting development in these other areas.

It is not only a question of incentives to firms to settle in the areas where they are needed. We shall support, as we have supported and have been very ready to support, such incentives, though we shall be on the watch for any new bribes to private enterprise that do not fulfil these social purposes. I have every reason for saying this, because the way in which the cotton industry scheme is being worked is a national scandal. So far as incentives are concerned, far more could be done by building advance factories. The Government had had time to do a lot on the lines of incentives, but incentives are only one blade of the scissors. The other blade is the effective control of new industrial development in prosperous and even over-congested areas, and this the Government have never been able to reconcile with Tory freedom, and the unrestricted pursuit of private profit.

Now I turn to a subject hardly mentioned in the Gracious Speech, as my right hon. Friend pointed out yesterday—the publicly-owned industries and indeed all the basic industries of this country by-passed by the present hire-purchase boom. In the debate on S. G. Brown, Limited, and the subsequent debate on 29th June last, some of us expressed concern about the Government's attitude, and asked whether they were embarking, as we suspected, on a systematic policy of making public enterprise unworkable, for the dual purpose of making more profits for their friends and creating propaganda unfavourable to the publicly-owned industries.

I am bound to say that those fears and suspicions have been increased by the sneers and the propagandist jibes at the hustings by hon. and right hon. Gentlemen opposite from the Prime Minister downwards. I think that some of these sneers about the working of the nationalised industries were quite unworthy of the Prime Minister and I would ask him what effect he thinks these speeches have on those who serve the nation in these industries at all levels—executives, managers and workers. For the purposes of party propaganda, the Prime Minister and some of his colleagues have rendered a real disservice to the nation.

They knew perfectly well, and every hon. Gentleman knows perfectly well, that if we had not nationalised coal, this country would have been on its knees years ago as an industrial power. They know that in 1945 there was not a miner's wife in any coalfield in this country who had not sworn that her son would not go down the pit if he had to suffer the conditions, the exploitation, the humiliation and the indignities which his father had had to suffer at the hands of the private owners of the mines. Every hon. Member opposite knows that to be the fact.

There is deep anxiety throughout the coalfields. Pits are closing, men are redundant, whole villages are becoming derelict, and miners know—there was a very big increase in Labour majorities in the mining areas—that what is happening is not because of nationalisation or the National Coal Board. It is in spite of those things. It is because of deliberate Government policy. Stagnation and depression in the heavy industries a year ago reduced the demand for coal, and the problem was intensified by the Government's fuel import policy. Fuel oil is coming in at fancy prices based on no economic system but simply at dumping below cost, if there is an ascertainable cost for fuel oil as a separate product.

The President of the Board of Trade knows, on his own calculations no doubt, that the substitution of oil for coal is making miners redundant at the rate of 25,000 a year and at the same time making the country more dependent on an unpredictable and vulnerable area for our oil fuel supplies. I hope that before long we shall have a clear statement from the Government on their fuel policy. Failing this, many miners will conclude that the Government are only too glad to see a weakening of the industrial power of the miners. Many of them will conclude that the mounting coal stocks in the coalfields are simply being regarded as a heap of ammunition in the class war which the Prime Minister tells us now belongs to the past.

Mr. Paul Williams (Sunderland, South)

I am trying to follow the right hon. Gentleman's point about a national fuel policy, which is a serious matter. I understand that he and the Labour Party would like to restrict fuel oil imports. If this is so, is he not telling the country that what he wants to do is to preserve the lot of the miner at the expense of the shipyard worker?

Mr. Wilson

I know that the hon. Gentleman is rather hard-up on the question of shipbuilding policy. I propose to come to shipbuilding in a moment, but I will answer the hon. Gentleman. The Government already have powers to deal with dumped products in this country and products which are being sold at ludicrous prices. I have not heard even the hon. Gentleman oppose the use of those powers in the interests of shipyard workers. What is happening is that fuel oil is coming into the country at a purely notional price which bears no relation to economic realities. The Government already have powers to control these imports, and should deal with them.

Mr. P. Williams

Is the right hon. Gentleman saying that prices of fuel oil should go up?

Mr. Wilson

If hon. Gentlemen opposite want to pursue this matter they will find it very fully dealt with by my right hon. Friend the Member for Blyth (Mr. Robens) when the question of fuel policy was last debated in the House. I do not remember either of the two hon. Gentlemen opposite interrupting on that occasion, if they were, in fact, present.

Turning from coal to the railways, hon. Members opposite know perfectly well—in this place; not perhaps when they are playing to the gallery in their own constituencies—that the railways have done a magnificent job in increased efficiency, as every objective statistical test will show. This must be very depressing to the right hon. Member for Flint, West (Mr. Birch), who is usually depressed on grouse moors. It must be depressing for him to be reminded of these facts. The railways have done this job despite deliberate Government policies designed to wreck the profitability of the publicly-owned transport system, by the sale to private operators of more profitable road haulage assets, by the crippling financial burden imposed on the British Transport Commission, by the unrestricted expansion of "C" licences and by the Government's refusal to allow the Commission to develop economic and remunerative services, which it is at present not allowed to develop.

The Government should before long tell us their policy in the light of the latest Report of the Commission. As a priority, I suggest that the Government could do two things. First, they should announce a radical reconstruction of the Commission's financial structure, which should be related to present-day economic realities and not to the compensation which was paid for the privately-owned assets which, without nationalisation, would have been bankrupt years ago. Secondly, they should give the green light to the development by the railways of the valuable central sites in London and provincial towns and cities instead of insisting that these should be handed over to private developers and property spivs. So much for the railways.

On civil aviation all I can say is that we shall watch the Government's detailed proposals with concern, and, frankly, with suspicion.

The Prime Minister yesterday took credit for the fact that nothing was said in the Gracious Speech about steel. We have had the revelation about the steel shortage and short-time at Vauxhalls since the General Election. We have also the fantastic position that, while the Government, backed by Mr. Hurry and all the vested interests, managed to secure the rejection by the electorate of the proposal that the British people should own the steel industry, we now have the position since the General Election of American capital coming in to buy shares in this industry. I wonder whether this is really what the Government want. They think it wrong for the British people to own the industry, but apparently they have no objection at all to American investors buying it.

Last year, the Minister of State to the Board of Trade said that he welcomed this American investment. I wonder how much longer he will go on welcoming it. The Foreign Secretary went on television and said that we were the anti-British party. Here we have a Minister of State fighting hard during the election to prevent the British people from owning the steel industry and saying how much he welcomes the Americans.

There is another industry—reference was made to it by the intervention of the hon. Member for Sunderland, South (Mr. P. Williams)—that really must be of very deep concern in this House. It is the shipbuilding industry. Only the most perfunctory reference was made to it by the Prime Minister yesterday. He is transferring it from the Admiralty to the Ministry of Transport, and much good that will do. All of us who have any knowledge of shipbuilding—like the hon. Member for Sunderland, South, I have a considerable number of shipbuilding workers in my constituency—and know the problems, realise that the industry is moving into a deeper and deeper depression. The House will have to debate the industry before very long, and I hope that the Government will give us some hope that something will be done. [Interruption.] There is no sign of American investment in the shipbuilding industry.

Once again accepting the invitation of the Prime Minister, I should like to look ahead and, before I sit down, to indicate what we on this side of the House feel are the priorities which the Government should give to the problems of the next few years. Obviously the Prime Minister felt when he spoke in this way yesterday that we can look forward to a prolonged period of settled peace. Clearly, this assumption is the only possible explanation for the appointment he made to the Ministry of Defence. On that assumption, let us look at the challenge from abroad.

It is a few months now since the Prime Minister, in that intrepid voyage of exploration, discovered Russia. In these few months we have had many reports from that previously "unvisited" country. Despite all that we have been told, the natives have outstripped us in many of the industrial and technological fields which have been thought to constitute a Western monopoly. This seems to have come as a great surprise to the Prime Minister. I remember how he, as Foreign Secretary, as Chancellor and as Prime Minister, resisted our proposals for relaxing export controls, to promote the sale, for example, to the Soviet Union of trawlers. He was very much against that on the ground that trawlers capable of more than 8 knots would strengthen Russia's economic and military potential. Russia's probes into space, I can now inform him, have involved speeds far in excess of 8 knots.

Now that even-the right hon. Gentleman is waking up to this kind of problem, I would ask how we are to counter the Soviet challenge industrially, technologically and educationally. Are we really to counter the Soviet industrial developments with an economic system the higher manifestations of which are the take-over bid and a Stock Exchange behaving like a casino run mad? Are we to counter their educational achievements with a system which still creates this artificial educational apartheid at the age of 11? Are we to counter their technological challenge with the frivolities of our so-called Western civilisation? The Soviets have photographed the reverse side of the moon. The summit of Western competitive achievement is an aspiration to photograph the reverse side of Miss Jayne Mansfield.

The Prime Minister has pledged himself to make Great Britain great. Let the Government tell us—they have failed to tell us in the Gracious Speech—how, in this fiercely competitive age, in this remorseless struggle, not only for markets but for men's minds, they hope to achieve success. They talk of science and have appointed the noble Lord, Lord Hailsham, to the task. His first job—I am sure that we all agree on this—should be to see that industry spends more on research, and spends it with more sense of purpose.

We can argue about public and private enterprise, but let us recognise that the task of harnessing science to the needs of British industry is, above all, a problem of partnership between the public and private sectors. I think that I can claim that we showed the way with the National Research Development Corporation, which was responsible, with and through public research facilities and private industry, for such developments as the Manchester University electronic brain and the Hovercraft. That was an example of partnership between the public sector and private industry.

Why should not this principle be extended? We are familiar with development contracts offered by Government Departments for the creation of new aircraft or missiles capable of this or that specification or performance. Why not extend this principle to civil industry? For example, in textiles, why should not an appropriate Government body be entrusted with the duty of placing development contracts for a new shuttleless loom? One could think of a hundred other possible developments in other sectors of industry. Why should the defence industries have a monopoly of this extremely valuable technique?

The Government have a real duty to release the latent energies of scientific inventiveness at present too much confined by the dictates of an unbalanced defence programme on the one hand and the limitation on private profit-seeking on the other. If we have this duty to develop industry, science and technology, we have an equal responsibility to give a lead to the world in social policy. Despite the result of the election, I cannot believe that "Damn you, Jack" has become our national motto, nor that as a people we have lost that real and burning social conscience which for so long has enriched our public life. We are capable, with the progress of science, of unimagined prosperity for ourselves and our neighbours in less developed countries, of a great expansion of this prosperity.

We may argue, and shall argue, how that prosperity can best be attained, but it must be a prosperity based, I suggest, not on selfish individualism but on social concern and social responsibility—phrases, I know, which have no meaning at all to the right hon. Gentleman. Whether we debate in this new Parliament social insurance, education, health or economic and social questions, this is the priority which we on this side will put forward. There will be budgets and Finance Bills in which I hope the increment of a growing national dividend will be distributed by the Chancellor with the consent of this House.

We have had, and no doubt will have, sharp differences of approach about how these distributions should be made. Conservatives tend to say that all income belongs to the recipient and that the first duty of the Chancellor is to remit taxation for the benefit of those from whom most is withheld. Our approach is different. We maintain that all wealth is derived from the community and that the Budget is an instrument, not for perpetuating the unequal distribution of wealth and income, but for correcting it. The test should be, not who pays most tax, but where can the Chancellor do most good and add most to total happiness and well-being.

We shall approach the problems of this new Parliament in that spirit, conscious of the fact that, though we on this side are in a minority, we represent upwards of 12 million voters and, we believe, countless millions abroad. We believe that those voters and those millions will look to us to press month by month and year by year in this Parliament for Measures designed, not only to increase national and international prosperity, but to ensure that that prosperity is enjoyed in fuller measure by those, both at home and abroad, to whom it has so far been only a name.

5.15 p.m.

The President of the Board of Trade (Mr. Reginald Maudling)

I must start by thanking the right hon. Member for Huyton (Mr. H. Wilson) for the kind things which he said about me and assure him that I will certainly not lose any interest in the problems of European trade, about which I hope to say one or two things this afternoon. Having thanked him for that, I must say that I thought that he was pretty rough with some of my right hon. and hon. Friends. I am sure, therefore, that he will forgive me if I do not reply entirely in kind to his kind remarks about myself.

The economic questions to which the right hon. Gentleman paid attention were the main issues of the election. The country's verdict upon them was made quite clear. The right hon. Gentleman, indeed, has been trying to prove that the country was wrong. We could hardly expect anything else from him in his new and unfamiliar rôle as the architect of defeat. He was not alone in this. There were others. I would have liked to refer to the former Member for Reading, but I suppose that the rule must be that, though in this House we hit people who are down, we do not hit people who are actually out.

I understood that the right hon. Gentleman was probably the genius behind the Income Tax undertaking given in the course of the Election by the party opposite, which probably put a bigger nail in its electoral coffin than almost any other move. I find the right hon. Gentleman's arguments a little conflicting, because he seems to be saying that the election was won by the Government because the hire-purchase boom and the tax reductions in the Budget created a sense of well being and euphoria throughout the country and at the same time to be painting a picture of a country where industry is stagnant and large sections of the population are living in penury.

The criticism of the right hon. Gentleman about the hire-purchase boom and the tax reductions in the past, so far as I recall, was that we were too late in permitting hire purchase to expand and that we did not extend to even more potential voters the benefits available at the time of this year's Budget.

Mr. H. Wilson

The right hon. Gentleman's memory is at fault, which is most unusual. What we pressed for throughout 1957 and 1958 was a restoration of the aids to investment. We never pressed for the removal of the restrictions on hire purchase.

Mr. Maudling

I always had the impression that the restrictions on hire purchase were regarded by the party opposite, and by many people, as something to be abolished as soon as possible. Hire purchase is really a poor man's overdraft, something which people who have not a bank balance use as a way of borrowing money. I did not get the impression that the party opposite resisted the removal of the restrictions on hire purchase.

With regard to the questions of stagnation and the present state of the economy, let us look at some of the facts. As the right hon. Gentleman knows, the current level of production in August was up 8 per cent. on a year ago and 6 per cent. on February of this year. The preliminary figures for September will be available tomorrow, and I think that we can reasonably expect them to show a further increase.

Where the right hon. Gentleman is quite wrong is in talking of this as if it were a consumer goods boom. That was the phrase which he used; I took it down. If we look at the facts, where has the expansion been? Compared with last year, cotton textiles are up 4 per cent., wool textiles 14 per cent., made-up clothing 14 per cent., motor cars 19 per cent. and commercial vehicles 44 per cent. In steel and chemicals, both basic industries, output is more than 15 per cent. up in both cases. It is not an accurate picture—[Interruption.] What I am saying is that the expansion in production is not solely in the consumer goods industries. The figures I have given have made that absolutely clear.

The right hon. Gentleman's second point concerned the level of investment. In the second quarter this year, the level of investment was 4 per cent. up on last year, up on what was already a very high level and certainly a level very much in advance, in real terms, of anything which had been achieved by the Labour Government in their years of office.

The figures of consumption, as we all know, show a steady and substantial expansion; an expansion which means an increase in the living standards of the people. Indeed, the main complaint of the right hon. Gentleman this afternoon was that consumption was expanding too fast. If he thinks that, the right hon. Gentleman should explain how he would put a brake on expanding consumption and what he thinks we should do about it. He would find it embarrassing to have to do so in public.

Finally, when we look at the picture of exports, we see that in the last six months exports have been 6 per cent. up on a year ago. We have had a surplus on visible trade and, for the first time since the Civil War, we have had a total surplus in our visible trade with the United States, which is one of the most difficult and most important markets of the world. Surely, all these figures are clear proof that so far from being stagnant, the country's economy is showing a new and unprecedented strength and capacity to expand.

The social services were the other complaint of the right hon. Gentleman during the election and, indeed, during his speech today. According to the right hon. Gentleman the Government had said that it was impossible to provide a bare minimum of subsistence for the old-age pensioner. Once again, I remind the right hon. Gentleman, as we have done in the past, that the real value of the old-age pension today is worth more than 10s. a week more in genuine purchasing power than it ever was when he and his colleagues held office. [HON. MEMBERS: "Nonsense."] That is statisically provable and cannot be denied. Looking at the figures, one sees that the increase in the purchasing power of the old-age pensioners as a group has kept almost exactly in line with the expansion in the purchasing power of the community as a whole. We have kept faith entirely with the old-age pensioners—[HON. MEMBERS: "No."]—and we intend to continue to do so.

Another reason of the right hon. Gentleman in trying to explain why the country did not accept his argument was the classic argument of the boxing manager whose champion has been defeated—" We was robbed." That is roughly what he was saying today. He was saying, "It may be that there was a case against us, but we had awfully bad luck. The Conservatives had all the luck." When one is in a Government, there is something in being lucky rather than unlucky. I am sure that the Opposition would not put themselves forward as being the unlucky party. That would not help them much in their political activities.

When we examine the argument about the "windfall," which we have heard often in the past, it is not a convincing argument. Like many of the right hon. Gentleman's arguments, it is a partial argument. In the first place, he should not assume, as he always does, that the policies of this country, which is one of the main importing nations of the world, have no effect on the level of import prices. That is quite untrue and unrealistic.

Secondly, the right hon. Gentleman must look at the other side of the coin. Circumstances in which primary commodity prices are low are, as the right hon. Gentleman said in the later part of his speech, circumstances in which it is more and more difficult for us to sell our exports. Thus, while we certainly gain considerable advantage from lower import prices, those same circumstances make it much more difficult to sell our exports and, therefore, much harder to maintain full employment. The right hon. Gentleman should not give one side of the picture without giving the other.

We have heard much on previous occasions, as again today, about what the right hon. Gentleman calls the stagnation of our production compared with that of other European countries. I notice that when the right hon. Gentleman quotes other European countries where production is expanding faster than here he seldom makes the point that most of those countries are strongly free-enterprise countries. There is no argument for Socialism in the expansion of German industry, and from what [know of Dr. Erhard I do not think he would vote for a Socialist economy.

Looking at the comparative production figures, it is interesting to look back to the last three years of the Labour Government, when the rate of expansion in Japan was nearly three times the rate here and the rate of expansion in Germany was about five times the rate of expansion here. That shows the folly of trying to compare statistics of the expansion of production immediately after the war with what is achievable now, which is what the right hon. Gentleman is always trying to do.

The main sentence in the Gracious Speech on the economic situation is that which the right hon. Gentleman himself read: My Ministers will strive to maintain full employment, together with steady prices, a favourable balance of payments and a continuing improvement in standards of living based on increasing production and a rising rate of investment.

The first question to which we must address ourselves is whether the rising demand in the country is likely to sustain full and increasing employment and increasing production. I suggest to the House that the prospects in this regard are definitely encouraging. Consumer demand is already high, as the right hon. Gentleman himself said this afternoon, and with expanding output which we are now seeing consumer demand should continue to grow, although possibly less rapidly than it has done in the last year.

Public investment is still moving upwards quite substantially, and we can, I think, look forward to an expansion in private investment. I know that the most recently published figures show that, on the whole, there is not likely to be any great increase in private manufacturing investment next year, but I think I am right in saying that those statistics were based on information obtained before the result of the election was known. I have a strong feeling that quite a number of industrialists may have been holding back on their expansion plans in the misguided belief that there was some chance of the Labour Party being returned to power at the election. Certainly, the right hon. Gentleman himself is of that view, because he was speaking today about the danger of having an investment boom now that the election is over. The right hon. Gentleman, therefore, was making my point for me.

Mr. H. Wilson

In view of all these speculations, will the right hon. Gentleman explain his pride in the fact that production rose by 8 per cent. in August, before the result of the election was announced?

Mr. Maudling

It is rising more even now. That is exactly the point. The reason why the rising production before the election was not necessarily reflected in rising investment was that people were not certain that there would be a Conservative Government again and they did not know what would happen if there was not.

I should like to ask the right hon. Gentleman a question concerning investment. He said this afternoon that he saw ominous signs ahead, and he queried whether there was room in the economy for a higher rate of investment because, he implied, consumption was so high already. If the right hon. Gentleman is also saying that we should speed up even faster the rate of investment, which he certainly says, the corollary must be that he wants to see consumption restrained to make room for the additional investment. How would he restrain consumption? What would he stop people from buying? Would he put back taxes or controls? How would he do it? He cannot get out of this dilemma.

The fact is that, in the opinion of the Government, there is still room for a growth of demand and a growth of employment within the capacity available to industry. We have now the industrial equipment to sustain a further expansion. We have access to raw materials throughout the world on the best possible terms and there are no artificial controls on production. It is possible to have a continued and sustained expansion, and it is not only possible but essential to combine this with the maintenance of stable prices, to which the Gracious Speech refers. If we cannot do that, we shall undermine the reality of our expansion and undermine our position in the export markets, which becomes more and more important as rising prosperity brings in its train a rising demand for imports of food and raw materials.

How will we go about ensuring that prices remain stable in the face of increasing expansion of production? The right hon. Gentleman himself raised this point in his speech. One of the essentials, now that we have this existing stability, is to ensure that in the expansion which we hope to see in personal incomes they do not outstrip the increase in the general rate of productivity. It is a simple mathematical proposition that if incomes generally expand faster than production generally, prices must inevitably rise. In fact, I think we ought to go further and say that we should not expect all the benefits of increased productivity to be taken up in higher incomes. If that were so, it would not leave room for any reduction in prices.

We must surely now start aiming at using some of our productivity for a reduction in prices. If it is true, as the Leader of the Opposition suggested yesterday, that we shall have to face in the coming years increases in import prices then we shall only meet them and maintain our stable price system internally if we can apply to counter-balancing them some of the fruits of increased productivity. Unless we look at the problem on those lines it will not be possible to reconcile expansion, full employment a strong balance of payments and steady prices in this country.

The right hon. Gentleman I thought, was verging this afternoon almost on his old subject of controls, implying that something like controls ought to be used to keep prices from rising in a period of expansion. I would like to address to him again this afternoon the question I addressed before to him and a question I had the temerity to address to him during the election and to which an answer has never been given.

The party opposite has said time and time again that it would expand the economy faster than we—it would keep rising prices in check by the use of certain key controls which the Government will not use. We have asked hon. Members opposite what those controls are and how they will stop prices from rising. We have never had an answer for the simple reason that there is no answer. What controls will keep prices from rising—price controls, import controls, process controls, foreign exchange controls?

If the party opposite were to pump more money into the system it would start the danger of another inflation. Clearly hon. Members opposite recognise that their policies involve the danger of new inflation because they will have to use these controls to stop it, yet they say they will not use generalised price control.

If I may quote from the authorised text, there are only two ways of preventing the cost of living rising. One is to impose a credit squeeze and restrictions. That, we are told, is the Tory way. The alternative is to encourage expansion while using controls to check it. What are these controls? It is not generalised price control, because in another passage we see that generalised price control is not what the party opposite is contemplating. Can it be import control? Of course it cannot. That can only put prices up, not down. Can it be foreign exchange control? One cannot start putting new controls on the import of goods. They certainly would not put prices down. They would put them up. Building control and foreign exchange control were the only ones mentioned.

If we take maintenance, which I think is the biggest single item, and factory building, which the party opposite wishes to expand, and house building and public authority building, which it also wishes to expand, we have 90 per cent. of the building in the country already. Can hon. Members opposite stop prices rising by imposing restrictions on 10 per cent. of the civil engineering of the country? I think that is the phoniest argument in all their bogus pronouncements.

If the right hon. Gentleman would explain what these controls are and how they would work, then we could judge better what the real truth is, but unless we can get from hon. Members opposite some statement of what they believe we must continue to believe that they do not know what they are talking about and that their policy could not have any effect.

Before I sit down I want to turn to the question of external economic policy because it seems to me that on the first occasion that I have the chance to speak as President of the Board of Trade I ought to say something about the question of external economic policy, particularly exports. In my judgment this is the most important problem facing the Government.

Mr. Sydney Silverman (Nelson and Colne)

Before the right hon. Gentleman comes to that very important part of his speech, is he not going to say a single word in reply to what my right hon. Friend had to say about the state of affairs now in Lancashire, and about the working of the Cotton Industry Act as it has been shown to work so far? He really must appreciate that this is a very tragic situation for a large part of Lancashire. One would like to hear what the Government, having been returned with this very large majority, now think of the situation.

Mr. Maudling

There are two points here, I think. On the question of local employment policy, with a Bill having been presented I think it would be out of order to refer to the provisions in it. As to the situation of the cotton industry, all the right hon. Gentleman said of the previous legislation was that it was something like a national scandal. He did not produce any evidence, details, facts or arguments. He said that it was a national scandal. I say that that is nonsense, and that is all I have to say in reply to that point.

Mr. Silverman

May I offer the right hon. Gentleman one piece of evidence? Maybe it is a particularly local piece of evidence, but it is regarded as scandalous there. In the constituency which I represent, out of every three people who work at all, two work in cotton, mainly in the mills. The effect of the Cotton Industry Act, so far as notification has been given—and the latest statutory dates, as the right hon. Gentleman knows, are now past—shows that almost 50 per cent. of the weaving machinery in Nelson and Colne is to be destroyed. This will result, indeed must result, in unemployment on a very large scale in a locality which depends almost exclusively for its living on that industry. If the right hon. Gentleman does not regard that as scandalous, I think we shall have to write him a new dictionary.

Mr. Maudling

I should be only too pleased to look into the question of the hon. Gentleman's constituency. What I am saying is that the cotton industry plan is working out as intended and will result in a streamlined and more efficient industry which is the only hope for the future of that industry.

Mr. H. Wilson

I would only suggest to the right hon. Gentleman that he takes the earliest opportunity of going to Lancashire to see for himself and not to believe all the claptrap that he hears. What we are saying is being borne out by statements in The Times and the Guardian and by everyone in Lancashire. What we are saying is that the scheme has become a glorified public assistance, where the assistance is going to the people with the least need and where a number of mills are closing down which do not need to close down, even on the Government's own assessment. We are now getting to a fantastic situation both with regard to the disposal of machinery and the acceptance of new orders.

Mr. Maudling

I have looked into the reports in the newspapers, particularly that in The Times, and the information I have received certainly shows them to be, if not inaccurate, at least grossly exaggerated. The right hon. Gentleman says that I should not listen to claptrap. I do not. But when the right hon. Gentleman gets up and says that this is a national scandal and nothing more I do not think that a Minister is called upon to give a reasoned and detailed answer to an unreasoned and undetailed argument.

I will now turn to external economic problems. Certainly a further increase in our export trade is one of our major objectives for many reasons. Increasing prosperity is going to bring with it an increasing imports bill. The level of our reserves is twice what it was two years ago and can be still further increased. We have to increase our balance of payments position in order to play our full part in helping with the development of the under-developed countries. The question of economic assistance to those countries was mentioned in the gracious Speech, and I think the Leader of the Opposition picked it up yesterday.

We cannot help these under-developed countries adequately unless we have a surplus, although we are doing an immense amount already. I think we should recognise that the help that we are giving and are going to give to them, particularly those in the sterling area—the Commonwealth—bears comparison with any other country in the world. We should not write down what this country is already doing, but we can only help them out of a surplus. As these countries progress and become more industrialised they will want to find outlets for their industrial products, and that will mean competition with us in our home market and in our traditional overseas markets. If they are to expand they can only do it in that way. That is new competition which we shall have to face, and we shall be happy to face it because it is based on evidence of increasing prosperity in those countries throughout the world, but it is a great challenge to British industry. If we are to meet it, we shall have all the time to find new industries, new products in existing industries, and we shall have to search all the time for more efficient, more highly developed and more sophisticated methods of production and goods for sale.

I am sure that the expansion of export trade is the first objective of an economics Minister. I think we must look forward to this, that as other countries are expanding their levels of income and living standards we must expect to face more and more of their industrial products coming on to the markets of the world. The only way this can be solved is by maintaining the greatest possible volume of world trade. The Government have been pursuing for some years past a policy devoted to removing all possible barriers to world trade and payments. We believe that this country is in a peculiar position in such matters, in that we need the things we import more urgently than our customers need many of the things we export. We must have food and raw materials but other people can put off the purchase of cars, sewing machines and textiles which are not necessities. Therefore, any contraction of the total volume of world trade must fall more heavily on our shoulders than on the shoulders of other trading nations.

I believe our policy must be to remove all the obstacles we can to world trade. In particular, this means continuing to lend our support to international institutions like the G.A.T.T. and the International Monetary Fund. I am sure there are many imperfections in both institutions, but I am equally sure that unless we can find something better to put in their place the only policy of wisdom for this country is to accept the rules even though they are sometimes inconvenient to ourselves. Under the rules of these institutions the maintenance of quantitative restrictions and the maintenance of discrimination is permitted only where there are balance of payments reasons. That means that when this country has come to a position where its balance of payments is strong and its currency is convertible, the progressive removal of restriction of imports and discrimination—apart from hard core items, on which, no doubt, a waiver will be necessary—must be the policy to which we are bound by solemn international obligations.

In the short run this may mean difficulties in certain cases. Clearly, the fortuitous freedom from competition which some industries have been enjoying by reason of balance of payments restrictions will be swept aside. At the same time a greater volume of competition will create great advantages for us in this country, for domestic consumers and industrial consumers. I think that the greater the competition within our own markets, so long as it is fair competition, the better for all concerned.

Then there are regional organisations in world trade which we think would not in any way conflict with the G.A.T.T. and the International Monetary Fund but which underpin and support those world-wide organisations. First there is the Commonwealth and, secondly, the association inside O.E.E.C.

The Commonwealth remains, of course, first priority in all our trade policies. Quite apart from political and sentimental ties the Commonwealth in terms of hard trade takes between 40 per cent. and 50 per cent. of our trade. Within the Commonwealth there are great opportunities now for further expansion in trade with the Commonwealth territories as the territories themselves are recovering from the effects of the fall in commodity prices which for so long undermined their reserves, so that many of them had to maintain restrictions on import programmes.

It is in Europe that, I think, some of the most urgent and some of the most prickly problems arise. I was glad that the right hon. Gentleman suggested at the beginning of his remarks that it should be my responsibility to continue to pay as much attention as possible to those problems because I think the country as a whole is beginning to be aware, as the House has been aware for so long, of the very great importance and urgency of finding some solution to the problems of European trade.

As the House is aware, we welcome the establishment of the European Economic Community under the Treaty of Rome. We welcome it because what strengthens our friends is clearly advantageous and desirable to ourselves. We have felt always, however, the dangers of a division of Europe, and the dangers of the development within Europe of an inward-looking or restrictive-minded bloc of countries. That was the reason that underlay the attempt to establish the Free Trade Area and the reason why the failure of that attempt has brought to us so great and deep disappointment. That having failed, we set about with our friends in the Outer Seven, as they are called, seeing whether we could establish a Free Trade Area.

We had three motives. First, to prevent a spreading of bilateral agreements throughout Western Europe. I am sure that if nothing had been done to organise the countries outside the Six there would have been a danger of bilateralism spreading pretty widely across Europe and the principles of O.E.E.C. being undermined. Secondly, any expansion of trade and removal of trade barriers between friendly trading partners is a good thing on balance. The association, if it is established, will mean considerable difficulties for a number of British industries.

We shall be very concerned to assure that competition, if it is met, will be fair competition, but if it is fair competition we must recognise that it will have to be met, because if we expect ourselves to sell more to our friends, they must at the same time expect to sell more to us; but on balance I think it is undoubtedly true that British industry as a whole will have a good deal to gain, if we can establish this association.

Thirdly, it is important also as a basis for further negotiation with the Six countries. I think our supreme objective in what we are doing at the present moment is to find some satisfactory basis for negotiating a settlement embracing not only the Six countries of the Treaty of Rome but also other members of the O.E.E.C, Ireland, Greece, Iceland, Turkey, Spain. It has been said on the Continent that the association we are trying to set up in Stockholm will not help in that way because the principles underlying it are the principles underlying the original Free Trade Area. They can hardly be anything else because the Seven countries think those the right principles on which to base trade. It is important that we should show at Stockholm that those principles can be made the basis for effective international agreement.

I think that the solid gain if the association is established is that it will also help us solve the problem of institutions. The concern which has been felt among the Six at the prospect of a Free Trade Area arises from the fact that the institution of the Six, the Commission, or independent organisations may lose their identity and possibly be engulfed in a wider Free Trade Area. With any association of the two groups, the one of Six, the one of Seven, it is more likely that we shall be able to overcome one of the basic problems of European organisation.

Finally I would say that these problems of European economic policy must be solved in the right political atmosphere and with the general good will of all the countries concerned I have no doubt they can and will be solved. I have spent part of my time—

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

One can see that European unity will develop rather slowly and in circumstances not wholly under our control, but the Government will understand that certain industries will eventually be injured in our country, which are under our control. Are they contemplating any steps whereby new industries will go into areas where old industries will be destroyed?

Mr. Maudling

It has always been understood that the policy of assisting special areas where there are special employment problems must not be undermined by any agreements reached among ourselves. I think that that is the point. If increased competition damages one industry and creates an acute problem, there is a Bill which we shall be discussing in the near future which will be available to deal with that. It is important to realise that, if competition is fair competition, and if we expect, in the exercise of fair competition, to expand our sales in other markets, we must also expect fair competition to mean increasing competition from sales of those countries' goods in our markets.

Mr. Woodburn

Real damage could take place and very real injury to our industry, such as there is in Scotland at the moment. Do the Government propose to take some steps to remedy it? What I am asking now is whether the right hon. Gentleman himself foresees action whereby new industries go into areas in which damage will be done before it is done?

Mr. Maudling

I believe that the degree of damage likely to be suffered can be very much exaggerated. I would myself rather talk in terms of increased competition rather than necessary damage, because I think that, at the same time as competition is becoming fiercer, total demand will rise and there should be more opportunities for all concerned to sell their goods. I am well aware that this question causes considerable concern, particularly in many parts of Scotland. No doubt we shall hear more about it in the course of the debate. There is an Amendment on the Order Paper about it already.

I have tried to deal partly with what the right hon. Gentleman said and partly with the responsibilities of the Board of Trade, particularly in regard to overseas economic policy. To revert to what I said in the beginning, it is quite clear that the economic policy upon which we stand was the one which the country chose.

Mr. William Ross (Kilmarnock)

Not in Scotland.

Mr. Maudling

Yes, in Scotland. We still have a majority of votes in Scotland. I looked up the figures this morning. I thought that that would be said. The hon. Gentleman will find that what I have said is quite accurate. The fact is that our policy is one which has been working, is working, and will continue to work. The policy of the Opposition, on the face of it, is one which is completely incapable of bringing about any of the purposes to which they subscribe.

5.51 p.m.

Mr. Laurence Pavitt (Willesden. West)

It is with some trepidation that I rise to address the House so soon after my entrance into it, but I am fortified by the long tradition of kindness and understanding accorded to new Members on these occasions.

I read with extreme interest the Gracious Speech, particularly that part which stated that My Government will give close attention to the social welfare of My people". I had hoped to read, following that sentiment, some remarks concerning the future impending changes which will inevitably soon arise within the National Health Service. I wish to address myself to that particular subject now.

I believe that, after ten years of working, the time has come for some radical changes and improvements in the Health Service. It would have been opportune if the Gracious Speech had indicated certain of the lines upon which these improvements and changes could be made. Naturally, I am particularly concerned with my constituency of Willesden, West, both from the point of view of the health of my constituents and from the point of view of the very hard-working team of doctors who live in the area. But health, like so many other things nowadays, is indivisible, and I know that, in order to ensure the health of my constituents, we must think in both national and international terms. In this respect, it is the Government who have to take action to ensure the well-being of the community.

With the technological and scientific advances which have taken place, it is possible today to make a further advance and push back still further the frontiers of pain and suffering. We can now take a more positive approach to the health of the people. So far, we have had a marvellous record in curing people once they become sick. I believe that the time is now opportune to take steps to ensure that people do not become sick. In other words, we should turn from curative medicine to ensuring that people are prevented from becoming ill in the first place. There are several ways whereby positive encouragement can be given by the Government towards this end.

I have been very fortunate, during the last three years, in attending most of the public hearings of the Royal Commission on the Remuneration of National Health Service Doctors and Dentists. I have been extremely impressed by the way in which the Commission is tackling its formidable task. I do not wish to anticipate the report of that Commission, but, like many others, and particularly those whom it affects far more closely than it affects me, I hope that it will come during this Session. It is very much overdue. The work of the Commission has a profound effect upon the whole National Health Service in all its branches except, perhaps, in the local health section. Alt family doctors and hospital doctors throughout the country are impatient to hear the results of the Commission's deliberations.

We must concern ourselves with the necessary reforms which will go alongside any improvements in the methods by which the doctors of this country are to be paid. Of particular importance, in my view, is the point of contact which we all have with the Health Service, that is, when there is illness within our own homes. The man with whom we come principally into contact is the ordinary family doctor, the humble general practitioner. General practitioners work for 24 hours a day, 365 days in the year—at least, they are on call for that time. In the National Health Service today, on the general medical services side, there are about 21,500 general practitioners in the service of the community. A maximum of 3,500 patients is allowed on each doctor's list. According to Stephen Taylor, now Lord Taylor, each general practitioner gives 5 or 6 items of service to each patient every year, which means something like 250 million items of service. I apologise to the House for giving these figures; I know that figures are always boring, but I am trying to indicate the weight of the burden which rests upon this hard working section of the community.

I believe the time has now come when the pressure should be eased. Although we have had a remarkable summer this year, the winter is now coming on and the pressure upon doctors' surgeries will become more heavy than at other periods of the year. There is an extremely strong case for the reduction in the number of patients on a general practitioner's list in order that he can have more time, not so much from the doctor's point of view, but so that the service rendered to the patient can be of a high standard, with plenty of time for diagnosis, method of treatment and determination of therapy.

I am well aware of some of the technical difficulties which will arise, but I feel that at some time a working party should be set up between the profession and the Government to examine ways and means whereby the reduction which should be brought about can be brought about in an orderly and co-operative manner. Considerable relief could be attained in this way. There could be a great saving in the National Health Service if the general practitioner were able to do his job more effectively.

In recent years, there has been a trend away from the single, "lone-hand" practitioner. The Government encouraged this trend after the Danckwerts Award, as hon. Members will recall, and the Group Practice Loans Committee was established. The Government have given a small measure of encouragement. The process should now be extended. I believe that group practice needs more positive incentives. Too often, as planners and politicians, we think in terms of buildings and equipment. We should, perhaps, think more in human terms, in terms of the people who have to work within our plans.

Under Section 21, we have had very few health centres since the National Health Service Act came into operation.

We have some marvellous buildings in this country, such as Woodberry Down and Sighthill, Edinburgh, but, however well-designed they are and however good the equipment may be, no one can design doctors to fit into them. A more practical approach might be to start with the doctors, to start with a team of doctors and then put round them the equipment and buildings to enable them to do their job effectively. In establishing a team and knitting a group of people together, of course, human personality plays its rôle. The human personality cannot be planned in any way by the State at the centre. Such a group must grow, and the group must be a natural growth from the people themselves.

The third point I want to raise and to which I should like consideration to be given is that the treatment of ordinary people in their homes through the general medical services results in time being unnecessarily wasted in doctors' surgeries and waiting rooms. We appreciate that the way in which the family doctor decides to organise his premises is his own responsibility. Nevertheless, positive incentives should be given, first, to enable all accommodation to be brought up to a reasonable standard, secondly, to encourage doctors to give appointments to patients needing medical care. This is already being done to a minor extent, and I have seen throughout this country and also in Scotland some really first-class waiting rooms and surgeries. I am pleading for the worst to be brought up to the best. I know a number of practices where doctors offer their patients an appointments system and I am asking that this should be encouraged so that more doctors give more patients appointments in order to avoid time being wasted.

I have dealt with three aspects of general practice. I am convinced that the time is now opportune for radical changes to be made. We have had ten years' experience of the National Health Service. Let us build on that, moving forward and making almost revolutionary changes which I am certain will be welcomed not only by a large section of the community but also by the medical profession itself.

The grass roots of the National Health Service lie in the service given by the family doctor, who is the Cinderella of the service. Less is spent on the remuneration of the medical practitioner at the moment than on drugs. A little wise spending could result in a considerable saving in hospitalisation, in keeping people in their own homes, and thus preventing people waiting until they are sick and then being given a very expensive service at hospital level.

I realise that after this long day I must not weary the House by dealing with other aspects of Health Service problems, but I want briefly to deal with two problems of the hospital service which are not controversial and where action might be taken. I welcome the approach of the Government towards the extension of hospital building. We all agree that there has been too little building, but again the question arises of time unnecessarily wasted. The wrong values are being given to time in out-patients departments in the hospitals. For instance, a man may go there at ten o'clock in the morning and not leave until four o'clock in the afternoon. Again, this is a question of organisation, and surely it is not beyond the intelligence of human planning to overcome it. If it is possible to send something to the moon, surely we can organise our hospital system in such a way that we have an orderly appointments system to prevent people who are sick waiting about in hospitals.

There are a number of other constructive suggestions I could make, but perhaps I may have another opportunity to make those points before the next General Election. Now I wish to raise another extremely important one. I have within my constituency at West Willesden one of the finest hospitals in the country, the Central Middlesex. Its organisation, within the framework we have provided, is as good as any in the country, but I was provided this morning with the following figures. The waiting time before admission to the gynaecological department for a minor surgical case is six months. For a major surgical case it is one month. This is a period of profound discomfort which is unnecessary, and it should not be beyond the power of the Ministry and of the National Health Service to solve that problem. The waiting time for general surgery in the case of non-urgent cases is four months. If one is suffering from hardened arteries—I hope nobody in this House will ever do that—the waiting time is one year. I could give a number of other figures, but I have said enough to show that this problem should have the attention of the Ministry and of all citizens of good will throughout the country.

I suppose it was too much to hope that in the Gracious Speech I should see some reference to the extension of the National Health Service, though I believe this to be a serious omission. There are three wings of the National Health Service, the hospitals, local health authorities and general medical services, but there should have been a fourth. Because there is not, a large gap exists. We now need to establish a sector dealing with occupational health. The changing pattern of medicine and treatment today makes this increasingly important. The scourges of tuberculosis and diphtheria and similar illnesses have been banished to a large extent by the antibiotics, but the victory in that sector has been offset by the fact that at the same time as we have reduced the incidence of those diseases there has been an increase in nervous strains, in the tensions of everyday life caused by the high speed at which we live. I believe that the only place where this can be tackled is at the place of work, where a man spends the great part of his day. At this moment. Sir, I can speak with real feeling of the nervous strains and hazards of a man's occupation.

In this respect, I would refer to the recent recommendation of the International Labour Office at Geneva. In my opinion, it does not go far enough, but I hope that when the I.L.O. Governing Body places the resolution as a convention before its complete conference this will receive the support of the employers and trade union representatives and also of the governmental representatives of the United Kingdom on that body.

My main concern is with the social consequences of the omission in the Gracious Speech regarding health, but the economic consequences of the National Health Service are equally important. For instance, I was interested to learn from the insurance statistics that 262.42 million days of production were lost in 1956–57 through ill-health. I also noticed that the number of days of production lost through strikes during the same period was 8 million. It seems, therefore, that it would be a good investment for the country to make sure that people are not wasting production time through illness and are not entering hospitals at a considerable cost to the community.

I will end these remarks by referring to the fact that Sir George Schuster, who is chairman of the Acton Society Trust and of the Oxford Regional Hospital Board, recently made a strong plea for imaginative and creative leadership in the National Health Service. That, I am convinced, is the primary need in this sphere in the years lying immediately ahead. But the Ministry itself must give the lead. This means, I submit, that the Government must be ready to accord it the status, dignity and prestige which I fear it lacks at present. Nothing will do more for the National Health Service at this moment than a clear indication from the Government that it regards the Ministry of Health as the keystone of its welfare services.

6.9 p.m.

Mr. E. H. C. Leather (Somerset, North)

It falls to me to have the pleasure of congratulating the hon. Member for Willesden, West (Mr. Pavitt) not only on the excellent content of his speech but on his rare courage. I think I am right in saying that he is the first Member voluntarily to make his maiden speech. I say that without any denigration of my hon. Friend the Member for Billericay (Mr. Gardner), who made such a wonderful maiden speech yesterday, but which could only have been called voluntary in the old army sense that somebody says, "I will take one volunteer and it will be you." The speech was a splendid achievement, but the hon. Gentleman who has just spoken, if I may say so most sincerely, has spoken in the best tradition of maiden speeches in this House. He also performed the by no means simple feat of being as non-controversial as a maiden speaker is supposed to be while at the same time extremely effectively prodding the Government in the direction in which he wanted them to go. I am sure that he carries the whole House with him in his most interesting remarks, particularly about preventive medicine, a subject about which obviously he is a very distinguished expert.

I should like also to comment particularly on how interested I was to hear him give those comparative figures of production losses through sickness as opposed to industrial disputes. I do not think that those figures can be too often quoted in the House and the country, because the general public have a completely false impression of this matter. No doubt the hon. Member will be able to do a great deal in future debates to see that those impressions are put right and people made to realise much more the tremendous importance of the economic wastage as well as the immense human suffering caused by lack of facilities for preventive medicine.

I hope that the hon. Member will forgive my leaving his subject. This illustrates the difficulty of our debates, especially on the Address when one can talk on practically anything that is in the Gracious Speech and also at considerable length deplore what is not in it. I wish to speak on two or three different subjects some of which I am told are appropriate to other days, but I think that my chances of being called twice in the same debate are so remote that it would be wiser to speak of them all at once.

First, I particularly welcome the statement in the Gracious Speech which says: The earnings rules for pensioners and widowed mothers will be further relaxed. I had the good fortune four years ago to introduce as a Private Member's Bill the National Insurance Act, 1956, which brought about the sliding-scale basis as it exists at the moment. The hon. Member for Sowerby (Mr. Houghton) will remember our interesting discussions at that time. We made some improvements from which widows and retirement pensioners have benefited in the last three years. I particularly rejoice that further relaxation may be made.

While I appreciate that there are still objections to abolishing the earnings rules altogether as far as they apply to retirement pensions, I hope that the Government will give careful consideration to the question whether it is not possible to abolish the rules as applied to widows. I feel that this is quite a different case. The sum of money involved would be comparatively small and nothing like as much as would be involved over the entire field. The problem of unjustified or faked retirement does not arise. I hope that the Government will go out of their way to be as generous as possible, particularly to widows with children.

I should like to turn attention now to a statement in the Gracious Speech which I do not think has been mentioned so far in the debate, namely, the reference to the needs of young people and of the youth services. I particularly welcome the statement that with the aid of more trained youth leaders and improved youth services and other means young people will be able to put their leisure to better use. I have long held the view that this is one of the major social problems of our age. With great respect, and I hope with humanity towards the problems of the old and the sick, I hold the view that this problem is even more important because its ramifications are much wider and its ill-effects to be felt in future years will continue to multiply, while with the problem of the old and the sick, however slow the progress may be, we are catching up. As to the problems of youth, quite frankly, for many years the position has been getting continually worse and not better.

We have an educational system of which we have great cause to be proud. One of the most exciting and important things that has happened in the last three years—and I use the word "exciting" deliberately and specifically—has been the tremendous stride made in the education of the whole broad mass of our children, particularly in the secondary modern schools. There has been a tremendous rise in the standard of education, particularly in those schools in the last few years, and I regard this as one of the great steps forward in building a progressive industrial democracy. We spend immense energy and hundreds of millions of pounds on all our children up to the age of about 15 and then we drop about 75 per cent. of them and do not spend a penny or devote any care and attention on them from then on.

This surely must be hopelessly illogical. Educators have a deplorable phrase for these children. They call this group "The Sink". They are chucked out into the stream, not to starve, because we are not now living in an Oliver Twist age. They have money in their pockets on a scale of which their parents never dreamed. They are well fed and wear good clothes and can afford to spend their evenings in cafés. They like noise, juke boxes, skiffle and all that. God bless them; so do I. A dramatic phrase, which was used in a document issued recently, said that the children of "The Sink" were not chucked out to starve, because … they wear good shoes on the golden road to nowhere. It is a dramatic phrase and a horrible phrase, because it is so true. We go to an immense amount of effort to try to instil into these children some spirit of ambition and some idea of the opportunities in this world, and then we drop them in the stream, and from that moment on, up to now, practically no one has paid them the slightest attention. This is an indictment on all of us, on the Government, on local authorities, on those of us who are in industry and on the trade union movement.

There are honourable exceptions, but they are few and far between. Some local authorities take our youth services and the problems of youth seriously, but they are very few. There are some industries and some great companies which do magnificent work. Some trade unions do magnificent work, but they are a tiny minority. The great majority of local authorities, which are supposed to be the key authorities in the Government's scheme for youth service, put youth service and youth problems, if not absolutely at the bottom of their list of priorities, then at least very nearly at the bottom.

It is no use, and it ought to be said in the House that it is no use, for old gentlemen to write letters to the papers demanding corporal punishment for Teddy boys and hooligans, because prevention is the responsibility of society and that is a responsibility which society almost totally does not discharge. Indeed, I am sure that the great majority of society, at all levels and in all groups of the nation, are quite unaware that they have such a responsibility. We send these children out of school and the great majority go straight into a factory in an unskilled or at best semiskilled occupation. What an appalling let-down. From that moment on, in the critical years between the ages of 15 and 17, the environment of a factory of some kind is probably the most important influence on the lives of these young people.

If they are fortunate enough and, thank God, the majority are, to have good and wise parents, to belong to a church or some youth organisation, even fortunate enough to belong to the Young Conservatives, they have some guide. [HON. MEMBERS: "The Labour League of Youth."] I gather that hon. Members opposite are referring to some body which I believe to be defunct and which I have not taken into my calculations.

There is for the great majority of these youngsters at least the possibility of a tendency to drift and not to come into contact with any of these bodies—and the misfits and the juvenile delinquents are touched by nobody. The factory is a dull, grim and uninteresting environment for the great majority of these youngsters, and I hope that this passage in the Gracious Speech means that the Government are to give priority to this matter.

I know that the new Minister of Education is extremely interested in this subject. I am pleased to see the new Parliamentary Secretary in his place. I am delighted to congratulate him on his appointment. I have a feeling that he may shortly become the chairman of a committee to deal with this matter. If that is the happy situation. I hope that he will know that he will have the support of the whole House in trying to prise every penny he can out of his right hon. Friend the Chancellor of the Exchequer in this important cause.

Youth services, youth clubs and so on. by and large are hopelessly inadequate. The great majority of them are starved for money. The few people who do spend their lives in the youth services are ridiculously badly paid, not only ridiculously badly paid as to £ s. d" but as to the whole basis of their remuneration. There is one instance in my own constituency where a bit of a grant is paid from local industry, a bit of a grant from the district council, which is doing its best, and from there on all the man gets must be made up by bazaars and garden fêtes. That is a shocking situation.

We are all looking forward to the report of the Albemarle Committee, which I hope we shall get before long. I hope that that will be a great step forward and that the Government will grasp whatever measures it offers quickly and with a true sense of urgency. Secondly, there is the Committee under Sir Colin Anderson which is dealing with somewhat allied problems and which is due to report early next year. That Committee is dealing with what is known as the "university means test", among other things. I hope and pray that Sir Colin Anderson's Committee will report that the university means test is the monstrous thing which I think that it is, and will recommend that the Government should abolish it.

If by some remote chance they do not do so, I hope that there will be widespread feeling in the House that the Government should be prodded in that direction, too. The whole basis of a means test for scholarships to universities is completely illogical. It would cost a comparatively small sum of money to put the situation right. I think that it is grossly unjust.

I now want to turn to the next section of my speech, dealing with that paragraph in the Gracious Speech which says: My Government will initiate an enquiry into the working of the Companies Act and will introduce a Bill to strengthen the present law relating to building societies. I am delighted to read that and I hope that it is quite clear to everyone in the House and to the public that there are many responsible people and responsible bodies in industry in general and in the City of London in particular who have been urging these measures for a very long time.

It is quite untrue to suggest, as the right hon. Member for Huyton (Mr. H. Wilson) did today, that somebody has been panicked into trying to cover up something because of unfortunate publicity during the election. That is quite untrue, as can easily be seen from a study of the evidence. I say with all the sincerity I can and with whatever small authority I may have from having spent the whole of my working life divided between the House and the City that if the Government only initiate an inquiry into the Companies Act and introduce a Bill to strengthen the law relating to building societies, the results will be grossly disappointing. There is a great deal more than that which needs to be done.

In my humble view, that would be only nibbling at the problem It is a very important part of what has to be done, but there will be terrible disappointment if that is all. I hope that the Government can give the assurance at the earliest possible stage that they propose to take a much wider view of this important matter.

Let me say this quite clearly so that the position of the many people who think as I do is quite clear. I have spent my working life in the City of London, and I am proud of it. Whatever its detractors and opponents may say, the City of London is still the greatest free market in the world. Indeed, it has grown more in the last five years than for more than a century. It is still the greatest free market in the world for one primary reason—because its standards of integrity are known to be the highest in the world.

The whole world invests in British companies. Nearly half of the total world trade is done through London. If an Indian merchant is selling to a Japanese, it is three chances out of four that he finances it through a British bank and insures it through a British insurance company, not because he has to, not because anybody can bring the slightest pressure on him, but because he knows that he will get the best possible deal, the highest standard of integrity at the lowest rates in the world. No propaganda, political or any other kind, can detract from those facts.

It is an interesting fact that in the last few years, since the City of London has had its freedom restored to it, its contribution to our annual balance of payments has increased from about £300 million a year to about £1,000 million a year. The City of London exports one thing only, and that is know-how. In fact, we are the biggest exporters of know-how in the world. The great advantage of that from the country's point of view is that that is 100 per cent. profit for the country. There is no import content, no dollar content, in what goes out from the financial institutions in the City of London.

Having said that, I say equally clearly that, of course, there are abuses and, of course, there are weaknesses. Those of us who are concerned have for a long time implored Governments to take action about many of them. I hope in the course of the next few minutes to give specific instances of those things.

We in the City of London have our enemies. Certain sections in the party opposite, the right hon. Member for Huyton in particular, seem to regard themselves as having sworn hostility against everything the City stands for and never hesitate to smear or denigrate in any way. The most remarkable thing that always strikes us in the case of the sections in the party opposite and the right hon. Gentleman in particular is the absolutely uncanny accuracy with which they consistently shoot at the wrong targets.

Even over the notorious Bank Rate leak so-called scandal which back-fired, there were certain very grave weaknesses which could have been severely criticised, but in his passionate search for mud and abuse, the right hon. Gentleman completely ignored the weak spots which were never shown up.

The key to this problem is not in the Companies Act, the Building Societies Act, or in any other piece of legislation. It lies in the fact that at present anyone in the country has an absolutely unlimited right to solicit money from the public without any check or safeguard at all. That cannot possibly be right. There are ridiculous anomalies in this situation. For example, if a stock market salesman, if such an animal were allowed to exist, went around knocking on doors and trying to sell shares in the soundest "blue chip" in the country, he would be put in gaol at once, for that is a criminal offence. But there is nothing whatever to stop anybody advertising in the newspapers and soliciting deposits in a company which has never even produced a set of accounts. That happens all the time.

One will never stop every rogue in this field of criminality or any other and one will never protect every fool in this field or any other. But while to draw or try to draw laws which will stop every rogue and every fool is a counsel of perfection, which would do nothing but harm, there are many things which could be done to control the solicitation of money from the public.

The first point I want to make about the idea of a Companies Act is that if we are to have an inquiry on the lines of the very comprehensive Cohen inquiry, the inquiry will take at least a year and the report will take the better part of six months, so that we cannot possibly have legislation for two or three years. In the meantime, many great opportunities will be missed and much more damage will be done. I urge the Government to realise that this is not something that can be referred to a committee and forgotten about for the next two or three years.

May I list specifically what can be done? Firstly, the Prevention of Fraud (Investments) Act, 1958, needs considerable amendment. Although it was brought up to date last year, any lawyer or chartered accountant in the country knows that a horse and cart can be driven through it. It needs drastic amendment and this can be done without waiting for an investigation into the Companies Act.

Secondly, the companies department at the Board of Trade needs considerable strenthening.

Thirdly, there are certain abuses which I hope will be dealt with in next year's Finance Bill.

Fourthly, there is the question of legislation for building societies, but, with respect, that will close only half the door if it does not include hire-purchase companies. Hire-purchase companies have an unlimited right to solicit from the public, and it would be the simplest thing in the world for a building society, by altering the wording slightly, to get out of the Building Society Act, become a hire-purchase company, go on soliciting and thus nullify the effects of any legislation which is confined solely to building societies.

Mr. A. C. Manuel (Central Ayrshire)

Is the hon. Gentleman putting a case to the House for more controls to control Tory freedom?

Mr. Leather

I am doing no such thing. I am putting a case to the House to tighten certain laws. With respect, I do not think party politics enter into this at all. They would only completely confuse the issue. I am delighted to see the hon. Member for Central Ayrshire (Mr. Manuel) back in the House, and I am glad that he is starting off in good heart, but let us for a time at any rate stick to the point rather than confuse the issue by making party points.

The other point which should be dealt with immediately and does not have to wait for an inquiry into the Companies Act is that non-voting shares in a company should be abolished. This could be done by a one-sentence, one-Clause, Bill. That is something about which practically everyone, particularly those in the stock market, is unanimous. It is an abuse of the whole idea of a democracy in industry, and can be put right quite simply.

Mr. George Lawson (Motherwell)

On the question of non-voting shares and voting shares, is the hon. Gentleman advocating that those who possess voting shares should have a ballot vote rather than have the meeting at an hotel, in which case many shareholders find it impossible to attend?

Mr. Leather

If the hon. Gentleman knew the facts, that is precisely what does happen. In any company election all the shareholders must be sent a ballot form. The fact that they do not exercise their right to vote is the same as in many trade unions where the members do not bother to vote.

Finally, we should have a securities and exchange commission with regulatory and investigating powers. It is said that although they have such a thing in the United States it is merely a paradise for litigation. There is a certain amount of truth in that argument, but we should not go to the other extreme and have no investigating powers at all.

I ask my right hon. Friends on the Treasury Bench to consider what might be called a party political point in this. An article was published in the Financial Times a week ago by Harold Wincott who is, without doubt, the most authoritative and responsible financial commentator in the City of London. In urging the kind of law that I am asking for, he said: … if you really want to establish a property owning democracy you've got to be very militant in selling it, and very militant in defending it. With one hand, you've got to make share ownership cheap, easy and simple; in the other, you must carry a dirty great stick and crack down immediately on the knuckles of anyone who attempts to trade on the simplicity or ignorance of the investing public. We've done neither the one, nor the other. We didn't fall between two stools. We never even got the stools ready… unless our fundamental attitude towards the protection of investors changes, we shall never equal America's achievements in the creation of a share-owning democracy. I believe that to be profoundly true.

Unless we are prepared to go a long way in making it clear to the public that they can have confidence that they are not going to be taken in by rogues, many of the people who may wish to participate in a share- and property-owning democracy will be very dubious, to put it no higher.

Each of the so-called scandals which are at present being reported in the newspapers was reported to the authorities by responsible people in the City at least two or three years ago. I shall give the details and names of them. In the M.J.A.S. case, which is under discussion at this moment, full details of exactly what these people were up to were reported to the companies division of the Board of Trade nearly two years ago. I do not wish to be misunderstood, because I am making no criticism of the officials at the Board of Trade, but they said: "You are right. This is really deplorable, but we have no powers to do anything about it". We had to wait and let the thing drag on until over £600,000 of ordinary investors' money was squandered and irretrievably lost before any action could be taken.

In the case of the State Building Society, not only were all the details of what was happening given to the Registrar of Building Societies more than two years ago, but everything that was going on was exposed in the public Press. There is an article in the Investors Chronicle of October last year giving the names and details of exactly what was happening. Again the Registrar said: "I am sorry. I agree this is dreadful, but I have no powers to do anything about it". That must be wrong. After all, this was exposed in the public Press without challenge. A list was given of these incredible investment companies with the most ludicrous names such as Bisky Investment Co., Brutod Investment Co., and Bubro Investment Co., and four or five others. Not one of them had a capital of more than £100, yet they all had loans from the State Building Society of over £9,000. It was made clear that the directors of the State Building Society were associated with these companies, and one year after that appeared unchallenged in the public Press, it produced an annual statement which said … your society is entitled to trustee status". What is so damnable about it is that it is true. There is nothing wrong, malicious or inaccurate in that statement. It shows that the phrase "trustee status" as it is defined in the law is absolute mockery. It does harm, not good. It does not do good because it allows a company which is carrying on these speculative activities in what is supposed to be a building society to advertise to the world: "We qualify for trustee status". The ordinary individual looks at that and says: "My goodness, they would not dare say such a thing if it were not true". The point is that it is true, and that shows what a mockery the law is at the present time.

Mr. Woodburn

Since all this was known about two years ago, what Department of the Government is responsible for not having taken action? Was this brought to the notice of the Chancellor of the Exchequer before his last Budget?

Mr. Leather

I am sorry if I did not make myself clear. These things were made clear to the responsible people concerned, but they all said: "We are very sorry. We have no power to do anything. We can only take action when the House of Commons alters the law." These subjects were not brought up in the House until the present time.

I want to refer to another case about which Ministers may not yet have heard. Incidentally, I know that there are three more scandals blowing up at this moment, and there are probably others as well. They have blown up because of laxities in the law. At the present time, an insurance company—

Mr. S. Silverman

On a point of order. 1s there not a question whether this matter is sub judice, in view of an arrest and an impending trial?

Mr. Speaker

At present I do not Know what case the hon. Member for Somerset, North (Mr. Leather) is talking about. I have no reason to think that it is sub judice.

Mr. Leather

With respect, Mr. Speaker, both cases to which I have referred were reported in full in yesterday's newspapers, and I have said nothing that was not contained in them. The case of the insurance company to which I am now going to refer is not sub judice. The company is in liquidation. In this case there is no question of any fraud. It is purely a case of bad management and inefficiency.

I want to use it to illustrate my point. Here is an insurance company which has done a great deal of damage to our national prestige, because most of its business is in the United States. Vast sums of money and claims have already been repudiated, which will be extremely bad for the name of the British insurance industry. This company put out its balance sheet in December last year and a reputable and honourable firm of chartered accountants signed a declaration that it had received all the necessary information and explanation. It said that it had had the best of the information, and that it was all according to the Companies Act, 1948, and presented a true and fair view of the state of the company. No one could want a more categoric certificate that a company was in sound order.

In spite of this, many of us knew that this company was going bankrupt three years ago. We said so publicly and told the authorities, and the authorities again said, as they had to say, that they were terribly sorry but they could not do anything about it. These are weaknesses in our law which can be dealt with authoritatively without having to wait two or three years, with the whole paraphernalia of an investigation of company law.

I now turn to a point which I said I thought could be dealt with in the Budget. I refer to the ridiculous abuse of the so-called "golden handshake". There is a fair case for compensation for anyone who loses his job, whether he is an officer or other rank in the Services, a coal miner, or a company director. If, because of some reorganisation, a man loses his job, he is entitled to compensation, but nobody is entitled to the ridiculous amounts of compensation that have been paid on occasion in recent years. They are an abuse of the principle, and we all know it.

This abuse can be put right simply by a Clause in the Finance Bill. Fair compensation is not difficult to assess. It is possible to discover what a man's remuneration was, and how many years he would have had to go before reaching the normal age of retirement, and make an assessment upon a generous interpretation of those figures. We can then say to the Inland Revenue, "For anything over that amount, tax him at the full rate." That would be perfectly fair, and nobody could complain. It would stop this abuse of private enterprise which those of us who believe in private enterprise want stopped.

Finally, I want to refer particularly to the Stock Exchange. There is probably no institution in this country about which more completely ignorant nonsense is talked than the Stock Exchange. It is not possible to run any kind of free society without a free market for securities. Stockbrokers do not make fortunes by running prices up and down. They have nothing to do with running the prices up and down, as anyone who knows anything about the matter can confirm. I have heard it said by the party opposite that stockbrokers are making fortunes at the expense of workers in industry. Nothing could be more misleading, malicious or stupid.

There are two important weaknesses in our stock market structure, however. The first is the abuse of non-voting shares, to which I have already referred. The second is the sometimes incredible lack of disclosure of information. The Stock Exchange takes a great deal of time, trouble and effort to get the whole story, but, with the greatest respect to the people concerned—and I have a great respect for them—experience has shown that self-policing is certainly not enough.

Many prospectuses hide more than they reveal. Many show asset values far lower than the prices at which the shares were offered. That cannot make sense. There are still many rogues who can obtain quotations without giving any information at all. I know of a case which occurred in the last few weeks, concerning two gentlemen from the United States of America who had no less than 48 indictments against them in respect of the manipulation of securities. They acquired a so-called "shell" company—a defunct rubber company—in this country, put two nominees on the board and obtained a quotation from the Stock Exchange inside 48 hours, without any record of profits or even of what the business was about. That cannot be right. It should be stopped.

I do not want to see us go to the extremes to which the Americans have gone, and tie the whole thing up with so many legal complications that much legitimate business is stopped. On the other hand, I am certain that we need some body with regulatory and investigatory powers which, when these matters are reported to it by reputable and responsible bodies in the City, can say to those concerned, "We know what you are up to. You must stop." There can be no valid objection on political or economic grounds to having such a body, and I am sure that until we have it we shall not get the best out of private enterprise. We shall continue to have these scandals which besmirch the name of our industry and especially its prestige abroad.

Until we have these powers we shall not take that step forward in selling confidence in British industry to the British people so that we can achieve what has been achieved in the United States and Canada—a share-owning democracy in which the mass of the people know that they are getting a fair deal.

6.47 p.m.

Mr. William Baxter (Stirlingshire, West)

To a new Member this House is a strange place, and it is even more strange when he gets up to make his first speech. In the circumstances I crave the indulgence of the House for what I wish to say. It is a very important occasion for me, although I feel it will not be so for other hon. Members.

Like all new Members, I listened with great care and interest to Her Majesty's Gracious Speech, indicating the Government's intentions during the present Session of Parliament. The part of the Gracious Speech to which I want to draw attention is that which refers to the Outer Seven Free Trade Association. This is a matter of the utmost urgency and importance to the people of this and other countries. It seems to me to be an agreement the purpose of which is to permit the Outer Seven to lever open the door of the Rome Agreement, which set up the European Free Trade Area of the Six.

This is a rather dangerous game. It is also a dangerous gamble with an important section of our trade and commerce, especially for Scotland. If great care is not exercised in this matter we may lose the substance of our trade by grasping at the shadow of European unity.

I need not tell the House of the possibilities of markets within the Commonwealth, or stress the advisability of looking in that direction for greater trade for our country. I would only remind the House of an article which appears this morning in the Canadian national newspaper, the Globe and Mail, which most hon. Members receive every morning. Members will see therein a report that Russia is endeavouring to bring about a trade agreement with Canada, the purpose of which will be that Russians will spend two dollars in Canada while Canadians will be permitted to spend one dollar in Russia. That, surely, would presuppose that Russia recognises the importance of trading with Canada. I would commend that lesson to this House.

Surely we should try to expand our trade and commerce throughout the Commonwealth with which we are so closely linked without jeopardising our own national industries. I respectfully suggest that this agreement is a matter of the utmost importance and I think it should be given a greater degree of thought and consideration before it is signed by Her Majesty's Government.

I have here the document which was circulated in July and I maintain that it has not had the consideration which it deserves. May I direct the attention of the House to two aspects of this document which could well bring a spectacular degree of harm to two of our basic industries? First I would refer to the agricultural industry and the part of it connected with the bacon trade. I need not devote much time to this, because my hon. Friend the Member for Deptford (Sir L. Plummer) yesterday gave a grand summary of the position which I commend to the study of hon. Members, who will then realise the importance of this agreement in its effect upon our bacon industry. It is not necessary for me to develop the theme of how the Outer Seven Free Trade agreement may affect the agricultural industry of our nation.

I will, however, endeavour to deal with the paper industry principally as it affects Scotland. For quite a time I have been chairman of a local authority committee in Scotland dealing with this agreement from the aspect of its effect on the paper industry. I wish to draw attention to the fact that there are 17,000 people employed in the paper industry in Scotland, 12,000 men and 5,000 women. Indirectly, of course, they keep other industries going, such as the transport industry and one important industry which was referred to by a previous speaker, the coal-mining industry.

If the paper industry in Scotland stopped production there would be less consumption of coal to the extent of approximately 800,000 tons. This coal is of a small type unsuitable for ordinary domestic purposes. Therefore, the effect upon the coal industry would be great and a lot of miners would be prevented from carrying on their normal work.

In my constituency of West Stirlingshire, in that rather beautiful and delightful town of Denny, there are four paper mills. I have in my hand a letter from the managing director of the Carron Grove and John Collins Mills. Those two paper mills employ 600 people and the other two employ approximately 400, which means that in the town of Denny 1,000 people are directly employed in the paper industry. Mr. Wallace, the managing director, has clearly indicated that if this agreement, as it is here summarised, comes into effect, it will mean the ultimate closure of the Denny paper mills.

It has been stated by a previous President of the Board of Trade that the esparto grass section of the industry is not in direct competition with the wood pulp part and that the agreement would not affect the esparto grass section. This has been directly contradicted, not by laymen and not by members of a local authority, but by the British Paper and Board Makers' Association. The Association has proved conclusively—a copy of the document is in the hands of the President of the Board of Trade—that the previous President, who is now Minister of Education, when he made a speech at the end of the last Parliament in which he tried to substantiate the rights of this particular Free Trade Area, was badly informed by his advisers and accordingly gravely misinformed this House.

In the document I have referred to his speech has been taken paragraph by paragraph and it has been conclusively proved by the Association that he was badly informed about the ultimate effect on the industry. I wish to quote one sentence from the report by the Association. In column 728 of HANSARD, the then President of the Board of Trade said: Half the paper output in Scotland is based upon esparto and, therefore, is not in direct competition with the paper made from pulp from Scandinavia We do not see why the section of the trade, the raw materials of which are not wood pulp, should be severely attacked by Scandinavian competition. I am very sorry I cannot continue. I must crave your indulgence, Mr. Speaker.

6.58 p.m.

Mr. T. L. Iremonger (Ilford, North)

I am sure that I speak for all my right hon. and hon. Friends and for right hon. and hon. Gentlemen opposite—especially for the right hon. Member for East Stirlingshire (Mr. Woodburn)—in conveying the sincere feelings of the House to the hon. Member for West Stirlingshire (Mr. Baxter) and congratulating him in the first place upon his maiden speech. We congratulate him much more on the great fortitude and courage he showed under adverse conditions and give our assurances to him that we look forward to hearing him again on other occasions. [HON. MEMBERS: "Hear, hear."] One might almost say that the indulgence which the House always shows to a maiden speaker has not yet been fully extended to him and that he will be able to make his maiden speech a little later.

The hon. Gentleman has been very bold today. In fact, he has departed from the tradition of his constituency. I believe I am right in saying that the hon. Gentleman who previously represented the constituency in this House did not venture to address the House for the first time on the very first active day on which he entered it.

I think that in the time we were able to listen to the hon. Member for West Stirlingshire we realised the intuitive and most remarkable way in which he has sensed the spirit of this House.

The House is always very sympathetic to hon. Members who speak of their constituencies and always interested in hon. Members who speak from first-hand experience. It is very sympathetic with hon. Members who speak with absolute frankness, and I am sure the hon. Member will give us the benefit of his counsel on many other occasions. Speaking as an English nationalist, I must say that there are deep divisions between the two sides of the House, but those divisions are not so deep as the points which unite us and our devotion to the standards of the House which he has grasped very well.

I now turn to the brief remarks I had hoped to make to the House. I wish to refer to the Gracious Speech and simply to the passage on the last page dealing with penal reform. I see that A Bill will be introduced to provide more effective; means of dealing with young offenders… Before actually referring to young offenders, I should like to say a word on a subject which is not in the Gracious Speech and to express some regret about its omission.

My right hon. Friend said in the manifesto which the Conservative Party addressed to the country during the last General Election that it would be the intention of this Government to introduce a Bill to provide compensation for victims of violent crimes. I am sorry to see that there is no mention of this in the Gracious Speech. Legislation on this point is very difficult and cannot be undertaken without inquiries, which are bound to reveal legal pitfalls. Therefore, I should have thought it unlikely that we should have expected a Bill at this stage, but I am sorry that there is no reference in the Gracious Speech to inquiries being made upon which a Bill might be based.

Having said that, I must welcome the fact that penal reform is here in evidence in the first Queen's Speech of this Parliament. If I have any criticism, it is only that penal reform should come last in the subjects which are mentioned, because I think it should have a very high priority. I am not sure that it was intended to be a climax; I rather doubt it in the light of the things which come before. I think we should be quite wrong if we gave a low priority to this subject. I do not think there is any single issue facing the Government which causes more universal and profound anxiety than the highly unsatisfactory state of maintenance of public order in the country today and the high wave of crime which is causing so much public misgiving.

I am sure the political insight and experience of my right hon. Friend the Home Secretary will make him properly sensitive to this. I am sure he is under no illusion but that his policy will be judged not by good intentions but by its manifest effectiveness, because what the public wants is a reduction in the present rate of crime. It is not particularly interested in softer mattresses for criminals. If the crime rate continues to increase, we are going to find that we shall come under intolerable pressures for violent and panic measures which would be ineffective in the long run but in the short run, unfortunately, are satisfyingly dramatic. If the kind of penal reform which I know is in the mind of my hon. Friend is not seen by the public to be having a good effect, we shall hear the cry of "bring back the birch" growing to intolerable intensity.

I want to refer to one particular aspect of penal reform only and to direct attention to the problem of young offenders. I notice that the Gracious Speech promises us a Bill, and presumably the object of the Bill will be to make the punishment fit the criminal—that is to say, as foreshadowed in the White Paper on Penal Practice in a Changing Society, in effect to remove from the bench to the Prison Commission the duty of prescribing the medicine for the convicted criminal. I think this an entirely sound conception.

I have taken a great deal of trouble to see the operation of the law in relation to young offenders in effect. It seemed to me that part of the difficulty with which the Prison Commission was faced was making quite sure that it got the right person in the right place. It is not at all satisfactory to have to deal with a detention centre type in a Borstal institution. It is quite impossible to be of any use to a Borstal type if he is put in a detention centre. Very often the possibilities of probation are not appreciated by the bench, and there is always a reluctance by the bench under the present system to commit a young offender to a young persons' prison.

It will probably be altogether effective if we are allowed, as we hope to be, to send young offenders to suitable institutions at the discretion of the Prison Commissioners—that presumably will be the object of the Bill—but for this to succeed two things are needed. First, more accommodation is required and, secondly, there should be an enormous expansion in the probation service. I think it might be useful if my right hon. Friend could arrange for us to have an early debate so that he could take the earliest possible opportunity of indicating his intentions to the House and making a preliminary report on the rate of progress he is making in preparation for the Bill.

I think these are some of the things we want to know. First, in regard to the matters which are the responsibility of the Prison Commission, I think it would be very useful if we could have an estimate from my right hon. Friend of the increase in the number of Borstal places which he expects to be able to establish. In the first place, is he anticipating actually building fresh Borstal institutions? One of the things which struck me when going round a large number of Borstal institutions was the very great difference between one and another. They ranged from the Borstal at Felt-ham, which is really designed for young offenders who are almost handicapped mentally and physically, to the other extreme, the Borstal at Huntercombe under Sir Almeric Rich, which is a unique institution where boys who are likely to respond to it are given the benefit of the guidance of a profoundly rich and wise personality. Then there are the Lowdhams and the North Sea Camps and other types of institution, each one of which is absolutely right for a certain kind of boy.

One of the difficulties facing the Borstal service and the Prison Commission is that it is not always possible to make sure that the right boy goes to the right place because there may not be a vacancy. Very often the wrong boy is a nuisance to the administration, and also he does not himself get full benefit from his training if he goes to the wrong place. It would be helpful if we could know whether there is going to be some easing of pressure by actually setting up new Borstal institutions quite apart from those we have at the moment.

May we expect to have an early fulfilment of the long-standing promise of more remand centres?

Are we going to look forward to more allocation centres, such as Latchmere House, so that young offenders who are committed are able to be sized up by experienced officers of the Prison Commission and then sent to the institution which is going to give them the best treatment?

I am asking these questions as it were to my right hon. Friend, but I should say that I am most grateful to see my right hon. Friend the new Under-Secretary to the Home Office in his place. It would not be entirely out of place here to say how warmly hon. Members on every side of the House will welcome his return to Ministerial office. He has had experience of the two Departments of Health and Education which are best aligned and geared to tackling the particular problems of penal reform and care of young offenders, which will be his particular responsibility. I feel sure he will forgive me for saying that to him. No doubt his right hon. Friend the Home Secretary will have to give very close thought to these matters with the assistance of his advice, and, perhaps, he might like to ask himself whether the time has not come for trying to introduce a new idea into the whole conception of the Borstal system. If I may, I should like to recommend to him that he should visit, if he has not already been there, the Military Corrective Training Establishment at Colchester, which provides an extremely illuminating experience.

This establishment has to deal with particularly difficult types of military offenders, many of whom are, incidentally, criminals as well, although, in fact, their criminal record is quite irrelevant to their military punishment. When I went there and had a look at what they were doing, I was most impressed by the philosophy of training adopted by the commanding officer. He said that the young fellows they had there were not types whom one could actually help by any intellectual appeal. They were somewhat tough, somewhat unreceptive and somewhat unsophisticated. If they were to do anything for people of this kind, the difficulty was to give them some ideal they could aim for. One could not help by an entirely repressive régime The difficulty was to see what kind of inspiration one could offer to people of this type.

I think that his approach was entirely the right one. He said that essentially these boys respect one thing—strength and achievement. "When they come to us they are flabby, morally and physically, but they have a great admiration for physical strength. If you tell them to climb a rope they cannot get half-way up, and if you tell them to run round the block they are out of breath."

Mr. Gordon Walker (Smethwick)

What about the hon. Gentleman?

Mr. Iremonger

The right hon. Gentleman would be surprised at what I can do.

The commanding officer then showed us what he had managed to achieve with these young fellows. They were out in a field giving a demonstration of the most appalling feats of physical prowess, heaving great tree trunks to one another, climbing trees and walking along ropes between the trees. They were giving a demonstration of acrobatics which I would have thought quite outside the scope of anyone but a professional who had taken it up from the cradle.

In talking to these soldiers under corrective training, I was impressed by the enormous enthusiasm he had managed to engender in them. It seemed to me that he had there a technique that might very well be applied outside the military sphere in the civil corrective training establishments. I think that it would apply certainly to detention centres and very largely to Borstal institutions. I hope that my right hon. Friend will give some thought to that. He should try to give some incentive and sense of achievement to what spark of ambition there may be in these people who are put in charge of the prison staff.

All that applies to Borstals, but I would also like to ask my right hon. Friend if he would give us some idea of what we may expect now by way of increase in detention centres. My right hon. Friend will be under constant fire and probably increasing pressure to resort to violent methods of deterrence and redemption in crime. He has to satisfy the public that he has an alternative which will in fact deter and redeem these young criminals. I think that he might well have an answer in the detention centre, but I am not sure that we have yet got it entirely right. In the first place, it would be useful to know what my right hon. Friend imagines are the ultimate requirements for the numbers of detention centres for the young criminal population in the foreseeable future.

Secondly, I suggest that he might address his mind to the question of junior detention centres. I have seen both the junior and the senior centres. I felt that in the junior detention centres the staffs were doing their best under very great difficulties. One of the greatest of their difficulties was that they were sent boys of very different types of character and background. Some of them were not suitable to this treatment, and I could not be satisfied that these young schoolboys were detention centre material.

It might be worth considering writing off the junior detention centre experiment altogether and confining ourselves to senior detention centres, while at the same time recognising that the difference between an immature boy of 17 going to a senior detention centre and a mature boy of 21 is far too great for them to be accommodated within one establishment. I would have thought that it might be advisable to have a large number of detention centres and to segregate the inmates according to maturity rather than age much more than seems to be done at present. I hope my right hon. Friend will be able to give us an assurance in the not-too-distant future that he has the programme of building new detention centres well in hand. In addition to the extra Borstal institutions required, as I see it, extra detention centres are required.

Can he also tell us to what extent he is satisfied with the rate of recruitment and the field of recruitment of prison staff? I think the conditions of service are very much more satisfactory than they were. The remuneration and conditions of the senior officers are quite attractive, and my right hon. Friend may well be satisfied that he has a very fine service, but he will require very much more manpower before any Bill that is introduced will have any effect. We ought to know that this manpower is forthcoming. Perhaps he might be able to tell us that.

Apart from the responsibility of the Prison Commission, I should like to make a reference to the probation service. Surely the probation service is the most neglected weapon of penal and social reform. It is the cheapest way of dealing with the criminal. I am inclined to think that it is in very many cases the most effective. At present I think that it is far too small a service. It is underpaid in any case, which makes it difficult to keep up even the present establishment, and, because it is too small, it is comparatively ineffective. I know that the officers are grossly overloaded. For all these reasons, it does not command the degree of public confidence which it deserves. The public are inclined to regard putting a criminal on probation as being soft with him and letting him off

If this impression is allowed to persist, I think that we shall be neglecting what is probably the most effective and most worth-while arm in the redemption and deterrent service. I hope that we may look forward to an expansion of this service as a means of checking juvenile crime as well as looking after the older offender. If we can have the assurances of my right hon. Friend in this respect, that is to say, that there should be more buildings and staff on the Prison Commission side and an extension of staff on the probation side, I think that we shall be much better able to judge the worth-whileness of the Bill when it comes before the House and speed it on its way. The Bill will be concerned only with the legal formalities of the processes, and it is not much use having a good Bill and getting the processes right unless the House can be satisfied that when the processes are brought into effect we shall have the buildings and staff to get to work on the offenders we intend to commit to them.

7.21 p.m.

Mr. Richard Marsh (Greenwich)

As hon. Members will appreciate, for some days past I have been walking about the House composing a maiden speech. I have been intrigued by small groups of other hon. Members walking about the House, and I have wondered what they were doing. As the evening has passed it has become evident that they. too, were composing their maiden speeches.

Hon. Members will recognise the feeling of diffidence with which I rise to intervene in a debate so early in the proceedings of this Parliament. I intervene as the Member who represents, in Greenwich, probably the most highly industrialised area of London.

In addition, for the past nine years I have been one of those much maligned souls in British industry—a full-time trade union official. I have risen this evening because I am convinced that the key to all our hopes and aspirations in the field of economic activity lies in the maintenance and improvement of our industrial relationships within this country. No nation can maintain, much less improve, the living standards of its people if its industries become a permanent battlefield. Yet, with the major arguments on wages and hours with which we shall be faced in the coming months, the prospect of serious industrial dislocation provides a problem with which we have to deal.

May I suggest, therefore, with all humility, that one of the major problems with which we as hon. Members have to deal is that of a positive approach to the improvement of industrial relations within this country. From bitter experience I am well aware that men do not strike for the fun of it. No one enjoys a strike, in view of the very real suffering which that activity brings with it to the families as well as to the men themselves.

As one with some experience of trade union activity, I have no hesitation in saying that in my opinion the strike today is an abject admission of failure. It is frequently forgotten, however, that the complete responsibility for such failure seldom lies with the employees. It is a truism, self-evident, that it takes two to make a quarrel, and while one can ask and hope that members of the trade union movement will recognise the changing features of our industrial life, it is no less essential that many persons in management should be equally aware of the changed situation which has developed in the past twenty years.

Whether one likes it or not, the trade union movement is here to stay, and one does a great disservice to the nation if one contributes towards destructive or sensational criticism of the trade union movement. The trade union movement today, with about 8½ million members, is possibly the most representative organisation in our modern society. It represents not only the unskilled manual worker but also the airline pilot, the nurse, the doctor, the dock worker, the waitress and the lorry driver. There is probably no other organisation which represents so many differing interests or any other organisation within this country which has quite so much power.

Those who jump into print criticising the trade union movement would do well to realise the tremendous effect it would have on the economy of this country and on our way of life if the trade union movement were half as irresponsible as some people say it is. It is therefore not only desirable but essential that all persons of influence inside the House—and I have come to the conclusion as a new entrant that not all the influence is inside the House—and elsewhere should do all that they can to assist this massive movement in its functions.

Some persons look for the solution to our industrial difficulties in overcoming Communism. I would not deny for one moment that sometimes the Communists have a part in industrial disputes when they arise, but to ascribe the fundamental difficulties facing labour in the modern world to the Communist Party is the most dangerous over-simplification in which any of us can indulge.

To my mind the enemy of industrial peace is not the Communist Party. It is the very serious possibility that human problems and human sensibilities, and even human stupidities, are overlooked and unaccounted for by the relentless grinding of the modern, institutionalised machine, for the cause of most disputes and unofficial strikes is a breakdown in communications and trust at shop level and upon the factory floor. Yet it is precisely at this level that the least attention is given to the improvement of relationships. For example, men sometimes strike over the introduction of labour-saving processes. Because all of us recognise the inevitability of scientific advance, they are condemned almost universally, but I do not join in that condemnation, because I have seen the fear which is upon men's faces when confronted by the possibility of redundancy. Hon. Members on both sides of the House would do well to cast their minds back a few weeks to remember their feelings towards their opponents when their own jobs were in danger.

I recognise that the reaction of these men, however mistaken, is at least easily explained. It is both possible and essential that this type of fear, which I feel is the underlying cause of many of our difficulties, is removed before the introduction of new processes by making every endeavour to consult local staff representatives about the possibility of alternative employment and redundancy agreements.

It is regrettable that there are still very few redundancy agreements in British industry. In this connection I draw the attention of hon. Members, with respect, to the report of the team from the British shipbuilding industry which recently visited Sweden under the sponsorship of the British Productivity Council. Members of both sides of that team returned convinced that the remarkable absence of disputes in the Swedish shipbuilding industry—one of the major danger spots in this country—was due to consultation at the planning stage, not at head office level but between foreman and shop steward.

On this point I think that local management must recognise the shop steward not as an industrial gangster but as a perfectly ordinary, average citizen who has been elected by his workmates to work on their behalf. He performs an extremely difficult task. He seldom has any training. I know of no other job of such importance, with the possible exception of my present occupation, which one can enter with so little training. The shop steward has very little training and he certainly receives very few thanks. The Trades Union Congress, to its credit, operates a first-rate training scheme for local officers, but I fear that too little help is given in this connection by management—and I suggest that it is a responsibility of management as well as of the trade union movement—to encourage its shop stewards to attend such courses and to make it easy for them to do so.

The trade union movement instinctively dislikes having its affairs discussed in public. As we have all learned, publicity is the price we pay for power in a democracy and the trade union movement has to pay that price as well as any other section of the community. Much needs to be done by the trade unions to explain their case to the public, but it would be a serious mistake if we in the House of Commons or elsewhere came to the conclusion that the sole answer to the problem lay with the trade union movement. Much can be done by other bodies. Much can be done by direct Government assistance.

As a constituent of the right hon. Member for Bexley (Mr. Heath), although in all fairness I can claim no credit for his return to the House, I hope that he, as Minister of Labour, will take more positive steps to provide facilities for training and consultation between those involved on both sides at the lower levels of industrial negotiation. The Ministry of Labour operates a personnel management advisory service. This service is far too one-sided at present to be of maximum value.

Consideration should be given to turning the service into an industrial relations advisory service to provide facilities in the shape of schools and seminaries where employer and employee representatives can meet to discuss the principles of industrial negotiation rather than specific cases. There is a major fault in the present system in that all too often the first contact that the college-trained employer representative has with the trade union movement is when he faces an aggrieved shop steward across the table to argue a specific case. That is a great misfortune.

Despite the immense size and importance of the industry with which I have been associated as a trade union official, namely, the National Health Service, it has no industrial relations department, nor is there a person whose task it is specifically to deal with industrial relations. Discontent amongst many of the staff in the National Health Service does not hit the headlines in the Press, simply and solely because of the tremendous loyalty of these employees towards their patients. Many hospital porters' lodges and many nurses' common rooms are seething masses of discontent, but not upon the major issues. The answer to nursing recruitment is not to be found purely in salary scales, nor in conditions of service. Much of the staff wastage problem in the National Health Service and elsewhere is the direct result of perpetual, festering, small and, on the surface, trivial complaints which are never dealt with by people with specific responsibility for dealing with those complaints. This is a field where experiments in modern industrial relations techniques are both desirable and essential.

Finally, the time has come to remove the aspidistras and the odour of mothballs from the negotiating chambers. We are living in a world which has changed out of all recognition within living memory. The rôle of trade union representatives today is not the r61e which trade union representatives undertook perhaps twenty years ago. I have had some arguments on this point with former colleagues. The emphasis of relationships has changed completely. Unless we can achieve peace in British industry and unless both sides recognise the need for some genuine positive degree of at least peaceful co-existence, all the discussions in the House of Commons about improvements in living standards at home and abroad will be but memorials to the economic opportunities we have missed.

7.34 p.m.

Lady Tweedsmuir (Aberdeen, South)

I think that all hon. Members would like me on their behalf to congratulate the hon. Member for Greenwich (Mr. Marsh) on a maiden speech which was able, sincere and important. I very much admire the hon. Gentleman's courage in addressing the House so soon, because it was three months before I dared to do so. I was very much impressed by the fluency of the hon. Gentleman's arguments, but above all by the subject which he chose. The hon. Gentleman pinpointed one of the most important factors in the economy in Britain today. As a trade union official who understands personally and intimately the problems involved, the House will want to hear him often, helping us in our deliberations on this subject.

I felt particularly attracted to the hon. Member's speech because he laid such stress on the personal touch. For a short time during the war I worked in industry in a munitions factory, and I am absolutely certain that many of these disputes can be prevented in the early stages, long before they grow quite out of proportion to the cause at the start.

This debate is of special interest, because it shapes the mould in which this Parliament will sit for the next five years. The Prime Minister gave us the key to the work which we should do when he said at the end of his speech yesterday: let us now begin our labours in unity, confidence and forbearance. A Government with a majority of 100 is not only an encouraging experience, but a sobering experience. When the Labour Party came into office in 1945 with a much greater majority, hon. Members who have sat in the House since then will remember the famous remark of Sir Hartley Shawcross, "We are the masters now". I hope that we shall say with a majority of 100, "We are the workers now", because we have with great clarity been asked by the people of this country to work for them solidly and sincerely for the next five years.

Never perhaps has there been so great an opportunity before the Tory Party, because never before in time of peace have the problems and opportunities been so great. We have, first, to thaw the cold war and, secondly, to keep 50 million people at work in highly competitive times. The Prime Minister's account of his struggle in international negotiations to reach the Summit was very impressive. On that hinges all else. Easily the next thing in importance is our ability to create and maintain jobs. I hope that hon. Members who sit for English constituencies will forgive me if I talk of Scotland for a short while, because we in Scotland have our very special problems, particularly unemploy- ment. We are quite determined to tackle this question of long standing in Scotland of being too dependent on our heavy industries and therefore often having an unemployment figure double that of England.

That is why I welcome in the Gracious Speech the reference to the Bill to deal with local employment. It is the first pledge of the election which has been honoured. Therefore, I fail to see the relevance of the Amendment appearing on the Order Paper today in the name of all Scottish Socialist hon. Members regretting that there are no specific proposals of sufficient urgency to deal with unemployment. It could hardly be more urgent to present a Bill to deal with local employment on the second day's sitting of the first Session. I should be out of order in discussing its specific proposals now. We shall have plenty of opportunities later.

Mr. Ross

There is no specific proposal in it.

Lady Tweedsmuir

I very much welcome the quite long reference there is in the Address to the fishing industry, and a Bill has been presented today that increases the grants available under the White Fish and Herring Industries Acts of 1953 and 1957. Fishing is, of course, the major industry in my constituency. We have been able to take advantage of the increased grants made available by the Government in the past, and it is hoped that by 1961 we shall have 71 new boats sailing from the port of Aberdeen. It is right that fishermen should have the best, because it was only during the early hours of yesterday morning that we were reminded of the hazards of their calling by learning that five men had lost their lives off the Fraserburgh coast.

What this Parliament seeks to do for employment in Scotland must, by the nature of the difficulties, differ very greatly in various places. The main point is to get industries to take advantage in time of the new steel strip mill, but what matters very much in my own constituency is that we should expand and modernise our existing industries. In recent years I have often found that the problem there is not so much one of capital but of finding new markets, and of holding them in the face of increasing competition. Now that the Board of Trade is taking to itself far more responsibilities in relation to employment, I should like to know whether it is to have close consultation with, for example, the chambers of commerce all over Scotland to try to help particularly the smaller industries to band together to seek new export markets.

What, for instance, will be done through the Board of Trade in Scotland to try to get as many small firms as possible—as well as the big ones—to take advantage of the Scottish stands at the United States Industries Fair which is to be held shortly? What is being done to do the same at the Canadian Fair in Toronto? All these are obvious opportunities for our exports, and I think that the Board of Trade in Scotland should do a great deal more to keep in touch with firms and encourage them to bring us new industry because, of course, it seems to us that the job of Government is to create the conditions in which private enterprise can get on with its own job.

That is why I welcome the statement of the President of the Board of Trade that he is still determined to do everything in his power to try to create a European Free Trade Area larger than the Outer Seven, now nearing completion, because, without doubt, we are likely to lose the chance of a good many American firms establishing themselves in the North—or even in Britain as a whole—if we cannot overcome the disadvantage to us of a close-knit Common Market's attraction for foreign capital.

I must say that today and, of course, during the General Election, I have found that the party opposite is very unclear as to exactly what it would do by way of attracting, directing or steering industries to these areas where it is most needed—

Mr. Ross

That is why the hon. Lady represents a marginal seat.

Lady Tweedsmuir

Yesterday, for instance, the right hon. Gentleman the Leader of the Opposition said that we should control the location of industry, and that we should steer new firms to areas where it was necessary. When the right hon. Gentleman was in Glasgow during the election campaign, he was reported in the Press as having said: Industry should be directed in areas of unemployment We believe in controls, you know, and we are not ashamed of it. Yet, from the Front Bench opposite this afternoon we heard nothing about the actual direction of industry, which everyone knows inevitably means also the direction of men and women in time of peace. Therefore, if hon. Members opposite have either not made up their minds on the subject, or will not declare themselves on the subject, they must support the Government's proposals for attracting industry to those areas. [HON. MEMBERS: "What are they?"]

In what is undoubtedly a second industrial revolution we have to overcome some of the problems so ably mentioned by the hon. Member for Greenwich. The first is to try to overcome the quite understandable fear that new machinery will work a man out of his job. The second is to try to overcome the fear, prevalent in the minds of many people, that new industry, while being, in one sense, desirable, is, in another sense, not so. Many people cannot make up their minds about it.

For instance, the burden of many of the speeches has been the coal industry and the relation of coal to oil. Are we to turn back the clock, and say that because oil is available to industry at cheap prices then, somehow, we have to support another form of fuel? We must try, through Government action, to bring alternative employment to those areas where old or uneconomic pits are being closed, but we all have to recognise just what are the problems of an industrial revolution and learn our lesson from what happened in the first industrial revolution.

I suppose that that industrial revolution made Britain one of the most prosperous and wealthy nations in the world, but it also brought great hardship in its train. Looking back, it seems that it was because of those hardships that the Labour Party was born. It wanted, somehow, to alleviate the destruction it saw of old industries, of jobs and of men's lives. Nevertheless, all evolution is a process of creation and destruction, and we cannot escape from that, but we must try to mitigate the hardships that are caused.

To give an example I must refer to Aberdeen. In Aberdeen we were once very famous because we used to build great wooden sailing ships. We were one of the first whaling ports in Britain. When the steamship came there was a great deal of criticism and heartburning as to whether it was wise to turn from sail to steam. We did, of course, turn to steam. It caused great hardship but that was nothing to the hardship that would have been caused had the fishing ports and other ports of Britain decided to try to stop the advance of modern methods and inventions.

Therefore, I hope that the Labour Party will not mind my saying that I think that one of the problems with which its members have been confronted in the last years is that, knowing of the hardships of the industrial revolution, they have thought "We will try to have controlled creation, or controlled production, in order to mitigate these hardships." After a time, the realists in the party opposite recognised that to do that was to stifle creation. If one tries to control creation too much one stifles all the ideas coming from the countless minds of people in all walks of life all over the country—and any visitor to Britain must, above all, be impressed by the variety of our life and the structure of our industry.

I believe that the whole job of Government is to seek to provide alternative opportunities, but not to stifle change. We must look on change as our ally in a competitive world. In addition to introducing these Measures to encourage industries to come to areas of local employment, or facing possible difficulties in regard to the European Free Trade Area, I very much hope that we will make a really determined effort to solve the whole problem of retraining men for jobs in their own area. We now have plenty of grants for moving men to other areas or training them for other skilled jobs but, if possible, we should seek to retrain, in their own areas, men who do not want to move.

I hope hon. Members will allow me to say, in the debate on the Motion for an Address, because this is the most suitable time to say it, that, after all, what we really hope to achieve in the next five years, is a way of life in Britain that is worth living for everyone concerned, no matter from what part of the country they come. The great debates since the end of the war really have been on the extent of the responsibility of the State on the one hand and the responsibility of the individual on the other. That is really what we have all been arguing about, on whichever side of the Chamber we sit.

Obviously, the more power which a Government takes to itself, whether in key controls, nationalisation, or the direction of industry, the less power is given to the individual and the less the individual is trusted. It is our object on these benches to try in the next five years to give as much power as is possible to the individual, consistent with the responsibilities which the State must have in the modern age, and particularly in a trading nation such as this. Because all human beings, whether in Government or not in Government, can at times abuse power, we have to discover, discuss and decide what checks and balances we should put upon this power, whether outside Parliament or on the Executive.

I am quite sure that the country voted not only for a continuation of the search for peace and the steady advance of domestic affairs, but also for a way of life which will avoid the twin evils of over-government and under-government. For instance, in Canada, a very high standard of prosperity has been obtained through the stability of succeeding Governments, which always tried to avoid extremes. On the other hand, no amount of natural wealth in a country will keep people even above the poverty line if they allow politics to bedevil their economics, which is what happened, as we all know, in the Latin-American countries, some of which I had a chance to visit in January.

Therefore, while we now have both the majority and the unity which will give us the power of decision, I hope that in the next five years we on these benches will steer a middle course between over-and under-governing; above all, that we shall be unhampered by prejudices, from wherever they may come, but will do our very best to act together as one nation in this House because it is only so that we shall ever survive.

7.54 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

Having been elected at the recent election, I rise to speak on a subject to which the hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) referred, namely, unemployment. In doing so, I ask for the indulgence, the tolerance and the forbearance of the House which, I understand, is afforded to new Members.

I was interested in the suggestion in the Gracious Speech for dealing with pockets of unemployment, because we have such pockets of unemployment in Scotland, and I can assure hon. Members that they are very large pockets indeed. Coming from the part of the country to which I belong, I have found it interesting from time to time to hear figures being quoted—and we heard them quoted during the debate yesterday—about the extent of the insurable unemployed in this country being now between 1 and 2 per cent., but I assure the House that that percentage is far greater north of the Border. Indeed, during 1959 we have been faced with the most serious unemployment with which we have ever had to contend since the end of the last war.

While the actual percentage of the insurable population who were unemployed in the United Kingdom was 2.8, it was actually 11.4 in my own constituency of Coatbridge and Airdrie. If, therefore, we intend to tackle this problem, if we believe that it is serious and if we are sincere in our efforts to try to deal with it satisfactorily, in my view the Bill which was introduced today will require to contain several other provisions, without which it must become an abortive piece of legislation.

The figures to which I am referring are not those of casual registrations at the local employment exchanges. Nearly 14 per cent. of the total were unemployed for two years and more, and indeed 80 per cent. were unemployed up to a period of nine months. There is no question of people changing jobs. This is a problem which is serious in every sense of the word. Unless, therefore, the Bill recognises the seriousness of the situation we cannot hope too much from any of its provisions. Indeed, I can say quite frankly as a member of a local authority that we have been trying for the past five or six years, by representations made through our own offices in Scotland and at Westminster, to make our views known in order to safeguard the interests of our constituents, but, I am sorry to say, without any great deal of success. I hope that the proposed legislation will effectively solve this problem once and for all.

I should like to see in the legislation some steps being taken which will deal with the immediate situation until such time as new industries arrive and are in production. We have learned nothing, not even from the hon. Lady who preceded me, about what these provisions are likely to be. Frankly, therefore, it is very clear to those of us who have been afflicted with the scourge of unemployment for the past three or four years that unless something of that nature is done we shall have to continue with serious unemployment over the next few years. We suggest—I have suggested it, and so did the local authorities—that immediate relief must be given, and that a great responsibility rests on the Government to adopt several measures to that end.

Personally, I feel that the Government should use their good offices, wide powers and influence to steer orders for Government work into these localities in which industries have been running at far below capacity for the past two or three years. That would immediately bring about some relief in these localities. I also believe that the Government could take other remedial measures very soon. They could, for example, begin schemes of social service development that would relieve the serious unemployment existing at the moment.

I was not a member of the last Parliament, but I suggest that if they would pay as much attention to a canal which runs through my division as they did to another canal in another part of the world, they could remove a filthy objectionable, obnoxious extent of water which is a disgrace to our community. If hon. Members could realise that running through our main thoroughfare is such a piece of objectionable obscenity, they would understand how necessary it is that it should be removed forthwith. It is the antithesis of modern town planning. In addition, apart from the resulting benefit to public health, its removal would mean that it would no longer be a menace to life and limb and policemen might be relieved of the duty of fishing people out of it in the course of enforcing law and order in our community. There is a scheme which should be provided for in legislation which would assist us immediately in our quest.

There are other measures which could be taken. After all, the situation is very serious, and it demands serious thought. It demands prompt, not ultimate action. To proceed now with the building of new schools, the extension of existing schools and the remodelling of obsolete schools would be another way of making an effective contribution to dealing with the problem.

The Government must tackle the matter of new industries far better than they have in the past. If the provisions of the Bill are intended to deal effectively with new industrial development I feel that I must remind the House that several promises were made during the last Parliament. Indeed, I recollect a promise for an advance factory for my part of the country. It has not materialised. As a new Member, I wonder what has happened to it.

We have heard it said that one cannot direct industries. The noble Lady spoke about steering. I have heard so much about steering since I came to this building that I almost feel that I have travelled steerage to London. Action can be taken immediately in these matters. I suggest that we require a planned approach to industrial development. We must reject the laissez-faire attitude towards providing employment, attractions, pursuits and interests for our insurable population. I should like to see diversified industry. I do not wish to see only heavy industries or medium industries, like the noble Lady; I should like to see light industries also. I do not believe that it is beyond the wit of modern government to examine the employment aspects of a constituency and plan accordingly. I ask that affection, interest and energy be devoted to that end.

We have heard much about not directing industries. I am not asking the Government to direct industries, although I recall that, not so long ago, they did direct workers all over the country. What they can do, however, is to direct State-controlled industries to these localities. Surely, one can direct publicly-owned enterprises, industries and services into these localities forthwith in order to relieve our unemployment.

Another factor which must be included in legislation is much more direct help for local authorities, so that they may be assisted financially to play their part in inducing new industries to the constituencies where unemployment now presents a pressing problem. After all, if the local authorities can be assisted financially to prepare sites, to lay down the roads and to provide the drainage, water, electricity, and all the other services required, a very great service would be rendered to mankind in the constituencies concerned. There is surely a greater prospect of attracting potential industrialists into a carefully planned and laid out site than there is of inducing them to enter empty fields. For those reasons, I hope that the coming legislation will provide for financial assistance to local authorities.

Those are only some of the measures which could be contemplated to deal with the problem. I appeal, therefore, on behalf of a very hard-working community, and I ask that the industrious people of Coatbridge and Airdrie shall be guaranteed one of the fundamental rights of British citizenship, that is to say, the right to work.

8.5 p.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

I am sure that the whole House would wish me to congratulate the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) upon having taken the inevitable plunge so early and having taken it with such success. It was impossible to listen to him without one's mind going back to his predecessor who used so often to address and to delight the House from, if I am not mistaken, almost exactly the same place on the benches. When one heard the vividness, the incisiveness and the confidence of the hon. Member's speech, it was quite clear that both the House and Coatbridge and Airdrie have succeeded in finding an efficient and suitable replacement. There was in the hon. Member's speech a raciness of local feeling and local patriotism. This House will be a poorer place if hon. Members do not bring to it, quite apart from national and party policy, local and personal contributions. For that reason, if for no other, we shall look forward to the future contributions of the hon. Member for Coatbridge and Airdrie who has made his debut so successfully this evening.

The last three speeches have brought us back to the general issues of economic policy. The debate upon the causes and the effects of what happened at the General Election a few weeks ago will, I am sure, be protracted long beyond the period of this present debate upon the Address. But it would be difficult to deny that the increase in the representation of the Conservative Party in the House, which has now occurred in four successive General Elections, indicates that an increasing number of our fellow citizens are disposed to seek their own interests and the national interest within the framework of a free society and a free economy, and that they increasingly repudiate the alternative which is offered to them of central control.

This being so, I believe that it is our duty to ensure that we reap the full benefits of freedom; that, on the economic side, we use a free economy to obtain the best return from the resources and efforts of the nation, and, secondly—this other aspect is complementary to the first—that we allot a due share of the ever-increasing national income to those functions and services which the community alone can perform for its members.

It would be a great mistake to assume that we are reaching or even approaching the end of a journey, that, to use a phrase which, I believe, was Professor Butterfield's, we have somehow "walked out of history." On the contrary, I believe that our ever-changing social circumstances at home and our ever-changing economic environment in the world present us with a great challenge and with major problems in achieving our twin purposes, the purposes of working out ever more fully a free economy in this country and of bringing a fresh, vivid and critical definition to bear upon the functions which the State ought to perform.

Among the conditions for succeeding in this twofold task is one which has been hard won in recent years, yet which I sometimes think we are already in danger of taking for granted, namely, the stability of the value of our money, internally and externally. There cannot be any point in a free economy unless the medium in which people take their decisions—individuals, corporations or the country at large—is one which has stability of value. There cannot be successful functioning of a free economy unless there is real and lasting confidence in the medium of exchange.

Closely linked with this condition of success, that of a stable money value, is the whole question of the proportion of the nation's income which is laid out upon central account, that proportion which is laid out on the basis of central Government decision and not in response to the free impulses and decisions of individuals and groups in the community.

A free economy would be an illusion unless the citizen retained a substantial part of his income and the decisions on expenditure and investment were therefore, to a large extent, his decisions. We must therefore jealously watch the proportion which the part of the nation's income spent on central account bears to the whole. We have scored notable successes in recent years in reducing that proportion; but any attempt to maintain it at too a high level—I am far from convinced that it is yet below the danger level—is fraught with the risk of sacrificing what we have gained in stability, and so sacrificing the real advantages of freedom.

With these conditions of success in mind, I should like to mention some of the difficulties, some of the challenges, which confront us in our path. So decisive has been the repudiation of re-nationalisation by the electorate that I think we are sometimes in danger of forgetting the very real difficulties which the existing nationalised industries present. Here we have a great sector of industry which is insulated and isolated from the rest of the economy, whose current operations are conducted on principles and by methods unrelated to those on which the rest of the economy works and, what is perhaps even more serious, whose capital requirements are met through entirely different channels and on entirely different principles.

Between £600 million and £700 million a year of the capital requirements of the nationalised industries is determined centrally by the Government and is procured upon the public credit by Exchequer borrowing. It is a sum which is almost equivalent to the entire Budget deficit in the present year. The endeavour to raise these vast sums upon public credit year by year for the capital requirements of the nationalised industries carries with it the ever-present risk of inflationary borrowing, nor can the isolation of so important a sector from the fabric of the rest of the economy be in the long run successful or wholesome. We cannot rest satisfied or persuade ourselves that we have realised a free economy in this country until the nationalised industries are reintegrated, not necessarily all in the same way but reintegrated, with the economy of the country at large.

I believe that anxious attention is also called for by the claims of private industry upon the public purse for subsidy or subvention. Of course, where an industry and its operations have been distorted for years in the national interest and by State decision there is a strong case for transitional assistance to that industry in regaining a shape which corresponds to its economic function. A very clear example is the aircraft industry, which has an exceptionally difficult period of transition through which to pass. However, constant vigilance is necessary if we are not to slip, from one industry to another, into a position where it is the Government that takes the vital decisions on development and on investment, thereby lifting those decisions entirely out of the plane of a free economy.

The subsidies to which I have referred are in the nature of producer subsidies. On the other hand, price subsidies are today very much less familiar than they were eight or nine years ago. It is one of the great achievements of the last eight years of Conservative Government that we have very largely eliminated the consumer subsidy and have established over the greater part of the field honest prices, which tell the truth about the cost of producing an article and the balance between the supply and demand for it.

Mr. Woodburn

Would the hon. Gentleman explain that in relation to the agricultural industry?

Mr. Powell

The agricultural subsidies are, of course, producer subsidies, and, as I have mentioned, there is a case for the producer subsidy where an industry is in a state of transition from a condition where it was subjected to pressures and distortions to a condition where it can take its place in the free competitive world.

To come back to price subsidy—

Mr. Ellis Smith (Stoke-on-Trent, South)

That does not change the price of coal and various services.

Mr. Powell

Yes, there is price subsidy on coal, but only an involuntary one through the losses incurred by the National Coal Board; but I do not wish to diverge into a discussion of that type of price subsidy. I want to draw the attention of the House to what is perhaps the one remaining important price subsidy, and that is in housing.

This has been an exceptionally difficult field, and it remains so because of the long period over which severe distortion has been at work. We are not here thinking of fourteen years but of forty years during which the economic forces have, for one reason or another, been dammed and falsified by the intervention of the Legislature and of the Government. I do not pretend that I think the transition can be speedily or easily completed, but a situation in which about £100 million a year is being laid out by public authorities on a subsidy which is indiscriminate in its incidence and in its amount cannot be easily reconciled either with a free economy or with a wise delimitation of the functions of the community towards its members.

The housing subsidies, which are the historical relic, the historical deposit, of so many years of legislation and so long a period of social change, illustrate another of the great challenges which we face today—the challenge of recognising how social change is always tending to make our welfare structure obsolescent, so that we have constantly to be looking for new directions for community action while seeking out the directions in which the community's action is no longer necessary because social change and economic advance have rendered public provision superfluous.

There is little doubt, for example, that in the 1930s the size of families, even families as small as those with two children, was a potent factor in depressing people below the poverty line. Since the 'thirties, however, there has been a vast improvement in the purchasing power of wages and in the general standard of living. It would be difficult to contend today that families of that size are a serious factor in the problem of poverty. That leads us to ask whether to redistribute, through the present structure of family allowances, a sum of £125 million a year still corresponds with contemporary social realities.

Twenty, thirty or forty years ago the State was the only conceivable resource for the maintenance in retirement of a very high proportion of the old. In the last fourteen years, however, we have witnessed, and, I believe, everyone has been gratified by it, an astonishing development in private provision for retirement until we have already reached a position in which nearly half the male workers are making some separate and private provision for their retirement. Does this not mean that our State scheme, our scheme of National Insurance, has to be one which will accommodate within itself and will encourage rather than repress this healthy, growing private provision for the needs of the retired outside State action altogether?

These are just two examples of the way in which, unless we keep our eyes open to contemporary economic and social realities, we may burden the State with an expenditure and a machinery of redistribution which no longer correspond with a real need, and thereby hinder or prevent ourselves from assigning the due proportion of the national income to the new and emerging needs which the community must meet.

Much is being said and written about the necessity for this House and this Government to be progressive. "Progress" is a heart warming and satisfying word, but a very vague one. I suggest that the services of this Parliament to the nation will best be measured by the progress which we achieve in the next four or five years as measured upon two scales—how far we progress in realising ever more fully the advantages of a truly free economy, and how far we make progress in discerning and fulfilling those needs which, in the present and the future, the community should, and alone can, perform for its members. If we can make progress in those two directions, I believe that this Parliament will have deserved not less well of the nation than its many predecessors.

8.24 p.m.

Mr. F. J. Bellenger (Bassetlaw)

Listening to the hon. Member for Wolverhampton, South - West (Mr. Powell), I was not sure whether he wanted to dismantle some of the nationalisation that was put into effect during the time of the Labour Government. I should have thought that if the hon. Member were an ardent advocate of a free economy, it would logically follow that he should go on to argue that the nationalised industries, which, he says, suffer under many disadvantages, should go by the board and that we should put the whole lot back into what the hon. Member calls a free economy.

Whatever may be the hon. Member's answer to that question, I gathered that he considers it wrong that these nationalised industries should be financed annually to the tune of some £600 million a year from central resources. I do not see that there is anything very wrong in that once we accept the principle of nationalised industries. The hon. Member, of course, indicates that he does not accept that, and I suppose that therefore the reverse would follow; but he would be a very brave Member of Parliament on the other side of the House who would suggest that we should dismantle the nationalisation of coal, for example, and put it back under a free economy.

Mr. Ellis Smith

He did not suggest that.

Mr. Bellenger

I am trying to elicit what he was suggesting. When we realise that one national service—it cannot be called an industry, it is certainly not a producer industry; I refer to our defence forces—is financed to the extent of £1,500 million out of the Budget every year, I see no reason why it is wrong for the State to finance industries which really belong to the State and which, as the hon. Member said, are to a large extent controlled by the State.

I wish to refer to the speech of the hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir), who has now left the Chamber, and to try to answer her question about whether we on this side of the House are in favour of direction of industry. In my constituency—and, indeed, most of the East Midlands—we are in a favoured position. My constituency contains many coal mines. It is probably that fact which put me back into the House of Commons. I suggest, however, to hon. Members opposite, in their exultation with their large majority and their taunting sometimes of us on the Opposition benches, that they, too, might consider what happened at the General Election. There is no doubt whatever that we on this side must consider what happened in the same way as the party opposite had to consider its own unmitigated defeat in 1945.

Have hon. Members opposite noticed the pattern of the General Election in Scotland and in Lancashire and in the coal mining constituencies? It is well known that Labour majorities decreased all over the country, and, of course, we lost a certain number of seats, some of them by small majorities. The pattern in the coal mining areas, however, can be clearly seen. I speak of one of the three county constituencies of Nottinghamshire, where my hon. Friends and I increased our majorities, and of Lancashire and Scotland, particularly the latter.

What is the reason for this pattern in face of the general trend in the country? It is the fear of unemployment. One can well understand it when the miners, even in a prosperous area like the East Midlands or my own constituency, see the coal which they are digging out of the ground piling up in mountains outside the pitheads. They have the fear which has existed in the mining communities ever since the beginning of this century—the fear that stocks of coal will reach such dimensions that there will be no more room to store them and miners will probably be put out of work. I mention this not by way of criticism of the Government, because I shall be interested to see the unfolding and development of the plans which they describe briefly in the Gracious Speech.

The fear of unemployment may even sound the death knell of the Government's 100 majority. They think at present that they are in power for a considerable number of years, and I have no doubt that the mathematicians, including the right hon. Gentleman the President of the Board of Trade, may have worked out how long it will take the Opposition to reduce the 100 Tory majority and turn it into a Labour majority. I ask hon. Members, particularly those representing Northern constituencies and constituencies where there are heavy industries, to consider that should unemployment increase to the dimensions mentioned by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) in other parts of the country, the Government's majority will soon melt away.

I wanted to say to the noble Lady the Member for Aberdeen, South that there is a way to deal with these problems of large-scale unemployment which show themselves today in various parts of the country. Every time I motor to my constituency I pass through the new town of Stevenage, and quite often when I go south I pass through Crawley. A sum of £200 million of taxpayers' money has been spent in creating new towns from almost zero, with their brand new shops, churches, chapels and houses, and with industries going into them, not necessarily by direction but because they have an inducement to go there. Most hon. Members who have any connection with industry know that when manufacturers make plans for new factories one of the principal items in those plans is labour. There may come a time when labour conditions in the South of England will have reached a point where there will be no more labour left to staff or run new factories. That will create inflation. Indeed, it has created it in the past, because if there is a shortage of labour the law of supply and demand will operate and up will go wages.

This is putting the matter on a material basis, but there is another basis on which I should have thought a Government, particularly one with the majority of the present Government, would bear in mind. It is the moral issue. There is no unemployment in my constituency among miners. Indeed, the industry there is advertising for young miners, but we know that in Scotland Wales and various other parts of the country the mining communities are becoming derelict. Many hon. Members who were in the House before the war and still have a conscience will know the terrible disaster caused throughout the country in terms not only of pounds, shillings and pence but in terms of deterioration among human beings, many of them their own constituents. Have they no responsibility therefore for considering ways and means of dealing with these problems?

I suggest that the new town idea could be superimposed on some of these communities where there is the labour and where there are many of the material factors, such as houses and other amenities.

Mr. Ellis Smith

Provided that it is done on a democratic basis.

Mr. Bellenger

We always hope that in all our considerations we shall keep the democratic factor in mind. Though I agree that it is an issue, I am concerned not with the question of who is to own the new towns but with who is to provide work for these communities. It seems to me that the answer which the Government appear to suggest—that people should migrate to new fields, as they did in the industrial era of the last century—is not the right answer. These communities have been built up where they now stand and, on the whole, the people there are very good and experienced workpeople. Why cannot these communities be utilised as they are utilised in the new towns? The cost in money would not be too great—I have mentioned the £200 million for the new towns created since the war.

That is my answer to the hon. Lady the Member for Aberdeen, South. If necessary, I would direct industry. We did it during the war in a national emergency, and if the emergency is so great among thousands and perhaps hundreds of thousands of our constituents, then the Government have the responsibility to see that by hook or by crook, industry goes to those areas.

I am not against inducements, and I agree with an hon. Member who spoke yesterday and suggested that the Government have to give much more material inducements than they are now offering.

The Government of Northern Ireland offer considerable advantages to industry to go to Northern Ireland—low rates, low taxes, low rents and so on. Why cannot we do that? We give subsidies to all sorts of people in this country. How many millions are to be given to the cotton owners to scrap their spindles? Why cannot we have something like that, so long as we are to keep this free economy? Why can we not offer inducements to manufacturers to set up industries in the underdeveloped or distressed areas, whatever they may be called?

I conclude with a few observations on what the President of the Board of Trade said today about European trade. This is a problem with which he has had to deal for a long time. I shall not say that he has not attempted to deal with it in the best possible manner within the limits of his brief. Of course, he is governed by various considerations with which we are all conversant—Commonwealth trade and world trade. He knows probably better than any of his colleagues in the Government that an extremely dangerous situation is growing in Europe.

The danger is that trade will not be liberated and expanded, but that there will be created two blocks, a situation which may well have grave political consequences. With the greatest respect to the right hon. Gentleman, I am not sure that he is the right Minister to deal with this problem. It is a matter not so much of trade and economics as of politics. It may well be that the journey to France of the Secretary of State for Foreign Affairs will be a step nearer to the right direction than some of the steps which the President of the Board of Trade has taken.

I wonder whether hon. Members have seen a little publication isued by the General Electric Company, which was presumably sent to all hon. Members, called, "The Export Guide". It gives that company's views about the prospects for the Outer Seven and answers many of the questions of hon. Members from both sides of the House with which the right hon. Gentleman did not deal today, possibly through lack of time. It says that many benefits are to be gained from the Outer Seven arrangement by certain of our industries, but it goes on to say that competition for certain other industries will be more severe.

Members representing a constituency connected with the paper industry or other industries liable to be adversely affected will naturally do the best they can for their constituencies and for the industries in their constituencies, but as a House of Commons we have to look at the matter more widely than that. The question seems to be whether the arrangement of the Outer Seven or the Outer Seven and the Six—and we must not forget that there are another five countries outside those two groups in O.E.E.C.—will expand trade. If it does, that will be the answer to many problems. Such a solution was probably at the back of the mind of my right hon. Friend the Member for Huyton (Mr. H Wilson) when he said that we could have borne the cost of all those items in our election programme—including higher pensions and the elimination of Purchase Tax and so on.

Unless the right hon. Gentleman the Leader of the House is trying to fool the public with his statement that we can double the standard of living in twenty-five years, it can only be done in one way, and that is by the expansion of industry and the expansion of trade. Had I been one of the leaders of the party—which is never likely to happen, and I do not know that I would wish to be in that position—I would have said not only that we would keep Income Tax at 7s. 9d. in the £ but that we would reduce it. It used to be the function of the Opposition to resist Governments in their imposition of taxation. Why should we not say that we want lower taxation and that if we were in power we would do it?

It is no good making a statement like that in this House unless one is prepared to offer evidence that one can do it, but I suspect that if the Government are asked how they are going to reduce taxation they will give the answer which everyone, without being an experienced economist, knows: If there is more revenue coming into the Exchequer the Chancellor of the Exchequer has more scope for the reduction of taxation.

I happen to know something about Germany. There is no doubt that on the free economy which the hon. Member for Wolverhampton, South-West spoke about, Germany has built up a prosperous industry. So much so that the Chancellor there, although he has not been re-elected four times like the present Government, has got through on three occasions.

Although I have been a Member of the Labour Party for many years, I am not one of those who believe that the tablets of stone have been brought down from the mountain top, or that any declarations by the prophets that we have in the Labour Party, are like the laws of the Medes and Persians and will remain true forever. I am sure the hon. Gentleman knows from the results of the Election that the people of this country want certain fundamentals and that so long as they get those fundamentals they are, with the exception of a few who are very dogmatic, not concerned with the methods, whether it be by nationalisation or otherwise. They are concerned with opportunities to live their own lives and to spend their incomes, as the hon. Gentleman truly said, in their own way.

We have a very ill-balanced system. Last year, £48 million was injected into Littlewood's Pools, yet the Government come here and tell us that they have not got the money to do certain things which will be conducive to a better standard of living for those who do not want football pools and cannot afford them.

We shall watch with great interest what the Government does. After the opening shots of our first debate today, I seem to detect some new hon. Members on the other side of the House who are concerned with the factors which we in the Labour Party have advocated for years on end and which the trade unions have also advocated. These hon. Members may disagree with our methods or our means of getting there, but I am certain that unless our economic destination is sure the end of the present Government is certain.

8.45 p.m.

Mr. John Arbuthnot (Dover)

One of the difficulties of this debate is that it is so wide-ranging that it is very difficult to follow a theme. The Gracious Speech clearly foreshadows a busy Session ahead and a great deal of useful work to be done. Today I want to pick out four items referred to in the Gracious Speech and comment briefly upon them.

I start with a point dealt with by the right hon. Member for Bassetlaw (Mr. Bellenger), when he talked about the pattern in the coal mining constituencies. As a Member representing about as many miners as any other Tory in the House, I am glad to say that my majority went up instead of down, but the right hon. Gentleman was probably right when he remarked that one of the factors which affected coal mining constituencies as much as any other in the election was the genuine fear of unemployment which miners in the 'thirties and 'twenties suffered from so much.

My first point is a constituency one and relates to the Bill to deal with local unemployment. It will be immensely helpful in relieving some of the fears which groups such as the mining and cotton communities feel so genuinely. It provides further opportunities for employment and replaces the Distribution of Industry Acts. It would be out of order to go into the provisions of the Bill in detail, but in the Dover area we are especially concerned by statements by the National Coal Board in the new "Plan for Coal" which foreshadow a reduction of employment in the East Kent coal field.

At present we have about 7,000 miners, and there is a possibility that if the demand for coal does not increase there will be a reduction of between 1,000 and 2,000 in their numbers. As the law stands at the moment the Government can bring help to areas only where the average unemployment over the previous 12 months has exceeded 4 per cent. It is right that the law should be amended to enable the Government to bring help to areas where unemployment is expected without people having to suffer its hardship for 12 months beforehand.

Those in the Dover area hope to benefit from the Bill should the danger of unemployment threaten them seriously. We hope to benefit from it, especially since, in Deal and the Rich-borough Trading Estate, we have sites which are ideal for factory development. I greatly welcome the decision taken by the Government to bring help to any areas where unemployment may occur as a result of the inevitable developments and progress as it takes place.

My next point concerns the statement in the Gracious Speech that the Government will initiate an inquiry into the workings of the Companies Act. Hon. Members on both sides of the House will welcome this inquiry and hope that there will be an opportunity for individual Members from both sides of the House, as well as for professional bodies and others who are concerned, to submit evidence before the committee set up to consider these matters. We also hope that the deliberations of the committee will not be too protracted. We know only too well the habit which committees have of sitting on and on, until by the time they produce a report the sense of urgency has gone out of the problem which they were set up to consider. I hope that this committee will conduct its deliberations expeditiously, so that we can have something to get our teeth into and in connection with which legislation can be introduced at an early date.

I hope, furthermore, that its terms of reference will be wide. In particular, I trust that they will include the consideration of making legal shares of no par value. This is an old hobby horse of mine and an alteration in the law which was recommended by the majority of the Gedge Committee and accepted in principle on behalf of the Government by the then Parliamentary Secretary to the Board of Trade when we last debated it in this House.

The third item I wish to mention in the Gracious Speech is the determination of the Government to help in the improvement of conditions of life in the less developed countries of the world. Here I speak from very practical experience because, as hon. Members may know, my employment outside this House is connected with the growing of tea in India, Ceylon and the Cameroons. We are all anxious to see a substantial improvement in the standard of life in those countries which are under-developed at present and I feel sure that British industry, and the industry of other countries as well, would like to expand there were it possible to raise the money to do so.

The difficulty about raising the money lies very largely in the high rates of taxation that the Governments of the under-developed countries levy upon those industries which are already there. To take my own industry as an example, if we take into account the rates of income tax, India has a rate of 63 per cent. for foreign-owned companies. If we add to that the export duties levied on tea when it is sold and exported, the result is that out of every £100 earned in the tea industry approximately £75 goes to the Government and only £25 remains to those risking their capital. It is out of that £25 that the money for expansion has to come.

Under those circumstances it is very difficult to persuade people who can invest their money in whatever direction they like to put it into the development of an industry in an under-developed country where the rates of taxation are as high as, for example, in India and Ceylon.

I hope it will be possible for the Government to indicate to the Governments of these countries which need development that if only they reduced their own taxation, as successive Conservative Governments have been doing in this country, expansion can and will take place through private enterprise and private capital. This would be to the untold benefit of the countries concerned and would also reduce the necessity for money, raised by taxation in Britain, to be found for the raising of the standard of life in under-developed countries. I hope that point will be made by the Government in order to encourage these countries to create conditions in which private industry and enterprise can come in and really help to improve their general standard of living.

That brings me to the last point I wish to make with reference to the Gracious Speech in which is foreshadowed independence within the Commonwealth for the Federation of Nigeria in 1960. I approach this from the particular angle of its relation to the future of the British Southern Cameroons.

The British Southern Cameroons is a mandated territory, next door to and at present a part of the Federation of Nigeria. Ethnologically there are much closer ties between the British Southern Cameroons and the French (Cameroons. There is little in common, for example, between the Southern Cameroonians and the Ibos in the eastern region of Nigeria, and I am afraid there is a certain distrust between them. I understand the United Nations is anxious for the British Southern Cameroons to make up its mind, at the latest by 1961, whether to join an independent Nigeria within the Commonwealth or to join the French Cameroons, from which the French will have disappeared by 1960.

To join the French Cameroons would raise formidable problems; differences of language, currency, posts and telegraphs and the problem that French law is totally different from British, which they now use. That says nothing of the danger, once the French have gone, that Communist agitators, expelled from there by the French, may return and cause further trouble: a very real danger in my view. I hope it may still not be too late to give the people of the British Southern Cameroons a third choice, of continuing under British help for a further period. That would give them an opportunity of seeing how matters developed both in the French Cameroons and in Nigeria before having to make up their minds irrevocably.

I believe one of the difficulties is a fear on the part of our Treasury at home that if that choice were to be given to the British Southern Cameroons it might involve a subsidy to the tune of £500,000 a year from the Exchequer, since the British Southern Cameroons is not at present fully self-supporting and obtains some of its revenue from the Federation of Nigeria. I should have thought that if such a subsidy were necessary—and it is by no means certain—it would be money well spent. It would give to these people, for whom after all we have a great responsibility, a breathing space It would free them from the need to take a decision which in present circumstances would have to be taken virtually blind.

There is so much in the Gracious Speech one would like to discuss, but I know that many hon. Members are wishing to catch your eye, Mr. Deputy-Speaker. Therefore, with these few remarks on these four points, I content myself by welcoming the Gracious Speech.

8.57 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I should like to follow the hon. Member for Dover (Mr. Arbuthnot) in his remarks about the need for the Governments of under-developed countries to reduce taxation in the hope that that would be a tremendous inducement to industrialists to move out and to expand their industries in those countries.

That may be true of the tea industry, but in the industry with which I was connected between the wars that was not our problem. The under-developed countries of the world have to create themselves—in large measure by their own efforts, but also with help from us—the necessary educated and trained people as staff, and they have to provide water supplies and other services of all types and generally stable conditions in which industry can operate. That must be done by local taxation, and the Governments in those countries must raise revenue for that purpose.

To suggest that the main thing they can do is to reduce taxation to induce investors from other parts of the world is raising a hare which will not run. What is needed is the physical conditions and necessary qualities of labour to engage in the technological industries which are developing in many countries of the world.

I follow the hon. Member on the point about miners. I represent a Scottish constituency and people there feel that Governments in Westminster, of whatever colour, must learn a lesson. In Scotland there are all sorts of people who feel far removed from all forces that are working in our country to make it so that many can say "We have never had it so good." We do not feel that in Scotland. I am sorry to have to say this, but we just do not feel that we have "never had it so good". In the coalfields and districts where there are heavy industries, in my constituency where more than 300 skilled workers have been forced in the last few years to come to England, leaving their wives, children, mothers and fathers behind, when they saw those posters they really did not believe it, but were rather offended. I know that we have Departments in Edinburgh and we have what I call the illusion of a good deal of self-administration; but, whatever we want to do in Scotland, the Secretary of State has to run cap in hand to the Cabinet, which has to go to the Chancellor of the Exchequer to find out if there is enough money to do this, that or the other.

I feel that this may not be practicable. It is not in my party's manifesto, but why talk about party manifestos when one can read them? This House of Commons is the forum of the nation and it is here that we individually should say what we have got to do, because everyone can read the manifestos of both parties. I am making a suggestion which is not in either party's manifesto. I think that in Scotland during the lifetime of a Parliament we should not have week after week, month after month, to send Members of Parliament, deputations from the local authorities, and the Convention of Royal Burghs and Cities to the Treasury for £500,000, £1 million or £2 million to do this, that or the other.

I think that there should be appointed in Edinburgh a Financial Secretary of State for Scotland. We should have a central bank in Scotland and a department of the Treasury in Edinburgh so that Edinburgh would be the metropolis of Scotland, with a Treasury Department in Scotland. In the annual Budget there should be an allocation to the Treasury in Edinburgh of a decided proportion of the Budget, £1,000 million or whatever it may be, and the Scots should decide their priorities and how this money should be spent. That is how we feel about it.

Mr. Ellis Smith

Would the income come from Scotland?

Mr. Bence

We would get our income from the United Kingdom. After all is said and done, the heavy industries and many of the other industries in Scotland make a tremendous contribution to the income of the United Kingdom. We are part of the United Kingdom and we make our contributions in many ways. I see no reason, as we have a system of Government grants, why we cannot have an annual block sum for a Treasury Department in Scotland which would be a department of the Treasury here. It would mean that the Secretary of State for Scotland and St. Andrew's House could become a centre to which the local authorities could put their own requests and problems and we could make a decision in Scotland as to how these sums would be employed.

Mr. H. Hynd (Accrington)

Would not that mean some more Under-Secretaries of State for Scotland, and, as there are so few Conservative Members for Scotland, where would we get them?

Mr. Bence

If something is not done to give Scotland a greater consciousness of its place in the United Kingdom there may be no Conservative Members at all. If that time comes the seventy-one Labour Members for Scotland will have to appoint a Secretary of State among themselves and begin to run the show as an independent nation. No one wants to reach that position. We must recognise the fact that in Scotland there is a feeling that we are isolated from the general benefits that flow from the Treasury down here.

We contend—and there is plenty of evidence for this—that a large proportion of the money which the Government spend in this country, particularly on the Armed Services—and an awful lot is spent down here—used to be spent in Scotland. The Greenock Torpedo Works and the Rosyth Royal Naval establishments have been closed. We know that their work has not been discontinued and that the function which they used to perform in Scotland is now performed down South. We have seen these industries removed from Scotland, not to be abandoned, but to be continued down South.

We have an almost deflationary position in Scotland compared with the high pressure in the South of England. Nevertheless, because of trade association and manufacturers' agreements, we do not benefit from the lower economic level of activity, from more unemployment and a lower wage level, in correspondingly lower prices for commodities. This can be seen by a survey in the shops of prices of food and clothes, many of which are controlled by the huge chains, monopolies and associations. Often transport charges are added, too. We pay more for products in Scotland than in England because a transport charge is added. The commodities are manufactured here and a fixed price is agreed between the manufacturers and retailers. A transport charge is then added, with the result that the price level in Scotland for a wide range of consumer goods is greater than in the South, although the wage level and the level of economic activity is lower in Scotland than in the South. Forty years ago this would not have been so, but it is so today.

For what are we waiting in Scotland? The Government say that there must be general expansion. Have we, in Scotland, perpetually to await over-full employment in London and the Midlands in order to have near-full employment in Scotland? Is that the Government's policy? Are we to be dependent on overcrowding down here and too much full employment here before we have near-full employment in Scotland? If so, the Scots are not prepared to accept it. We reject that proposition. We want expansion in Scotland. Expansion can be carried out there if more Government money is deployed in Scotland.

In two years' time the shipbuilding industry will be in a parlous condition. It is the great basic industry of the Clyde. Without shipbuilding on the Clyde the whole Lowland industrial belt will collapse, for it is the major industry. John Brown's yard is one of the most famous yards in Britain, if not in the world, and it is the best advertisement on the North Atlantic for British shipbuilding. For forty years their ships have plied across the North Atlantic, and they have a great reputation.

We are awaiting for two vessels to be built. It is twelve months since the Galbraith Committee was set up to investigate the problem of nuclear propulsion. A consortium of companies was established, and some of us who are interested in marine engineering were invited to the Board of Trade office in Whitehall to see six nuclear power units for marine propulsion. We have heard nothing about this since. Has the Galbraith Committee reported? Has a decision been taken on which of these forms of marine propulsion will be employed?

We understand that the two Queens are to be replaced. Will they be designed with hulls suitable for conversion from the conventional method of propulsion to nuclear propulsion? This is vital, because Britain is still a maritime nation. We are still the centre of an oceanic Commonwealth, and it is vital to us that we keep the lead in shipbuilding. We must keep it. British shipping and shipbuilding earns for the nation a great income from all over the world. The hon. Member for Somerset, North (Mr. Leather) said that 49 to 50 per cent. of the world's trade is still done through the London market. Certainly many of the world's cargoes are still carried in British ships. Unless we keep ahead of American development, however, I am afraid that we may well face difficulties.

I will not mention any of the companies, although I know that John Brown of Clydebank has played a part in designing a mineral organic reactor suitable for marine propulsion. Whether it has been tried out I do not know, but I have seen a model of it. The people of Scotland are entitled to know how far this development has gone and what has been done and what will be done by the Government to protect British shipbuilding and to give it the opportunity to keep its yards going and to keep the British merchant fleet on the seas in competition with the United States, Germany and Japan, who are subsidising their shipbuilding to a great degree, both in construction and in the running of their merchant fleets. We cannot afford to be driven off the seas.

I turn now to consider the problems in coal mining. There are forty or fifty pits in my constituency. Some of them have gone and many of them will go. It has always struck me as unfair that compensation was paid for physical assets taken over on nationalisation in 1946, yet many of the assets are now exhausted; but the coal industry has to bear the cost of taking over assets which are of no more use. Many mines are exhausted. In many other mines the seams are full of tremendous faults and the coal is difficult and costly to mine. The National Coal Board still has to pay compensation as a charge on its industry for assets that have been exhausted.

I recall that when I was young the company I worked for summoned its shareholders to a meeting and wrote the £1 shares down to 2s. 6d. Times were bad. The industry was in a bad way. The shareholders had to accept it whether they liked it or not. The company cut its losses and wrote down its shares. Why should not the National Coal Board write down its capital cost? If it is good enough for private enterprise why cannot a nationalised industry do it? The coal industry should be relieved of the burden of compensation for this huge conglomeration of outworn and exhausted pits.

The attitude of some hon. Members and some members of the British public to the coalmining industry and coal miners is deplorable. I am not a miner, but I have worked as an engineer in a number of pits in the Wesh coalfield. From the age of fourteen or fifteen a miner learns a valuable skill which is of no use anywhere else except in mining. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) is a pattern maker. Another of my hon. Friends is a toolmaker. I am an engineer. All sorts of people want such skills, and those skills can easily be sold. The miner is in a special category. As soon as he leaves the pit as a skilled miner he is a labourer.

We know when a coalfield is being worked out. We know when the coal in a pit is becoming exhausted. That is known long before the coal is exhausted. Any Government responsible for the social conditions of the people they govern should take energetic and effective action. After all, that is what Governments are for. Governments do not create prosperity. During the General Election I was shocked when I saw posters claiming that the Tories had created prosperity. I had never heard such nonsense in my life. The people who create prosperity in this country are the people who dig coal, the people who build ships, the people who organise shipbuilding, and the people who produce machines such as washing machines and radios. These are the people who create prosperity, not Governments. It is not the function of a Government to create prosperity. It is the function of a Government to see that prosperity is reasonably distributed and that, within that prosperity, there is justice for every section of the community.

The miners of this country are not getting a square deal at present. They have not had a square deal for the last six years. As young men they were induced to go into the mining industry to be trained and to become skilled. Yet within a few years, because of oil and other factors, they are not wanted. A Government who see that the mineral resources of a coalfield are becoming depleted should take immediate action to ensure that alternative occupations are provided in the area for the men who they know will be displaced.

Is this being done? It is certainly not being done in Scotland. In my constituency there is a triangle running from Kilsyth, through Twechar, Croy, Cumbernauld and back to Kirkintilloch. That triangle has pits dotted all over it, but many of them are already closed. Two closed a few weeks ago, others are to be closed next year, and all are to be closed in ten years. In that triangle there are 22,000 people, all dependent, in the main, on coal mining. They know that the coal will be exhausted in ten years, but they cannot move from the district. That is just the place where an industrial estate could by now have been in the planning stage to create alternative employment for that mining population—

Major W. Hicks Beach (Cheltenham)

Surely, what the hon. Member is now telling us—and I have full sympathy with what he says—shows the tragedy of nationalisation.

Mr. Bence

That remark merely proves what I have said here many times before as an engineer; that we could tell the directors anything we liked, because they knew nothing about the techniques or the conditions under which we worked. If the hon. and gallant Member can demonstrate to the House that, before this industry was nationalised, coal kept growing, that it did not become exhausted, but that, after nationalisation, it became an expendable material, I will agree that nationalisation was wrong. Personally, I never thought that when we nationalised the coal-mining industry we altered the very nature of the product that we first found in the earth some 600 years ago. The coal is there; when it is extracted it cannot be replaced. Nationalisation had nothing to do with that fact. I cannot understand why the hon. and gallant Gentleman interrupted with such a remark.

In Scotland we have thousands of men who are being denied the right to exercise their industrial function in the status to which they have been used for many years, Monetary compensation is no good to them. That is not what they want. To a man like myself who has lived by his labour, monetary compensation is not wanted. I do not want an employer to give me monetary compensation—I want a job. I believe in work, and I know that our working people want to work. They do not want to knock off at 50 years of age with a couple of hundred quid. That is no use to them. They want a job, and they are entitled to a job.

A society that induces young men and women to enter into specialist industries and gain specialist skills has a particular responsibility to see that throughout their lives those people are able to use their skills and talents to maintain themselves and their families—

Major Hicks Beach

The hon. Gentleman has still not answered my question. What, in fact, has nationalisation done since 1946 to deal with the problems of the coal-mining industry? That is all we want to know. If nationalisation is right, can we be told how it has helped these unfortunate people, who have my full sympathy?

Mr. Bence

I remember the Welsh coalfields between the wars, when the demand for coal kept dwindling, and whole pits were thrown on the scrap heap wholesale by the coal companies. On the other hand, the National Coal Board has kept men in work by deploying them from pit to pit, and has maintained a reasonably just system such as was not seen in the 'twenties and 'thirties when the pits were privately owned—

Major Hicks Beach

The hon. Gentleman's grumble, as I understood, was that now unemployment has been created in the coalfields by the Coal Board—[HON. MEMBERS: "No."] I am much obliged. I thought it was the Coal Board, because I thought that the Coal Board was in power.

Mr. Bence

My plea is not to give more employment to men digging coal but to provide alternative occupations for men no longer required to dig coal. In fact, all my life, I have always said that I hope to live to see the day when we shall fire our boilers, generate our electricity and drive our ships and trains without having to force men to go down into the bowels of the earth to work under dangerous conditions. I have always hoped that we should get our warmth and our motive power for our machines by other means. I had hoped that we should find other means of doing it.

During the election campaign, my hon Friend the Member for Lanarkshire, North (Miss Herbison) and I spent two days at the pit waiting for the bodies of forty-six men to be brought out after an explosion. We cancelled our election campaign for the time. These forty-six men were killed when a spark from a booster fan, boosting air to the mining roads to the coal face, started a fire. These men lost their lives through a spark from a fan. I hope I shall live to see the day when we shall get all our heat and motive power without having to endanger other people's lives. That spark killed forty-six men, but it could have been nearly 400. Fortunately, it was the beginning of a shift, and only forty-six men died.

I am not pleading for more miners to dig more coal. I am saying that it is the Government's responsibility to provide alternative industries in the mining villages, because the Government are responsible for the social well-being of these people and of everybody else. The Government must take action to see that these people are provided with alternative employment long before the pits become exhausted.

There is another point concerning my own constituency. The burgh of Milngavie agreed to take overspill population from Glasgow, and under an overspill agreement it was to have new industries going out from Glasgow. The agreement was signed, and a month afterwards, industry went out of Milngavie back to Glasgow, and we now have an empty factory in Milngavie. I have been in touch with the Board of Trade, which said that it cannot find a customer for it. Here is this empty factory in a burgh which agreed to take overspill population from Glasgow on condition that new industry came with it. The Government do nothing about it, and neither does the Board of Trade.

I was at the opening of a new factory in Kirkintilloch, when the trumpets were there and the flags were out and it was a wonderful show. I was shown round it on one Friday, and the next Friday the firm was declaring redundancies, because the order had gone there from England. I went to two other factories where two-thirds of the work came from Government orders. When we were in power, they always had 100 per cent. of the work of a Department, but this Government have reduced it from 100 to 29 per cent. But this Government always said that they would do everything they could to bring industry to Scotland. They have been saying that for years, but now in my constituency they are taking it out.

There are two other points I want to make, because I feel strongly about them. We hear a lot about two nations and Disraeli. If Disraeli were alive today he would be talking about two nations. He would talk about the nation which pays its Income Tax on P.A.Y.E. and lives on what is left, and the other nation which lives on expenses. These are the two nations. There are more of the latter sort in the South than there are in the North. There are a few up North, but there are more down here.

During the General Election campaign, my opponent said that the Government would do something about it, but there is not a word about it in the Gracious Speech. Naturally, I spoke of the two nations in my constituency, and my Conservative opponent, when he saw it reported, got cracking on it and he himself said that something ought to be done. Fortunately, he is not here to mention it. I am doing it on his behalf. He said that it was disgraceful that businessmen should live on business expenses and have their incomes as pocket money.

Mr. Ellis Smith

How does it operate?

Mr. Bence

I do not know. Perhaps an hon. Member opposite will tell us.

Major Hicks Beach

There has been a great deal of talk about directors' expenses and so forth. Does not the hon. Gentleman agree that the subsistence allowance which, as he knows, trade union leaders receive for conferences and the like is the same sort of thing? Does he think that that should be taxed?

Mr. Bence

What has that to do with it?

Major Hicks Beach

It is rather an important point, is it not?

Mr. Bence

It has nothing to do with it. Business expenses are a wonderful racket. They are not the same thing as subsistence allowance. Unfortunately, some businessmen, when they speak of subsistence, expect to have their subsistence at a very high level indeed, a far higher level than my union would ever countenance. I am quite sure that what any businessman would call subsistence includes a great many things which would never be stood for in my house.

Major Hicks Beach

It is subsistence allowance, and that is what the hon. Gentleman is talking about.

Mr. Bence

I am not. I am referring to business expenses generally, and the argument about subsistence is a "phoney" argument.

Major Hicks Beach

It is a very awkward point, is it not?

Mr. Bence

No, it is not awkward.

I appeal to the Government to tighten up on business expenses during the life of this Parliament. They represent one of the greatest rackets in this country today, a racket practised by all sorts of people in industry. What business people escape in Income Tax the rest of us have to bear when we pay under P.A.Y.E.

There have been several speeches referring to youth and corporal punishment. Our boys and girls today are stronger, more virile, more dynamic and, I am sure, much more precocious than we were when we were young, but they are plunged into a much more difficult world than the world into which we were pushed. When I look at the world of today, at the conurbations in which we live and the complexities of modern society, I am sure that the world into which I was pushed at the age of 15 was a far simpler one.

It is not right to throw young people out of the nest at 15 and to drop them into the vast modern world with all its temptations and entertainments and then to think about how we can wallop them or do something to overcome the damage which is done. No child should be released from educational influences at the age of 15. I am certain that there is not an hon. Gentleman opposite who would for one moment consider his child leaving school at 15 and taking the plunge into the complex society in which we live. In our modern community, with our capacity to do so much, we should do everything possible to ensure that every child comes within the educational system and remains to continue his education far beyond the age of 15.

It may be that we have not enough teachers or school places at the moment to raise the school-leaving age to 18, but we have our youth advisory services. The niggardliness of some county councils and their attitude to the youth advisory service is really shocking. I know the youth leader in my constituency very well. He works very hard. I bet that he works 16 hours a day, but he is grossly underpaid. His work is not recognised to the degree that it should be recognised, but he will keep more boys and girls out of mischief than any rod, birch or reformatory school, because he takes them over after, and even before, they leave school.

This is one of the ways in which we can deal with the problem of delinquency among adolescents. Many of us have been fortunate enough to have the opportunity to keep our children actively engaged in creative and positive work. We have kept our children on the rails, but not everyone can do that today. Youth leaders dealing with the youth of our country between the ages of 15 and 21 are the people on whom we should concentrate all our efforts if we are to protect our children even from themselves and from the dangers of the world in which we live.

We talk about protective rather than curative medicine. This is the sort of protection which we should carry out. This is the sphere in which we should spend more of our resources—among the boys and girls leaving school at 15. Those who go to university until they are 21 are under some kind of control, but it is a different proposition when younger people are turned out on to the streets and into the factories. A greater status should be given to youth leaders. That is one way in which we can try to stave off the delinquency about which we talk so much today.

In conclusion, I agree with something said by one of my hon. Friends who accused an hon. Member who represents a constituency in Liverpool of exaggeration. He spoke about how the people in Manchester were "bashing one another over the head" and doing all sorts of terrible things. I was telling my father, who is 83, about this, and he said, "I was manager of a butcher's shop in Bute Street in Cardiff in 1890. Policemen went down Bute Street four at a time, but there was far more bashing about in the 1890's than there is today. People of my age who say that there is more brutality today than there was sixty years ago are talking nonsense. It was then a much harsher and crueller world." There was far more brutality among ordinary people than there is today, but it is spotlighted more today than it was then. Areas like Tiger Bay are spotlighted, but it is now possible for a person to go down there any day of the week and it is like a Sunday afternoon treat. It is quiet, but that was not true even fifty years ago.

I hope that the Government will ensure that the exaggerations mentioned in the House about the behaviour of our youth are corrected and that things are put in their proper perspective. If in the next five years the Government are successful in doing for Scotland what they ought to do, things may be better for them. I want, and I am sure that everyone in Scotland, whatever his political views may be, wants a squarer deal for Scotland than we have had in the last eight years.

9.34 p.m.

Mr. F. V. Corfield (Gloucestershire, South)

I am glad that the hon. Member for Dunbartonshire, East (Mr. Bence) has spent so much of his speech in dealing with his own part of the world. That gives me perhaps a precedent to do likewise, and I am sure that he will forgive me if I do not follow him. I want to say a few words about a subject which looks like having some prominence in this Session, even though the reference to it in the Gracious Speech is perhaps more indirect than direct. I refer to the future of the aircraft industry, which is of such over-riding importance to a very large number of my constituents.

I welcome very much the creation of a new Ministry of Aviation and the appointment of a senior Cabinet Minister to be in charge of it. I think that the industry as a whole welcomes that too. It is a step that has been advocated on a number of occasions in this House by myself and many others, because, despite the considerable personal qualities of my right hon. Friend the former Minister of Supply, I have felt for some time that he was becoming more and more in an impossible position. Nominally responsible to the House of Commons for this important industry, he was the junior of a considerable number of Ministers, many of them in the Cabinet, who shared that responsibility or in some cases had in effect a greater responsibility.

In a speech on the Address, it would be inappropriate to recapitulate in detail the problems and difficulties that have overcome this industry in the last few years. It has been done on many occasions in the past, and I think it is true to say that there is broad agreement on the problems and difficulties, even if there is little agreement on the remedies.

It is, perhaps, fair to say by way of summarising that the main causes of those difficulties are, first, the loss of the military contracts which enabled so much development to take place at Government expense to cover the overheads and to enable that development to be adopted for civil needs. It is that loss of so much military work which emphasises the widening gap in our competitive power with the Americans, who still have an enormous military demand which continues to underwrite a great deal of their civil production.

Secondly, we have a very small home market for aeroplanes. It is necessary to sell about 100 of almost any aeroplane to cover its costs, but the most that any firm could hope to sell of any aircraft in this country alone would be between twenty and forty. That is a matter both of geography and of our much smaller military forces as compared with the United States. We must face the fact that there may well be similar advantages to those possessed by the United States building up in the Common Market countries of Europe, and I hope that we shall bear this in mind in tackling the future pattern of our aircraft industry.

Thirdly, I think that the other main cause is something that is always present with a progressive industry. The enormous speed of technological advance makes it almost inevitable that from time to time what appears to be the best and wisest possible decision may prove to be wrong because it has been overtaken by developments elsewhere. Indeed, that has been the subject of a good deal of criticism in this House in the past.

One remembers how the Comet disasters were cited and the icing troubles with the Britannia. Of course, there have been mistakes. But in any industry which, if it is to progress at all, must for ever be trying to cross the frontiers of knowledge, it would be surprising if there were not. I hope that we shall treat these mistakes and failures with a proper sense of proportion. They are not confined to British aircraft. We have only to read our newspapers almost any day to know the sort of thing that is happening with the Boeing 707. Whatever may have been said about the Britannia when minor things went wrong, at least it did not scatter its engines about the world!

We have also to bear in mind the considerable contribution that the aircraft industry as a leading engineering industry makes to other industries. And it is as well to remember that not all the delays are attributable to the industry. I hope that the new Minister of Aviation will make it a matter of first priority to ensure that once a decision to back a certain aircraft is taken, there will be no unnecessary delay until the contract is signed or the firm is in some other way given an order to go ahead.

I think it was last spring, certainly it was a good many months ago, that we were told at long last, after many Questions in the House, that the Government had decided to order the Argosy Freighter and the Britannic Freighter for Transport Command. I believe that no contract has been placed yet for either aircraft, or for the engine for the T.S.R.2 combat aircraft to replace the Canberra. It is not fair to blame the delays on the industry unless the Government are themselves quite sure that they are not responsible.

We have had evidence in the past—and the Britannia made in my constituency is a shining example—of the results of delay. Moreover, in this interim period in the aircraft industry, when it is changing over from the completely different circumstances that existed when we were making more military aircraft, all the financial difficulties which delay involves can constitute a considerable embarrassment to the firm concerned. As a result, few of them are in a position to meet these difficulties, because the cost of research, development, and the production of any new aircraft is by any other standards almost astronomical.

In the past, my right hon. Friend the Member for Hall Green (Mr. Aubrey Jones), as Minister of Supply in the last Administration, was absolutely right, as a first step, to encourage the amalgamation of firms both in the airframe industry and in the aircraft engine industry with a view to providing stronger financial units and stronger productive units. I am sure that that was essential as a first step, but all the evidence in the last two or three years, and indeed all these projects on the building line at the moment, show quite plainly that that has not been enough.

With the best will in the world and the best skill in the world, which I believe that we still have, once a decision is taken, because of developments elsewhere or even a change in fashion we cannot guarantee that a particular aircraft will sell. We have examples before us today in the two very promising aircraft, the Vanguard and the V.C.10, the manufacturers of which have been facing considerable difficulties because orders are not coming forward in anything like the number required to break even. The company is facing considerable deficits.

We must realise that no company, however strong, can go on facing that type of loss. What is much more important is that the more efficient the firm, the more it has tried to co-operate with Government policy by forming amalgamations and by diversifying its products, the less likely it is to continue to bear this loss. It is precisely these companies where they have a comparison of the use to which capital and labour is being put in their various other enterprises which sooner or later will decide that those other enterprises cannot go on indefinitely subsidising their aircraft production.

These, which include some of our most prominent firms, therefore could well go out of the aircraft business quicker than the others. I hope that that will be borne in mind when the Government decide what projects in future should be backed by Government finance. The evidence is overwhelming, that if we want an aircraft industry—and I am certain that we all do—Government finance is necessary for new projects, at any rate over this period of readjustment.

I hope that once a decision is taken, on the assumption that the Government take the best possible advice available, which I have no doubt they will do, neither the House nor anyone else will be too critical if, with the advantages of hindsight, it is discovered later that there have been some mistakes.

I believe that any policy of parsimony and safety first is in grave danger of leading us to a situation in which there is no aircraft industry in this country to compete with the very powerful aircraft industries in America, and what may become the very powerful aircraft industries on the Continent. If we are faced with that sort of situation, we are faced, too, with the loss of that tremendous contribution which the aircraft industry has made to helping other industries to keep the lead over their competitors in the export markets of the world.

We have only to think of the new materials which have been developed as a result of research in the aircraft industry; of almost the whole technique underlying the development of computers; the enormous increase in the knowledge of fatigue in metals, and, perhaps more familiar to most of us, the great strides forward which have been made in the development of hydraulic servo brake systems. Those are but a few of the achievements for which the aircraft industry far too seldom gets any credit.

The second essential is that we must face the fact that, however successful my right hon. Friend may be in his policy, there will not be room for all the airframe companies at present operating in this country. We have already seen an amalgamation of the engine companies, which leaves us virtually with two leading firms, Rolls Royce and Bristol Siddeley Engines. Something similar will have to happen with the airframe companies. We have to realise that the decisions which my right hon. Friend makes in the next months or years—and we hope that it will be months—will set the pattern of the industry for the future.

Whatever projects are selected for support, they will have to be allocated to firms, and it is those firms which will form the basis of the future aircraft industry in this country. Whether it be the project of the much discussed and argued supersonic transport, the idea of a small, thousand-mile range turbo-prop airliner, somewhat replacing the Viscount, or in development of the vertical-lift aircraft, those projects will set the pattern for the future of the industry.

From that it follows that there will be some firms which will be unlucky. I am convinced that the proper course is not to attempt to keep the whole industry ticking over at half-cock with constant fears of redundancy and worry, but to concentrate wholeheartedly on those firms for which there really is a place, depending on the projects and so on which are to be started in the next two or three years, and to concentrate elsewhere on anticipating the redundancy which may arise by helping with the diversification of the work of those firms and the introduction of new industries.

I particularly welcome the Local Employment Bill, which has been published today. I remember in the last Parliament getting a rather dirty look from one of my right hon. Friends at the Board of Trade when I suggested that anticipation might be a more practical step forward than waiting for unemployment to rise to 4 per cent., but that has not lessened the welcome I now give to this very important and helpful Measure.

I pay tribute to the men in the industry. Like many other Members from aircraft constituencies, in the last Parliament I had a deputation of the shop stewards of the Bristol Aeroplane Company. Almost unanimously, they assured me that they did not expect to be regarded as having some divine right to produce aeroplanes which nobody wanted. But they expected, and I thoroughly agree with them, to be able to use and to develop their skills if necessary in other industries and in employment which would give them a reasonable degree of security in which they could plan their future and bring up their families.

It is, and perhaps always will be, the first duty of an hon. Member to represent the interests of his constituency, but I am certain that the primary interest, as I have said, is to ensure opportunities for using skill in employment of reasonable security rather than trying to keep a much bigger aircraft industry than the country can properly allow. It is particularly significant and helpful that my right hon. Friend will be responsible not only for the aircraft industry, but for the operators of the aircraft in so far as they are represented by the nationalised air corporations. It is those corporations that form the bulk of the home market without which our chances of exporting aircraft would be very dim indeed.

We all want to see our State airlines taking a leading part in the aviation of the world. Inevitably, many of their competitors will be using American aircraft. In the past there has been far too great a temptation, particularly by B.O.A.C., to wait to see the type of aircraft its competitors were using and then to follow suit rather than to go boldly out in support of a British model.

We must have a real determination to support British aircraft for the next generation. The history of this matter is not at all encouraging. At one time the Viscount was cancelled by B.E.A. It developed into the outstanding aircraft that it became only because of the determination of Vickers, supported by my right hon. Friend the Minister of Supply. If we look back further, we remember with considerable sadness the decision of B.O.A.C. to cancel the V 1,000 aircraft which might well have been more than holding its own with the Boeing 707 and DC 8; and we have rumour and counter-rumour about troubles besetting the DH 121.

One of the great dangers has been the demand by our aircraft companies for specifications which are tailor-made for their own particular routes, instead of looking to the airlines and operators with similar but not identical routes, to whom we must look if we are to have any export market at all.

Finally, there is the more controversial matter of the independents who have played an enormous part in making flying more popular. They can go on doing that and thus widen the home market for British aircraft. One passage in the Gracious Speech says: A Bill will be laid before you for improving the arrangements for licensing air services and airline operators and to ensure the maintenance of high standards of safety. I hope this will include some extension of freedom to enable independents to play their part in flying British aircraft and providing a market.

In conclusion, I do not think that anybody who has studied these problems, however superficially, will consider my right hon. Friend's task an easy one. The industry is at the crossroads. It needs a firm lead and, to a large extent, that lead must come from the Government. Government finance will be necessary to bring forward the projects of the next generation, and the Government, however indirectly, to a large extent control the home market.

This lead must be given soon. We have already lost far too much valuable time. The lead given by the Government will decide the pattern of the industry and whether it will be able to continue to make the great contribution that it has made, and is continuing to make, to other industries.

I wish my right hon. Friend and his Parliamentary Secretary well. I hope that that is a sentiment to which the whole House can subscribe. My right hon. Friend will be dealing with matters that are vital to the industrial welfare of this country, the welfare and security of my constituents, and no doubt the constituents of many hon. Members on both sides of the House.

9.45 p.m.

Sir Colin Thornton-Kemsley (North Angus and Mearns)

Inevitably, debates on the Address are untidy. We all talk about our special points and in the few moments available before this debate ends I do not propose to do anything other than say a few sentences about the problem that concerns us in Scotland more than any other problem, the problem to which the four previous hon. Members from Scotland devoted their speeches, that of our serious pockets of unemployment.

We have always had a higher rate of unemployment in Scotland than in the rest of the United Kingdom. We have our special problem of the Highlands and Islands; we have lately had the immensely difficult problem of the reorganisation of the Scottish coalfields, and we suffer particularly from our over-dependence on heavy industry.

Our main need is diversification, and in the last few years we have gone a long way towards diversifying our industries. It is sometimes not realised that Scotland today is producing about 40 per cent. of all the watches and clocks and 30 per cent. of the office machinery produced in the United Kingdom. Although we have only 10 per cent. of the population of the United Kingdom, 70 per cent. of the factories from North America which have established themselves in these islands since the war have chosen Scotland for their location, and are producing about £100 million worth of goods a year, three quarters of which are for the export market.

In spite of that we have an immense problem in front of us. The Digest of Scottish Statistics, published the other day, shows that in the 10 years after the war, from 1948 to 1958, at a time when, in the United Kingdom as a whole, the working population increased by 1.3 million, that of Scotland fell by 200,000. It is estimated that 120,000 new jobs will be required in Scotland in the next decade if we are to absorb the "bulge" of the school leavers and bring our unemployment figure down to the national average.

Against that background it is natural that all Scottish Members will welcome the Local Employment Bill. It would not be proper for me to deal with its main provisions tonight, but on other occasions I and other Scottish Members will hope to devote our speeches to those matters. In the meantime, there are immediate tasks for us to tackle.

A few days ago I had a letter from one of the Border tweed mills. It was not in my constituency, but a young constituent of mine has gone to work there. He told me that at the moment they have about one-third of their looms idle, not for want of orders—they have full order books—but for want of workers. He went on to say that the lack of housing for workers there is causing anxiety. I have no time to do more than mention that, but I shall bring it to the notice of the Scottish Office.

In conclusion, I want to express our great concern that the unemployment pockets which exist in Scotland should be cleared up during the lifetime of this Parliament.

Debate adjourned.—[Mr. Bryan.]

Debate to be resumed Tomorrow.