Commons Sitting of 15 February 1960

Preamble
The House met at half-past Two o' clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH TRANSPORT COMMISSION BILL (By Order)
  Second Reading deferred till Thursday.
  CITY OF LONDON (GUILD CHURCHES) BILL (By Order)
  Second Reading deferred till Monday next.

STANDING ORDERS (PRIVATE BUSINESS)
The Chairman of Ways and Means (Sir Gordon Touche): I beg to move,
That the several Amendments to Standing Orders relating to Private Business hereinafter stated in the Schedule be made.

STANDING ORDERS (PRIVATE BUSINESS)

  SCHEDULE—AMENDMENTS TO STANDING ORDERS
  Standing Order 243, leave out lines 1 to 11 and insert—
  (1) Where under section 4 of the Special Procedure Act any special procedure petition stands referred, or has been referred by order of either House, to a joint committee, the committee of this House shall consist of three members to be nominated by the Committee of Selection and the order of proceedings shall be as follows—

  (a) the minister shall, if required by the committee, briefly explain the order by means of a factual statement, to be agreed with the petitioner and counter-petitioner if any;

  (b) the petitioner shall be entitled to be heard in support of the petition;

  (c) if the committee are of opinion that he has a case to answer, the minister shall be entitled to be heard against the petition;

  (d) the petitioner shall be entitled

  (i) to reply, or

  (ii) before replying, to call rebutting evidence, with the leave of the committee, on which the minister shall be entitled to comment;

  928

  (e) the petitioner and the minister may appear by counsel or agent.

  Line 13, after "rights", insert "and functions".
  Line 14, leave out "sub-paragraph (c)" and insert "sub-paragraphs (a) (c) (d) and (e)".
  Line 30, at end add—
  "(3) The minutes of the evidence taken before the committee shall be reported to the House".
  Standing Order 244, line 52, at end, add "either before or after the minister or applicant has been heard as the committee may direct".
  These Amendments relate to the procedure in Joint Committees on Orders under the Statutory Orders (Special Procedure) Act, 1945, and set out the order of proceeding in the Committee.
  Question put and agreed to.

ORAL ANSWERS TO QUESTIONS
  MINISTRY OF POWER

    Fuel Oil
    Mr. Wyattasked the Minister of Power what progress has been made in implementing his recent undertaking to the hon. Member for Bosworth to consider amending legislation by which exemption would not automatically be given under the Clean Air Act to installations burning fuel oil from Middle East sources.
    The Minister of Power (Mr. Richard Wood): Both oil-fired and the newer mechanically-fired coal installations are exempt because they make little or no smoke. Amending legislation to deal with sulphur as well as smoke emitted by both coal and oil would be a matter for my right hon. Friends the Secretary of State for Scotland and the Minister for Housing and Local Government and Welsh Affairs. I understand this would neither be practicable in the present state of scientific and technical knowledge nor likely to serve the purpose the hon. Member has in mind.
    Mr. Wyatt: Does the Minister realise that he is being wrongly advised and that in Los Angeles so many people were killed by sulphur from oil in the various smogs which occurred there that legislation was passed preventing the use of any appliances during the winter months which burnt oil containing more

    929
    than ½ per cent. of sulphur? Does he not realise that 70 per cent. of the oil burnt in this country contains 3 per cent. of sulphur, double the amount in coal, and people are being poisoned by the emission of oil fumes permitted by the Minister of Power at the same time as the coal industry is being ruined?
    Mr. Wood: I do not deny for a moment that sulphur is most obnoxious, but the Beaver Committee reported recently that there was no present prospect of substantially reducing the emission of sulphur oxides from general industry or domestic fires. That is one reason why I do not think that it would be practicable to do what the hon. Gentleman suggests. The other reason is that a ton of oil, as he knows, does the same work as 1½ or 2 tons of coal, and there is, therefore, as my hon. Friend the Parliamentary Secretary said the other day, really no reason to believe that oil burning produces more sulphur than coal.
    Mr. Wyatt: Does the Minister not realise that most of the sulphur when coal is burnt remains in the ash and does harm to no one, whereas the sulphur produced by burning Middle East oil, the 3 per cent., goes straight out into the atmosphere and is killing people every day?
    Mr. Wood: The findings of the Beaver Committee still seem to be relevant and, therefore, I do not think it is practicable to do what the hon. Gentleman would like.

    Fuels (Technical Advice)
    Mr. Wyattasked the Minister of Power what technical advisers he has to keep him informed on the relative merits of heating by coke, coal or oil.
    Mr. Wood: I receive authoritative advice in this field from my Scientific Advisory Council and my Fuel Efficiency Advisory Committee. The advice of my Chief Scientist and his staff is also constantly available to me.
    Mr. Wyatt: Will the Minister send them hot-foot to Windsor Castle to prevent the conversion of the coke-burning heating installations to oil? If the conversion takes place, it will be a disastrous blow to the miners who may think that in these dangerous days for the coal industry even the Queen has turned against them.
    Mr. Wood: I think my advisers might be trespassing if they went to Windsor Castle. I understand that, with his usual sagacity, the hon. Gentleman has already put down a Question to my right hon. Friend the Minister of Works. I hope that my right hon. Friend will be able to give him an Answer tomorrow.

  COAL

    Household Distribution
    Mr. McKayasked the Minister of Power if he will give a general direction to the National Coal Board to employ unemployed miners for the purpose of distributing coal from the pits directly to household consumers.
    Mr. Wood: No, Sir. Other things being equal, the Board already gives preference to applicants formerly employed in the coal industry when it fills vacancies in its distributing organisation. This organisation exists in certain areas only.
    Mr. McKay: The point of the Question, of course, is that an exorbitant price is being charged for domestic coal at the moment. In Northumberland, I think, the average pithead price is 84s., and the amount of overcharge beyond the pit price seems to be tremendous when people have to pay nearly £8 a ton. Is there not an opening here for unemployed miners?
    Mr. Wood: The hon. Gentleman asks me to employ unemployed miners. His supplementary question seems to me to go rather wider than the Question on the Order Paper. I think it is perhaps more relevant to his next Question.
    The following Question stood upon the Order Paper:
    Mr. McKAY: To ask the Minister of Power if he will give a general direction to the National Coal Board to investigate the commercial factors involved in undertaking a household coal distribution service in all districts not immediately adjacent to pit areas, and to submit to him detailed estimates of the cost of such a service.
    Mr. McKay: On a point of order, Mr. Speaker. I want to draw attention to a slight mistake in my Question. All that is required to put it right is the deletion of the word "not".
    Mr. Speaker: Very well. Answer to Question No. 6, without the "not".
    Mr. Wood: Despite the change in the Question, the Answer is still "No", Sir.
    Mr. McKay: How is it that in most districts the price the householder has to pay is nearly £3 to £4 more than the pithead price? Surely there is some exploitation. If the job can be done directly from the pits, as used to be done in Northumberland for their own men, why cannot the Coal Board do it and give the housewives their coal a little cheaper and provide more employment for the men in the coalfields?
    Mr. Wood: I have not been informed that the prices charged by the National Coal Board selling direct are substantially different from the prices charged by other coal merchants and other distributors.
    Mr. McKay: Will the right hon. Gentleman investigate the position?
    Mr. Wood: I will investigate any proposals the National Coal Board puts to me about the desirability of extending its selling organisation, but so far I have not had any proposals. If they are made I will look at them.

    Domestic Supplies
    Mr. Doddsasked the Minister of Power if he is aware of the rapidly deteriorating position with regard to the availability of household coal; and if he will make a statement upon the situation and the prospects for the next two months.
    Mr. Darlingasked the Minister of Power if he will make a statement on the present general difficulty in obtaining household coal and the prospects of its alleviation.
    Mr. Owenasked the Minister of Power if he is aware that retail organisations are experiencing difficulty in getting supplies of household coal; what is the cause of this difficulty; and whether he will make a statement.
    Mr. Wood: There is no general shortage of house coal, but transport difficulties may cause certain local difficulties.
    Mr. Dodds: I appreciate what the right hon. Gentleman has said, but does
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    he not appreciate the widespread feeling of anger in homes in the London area because they cannot get coal? Is he further aware that this morning coal merchants told me that coal which had left Midland collieries on 4th December had not yet been delivered in south-east London? Cannot something be done about this? Otherwise there will be a terrible shortage in the next week or two.
    Mr. Wood: I am told that merchants' stocks at this moment are just about normal; they are just about the same as they were in other years.
    Mr. Dodds indicated dissent.
    Mr. Wood: The hon. Gentleman shakes his head, but I have the figures and they are higher than they were two years ago and a little bit lower than they were last year. The problem of distribution below that is not a matter for me. It is a matter for the National Coal Board, which deals with the local distribution of coal. If the hon. Gentleman has difficulties, I hope he will get in touch with the Board.
    Mr. Darling: Is the Minister correct in saying that this is a problem for the National Coal Board? Would he not agree that part of the trouble at least arises from the fact that merchants are still using old-fashioned methods of shovelling coal out of coal trucks? At present there are coal trucks in sidings which have been standing for days on end while this archaic method is being employed. Surely the time has come to get a proper system of distribution at the merchant's end, which is primarily the cause of the trouble.
    Mr. Wood: I maintain the position that those are matters for the National Coal Board and not for me. I hope that the remarks of the hon. Gentleman will be drawn to the attention of the Board.
    Mr. Owen: Is the Minister aware that this is not a question of coal production but primarily one of coal distribution? Is he also aware that consumers are now waiting four or five weeks for supplies? Does he not recognise that this has now reached the point where there is a real bottleneck? Will he not take this matter up with his colleague to see whether it can be resolved speedily?
    Mr. Wood: I will certainly speak to my right hon. Friend the Minister of Transport about the transport side of this difficulty, but in fact the National Coal Board and the British Transport Commission are in close touch with each other. The real difficulty is that there is a shortage of suitable operating staff I or the wagons that are available.
    Mr. Finch: Can the right hon. Gentleman say whether it is the intention of the Government to implement some of the proposals in the Robson Committee's Report for improving efficiency in coal distribution? That Report has been available for some time and we have heard nothing about whether the Government intend to implement some of its proposals.
    Mr. Wood: I will certainly answer a question about the implementation of the Report, but I would like a Question to be put on the Order Paper.
    Mr. Speaker rose—
    Dame Irene Ward: On a point of order. May we have a supplementary question from this side of the House, Mr. Speaker?
    Mr. Speaker: If the hon. Lady wants to know something, perhaps she will put down a Question. I am under pressure from the House to get on with Questions.

    Coal Commission (Transferred Liability)
    Mr. B. Taylorasked the Minister of Power (1) if he will state the amount of the liability transferred to the National Coal Board from the Coal Commission set up under the Coal Act, 1938, when coal deposits became public property;
    (2) if he will state the rate of interest paid by the National Coal Board to the Minister of Power on the liability transferred from the Coal Commission set up under the Coal Act, 1938.
    Mr. Wood: The amount of the liability was £78,457,089. The yearly rate of interest paid is 2½ per cent.
    Mr. Taylor: What is the present liability twelve or thirteen years since vesting date?
    Mr. Wood: I would not like to answer that off the cuff. I think the hon.
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    Gentleman has put down a Written Question to which he will be receiving an Answer.
    Mr. Taylor: It was not a Written Question when I put it down, but because of the change in procedure since last Monday it has become a Written Question.
    Mr. Wood: Yes, it has become a Written Question.
    Mr. Griffiths: Does the Minister realise that a figure of £78 million is not the actual figure? The burden on the National Coal Board is greater than that. The National Coal Board has since then had to accept extra liabilities which should have been placed on the former owners, so that the total burden is not £78 million but £78 million plus the extra burden.
    Mr. Wood: I take the right hon. Gentleman's point, but in fact this was an ordinary liability placed on any business which operates with borrowed capital. I do not think there can be any question about the rectitude of this figure or the moderate rate of interest at which it has to be repaid.
    Mr. Taylor: The cost of buying out the royalty owners was just over £66 million. How does it come about that the transference of the liability on vesting date was £78 million? Why the difference between £66 million and £78 million, without admitting the morality of what was done in 1938?
    Mr. Wood: As the hon. Gentleman knows, the extent of the liability was fixed in 1946, under the Coal Industry Nationalisation Act, for which the hon. Gentleman and his friends were responsible.

  SPACE RESEARCH

    Policy
    Mr. D. Priceasked the Minister of Aviation, as representing the Minister for Science, whether he will make a statement on the Government's future policy towards space research.
    Mr. Gowerasked the Minister of Aviation, as representing the Minister for Science, whether it is the policy of the Government to increase space

    935
    research in the United Kingdom; what discussions he has had with other British Commonwealth Governments on this subject, with a view to obtaining their co-operation; and if he will make a statement.
    The Minister of Aviation (Mr. Duncan Sandys): Our general policy towards space research was explained in statements made by the Prime Minister on 12th May last and by the Minister of Supply on 29th July.
    The plans for Anglo-American co-operation referred to in these statements are developing satisfactorily and we are proceeding with the preparation of instruments to be carried in the first satellite. As regards Commonwealth co-operation, vertical soundings and experiments in the ionesphere are being carried out, in co-operation with Canada and Australia. All Commonwealth countries have been invited to give us their suggestions on all aspects of the programme and they are being kept fully informed of progress.
    At the same time we are going ahead with design studies of the modifications which would be needed to make it possible for Blue Streak and Black Knight to be used for launching satellites ourselves. Meanwhile we shall make any use we can of test firings to obtain further information about conditions in the upper atmosphere.
    Mr. Price: While welcoming the Government's tentative start in space research, may I ask my right hon. Friend, as the mouthpiece of my noble Friend the Minister for Science, whether it is true that our ultimate space research programme depends upon a few Blue Streaks falling from the rich man's table and whether, in his capacity as Minister of Aviation, my right hon. Friend can tell the House whether the rich man will in due course make a few Blue Streaks available for our space research programme?
    Mr. Sandys: On the subject of Blue Streak, the Defence White Paper will be the mouthpiece of the Government and will be published tomorrow.
    Mr. Chetwynd: When does the Minister hope that we will be in a position to undertake our own independent space research programme?
    Mr. Sandys: We have first to complete the development of our own ballistic rocket.
    Mr. Wyatt: Does the Minister realise that many scientists and engineers of a practical nature, as distinct from those members of the Royal Society who advise him, are extremely worried that if we do not soon begin to spend something of the order of £20 million a year in space research, we will be left behind in this branch of technology by Russia and America, with consequent suffering to our exports in the engineering and scientific field? Will the Government stop fiddling about with sums of £100,000 or £200,000 and get on with it?
    Mr. Sandys: The expenditure in the first case will be modest, but as the programme develops I have no doubt that it will increase. I did not like the hon. Member's disparaging remarks about the Royal Society.

  MINISTRY OF AVIATION

    Aircraft Industry
    Mr. Chetwyndasked the Minister of Aviation whether he will make a statement about the reorganisation of the aircraft industry and the ordering of civil and military aircraft.
    Sir A. V. Harveyasked the Minister of Aviation if he is now in a position to make a further statement on the organisation of the aircraft industry.
    Mr. Sandys: With permission, I will answer these Questions at the end of Questions.

    Lightning Fighter
    Mr. de Freitasasked the Minister of Aviation what discussions he has had with Service Ministers of the North Atlantic Treaty Organisation and Commonwealth countries on the sale to them of the Lightning fighter now coming into the Royal Air Force.
    The Parliamentary Secretary to the Ministry of Aviation (Mr. Geoffrey Rippon): The sale of the Lightning fighter overseas is in the first place a matter for the company concerned, but my right hon. Friend, as well as the former Minister of Supply, has had various discussions with Defence

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    Ministers of allied countries about the possibility of the Lightning meeting their fighter requirements.
    Mr. de Freitas: Is it not a fact that the American Government give far greater support and drive to their aircraft firms when trying to sell machines to our allies? Why cannot we do something as significant as the American firms in pressing the sale of a first-rate fighter like this?
    Mr. Rippon: We do press these sales. Of course, as the hon. Member knows, the Lightning is entirely paid for by the Government. We make facilities available for providing information and advice and by making aircraft available for demonstrations. It is not fair to say that the Government are not doing all they can to promote sales.

    Fire Extinguishers
    Mr. de Freitasasked the Minister of Aviation what research is being undertaken into the development of large fire extinguishers which, in the event of an aircraft crashing within the control radius of an airfield, can be launched by rocket on a beam to blanket the aircraft with foam.
    Mr. Rippon: Research into various methods of extinguishing aircraft fires is being undertaken. I am aware that an airborne device has been suggested, but the particular method proposed does not show sufficient promise to justify support.
    Mr. de Freitas: Will the Parliamentary Secretary consider what has been done in the United States in this direction and also the details recently published by the Fire Brigades Union of a scheme along these lines?
    Mr. Rippon: I understand that this idea has been considered in the United States, but at the moment it is purely a study project and no research or development has taken place. I am informed that there are considerable technical difficulties.

    Rotodyne Aircraft
    Mr. Chetwyndasked the Minister of Aviation when the Rotodyne will be in service; how many have been ordered for civil and military use; and what arrangements have been made with
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    Westland Aircraft, Limited, to recoup the Government for their £4 million development contribution from I he future sales of the Rotodyne.
    Mr. Sandys: As I informed the House last week, a contract for the further development of the Rotodyne has now been signed. Meanwhile, work has, of course, been proceeding.
    Production contracts are being negotiated to meet the requirements of British European Airways and the Services. These will include provisions for the Government to participate in the proceeds of commercial sales. It would not, however, be proper for me to disclose the contents of the company's order book. It is expected that the Rotodyne will be in service in 1964.
    Mr. Chetwynd: As the company now making the Rotodyne has a virtual monopoly of helicopter manufacture in this country, could not the Minister be a little more forthcoming on the amount that the Government hope to get out of this deal in view of the fact that we are making a large contribution to the profitability of it?
    Mr. Sandys: It will, of course, depend upon sales.

    Fares
    Mr. Straussasked the Minister of Aviation whether he will make a statement about discussions that have been taking place to enable internationally agreed air fares to be fixed on air routes other than within Europe, between Europe and South America and between North and South America, before 1st April.
    Mr. Sandys: Following informal discussions among airlines, a further conference of the International Air Transport Association will be held in Paris next week.
    Mr. Strauss: From his knowledge of the situation, does the right hon. Gentleman hold out any hope that agreement is likely before 1st April, or will there be a free-for-all after that date?
    Mr. Sandys: All I know is that the International Association earlier decided not to hold any further conference unless the prospects of agreement were reasonably good.

    Research and Development Contracts
    Mr. Straussasked the Minister of Aviation the general conditions under which research and development contracts are given by his Department to firms in the aircraft industry in respect of repayment out of subsequent sales, financial participation by the firms and safeguards to ensure that the sums provided by his Department are not excessive
    Mr. Sandys: The present arrangements for the sharing by the Government in the proceeds of commercial sales of aircraft developed with Government assistance are set out in paragraphs 26 to 31 of the Third Report of the Committee of Public Accounts for 1956–57, and in paragraphs 17 to 20 of their Third Report for 1957–58.
    On civil projects, the Government contribution, if any, is normally a specified proportion of the development costs with a fixed upper limit, leaving the contractor to bear the balance.
    Mr. Strauss: Can the Minister say whether there has been any change in Government policy since he has been appointed Minister of Aviation and the new post has been created? It has been suggested in usually informed circles and reported in the Press that the Government are now more willing to pay development costs to the companies that have joined in these various mergers than was the case when the Ministry of Supply was responsible. Is there any truth in this?
    Mr. Sandys: I am giving a longish Answer to two Questions on this subject at the end of Question Time.

    Short Bros. and Harland
    Mr. McMasterasked the Minister of Aviation if, in view of the recent announcement of mergers in the aircraft industry, he will give an assurance that the position of Short Bros. and Harland will not be overlooked; and if he will make a statement.
    Mr. Sandys: The Government well understand the importance of the aircraft industry in the economy of Northern Ireland; and I can assure my hon. Friend that I shall closely watch the position of Shorts. Should there be
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    any amalgamation proposals affecting the company, I shall, of course, consult the Government of Northern Ireland.
    Mr. McMaster: While thanking my right hon. Friend for his reply, I would like to ask whether he is aware of the acute anxiety which has been caused by the recent announcement of further redundancies this year in view of the shortage of similar employment opportunities for skilled engineers in Northern Ireland. Is my right hon. Friend aware that men employed by Short Bros. and Harland are willing and ready to work long and hard so that they can compete successfully with any other firm or group of firms, either in the United Kingdom or elsewhere in the world?
    Mr. Sandys: I am well aware of the fine record of Short Bros.
    Sir A. V. Harvey: Does my right hon. Friend not agree that Short Bros. and Harland might well be strengthened if they merged with another group? As this company is understood to have made losses over a number of years, will my right hon. Friend confirm that he has an open mind and will facilitate a merger if others wish it?
    Mr. Sandys: In view of the special position of Short Bros., I have not sought to encourage an amalgamation affecting that company as yet, but I will watch the position.

    London Airport (Noise)
    Mr. Skeffingtonasked the Minister of Aviation whether he will allow information collected about sound pressure levels at London Airport to be given to local authorities and residents' associations.
    Mr. Rippon: There are advantages and disadvantages in this procedure and my right hon. Friend is at present considering the matter.
    Mr. Skeffington: Will the Minister bear in mind when consideration is being given to this matter that the Port of New York not only monitors sound pressure levels daily, but actually circulates them to and discusses them with the residents' associations? As many hundreds of thousands of people are interested, would not this be a useful thing to do here?
    Mr. Rippon: We are aware of that. It will be one of the matters of which account will be taken.
    Mr. R. Harrisasked the Minister of Aviation what form are the noise trials taking in relation to the request by British European Airways to fly Comet 4B aircraft to and from London Airport at night.
    Mr. Sandys: Sound recordings are being taken of test flights of Comet 4B aircraft with varying loads during daylight hours.
    Mr. Harris: Will the Minister in due course be taking some readings at night as well, and, if so, will he be good enough to give advance warning when this will happen, and will he be good enough to have some of his decibel recording machines placed in various parts of Heston, Hounslow and Osterley, not merely on the edge of London Airport? Thirdly, will he be good enough not to make a decision till he has been able to make some tests in the height of summer, when the noise of an aeroplane going overhead is three times as loud as it is on a rather wet winter's night?
    Mr. Sandys: My hon. Friend asks a lot of things. First of all, as to the taking of tests at night, we are rather hoping to get the information we need without disturbing the residents at night, but if it is necessary night tests will be made. I am afraid I cannot remember the other questions my hon. Friend asked.
    Mr. Hunter: Will the Minister make sure that these test trials are completed satisfactorily in the interests of the local residents? I have already had a number of letters from my constituents, as other local Members of Parliament have, against this proposed night flying by B.E.A. because they feel that if the permission is granted to B.E.A. other airline operators will also apply for it and get it.
    Mr. Sandys: It is precisely because I am concerned about the interests of the residents that I have arranged for these tests to be made. In reply to my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris), who asked whether these tests could be made out-
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    side the immediate vicinity of London Airport, they are, of course, being made at a number of places.
    Mr. R. Harrisasked the Minister of Aviation what requests he has received from the users of Boeing jet aircraft for permission to operate these aircraft at night from London Airport.
    Mr. Sandys: I have received no request for services with Boeing 707 aircraft to be scheduled between 11 p.m. and 7 a.m.
    Mr. Harris: Would the Minister hear in mind that everybody living within a few miles of London Airport would regard a decision by him to allow Comets to fly at night as the thin end of the wedge to allowing Boeings to fly at night? That is the impression. If he will give an assurance that he will not allow Boeings to fly at night, that will be a step in the right direction.
    Mr. Sandys: Every case will have to be judged in relation to the noise made.

    Emergency Landings, London Airport
    Mr. Skeffingtonasked the Minister of Aviation the total number of full emergency landings and local standby landings at London Airport during the period 1st June, 1958, to 30th April. 1959.
    Mr. Rippon: The total number of full emergency and local standbys at London Airport during the period 1st June, 1958, to 30th April, 1959, is as follows:

    Full emergencies

    30

    Local standbys which are purely precautionary measures

    367

    Mr. Skeffington: Is there any reason why this information should not be made available to local authorities and local residents' associations? Is the Minister aware that the only reason why I had to put down the Question was that information for this period was refused by the authorities at London Airport, although previously they had given the information for other periods?
    Mr. Rippon: As the hon. Member knows, we try to give local authorities and residents' associations as much information as possible. At the moment, we do not feel that this information would serve any useful purpose.

  HOSPITALS

    De la Pole Mental Hospital (Patients' Money)
    Mr. Doddsasked the Minister of Health if he will make a statement in respect of the investigation into the deficiency in the accounts for patients' money at the De la Pole Mental Hospital.
    The Minister of Health (Mr. Derek Walker-Smith): The police and auditors' investigations are still proceeding, and all I can say at present is that two members of the nursing staff have been convicted at Hull Magistrates Court for offences relating to the deficiency in patients' money.
    Mr. Dodds: While thanking the Minister for what he has said, but regretting the nature of it, may I ask him to bear in mind the fact that I have complained bitterly on a number of occasions in the past about the slackness in some mental hospitals in dealing with patients' money? Is he satisfied that the best systems are introduced to obviate this sort of thing as far as possible and to give the patients a deeper sense of justice in financial matters?
    Mr. Walker-Smith: My auditors are considering, in conjunction with the hospital management committee, further steps which can be taken to minimise the risk of any such occurrence in future. Meanwhile, I should like to make it clear to the hon. Member and to the House generally that patients who entrusted their money for safe custody will, of course, in no way suffer.

    Mental Hospitals, South-East Metropolitan Region
    Mr. Goodhartasked the Minister of Health how many beds reserved for mentally defective patients in institutions controlled by the South-East Metropolitan Regional Hospital Board are out of commission because of shortage of staff.
    The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): 173.
    Mr. Goodhart: Is my right hon. Friend aware that the number of these beds is almost exactly equal to the number of mentally sick children on the
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    waiting list for admission to these hospitals? Can he assure me that every step is being taken to try to recruit the necessary staff?
    Miss Pitt: Yes, every step that is possible has been taken. I think my hon. Friend will be glad to hear that, since last September, the board has been able to open 37 more beds in this hospital where the shortage arises.

    Medical Superintendents
    Dr. D. Johnsonasked the Minister of Health whether he is aware of the prevailing uncertainty as to the future of the post of medical superintendent in the mental hospital service; and whether he will make a statement on the action he proposes to take in the matter.
    Mr. Walker-Smith: I am considering this matter and hope to be able to make a statement in the very near future.
    Dr. Johnson: While thanking my right hon. and learned Friend for his reply, may I draw to his attention the fact that in at any rate one hospital, about which I can send him particulars, this uncertainty has had deleterious effects? Is he aware that it will be of immense benefit to the service as a whole if he can clarify the future, whatever it may be?
    Mr. Walker-Smith: Yes, I do appreciate what my hon. Friend has said. At the same time, I am sure he will appreciate that this is a difficult problem, and that I have deliberately not rushed a decision because I have been anxious to take into account all the expressions of view which have been made to me since we had our very interesting discussions on this matter in general terms in Committee on the Mental Health Bill.
    Mr. K. Robinson: As the Minister knows, there are widely differing views about this matter, and while I am not asking him to be too rigid in the advice he gives, may I ask him if he will bear in mind that the regional boards and hospital management committees will need some fairly definite guidance from the Minister on this very difficult matter?
    Mr. Walker-Smith: I do appreciate that. Of course, the position is that by reason of the passage of the Mental

    945
    Health Act, as the hon. Gentleman will know, the Superintendents of Mental Hospitals Regulations, which up to now have governed the position, cannot stand in their present form, so we have to work out a new pattern as best we may.

    Pharmacists
    Dr. D. Johnsonasked the Minister of Health if he is aware of the difficulty that exists in recruiting hospital pharmacists at the present time; and what steps he proposes to take to remedy this situation.
    Mr. Walker-Smith: I would refer my hon. Friend to my reply to the hon. Member for Stoke-on-Trent, Central (Dr. Stross) on 14th December, 1959. Following negotiations on the Pharmaceutical Whitley Council new salary scales giving increases from 13 per cent. to 17 per cent. have been agreed for hospital pharmacists with effect from 1st January, 1960. In addition to the new salary scales special allowances have been introduced for the first time for pharmacists appointed to posts involving responsibility for the co-ordination of the pharmaceutical services of hospital groups.

    Broadmoor Institution (Escape)
    Mr. van Straubenzeeasked the Minister of Health whether he has yet received the report of the inquiry by the Board of Control into the escape of Leslie Parr from Broadmoor Institution on 1st January, 1960; whether he will make the report public; and whether he will make a statement.
    Mr. Walker Smith: Yes, Sir. The report, which I do not consider it would be appropriate to publish, deals particularly with the circumstances under which patients should be allowed to work outside the walls of the Institution. Work of this type is an important last step in the rehabilitation of patients for return to the community, but it is of course essential that there should be proper security arrangements. With this in mind, the report recommends

    (1) that no patient should be allowed in future to work inside a private house out of the direct observation of the nurse in charge of him;

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    (2) that the work done by all outside working parties must be of such character or so arranged as to allow the closest possible supervision of every patient by the nurse in charge;

    (3) that specific written instructions to the above effect be issued to nurses in charge of working parties.

    Arrangements have been made to put these recommendations into effect forthwith.
    Mr. van Straubenzee: In view of the very widespread anxiety which is caused to my constituents when a patient escapes from Broadmoor, may I ask my right hon. and learned Friend whether he realises that what he has said will be received with very wide approval? Would he say whether the report or his consideration covers the effectiveness of the warning siren? Would he also say whether he can give some categorical assurance to counteract the feeling in my constituency that, under the present administration of Broadmoor, where there is a balance of doubt it is given to the patient rather than to the security of those living around the institution?
    Mr. Walker-Smith: I am obliged to my hon. Friend for what he said in the first part of his supplementary question. As to the second part, the present siren is the result of much research and expenditure, and I think that it is the best that can be devised.
    As to the third part, as I have told the House before, in these matters we try to keep a fair balance between the interests of security, which are obviously very important, and which my hon. Friend very properly has in mind from the point of view of his constituents, and the interests of rehabilitation, which we also have to pursue under the duty cast upon us in the Health Service. I should like to remind my hon. Friend that there have been outside working parties at Broad-moor for at least 40 years, and that from 1941 to the end of 1959 there were only three escapes from working parties none of which was attended by any danger to the public.
    Mr. Emery: Does my right hon. and learned Friend realise that there is concern not only in the constituency of my hon. Friend the Member for Wokingham (Mr. van Straubenzee) but in the whole of Berkshire that an

    947
    assurance is always given that security will be tightened up after there has been an escape and yet these escapes continue.
    Mr. Walker-Smith: I associate my hon. Friend with the tribute which I paid to my hon. Friend the Member for Wokingham (Mr. van Straubenzee) with regard to his zeal for the well-being of his constituents, but we have to keep these things in balance and perspective. As he will see from the figures I have just given, the escapes from the working parties have been very rare and not attended with danger. The working parties are an essential traditional part of the valuable work of rehabilitation.

    Maintenance Staffs (Wages and Conditions)
    Mr. K. Robinsonasked the Minister of Health when the Professional and Technical B Whitley Council began their current consideration of the wages and conditions of hospital maintenance staffs; and when a recommendation is expected.
    Mr. Walker-Smith: The claim currently under consideration in respect of hospital engineers was submitted by the staff side in January, 1959, and rejected by the management side, after making inquiries, in June, 1959. The Industrial Court, in November, 1959, awarded increases of about 5 per cent. but left certain matters for further discussion between the two Sides. As agreement has not been reached the Court is being asked to determine the difference.
    A claim for increased salaries for hospital building supervisors was made on 1st December, 1959, and was discussed at a joint meeting on 12th February, 1960.
    Mr. Robinson: Does an arbitration award require the Minister's approval? If it does, will the right hon. and learned Gentleman give an assurance that he will give that approval promptly or make a decision promptly?
    Mr. Walker-Smith: If it requires my approval—and I should not like to say off the cuff whether or no it does—it will have it.
    Mr. A. Robertsasked the Minister of Health to what extent he contemplates
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    modifying the system of accountancy as it affects hospitals under his control.
    Mr. Walker-Smith: I have not in mind at present any substantial modification of hospitals' accounting arrangements.
    Mr. Roberts: Does not the Minister agree that the present system does not offer any inducement to prudent spending? Does he further agree that if a hospital wants to purchase any expensive apparatus or erect additional buildings the present system does not allow it to carry forward any moneys from one year to the next?
    Mr. Walker-Smith: I am afraid that that is a matter which is rather beyond the scope of hospital accounting procedure. The point made by the hon. Member is one which is related to our constitutional system here of annual accounting for public moneys which, as he will know, derives in turn from Parliamentary responsibility for moneys.

    Hospital Cadets
    Mrs. Castleasked the Minister of Health whether, in view of the fact that hospital cadets have had no increase in pay since 1957, despite the award to nurses in March 1959, he will amend the maximum scales of pay for such staff in order to enable regional hospital boards to increase their salaries.
    Mr. Walker-Smith: I have this matter under consideration.
    Mrs. Castle: While thanking the right hon. and learned Gentleman for his reply, may I ask whether he is aware that it has been the normal practice up to now for the hospital cadets to receive an increase when the nurses receive one but that they missed the last increase which the nurses received? Would the Minister, therefore, give this matter further and sympathetic consideration, because this is an excellent way of recruiting to nursing? We have found in Blackburn that all the cadets up to now have gone on to nursing. If the right hon. and learned Gentleman comes to a favourable decision, will he back-date the payments to the date of the last award made to nurses?
    Mr. Walker-Smith: I understand that there is not an automatic link between the movements in the pay of cadets and those in the pay of nurses, but I will

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    certainly check the history of the matter as the hon. Lady asks, and I entirely agree with her that these girls do excellent work.

    Commonwealth Doctors
    Mr. A. Robertsasked the Minister of Health how many junior medical posts in the hospitals of the United Kingdom are filled by doctors from the Commonwealth.
    Mr. Walker-Smith: I regret that the information is not available
    Mr. Roberts: Is the Minister aware that there is an acute shortage of senior medical staff in our hospitals in the north of England? Is he further aware that if it were not for these students from the Commonwealth our hospital services would break down?
    Mr. Walker-Smith: We derive much benefit from the presence of these Commonwealth doctors amongst us, most of whom are engaged in post-graduate training but incidentally make a valuable contribution. Junior medical staffs have increased in number by a little over 26 per cent. since 1951 and, as the hon. Member knows, I have set up a working party to look into medical staffing structure in the hospital services, and the party is hard at work.
    Mr. Roberts: Will the Minister pay particular attention to hospitals in the West Riding with emphasis on the General Hospital in Wakefield, where I understand the position is parlous indeed?
    Mr. Walker-Smith: I will certainly take account of the position of this hospital, together with that of others.

    Cotswold Hospital, Tetbury
    Mr. Kershawasked the Minister of Health whether he is aware of the shortage of nurses at the Cotswold Hospital at Tetbury; and what steps he has taken, and now proposes to take, to remedy this shortage.
    Miss Pitt: Yes, Sir. The hospital management committee is continuing its efforts to secure more staff at this hospital and, to help in relieving the shortage, my right hon. and learned Friend has agreed with its proposal to appoint an agency nurse.
    Mr. Kershaw: Is my hon. Friend aware that the last part of her answer will be received with considerable satisfaction? However, in view of the continuous difficulty of staffing hospitals for old people—a rather unrewarding form of nursing—will she review the position?
    Miss Pitt: I will put the last point to my right hon. and learned Friend, but the difficulty here arises because the hospital is isolated. In those circumstances, my right hon. and learned Friend is prepared to approve the employment of an agency nurse, as he has done on previous occasions, in order to help the hospital.
    Mr. Kershaw: May I point out that, far from being isolated, the hospital is in the middle of Tetbury?
    Miss Pitt: I know Tetbury and I would not regard it as a very large place.

    Staff (Insurance)
    Mr. Peytonasked the Minister of Health why he has refused to allow regional hospital boards and hospital management committees to insure members of their staff when carrying cash.
    Miss Pitt: It is contrary to Government policy to insure against risks of this kind in the public service. Compensation payments may however be made in appropriate cases in accordance with the National Health Service Superannuation Regulations, or otherwise an ex gratia payment can be made if the circumstances warrant it.
    Mr. Peyton: Would my hon. Friend look at the matter again, bearing in mind that these people are employees of regional hospital boards and hospital management committees which are anxious, very properly, to protect their employees during the course of their work? Does she not realise that this basis is not satisfactory because, without putting it too strongly, Government Departments are not the speediest or the most generous in the payment of compensation?
    Miss Pitt: It is the general practice for the Exchequer to carry its own risk. I am not aware of any instance in which a hospital pay clerk has been killed or seriously injured in the course of his

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    duties. If there were such incident, the superannuation provisions or the ex gratia arrangements would apply.
    Mr. K. Robinson: Is the hon. Lady not aware that there have been violent attacks on the pay staffs of hospital authorities and that there was one in the London area not long ago? Will she ask her right hon. and learned Friend to look again at the matter and not make it impossible for hospital authorities to behave as good and reasonable employers?
    Miss Pitt: I will certainly ask my right hon. and learned Friend to look at the matter, but this has been the general practice since the inception of the National Health Service.

    Regional Hospital Boards (Expenditure)
    Mr. Peytonasked the Minister of Health which regional hospital boards were responsible for the underspending of £649,000 in the advances on capital account during the financial year 1959–60, indicated on page 87 of the recently-issued Supplementary Estimates.
    Mr. Walker-Smith: All boards, except Oxford Regional Hospital Board, expect to underspend on major capital schemes and this accounts almost entirely for the total estimated underspending.
    Mr. Peyton: Does the Minister realise that there is considerable mystification in the minds of at any rate a number of hospital boards about underspending, which feel that if only they were given the chance to spend the money earlier they could spend it twice over? Certainly the South Western Regional Hospital Board could do so.
    Mr. Walker-Smith: As I have said before, I am continuously trying to give longer and longer notice of capital schemes in order to meet the point to which my hon. Friend has referred.

  MINISTRY OF HEALTH

    Dentists
    Mr. Ridsdaleasked the Minister of Health what steps he is taking to encourage more people to become dentists.
    Mr. Walker-Smith: There is at present no shortage of recruits to the dental pro-
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    fession and the dental schools are virtually full. Measures have been taken to implement all the main recommendations of the McNair Report on Recruitment to the Dental Profession.
    Mr. Ridsdale: Is my right hon. and learned Friend aware that what I am concerned about is the short-term position of the supply of dentists, which is causing such a serious position to arise in the school dental service? Would not one way of alleviating this position be to encourage more dentists from the surplus of dentists at present on the Continent to apply for temporary service in this country?
    Mr. Walker-Smith: There is nothing to prevent foreign dentists practising in this country, provided they obtain title to registration. Indeed, under Section 16 (2) of the Dentists Act, 1956, a foreign practitioner qualifies for registration provided he satisfies the General Dental Council that he is of good character, holds a foreign diploma and has the requisite knowledge and skill.
    Dr. Summerskill: As the Report on Recruitment to the Dental Profession mentioned that this profession is particularly suitable for women, could the right hon. and learned Gentleman say approximately how many of the recruits are women?
    Mr. Walker-Smith: Not without notice, but I will get the information for the right hon. Lady.

    Motor Tricycle (Personal Case)
    Mrs. Castleasked the Minister of Health why he has refused to supply Mr. T. Welsh, of Blackburn, with an invalid motor tricycle, despite the fact that he has had his right leg amputated in the upper third and suffers from gunshot wounds in the left thigh.
    Miss Pitt: Because his walking ability is fortunately not so restricted as to make him eligible.
    Mrs. Castle: Is the hon. Lady aware that that is an absolutely outrageous reply? Does she not agree that this man has told her, as he has told me, that he cannot walk as much as 400 yards without severe pain? Is she aware that he is employed at a Remploy factory and that he has no means of getting there in wintry weather on icy roads except by

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    foot and that he is in severe pain when he arrives at work? If this is not adequate ground for giving this mechanical assistance, can the hon. Lady think of any better?
    Miss Pitt: I certainly do not agree with the right hon. Lady's criticism. When she wrote to me about this man last December, I arranged for him to be medically re-examined. He has had one leg amputated, but the result of the examination showed that, although his sound leg tends to drag, he can walk quite well.
    Mrs. Castle: With pain.
    Miss Pitt: As the right hon. Lady said, he has since been found employment at a Remploy factory which, I am told, is near his home and within his walking distance.
    Dr. Summerskill: Can the hon. Lady recall other cases similar to this being drawn to her attention? Whilst I am sure that hon. Members on both sides of the House recognise that these injuries are not necessarily those laid down in the regulations, nevertheless these men who were injured during the war have now reached middle age and the increasing strain on a middle-aged man who has had one leg amputated and the other injured is very great. It cannot be assessed in surgical or medical terms, but nevertheless it is there. May I ask the hon. Lady to ask her right hon. and learned Friend whether he will reconsider this and similar cases which can only be very few in number?
    Miss Pitt: The question of transport facilities for the war-disabled pensioner is still under consideration, as I have told the House before, but in particular instances—and I take the point made flat they are now increasing in age—cases can be re-examined, as was done in this case with which I have just been dealing.

    Drugs
    Mr. Rankinasked the Minister of Health what recommendations have been made to him by the Drug Addiction Committee on the control of the sale of Persomnia.
    Mr. Walker-Smith: The active ingredients of Persomnia fall within the
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    group of substances referred to in my reply to Questions by the hon. Members for Swindon (Mr. F. Noel-Baker) and Barking (Mr. Driberg) on 7th December and in that of my right hon. Friend the Secretary of State for the Home Department to a Question by the hon. Member for Dartford (Mr. Sydney Irving) on 11th February.
    Mr. Rankin: Am I to take it that the right hon. and learned Gentleman proposes to carry out the recommendation of the Drug Addiction Committee and to make Persomnia available to the public only on the prescription of a doctor?
    Mr. Walker-Smith: I understand from my right hon. Friend the Home Secretary that the ingredients are covered by the recommendations made to him by the Poisons Board, and that this preparation is therefore amongst those of which he proposes to restrict the supply only on prescription.
    Mrs. Butlerasked the Minister of Health if he has studied the communication recently sent to him enclosing a copy of a warning given by the Co-operative Union to co-operative chemists, requesting them to sell Preludin, Persomnia, Relaxa, Menopax, and Miltown, only on a doctor's prescription or on the advice of a qualified chemist: and what reply he has sent.
    Mr. Walker-Smith: I have received this communication and am glad to know of the action taken by the Co-operative Union, which is similar to that taken by the Pharmaceutical Society of Great Britain last August.
    Mrs. Butler: Is the Minister aware that there is considerable public confusion about whether "pep" pills are on sale freely at chemists or not? Also, can the Minister say what there is to prevent him, when he puts these pills on the Schedule 4 list, as I believe it is called, referring to them by their popular names as well as by the normal medical formula?
    Mr. Walker-Smith: This procedure operates under the Poisons Act of 1933. As the hon. Lady will know, this is a matter for my right hon. Friend the Home Secretary rather than for me, but I am sure that he will take note of what she had said.
    Mr. Rankin: Is it not the case that some "pep" pills and drugs do not come under the Poisons Act? Is the right hon. and learned Gentleman then not responsible for ensuring that they are made available only on medical prescription?
    Mr. Walker-Smith: The control of these drugs falls under three Statutes: the Dangerous Drugs Act, the Poisons Act—for both of which my right hon. Friend the Home Secretary is responsible—and the Therapeutic Substances Act, for which I am responsible. Having studied this question, I have come to the conclusion that it is only less complex than the Rent Restriction Acts, and therefore we are engaged in reviewing the whole matter.
    Dr. Summerskill: Is the Minister aware that the country is being flooded with drugs of addiction, many being put on the market by firms which have their main offices in America? Is the Minister going to wait for the Pharmaceutical Society and the Co-operative Union to take action and, as he says, become tangled in the maze of Statutes, until a number of tragedies take place, such as occurred in the case of Preludin, before he himself takes action?
    Mr. Walker-Smith: No. Sir. In answer to the hon. Gentleman's question, I was referring to the general position and I gave a brief summary of the legislation on this matter which, as the right hon. Lady knows, is complicated. We are reviewing the whole position in order to simplify and improve it. The particular matter to which she has referred, as I said in answer to the hon. Lady the Member for Wood Green (Mrs. Butler), is governed by the Poisons Act, in respect of which my right hon. Friend is taking prompt and effective action.
    Mr. Gaitskell: I understood the Minister to say that the complexities of the situation resemble those of the Rent Restriction Acts and that therefore he is reviewing them. Are we to understand that the Government are reviewing the Rent Restriction Acts?
    Mr. Walker-Smith: In making that comparison, I had in mind less my sphere of responsibility as a Member of the Government than certain forensic memories of the past when I had to inter-
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    pret these matters for the benefit of my clients. It was only in this sense that I made the comparison.

    Opticians (Fees)
    Mr. Cleaverasked the Minister of Health why fees paid to opticians for prescriptions for private frames dispensed with National Health lenses have been reduced; whether he is aware that there is widespread dissatisfaction amongst opticians as to his decision, particularly as the recommendations of the Whitley Council have been overridden; and if he will reconsider the matter.
    Mr. Walker-Smith: I would refer my hon. Friend to the reply I gave to my hon. Friend the Member for Carlisle (Dr. D. Johnson) on 4th February.
    Mr. Cleaver: Is the Minister aware that the dispensing fee now is lower than that agreed in 1948, and in view of the resentment in the profession caused by this fact, will he look at the matter again?
    Mr. Walker-Smith: My hon. Friend will know that there is a long and complex history of this matter. Shortly, this is part of a tripartite offer which was made to the opticians. The part which benefited them—that is to say, the increased sight testing fee—was introduced as long ago as 1st January, 1959. This part—the hybrid fee, as it is called—was introduced only on 1st January last. I deferred it as long as was possible.
    Mr. Lindsay: Is my right hon. and learned Friend aware of the strength of the feeling that they have been harshly dealt with which is held by a very worthy body of people? Will he not, therefore, reconsider the matter?
    Mr. Walker-Smith: I realise that the opticians felt that the third part of the offer should not be put into effect, because they came and told me so and we discussed it in detail in November. I assure my hon. Friend that, having looked into the matter closely, I feel that the cut in the hybrid fee, which is in relation to National Health Service lenses dispensed in private frames, is justifiable and in accordance with the facts.
    Sir G. Nicholson: Does my right hon. and learned Friend not think that the

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    low rate of profit which opticians receive from frames leads to the exploitation of the public, since they are unwilling to encourage members of the public to get these frames and instead make them pay for expensive ones?
    Mr. Walker-Smith: There need be no such danger as my hon. Friend refers to because, if the patient so desires, there is available to him a range of National Health Service glasses with agreeable frames at an approximate cost of 30s. a pair.
    Dr. Summerskill: Is it not the fact that opticians are more prosperous today than they have ever been?
    Mr. Walker-Smith: I confirm the general conclusion that they are sharing in the present universal prosperity of the country.

AIRCRAFT INDUSTRY
The Minister of Aviation (Mr. Duncan Sandys): With permission, I will now answer Questions Nos. 14 and 21.
The Government regard it as essential that the United Kingdom should maintain a strong and efficient aircraft industry, capable not only of providing the Armed Forces with aircraft and guided weapons, but also of playing a prominent part in the world wide development of civil aviation.
On my appointment as Minister of Aviation, four months ago, I discussed the whole position with the aircraft industry. I expressed to it the view that the increasing cost and complexity of modern aeroplanes, together with the intensification of foreign competition, now made it necessary for manufacturers to possess much greater financial and technical resources than hitherto. For this reason, I suggested that they might consider creating stronger units by the amalgamation of suitable firms. I explained that the pattern I had in mind would consist of five major groups—two making fixed wing airframes and guided weapons, one making helicopters, and two making aero-engines.
I found a ready acceptance of the need for radical reorganisation; and I wish to express to the industry my appreciation of the prompt manner in which it has acted. In fact, the initial process
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of regrouping is now virtually completed, though, naturally, much remains to be done by the new groups to consolidate and rationalise their resources.
The sharp reduction in Government orders for military aircraft, which represents such a large part of the industry's business, has made it urgently necessary to expand sales of civil types at home and overseas; and the Government have been considering ways of helping manufacturers adjust themselves to this changed situation.
In order to provide a sound technological foundation, the Government will for the present continue to maintain a substantial programme of aeronautical research.
Except where specialised requirements or public policy make it necessary to do otherwise, we intend to concentrate Government orders on the five major groups. At the same time, we shall seek to harmonise the characteristics of military and civil types of transport aircraft.
In view of the growing importance of the civil market, the Government have decided to provide increased support where appropriate, for promising civil aircraft projects and aero-engines. The nature and extent of the assistance will vary. The Government may contribute towards the development, tooling or other initial costs of launching a new type. In order to enable earlier delivery dates to be offered, the Government may also, in suitable cases, take a share in the risks involved in producing a limited number of aircraft beyond those for which firm orders have been received. Futhermore, the Government may be prepared to contribute towards the cost of proving a new type of civil aircraft and of introducing it into regular air line service.
Suitable arrangements will be made for the Government to participate in the proceeds from sales. The manner in which these will be shared between the Government and the firm will vary and will depend, among other things, upon the proportion of the risks borne by each.
Concentrated thus in a small number of strong units and adequately backed by the Government, I am confident that the British aircraft industry will now be better fitted to meet the needs of modern

959
defence, and will be better able to secure its due share of the expanding market for civil aircraft throughout the world.
Mr. Strauss: The House will welcome the statement which has just been made, which has been long awaited. The Minister said that he had consulted the aircraft industry at an early stage. Did he consult the unions, who, naturally, have great experience of this industry, and have strong views about it? If the Minister has not yet consulted the unions, will he say whether he intends to do so at an early stage?
The right hon. Gentleman has proposed that in future there should be a closer partnership between the Government and the industry than there has been in the past; the Government are prepared to take greater risks and, on the other hand, are to ask to participate in any profits which are achieved. In the past, we have not been able to discover exactly on what terms that partnership has been based.
In view of the large amount of Government money which is likely to be involved and the very important question of principle which is before us, can the Minister say whether, in future, we shall know the extent to which the Government are participating in the profits as well as the losses of the industry to which they give orders, so that we may be able to form an opinion of the correctness of the Government's policy and judge whether the Government have adequate control and are receiving adequate benefits from the large sums of public money which they now propose to invest in the industry?
Mr. Sandys: Up till now the consultations have been concerned with the structure of the industry—the amalgamations between the firms—but I am sure that the unions have an important part to play in making a success of these new arrangements.
I have no doubt that the mergers will make a stronger aircraft industry, with better prospects for sales at home and overseas, and will, for that reason, improve the prospects of employment.
With regard to the question of partnership—as the right hon. Gentleman called it—between the Government and the aircraft industry, and the
960
money invested in it, I will do my best to show as much as possible of this side of the matter in the Estimates. The right hon. Gentleman, who is a former Minister of Supply, will know that it is not always easy to separate the figures in all cases, to show completely how expenditure is divided between civil and military projects, especially in the sphere of research.
I can assure the right hon. Gentleman that we shall see to it that there is adequate Government control. I do not think that there will be any difficulty in having that control in regard to those projects where the Government are themselves making a contribution.
Mr. Strauss: In the past, when the Government have invested sums amounting, perhaps, to millions of pounds, in the development of a certain firm, we have not known what return the Government would receive if that investment proved profitable. In future, where there is a Government contract with a firm, involving the investment of £5 million or £10 million of Government money, shall we be told the exact contract details, and the degree of Government participation in losses and profits likely to arise from such a contract? These details have been refused in the past.
Mr. Sandys: I will see what details can be given, but I think that the right hon. Gentleman knows the difficulties involved in disclosing details of contracts of that kind.
Sir A. V. Harvey: I congratulate my right hon. Friend on his success in this matter so far, but in regard to any future orders placed for research and development will he bear in mind that, if this country is to succeed in this matter, he must be careful not to have too many different developments taking place at the same time? Will he try to bring his officials much closer to the industry than was the case with the Ministry of Supply, so that there is co-operation in regard to future thought, and the industry is informed?
Will my right hon. Friend confirm that companies which are not taking part in this rationalisation will not be excluded if they have something which is new and different from the other groups? Will he further bear in mind that, having brought

961
about this rationalisation, the troubles of the industry will be just beginning, as will the sorting out of the problem, and that this will require further efforts by all concerned?
Mr. Sandys: I think that what my hon. Friend had in mind is that we should not back too many what might be called conflicting or competing projects. Normally, that would not be the intension of the Government. But the House must recognise that we are not starting with a blank sheet and in the first stage. I should not like to rule out the possibility of the Government supporting two overlapping projects, provided that the commercial prospects justified it.
I hope that some of the firms not so far included in the new groups will still join, but of course, as I made clear in my statement, we do not exclude the possibility of placing orders outside the groups for specialist requirements. For example, there may be a firm building a small aircraft which is not within the programme of the major groups, or it might be social or public policy to place a particular order.
Mr. Diamond: Can the right hon. Gentleman say, first, what is the likely future of the labour force of the aircraft manufacturing industry having regard to everything that he has said this afternoon? Secondly, do any of the risks which the right hon. Gentleman has in mind take the form of investing in equity shares in any of the regrouped companies?
Mr. Sandys: The answer to the second question is, "No." Various guesses have been made in the past about the size of the industry, and I do not propose to add any new ones of my own. It is no part of the Government's business to try to tailor the aircraft industry to any particular size.
Mr. Eden: When he is considering giving support to any project or placing an order, may I ask my right hon. Friend to make a decision as early as possible in the development stage, rather than leaving the developers in any degree of uncertainty for too long a time? If there is a further change in the structure of employment as the result of the regrouping, will my right hon. Friend, in consultation with his right hon. Friend the Minister of Labour, ensure that
962
everything possible is done to find alternative employment for any who may become redundant? Lastly, is there any chance of the House being able to debate the whole of this question, particularly in view of the substantial Government expenditure now envisaged?
Mr. Sandys: The question of a debate should be addressed to my right hon. Friend the Leader of the House.
It is, of course, always our intention to try to place orders as early as we possibly can, but it is not easy, as hon. Members who have been concerned with this business will know. All sorts of changes take place in the development stage and until one knows exactly what it is that one is ordering it is difficult to place a production contract.
Mr. Holt: Am I right in thinking that in these amalgamations many activities other than the manufacture of aircraft have been included? In view of the monopoly position now to be provided for some of the aircraft firms and support by the Government, are not very important matters raised regarding the competitive position and other activities—including the making of refrigerators, for example? Will not the Government make a further statement on this aspect at an early date?
Mr. Sandys: I do not think that the House need be alarmed about any lack of competition in the aircraft industry. The industry would be dead unless it could export on a large scale and there is no sphere in which there is keener international competition than between the manufacturers of aircraft.
Mr. Chetwynd: Can the Minister say now how much public money will be put into the industry? Can he say what orders have been placed under the scheme or which it is hoped will be placed in the near future? In view of the highly complicated financial arrangements which are being made, would the right hon. Gentleman consider issuing a White Paper on the subject, so that we may know exactly what we stand to gain or lose?
As we have now to expand our exports tremendously to make up for the loss of military orders, can the right hon. Gentleman say what initiative there will be to promote an aggressive sales policy overseas?
Mr. Sandys: My discussions with the aircraft manufacturers are still going on and I cannot, therefore, give the House any picture about costs at the moment. In reply to the right hon. Member for Vauxhall (Mr. Strauss), I undertook to show as much information as possible in the Estimates for the current year.
The pursuit of an aggressive sales policy is primarily a matter for the industry. I hope that the measures we are taking will enable the industry to take greater risks. One of the difficulties has been that firms have not been strong enough either to get their designs through quickly enough—an enormous design staff is necessary in the production of complex modern aircraft—or to provide sufficient capital to permit them to take the risks involved.
I will consider the question of issuing a White Paper, but I do not think that one would be appropriate at the moment.
Several Hon. Members rose—
Mr. Speaker: Order. We cannot debate this matter now.
Mr. Emrys Hughes: On a point of order, Mr. Speaker. In view of the fact that nothing that the Minister has said affects Scotland and particularly Prestwick, I beg to give notice that I will raise the matter at the earliest possible opportunity.
Mrs. Castle: On a point of order, Mr. Speaker. It is not a question of our wanting to debate this matter now, but as we have no White Paper, and no guarantee of one, there are some questions to which we must have an answer. Could not an opportunity to speak be given to those of us who have been attempting to ask questions in order to obtain concrete information?
Mr. Speaker: I have much sympathy with the hon. Lady, but I have to look after the interests of hon. Members in general. It often happens, if we have a statement or an answer to a Question at the end of Question Time, that some iregular debate arises. I believe it to be in the interests of the House that we should endeavour to put some check to that practice. I am in sympathy with the hon. Lady, but if some check is to be set, someone must be excluded.
Mr. Rankin: On a point of order.
Sir K. Pickthorn: It is not a point of order.
Mr. Rankin: Is it not a fact that United Kingdom finance is being utilised to promote these mergers? Therefore, does it not seem unfair that Scotland, which will contribute her share of the money, has no guarantee that she will get a single job as a result of these mergers?
Mr. Speaker: Frankly, what is unfair is to present matters which are not points of order under the guise of a point of order.

BILL PRESENTED
  CIVIL AVIATION (LICENSING)
  Bill to provide for the licensing of certain flying and to repeal section twenty-four of the Air Corporations Act, 1949; and for purposes connected with the matters aforesaid, presented by Mr. Sandys; supported by the Attorney-General, Sir E. Boyle, and Mr. Rippon; read the First time; to be read a Second time upon Thursday and to be printed. [Bill 70.]
ORDERS OF THE DAY

  EUROPEAN FREE TRADE ASSOCIATION BILL
  Order for Second Reading read.
  3.50 p.m.
  The Minister of State, Board of Trade (Mr. F. J. Erroll): I beg to move, That the Bill be now read a Second time.
  My right hon. Friend the President of the Board of Trade had hoped to introduce the Bill, but, unfortunately, he has had to go to Switzerland for talks, so he has asked me to take his place. I hope that the House will bear with me and accept my explanation of the Bill which, I know, can only be less lucid than would have been the explanation of my right hon. Friend.
  The House will remember that on 14th December last it accepted a Motion which welcomed the action of the Government in approving the Convention establishing the European Free Trade Association. This Convention has now been signed by Ministers of the seven member States. The text was presented to the House as Command Paper 906 and we shall deposit in due course the necessary instrument for ratification. The House will, I am sure, be glad to learn that there was general agreement among the Ministers assembled at Stockholm, in November, that each member State should endeavour to ratify the Convention by the end of March, 1960. It is the intention of the Government to take the necessary steps to that end.
  The Government see the establishment of the European Free Trade Association as part of the wider process of freeing trade in Western Europe, and, indeed, as working for the benefit of world trade as a whole. My right hon. Friend the Chancellor of the Exchequer described to the House on 26th January this year the results of international meetings on commercial policy which had been held since the last debate in the House. He then reaffirmed our hopes and intentions for a wider multilateral association, including all members of Western Europe.
  It is not, I suggest, necessary for me today to initiate a further debate on the European Free Trade Association itself. My purpose today is a much narrower one. In the debate approving the estab-
  966
  lishment of this Association, my right hon. Friend indicated that a short Bill of a minor and technical character would be introduced as soon as possible to enable us to implement certain parts of the Convention. It is that Bill which is now before the House.
  Perhaps I might describe—
  Mr. Arthur Holt: I am sorry to interrupt the hon. Gentleman. I hope that, in view of the importance of the whole subject, the remarks he has just made do not mean that he will confine his speech merely to the details—very technical details—of the Bill, but that he will tell us something about the developing policies of the Government in regard to the whole problem.
  Mr. Erroll: I phrased my opening remarks very carefully, because it is our desire—and we thought that it would be the wish of the House—as only a half-day has been proposed for the discussion, to limit ourselves to the points in the Bill itself, which are important, particularly to the industries and organisations affected. If the hon. Member will listen to what I have to say about the Bill, I think that he will find that there is quite enough material for a proper debate without ranging into the wider issues, which would be more appropriate on another occasion.
  Mr. Roy Jenkins: The point at issue is not whether there is enough material for a debate, but whether there is enough importance in the not altogether favourable conditions of the last few months and whether the hon. Gentleman could tell us how the Government see the new situation.
  Mr. Erroll: I was not proposing to do so, because it seemed to me that we ought to confine ourselves to the Bill.
  Major H. Legge-Bourke: On a point of order. While I appreciate that my hon. Friend is standing in at the Front Bench for the purpose of this debate—and we all understand why the President of the Board of Trade cannot be here—nevertheless, Mr. Speaker, perhaps you would help us by giving your Ruling on this matter. Is the debate to be confined strictly to the terms of the Bill, or are we to be allowed to consider all the various factors which relate to the operation of the Bill?
  Mr. G. R. Mitchison: Further to that point of order. Are we not entitled, since we are asked to provide machinery, to have such information as the Government can give us as to the purpose for which that machinery is to be used and also as to the sufficiency of the machinery? It seems to me that there is the Stockholm Convention to be considered and that there are matters in it which some of us may feel ought to have been covered and have not been covered.
  Mr. John Hynd: Further to that, Sir, I should like to be clear about this, because a number of hon. Members on both sides of the House are doubtful about the reports of this movement. Since this is the first instrument to be brought before the House, surely we are entitled to give reasons why we feel inclined to oppose the Bill and to ask the Minister to satisfy our hesitations by explaining some of the wider aspects?
  Mr. Speaker: I am not concerned with what information the House is entitled to—to adopt a phrase of the hon. and learned Member for Kettering (Mr. Mitchison)—but with the rules of order, I should conceive it to be in order, on the Second Reading discussion of the Bill, to discuss the necessity for it, the absence of necessity for it, the need for such machinery as it provides, and such matters of alleged omission from it as hon. Members thought fit to discuss.
  Mr. Erroll: I am sure that we shall be able to proceed with a very satisfactory debate under the terms of the Ruling which you have just given, Mr. Speaker.
  Mr. Roy Jenkins: May I get the position clear? While we are grateful for the Ruling you have given, Mr. Speaker, the point at issue is not so much what the House can discuss, but what the hon. Gentleman proposes to tell the House. Do we understand from the opening remarks of his speech that the Government have no information at all which they propose to give the House, through the hon. Gentleman this afternoon, as to what has happened since we last debated the matter, over two months ago?
  Mr. Erroll: It is not a question of whether the Government have information or wish to give it. What we thought
  968
  would be proper this afternoon, as the whole subject of the Convention had been debated only last December, was to give a short outline of the Bill and its effect on the people who are likely to be affected by it. If the hon. Member will allow me, I shall continue with the exposition of the Bill. If any wider points are raised this afternoon, my hon. Friend the Economic Secretary to the Treasury will be very glad to deal with them.
  Mr. Mitchison: With respect to the hon. Gentleman, that is an exceedingly inconvenient way of proceeding. I suggest that we ought to know what happened at the meetings in January and what progress has been made towards the building of the bridge for which this Convention is said to be the foundation. We ought to know that early in the debate, so that my hon. Friends and others might have an opportunity of raising points about it. That is a substantial matter.
  Mr. Erroll: I appreciate that it is a substantial matter and in my remarks I referred to these various points, but I do not think that I can add anything this afternoon which would materially affect a discussion of the Bill, which I am sure the House would wish to see go through, as it enables us to proceed with the organisation necessary for the Free Trade Association.
  Mr. Anthony Fell: I am sorry to interrupt my hon. Friend, and I quite understand that in a short debate such as this he feels that he can discuss only the technical details of the Bill. Nevertheless, this is a matter which will affect this country for many years to come. Therefore, would it not be possible for him at least to say that he will press for another debate on more general aspects at some time in the very near future? Then perhaps the House could discuss the technical matters this afternoon and the general matter on another day.
  Mr. Erroll: I think that we might see how we get on this afternoon. I have in mind that we debated this subject very freely on 14th December and up to then. Such developments as have occurred since could be referred to on a separate occasion, so that we could devote our full attention to this Bill itself. If, during the course of the

  969
  debate, it becomes apparent that further discussion is necessary on the wider issues, I am sure my right hon. Friend the Leader of the House will take that into account.
  Perhaps I might now proceed to describe some of the features of the Bill. The principal provisions of the Bill relate to certain technical matters concerned with the question of origin. Perhaps the House will permit me to explain as briefly as I can, as the background to the Bill, what this term means and why it is so important in the context of a European Free Trade Association.
  In a Free Trade Area of the kind with which we are concerned, each member country remains free to determine its own external tariff against the products of non-members but reduces and finally eliminates its duties on substantially all the products of the other member countries. It is, therefore, important to limit the free trade to goods which are grown, produced or manufactured within the area, while leaving the ordinary tariff to apply to goods which are introduced from outside.
  Major Legge-Bourke: Subject to G.A.T.T.
  Mr. Erroll: Yes, subject to G.A.T.T.
  If this were not done, there would be an incentive for non-members' goods to enter the area via the country with the lowest tariff and thereafter circulate freely throughout the area, by-passing the external tariffs of the other member countries. These problems of safeguards against deflections of trade, as they are called, and the undermining of external tariffs are solved by according Free Trade Area treatment only to goods which are grown, produced or manufactured in the area and consigned from a port or place in the area.
  Of course, with some commodities it is quite easy to recognise that they are grown or produced in the area. Mined coal and other minerals are obvious examples. It is quite easy to tell in which of the countries they have been produced. But a great deal of the trade between these countries consists of manufactured articles which, in these days of economic specialisation, may represent contributions of materials and workmanship from a number of different sources, and in these cases there is admittedly rather a difficult
  970
  problem in determining whether they are of area origin or not.
  A good deal of time and thought has been given to this subject of the origin or nationality of goods, and we in the United Kingdom have always held that the answer, if it is to be an objective answer on which both the traders and the Customs officials of the countries can rely, must be precise and must take account of different types of product and of the particular circumstances for which the definition of origin is required.
  I am happy to say that, in contrast with the difficulties which arose during the seventeen-nation discussions in Paris, the Stockholm negotiations soon led to an agreement on these matters, largely because of the co-operative spirit shown by all the countries concerned. As a result, the Convention now contains clear and comprehensive rules of origin as well as measures to safeguard against the corresponding danger, namely, deflections of trade.
  Broadly speaking, anything which is wholly produced in the area, or contains less than 50 per cent. of materials imported from outside the area, is regarded as of area origin. But we all recognise that many of the basic materials which are used in manufacture must of necessity come from countries outside the area. In the interests, therefore, of simple administration and in the spirit of an outward-looking Free Trade Area, the member countries of the area have agreed that in these rules of origin such basic materials shall always he regarded as part of the area content of manufactured goods even though the materials have come from outside the area.
  As a further measure of simplification, a list of processes has been drawn up. If goods have been produced by the appropriate listed process they are regarded as of area origin without recourse to the percentage criterion. Perhaps I could illustrate this rather complicated matter by a relatively simple example. Suppose we import a wallet manufactured in a member country from leather imported from outside the area. To qualify under the percentage criterion it would be necessary to be able to show that the value of the leather imported into the area was 50 per cent. or less of the value of the finished wallet as exported from the member country in which it was manufactured. Under the alternative

  971
  process criterion, all that would be necessary would be to be able to show that the manufacturing operations starting from the leather had all been performed in the area.
  What we have before us in the Bill, however, is not the rules of origin themselves, but the technical measures required in this country to put the rules into effect. I will deal, first, with the implementation of the rules of origin themselves.
  Clause 1 deals with that implementation. It will enable the Board of Trade to make regulations, subject to annulment by Resolution of the House, which will apply the rules of origin to all E.F.T.A. imports into this country. In total, Clause 1 provides a small extension of the existing powers given to the Board of Trade in Section 12 of the Import Duties Act, 1958.
  Clause 2 concerns a problem which, though not strictly one of origin, needs to be similarly dealt with. We and our E.F.T.A. partners recognised that free trade should take place under conditions of fair competition, and in that spirit we agreed to the principle that the goods traded between us should be denied the benefits of duty-free entry if the exporting country has given them the benefit of drawback or similar arrangements for remitting duties on the materials in the goods.
  The question of duty-free entry and drawback is perhaps difficult to follow. Perhaps I may be allowed to refer again to the wallet. If a wallet, made in this country from imported dutiable leather, is exported, drawback is allowed so that the duty on the leather is repaid. If the wallet is sent to an E.F.T.A. country it would be unfair for it to be admitted duty free. The leather in it would have borne no duty, and home manufacturers in that country would be at a disadvantage, as they would normally have to use duty-paid leather for making their own wallets.
  The principle which we and our E.F.T.A. partners have agreed upon is that in cases such as this traders will be allowed to choose between claiming drawback on exportation or claiming duty-free entry into the E.F.T.A, country to which the goods are sent, but not both.
  Mr. Holt: Perhaps I have not followed the point at issue, but I should like to know what is the basic difference between this example and the previous example which the Minister gave, apart from the fact that no duty was involved. If the leather is imported into this country duty-free and then goes through one of the processes recognised in Annex B of the Agreement, or the value of the leather is less than 50 per cent. of the total value of the wallet, surely it would go into the seven countries duty free. What is the essential difference between the first and second examples?
  Mr. Erroll: I am dealing with the case in which the imported material bears duty and where there would be a refund of that duty when the manufactured article was exported. Where there is no duty we have a state of affairs which is already understood and accepted by the other partners, but where there is duty it would clearly be unfair to refund it and thus place the article which is exported at an advantage over the corresponding goods manufactured in the country to which it is exported. I hope that that will make it clear to the hon. Member.
  Clause 2 will enable the Board of Trade to make regulations at the appropriate time to deal with this drawback point, on the basis of the rules agreed with our partners in the E.F.T.A. So Clauses 1 and 2 together provide us with suitable basic machinery. It is all very well, however, to have rules of origin and arrangements for the non-refund of drawback, and so on, but we have to have some assurance that the rules are being observed. The certificates of origin system is well known and we are confident that in this Association it can work smoothly and with little or no impediment to trade. But we have to ensure that there is fair as well as free trade under this system and that the manufacturing and trading communities as well as the Customs authorities have confidence that the system is not being abused. The problem is how to achieve this without a mountain of paper work and cross-checking.
  We have agreed on close co-operation between the Customs authorities of member countries for mutual verification of the facts and for action against traders

  973
  who make untrue statements as to facts. Thus, the authorities of the importing country, should they have reason to believe that an incorrect claim to the Convention rate of duty has been made, may ask the authorities of the exporting country to verify the facts of the particular case, and, if it is found that false information has been furnished, to take 1.he necessary action against those responsible. This is what we seek to achieve in Clauses 3 and 4.
  Clause 4 is a somewhat complicated one to read, particularly as it deals with penalties, but I hope that the House will accept that it is necessary to word it in the way in which it has been printed. On behalf of our partners, the United Kingdom Customs will verify the facts and take any necessary action against persons in this country who have committed an offence in this connection. As I have explained, this is not being undertaken solely by the United Kingdom. The Customs administrations of the other member countries will also be called upon to act on our behalf in a similar manner. These arrangements will, we believe, form a valuable safeguard against the abuse of the system of origin devised for the E.F.T.A.
  That, then, is the main substance of the Bill, but there are two other main points to which I would like to draw attention before I sit down. The first deals with dyestuffs. As a result of the obligation to eliminate quantitative restrictions on imports, it will be necessary, in respect of dyestuffs and their intermediates—the term for the chemicals used in the manufacture of dyestuffs—to abandon the present system of prohibition of imports except by licence and this, in turn, has entailed a decision to substitute tariff protection.
  The Dyestuffs Acts, under which imports were first prohibited, are still on the Statute Book, although they have not been used since 1939. Clause 5 provides the appropriate occasion for repealing these Acts in order to clear the way for the introduction of the tariff. As this is rather a complicated subject, I have asked my hon. Friend the Economic Secretary to deal rather more closely with this matter should hon. Members so desire.
  The protective import prohibition is contrary to the general rules of G.A.T.T. Dyestuffs, obviously, could not be
  974
  excluded from the scope of the E.F.T.A. arrangements. Progressive liberalisation of the import prohibition would, therefore, involve the admission duty-free from member countries of the Association of increasing quantities of dyestuffs of types already produced in the United Kingdom. This, of course, would create difficulties for the United Kingdom industry and, moreover, once imports had been allowed in duty-free from E.F.T.A. members it would become extremely difficult to establish a tariff in the context of any wider free trade area.
  It is, therefore, important for us to introduce, as soon as possible, a protective duty on dyestuffs and dyestuffs intermediates imported from all foreign sources. Such a duty would be subject to progressive reductions on imports from E.F.T.A. countries, until, at the end of ten years, dyestuffs from such countries would be admitted duty free.
  I felt it necessary to spell this rather complicated matter out carefully to the House, because the repeal of the Dyestuffs Acts is one of the features of the Bill and is thus a necessary step in the changeover from a system of protection by prohibition and license to a system of protection by the tariff for this important British industry. In broad terms, the import of dyestuffs and their intermediates will receive the same treatment as other chemicals and this section of the United Kingdom industry will thus receive the same level and form of protection enjoyed by the rest of the industry.
  I need hardly reassure the House that the dyestuffs industry has been duly consulted on the change-over, which will be effected by tariff orders, and that the amendment of the open general licence, operating from 2nd March, will be introduced to the House in due course.
  Mr. Roy Jenkins: What is it that the Economic Secretary will spell out in more detail?
  Mr. Erroll: The hon. Member will, I am sure, find the winding-up speech of my hon. Friend of great interest.
  Mr. Jenkins: What is the point?
  Mr. Erroll: The history of the dyestuffs industry and the way it was protected in the inter-war period, because, as I have said, if hon. Members so desire,

  975
  we could explain why this apparently unusual situation has come about.
  Mr. Holt rose—
  Mr. Erroll: I have already given way on a number of occasions.
  Secondly, the E.F.T.A. is not designed as a static organisation. Other countries which are prepared to accept the provisions will be welcomed if they care to join. Others might prefer to be associated with it in some other way rather than to accept the Convention as it stands. Again, there may be supplementary trade agreements within the framework of the Convention itself. Clauses 6 and 10 will permit the provisions of the Bill to be applied if appropriate to agreements of the kind I have described.
  This, then, is a Bill concerned primarily with the complicated administrative measures designed to implement certain provisions of the Convention, a Convention which the House has already fully approved. I hope, therefore, that the House will be able to give the Bill a unanimous Second Reading.
  4.19 p.m.
  Mr. G. R. Mitchison: I stand in even greater need than the hon. Gentleman of the indulgence of the House. Not only is this matter somewhat new to me, but two of my right hon. and hon. Friends have been sent to sit on either side of me with pistols in their pockets to make sure that I behave myself.
  I shall not question the Motion that the House passed on 14th December, approving the Stockholm Convention, but I shall ask the hon. Gentleman or his hon. Friend the Economic Secretary to give us somewhat wider information than has hitherto been vouchsafed to us. We have had explained with lucidity and in some detail the machinery Clauses of a machinery Bill, but we are anxious to know what progress has been made towards the main purpose for which the Convention was signed.
  The right hon. Gentleman the President of the Board of Trade, in his final speech on 14th December, referred no fewer than four times to the Convention as being the foundation of a bridge from those who are known as the "Outer Seven" to those known as "the Six". These things become a little difficult. I understand that the Six may also be
  976
  called the Common Market, or E.E.C. Speaking E. and O.E., I sometimes find it a little difficult to distinguish between E.E.C. and O.E.C., but no doubt I shall learn in time.
  We want to know what has happened. This was treated as a matter of urgency and was said to be something about which the Government were to take early action. On 14th December, meetings were held in Paris. All we know about them—all I know about them—appears from two sources, one being page 151 of the Board of Trade Journal of 22nd January and the other being a very short statement by the Chancellor of the Exchequer, which provoked several supplementary questions, on 26th January, 1960.
  I remind the Government that those questions are still unanswered. I leave hon. Members who speak from the Liberal benches to repeat the questions which they then asked, but my hon. Friend the Member for Stechford (Mr. Roy Jenkins) asked this:
  "Is it not quite clear that both the Six and the United States are firmly opposed to any special arrangements between the Six and the Seven involving discrimination? Would it not be as well if the Government now recognised this and also that, whether we like it or not, if there is to be an arrangement it has to be very near to a Customs union?"—[OFFICIAL REPORT, 26th January, 1960; Vol. 616, c. 12.]
  In short, what my hon. Friend was saying was that if this was a bridge towards the Six it would meet with opposition from the United States. As he said in another debate, that would be more particularly so since at the moment the United States has to deal with an exchange deficit which, in the last year for which we have information, amounted to no less than 4 billion dollars, which is a very considerable sum. The result, so far as we can see, is that, while welcoming the E.E.C. on what are really political grounds—that that is a political as well as an economic agreement, and involves a federation of a part of Europe to an extent for which the United States has always pressed—the United States is somewhat critical of the Stockholm Convention and fears that the result of the two agreements together, especially if the bridge is not built and there is no link between them, may involve some sort of discrimination against United States goods.

  977
  The Chancellor of the Exchequer's reply to that very pertinent question was that all these points would be raised in discussion. That magic sentence must have escaped the attention of the Minister of State. We want to know what is happening. We must see what the results of the meetings of the 20 Governments are—20 Governments which are members of O.E.E.C. with observers from the United States and Canada, and, oddly enough, with a representative of E.E.C. They are the people who are to meet. The Chancellor said on that occasion that the terms of reference for their discussions were very wide and would include all these difficult points.
  Turning to the Board of Trade Journal, it is extremely difficult to discover what he meant by terms of reference. I suppose that they are
  "… the need to examine, as a matter of priority, the relationship between the E.E.C. and the E.F.T.A. with due regard to the commercial interests of third countries"—
  especially, I imagine, the United States and Canada—
  "and the principles and obligations of the G.A.T.T."
  Are those the terms of reference? What is to be done?
  We were told on 14th December that approaches had already been made to the Six and that we were to expect to be told quite shortly what their attitudes were in this matter. Is it the position that the Stockholm Convention has been initialled and is awaiting ratification and that at some time in the future there will be meetings, but that at present no one can tell us what those meetings are to be about or what lines will be taken at them?
  What was actually decided on the 14th was to establish one or more informal groups for the consideration of these problems without infringing on various other objectives. Not a word has appeared about what has happened. Are we to conclude that although the matter was considered to be of some urgency in December, on 14th January all that had been done was to set up a special piece of machinery for dealing with it, and that no information could be given as to what had happened during the month or more since that special piece of machinery had been set up? We are
  978
  entitled to more information on that point.
  I turn from that to another question, and before coming to it in detail I have to say this, although I am sure that every hon. Member present is already fairly well aware of it. The Outer Seven are a different proposition from the Six, the difference not being merely a difference between the Treaty of Rome and the Stockholm Convention, but a difference of the position of the parties to the agreements. The Treaty of Rome is among a number of countries some, at any rate, of which are equal partners, broadly speaking.
  We must recognise that we have a quite preponderant position in the Stockholm Convention. Whether considered from the point of view of population or of trade, we are easily the predominant or senior partner. We, therefore, have a special responsibility to see not only that the Convention serves the main purpose to which I have already alluded, but also that the Convention is fully implemented.
  I take as one instance from the Convention an Article for which the Bill does not appear to provide. The Bill is to
  "Make provision for matters arising out of the establishment of the European Free Trade Association.…"
  It appears to be the one piece of Government legislation intended to implement the requirements of the Convention. I have in mind restrictive business practices. Article 15 of the Convention—reading the part which I consider relevant to what I am about to say—says:
  "Member States recognise that the following practices are incompatible with this Convention in so far as they frustrate the benefits expected from the removal or absence of duties and quantitative restrictions on trade between Member States".
  The first of those comes in paragraph (1, a) which, again taking the words that I consider relevant, says:
  "agreements between enterprises … which have as their object or result the prevention, restriction or distortion of competition within the Area of the Association."
  As I read the words, "enterprises" is very general and is intended to cover any business undertaking or anything of that sort and is meant in the context to refer to private business undertakings.
  I like lager beer. Lager beer is imported into this country from Denmark

  979
  in fairly considerable quantities. The last figure which I have been able to ascertain shows that nearly £2 million worth of lager beer from Denmark reached this country in 1957. I suppose that that beer will be sold through the usual channels. One of the usual channels is public houses, or licensed premises.
  Licensed premises are often run by tenants and not managers of brewery companies. Licensed premises so run constitute an enterprise and when that enterprise makes an agreement with another enterprise, the brewery, it is making an agreement which must not have as its object or result the prevention, restriction or distortion of competition.
  In fact, however, the ordinary agreement about a tied house has precisely that object. The result of such an agreement is that the brewers are able to say to the tenant of their licensed premises that he must sell a certain kind of English lager, because those brewers make it, and not a certain kind of Danish lager. It is, of course, up to us, having recognised that practices of this kind are incompatible with the Convention, to take steps to ensure that those practices do not exist and are not allowed to develop, let alone increase.
  Will the Government say whether there is already legislation to deal with this matter? I can only say that I doubt that there is. There is no question of monopoly, for, since Mr. Charles Clore is no longer in the field, I doubt whether there is anybody who can say that he controls a third of the trade in beer in this country.
  Again, what about the Restrictive Trade Practices Court? In Section 8 of the Restrictive Trade Practices Act, 1956, there are some excepted agreements. One type of excepted agreement is described in subsection (3), which says:
  "This Part of this Act does not apply to any agreement for the supply of goods between two persons …"
  "Goods", even to teetotallers, includes lager beer.
  "… neither of whom is a trade association within the meaning of section six of this Act …"
  So far it is all right.
  "… being an agreement to which no other person is party …"
  980
  An ordinary tied house agreement conforms with that.
  "… and under which no such restrictions as are described in subsection (1) of section six of this Act are accepted other than agreements accepted (a) by the party supplying the goods … or …"
  This is the part that I count on.
  "(b) by the party acquiring the goods, in respect of the sale, or acquisition for sale, of other goods of the same description."
  What I suggest the publican accepts is a restriction that he is not to buy lager beer or other beer—
  "goods of the same description"
  from anybody but the brewery. Therefore, as I read the subsection, the Restrictive Trade Practices Act cannot apply to tied house agreements. But, equally, it seems to me that the clause in the Stockholm Convention clearly does apply to them and that if the Government, having recognised that certain practices are incompatible with the Convention, do nothing about it to bring in this Bill, then, while being the senior partner in the Convention, and bound, we would hope, to set an example to others, they have refrained from carrying out that Article and have allowed to continue a series of agreements which we all know to be very widespread all over the country and which appear to be incompatible with the Convention.
  I have taken that as an instance—there may well be others—and I have taken it as an instance of mischievous purpose. I am well aware that dealings with breweries are a sore matter with the Conservative Party, and we must always go carefully with them from the point of view of hon. Members opposite. However, as I said at the beginning, I like lager beer, and I like to have a free choice in it. I do not want to have any
  "prevention, restriction or distortion of competition"
  about it. Therefore, I should like to have in any public house in this country, so far as this Agreement, when in force, can do it, a free choice between Danish and British brewed lager beer. I should like to know what the Government propose to do to give effect to that Article.
  I have taken that as one instance, and it seems to me to be a fairly obvious one, but I wonder whether, when one

  981
  looks through the whole of the Agreement, the Government really have considered what they are to do. I say it because when one looks, for instance, at the preceding Article, Article 14, "Public undertakings", and Article 13, "Government aids", it seems to me that some of the Government aid which may from time to time be given to industries will need to be considered very carefully in the light of the Stockholm Convention and the obligations which the Government have assumed under that Convention. I should feel happier if I could be assured that all the Government Departments concerned, including the Ministry of Agriculture, Fisheries and Food, have been carefully consulted about the effect of those Articles and whatever it is that they propose to do.
  I now turn to one or two minor points. I listened with great interest to the right hon. Gentleman's explanation of the tests for determining what were goods of Convention area origin. I wish to put to him one case, largely because it has been commented on in the public Press. The President of the Board of Trade recognised that a number of industries in this country would be, let us say, at risk as a result of the Convention, and one of them is the textile industry. The right hon. Gentleman's explanation was given, as he put it, broadly speaking, and the particular case that arouses attention not only here and not only in the Press, but also, I understand, in the trade, is that of woollen textiles and particularly what is known as outerwear.
  I am never too old to learn. When I saw there was something called "outerwear", and I knew that there was something called "underwear", I inquired whether there was something called "middlewear", but I am told that there is not, and that the jacket that I am wearing at the moment and the overcoat which I put on outside are both rated as outerwear. Therefore, it is a very big range of goods indeed.
  The test there, as I understand it—taking the percentage test—will be whether the material imported from some other country and used to make the jacket or overcoat represents less or more than 45 per cent.—I believe that I have the figure right; I think that it is
  982
  a special figure in this case of the import value or export value, whichever it is, of the garment in question.
  It seems to me, though I am not an expert in the matter, that that may open the door extremely wide, that it may allow manufacturers of garments abroad to use material coming not from their own country but from the area of the Common Market Six or, for that matter, from other areas—for instance, from Japan—and got a cheap material in that way, and add a substantial amount to it by way of make-up costs and, therefore, get, indirectly, a benefit which I should have thought goes beyond the wish and the intentions of the House and, equally, beyond the best interests of the wool trade.
  I noticed that one or two hon. Members were raising this type of question—I do not know that it was exactly the same one—during our last discussion, in December, and I hope that we shall be told whether any special arrangement has been made about outerwear; if it has been, whether the improbable has happened and I have stated it correctly, and, if not, what the correct statement of it is, and whether at the end of the day it has been accepted by the British Wool Textile Association and other trade interests as reasonably satisfactory.
  I feel that in the present state of employment in the textile areas of this country we really must be particularly careful to safeguard the interests of the textile trades in a Convention of this sort. I believe I am right in saying that this is a matter which will have to be reviewed within a fairly short time, and, therefore, we are not pushing at a closed door. If, in fact, the present arrangements, which are neither in the Convention itself, as I understand, nor have been mentioned by the Government today, go beyond what is right or proper, there will be an opportunity of correcting the matter.
  I have little more to say. A great many of the points which' the right hon. Gentleman put to us seem to be points which must entail a little more consideration in Committee, and if I may mention one particularly it is in the hope of avoiding spending too much time over Committee matters. The Minister of State explained that Clause 1, which is the main Clause of the Bill, goes a little

  983
  beyond the provisions of Section 12 of the 1958 Act. I do not know if I am right in my guess, but the point at which it seemed to me to go a little further is in lines 8 and 9 on page 1 of the Bill, under which regulations may be made
  "as to the time by reference to which … the question … is to be decided,"
  I could not find these words in the 1958 Act, but they certainly are an addition, and I shall be glad if the hon. Gentleman who is to reply to the debate will confirm or correct my impression that that is the addition referred to, or if not, tell us what the addition is and explain why that matter is required there.
  I am sure that we all understand the absence of the right hon. Gentleman the President of the Board of Trade today. I understand that he has gone to Zürich, and we hope that it has not been necessary to rescue sterling again.
  4.41 p.m.
  Mr. Leonard Cleaver: Having listened to the hon. and learned Member for Kettering (Mr. Mitchison), I thoroughly well realise that I am extremely "small beer" in standing before you today, Mr. Speaker, and asking for the indulgence of the House, as this is the first occasion on which I have addressed it.
  I have on many occasions appeared on playing fields in the constituencies of many hon. Members, and on those occasions the matter was usually controversial, and it was not always settled entirely to my satisfaction. However, I hope that if, on this occasion, I give no provocation, the House will be kind enough to extend to me the courtesy which it usually extends to a maiden speaker.
  As hon. Members are probably aware, the division of Yardley is part of the large conurbation of Birmingham, and is perhaps in one of the most intensive industrial areas in the country. Curiously enough, my constituency does not contain an enormous number of factories, probably a dozen or fifteen, but the manufacture of machine tools, wire drawing, the making of motor components and various goods required for transport facilities are among the trades which are carried on then. We are, in fact, a dormitory division for this great city.
  984
  The enterprise and hard work which has been characteristic of Birmingham for so many years is not dead, but is showing itself in my constituency in the way in which new churches are being built and old ones renovated and repaired. Any matter which concerns the trade and industry of this great country naturally affects my constituency very deeply. We do not, however, possess that civic centre in the division which is so important and would contribute to its life.
  During the last two years I have visited a great many homes in my constituency and could not help being impressed by two facts. One is the desire that the present prosperity of trade in the city should be continued, with employment for the people, and the second is that the weekly pay packet must buy as much in twelve months' time as it does today. Of course, that in its turn means that hire-purchase payments are met, that rent does not get into arrears, and that there are plenty of those things which go into the housewives' shopping bags.
  This position can be easily spoiled if inflation raises its ugly head again, as it may well do. No one realises this more than the Yardley housewife, or, indeed, housewives in general, for it is on the housewives that the burden of inflation falls, and they do not wish again to experience the spiral which involves rising prices.
  These facts are not entirely unconnected with the matter before us today. If Great Britain enters into a trading agreement which is unsuccessful, or turns out to be to our disadvantage in the end, the industries of my city will suffer, and that, in its turn, will bring unemployment, misery and hardship to many of my constituents. For the City of Birmingham depends on a flourishing export trade. In fact, there is no commercial decision at which this House can arrive which does not affect it very seriously. It is because the bread and butter of so many people are involved that this Bill will be scrutinised very carefully by all those concerned with the industrial and commercial life of my city.
  I hope that my right hon. Friend the President of the Board of Trade will be encouraged by the general welcome which has been extended to the Bill, and

  985
  not only from Birmingham but from many Midlands industries. Many people are now realising the advantages of bulk production, and the large reductions in costs which can be obtained if, in fact, there is a great flow of trade and plenty of orders about. The success of British industry in this field is admirably demonstrated by the motor industry, which plays a prominent part in the industrial life of our city, and has contributed so greatly to the export trade of this country, hitting target after target.
  The problem is always to find a bigger market than the 55 million souls who live in these islands can provide. The Agreement between the Seven adds a potential market of something like 26 million people in a very prosperous part of Europe, who have a great purchasing power as well. It is not only those who are engaged on mass production who will benefit, but also those who rely on their skill and the quality of their goods, and they will reap a benefit from the wider opportunities which these provisions will ultimately provide.
  We cannot, however, expect people from foreign lands to owe us our living. This House, unfortunately, cannot pass Measures which will ensure that foreign peoples purchase our goods. It cannot guarantee that we shall have easy business or comfortable employment. I was gratified to hear the Minister of State say that provisions were being made to ensure that there would be adequate supplies of cheap raw materials. It is absolutely vital for the continuance of industry in my area that there should be no increased cost whatever in providing raw materials.
  The opportunities which the Bill offers will only be achieved if certain requirements are met. First, prices must be competitive. Secondly, delivery dates must be met. Thirdly, design must be up to date, and quality must be first class. These requirements are not beyond the capacity of the efficient manufacturer, but they certainly leave no room for the old-fashioned and inefficient firm. Given these requirements, a great responsibility rests upon our export salesmen, who have a most important job to do.
  I sometimes wonder whether people realise that, and give them the status they deserve. I should like to see more chairmen and managing directors of firms going out into foreign markets to
  986
  consider whether prices are right, whether design is right and investigate all the possibilities. I am sure that this would do nothing but good. Increased activity by our salesmen will be effective only if there is no discrimination against British goods and if there is fair competition. I am thinking of tax subsidies, export incentives and similar devices. I hope that the Minister will be able to assure us that the Government are alive to these problems and that the Bill will enable them to take early action should export subsidies and incentives act to the detriment of British industry.
  The Stockholm Agreement contains an Article dealing with complaint procedure, but it is very galling for a manufacturer who thinks that he has been affected by indiscriminate and subsidised competition to be told that his complaint is being considered by a council when all the time he is losing his trade, is probably losing his profits and possibly turning off his workpeople. I hope that if a case such as that does arise and the Board of Trade is put to the test, the batting of the Board of Trade will be more like the M.C.C. batting in Jamaica than another test which took place in another part of the Commonwealth a year or two ago. We want some commercial zip when these circumstances arise.
  Another form of competition which must be faced is that of quality. It is possible to sell goods which on the face of them look perfectly all right, but are, in fact, sub-standard and of slightly lower cost. Very often goods coming into this country do not meet safety regulations. Industry would welcome an extension of the activities of the B.S.I. in this field. When the European Free Trade Area proposals come into operation there will be a much greater scope for the activities of that body.
  I should like the House to be assured that it is not competition which we want to avoid, but unfair competition which we want to eliminate. It is all right to be playing the other side, but is a little hard for the referee and linesmen to be against one as well. I hope that we shall not be subjected to many low quality and low-priced goods flooding into the country under these regulations. The future and livelihood of our people depend upon the success of our attempts to obtain export business. Everyone in

  987
  this country must realise the importance of these provisions and how essential their success is to our standard of living. I sometimes wonder whether ordinary citizens of the world realise how important they are.
  I want to suggest two things which we should lay down. First, we cannot tolerate inefficiency or obsolete business methods. We cannot afford restrictive practices or anything which harms our export trade. The City of Birmingham would not be the great conurbation that it is if it had not been for efficiency and good management, and its 1,500 trades would not have come where they are and stayed if they had been based on inefficiency and bad management. Among these industries there are some very small ones which are extremely adaptable and very efficient.
  Secondly, anything which puts up costs will lose us export markets and be entirely against the national interest. I have mentioned the responsibilities of employers, but I do not think that we should forget the obligations of employees. This is not the time to discuss the reasons or justification for an industrial dispute. I certainly do not want to enter into the realms of controversy, but I should like to refer to the method of settling disputes. If the strike weapon is used it will harm not only the general public, but employees and manufacturers as well. It is bound to put up costs and bound to make delivery dates more uncertain. Nothing annoys a foreign producer more than the non-arrival of his goods and his inability to keep his production programme.
  Under the Bill, which prepares for a reduction of tariffs and increased European competition, these are important matters. We cannot expect foreign firms which are importing into this country not to take every opportunity they can to secure every market which is possible. That will be to the detriment of our industry and the standard of living of our people. I hope that those responsible for these matters will bear that in mind.
  Some traders will be hit by these proposals. Obviously, there must be give and take in reaching an agreement with six other countries. Those who have to give will not like it and those who have to take will. I hope that we shall not
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  desert the more unfortunate industries in these circumstances. I know from my own experience that some small industries are apprehensive about what will happen. I am thinking of copper smelters and refiners, and bronze and brass ingot manufacturers. Both industries depend on non-ferrous scrap. They feel that, if certain export restrictions are removed, scrap will flood out of the country, will cost them more and in the end will put up the price of their products. The smelters expect to be put out of business. I hope that we shall not forget that and that the Board of Trade will be ready and available to go into action as soon as the necessity arises.
  In conclusion, we in Birmingham welcome the Bill as offering to our industries a challenge and an opportunity. It has the challenge that the cold blast of foreign imports will be felt by our industries, but they can be met by the skill of the workpeople and the inventiveness of the manufacturers. It gives us the opportunity of a much wider market, not only for those interested in mass production, but also for those supplying quality goods looking for other markets. Let us enter the European Free Trade Area with mutual co-operation and unity. The opportunity to increase our standard of living is before us. If we could do this and make an outstanding success of it, we could stagger the world and perhaps even surprise ourselves.
  4.58 p.m.
  Mr. Leo Abse: I am sure that the House would like to join with me in congratulating the hon. Member for Birmingham, Yardley (Mr. Cleaver) on his speech. Dealing with a weighty subject, he spoke with great liveliness and verve. The whole House will look forward to hearing him speak on equally complicated matters on many future occasions.
  My cold is so heavy that I almost have to ask the House for indulgence, but I am prompted to intervene because in my constituency there has been built up an important sector of the man-made fibre industry in this country. It is an industry which is fully prepared, as I am well aware, to face the consequences of any increase in fair competition between the countries of E.F.T.A. It is also an industry which is prepared to

  989
  look forward to the possibility of building a bridge between the Outer Seven and the European Economic Community.
  Unfortunately, it appears that the inevitable effect of the Bill on the industry will be most unfair competition. Paradoxically, the effect will also be that there will be a positive incitement in this type of industry for Common Market countries to remain outside the Free Trade Area. Five of the E.F.T.A. countries produce no synthetic fibres and one, namely, Denmark, produces no manmade fibre of any description.
  Few of these countries have any comprehensive textile industry. The consequence is that in several the perimeter duties on yarns and staple fibres are nil or negligible. Some of the countries adopt a liberal attitude, more liberal than the United Kingdom, towards Japanese supplies of textiles.
  The origin rules for textiles which Pave emerged from the Stockholm negotiations are, in my view, excessively liberal, and in many cases have been drawn up in such a way as not to favour the home industry but to suit special interests, such as the Austrian spinners, the Swiss embroiderers and the Swedish garment manufacturers.
  As a result, the E.F.T.A. markets will, unless adequate safeguards are introduced, be laid wide open to penetration by dumped yarn and staple fibre from Common Market and other non-area suppliers and by low-cost Asiatic yarns and fabrics. Thus, if these regulations are put into effect, it may be possible for synthetic staple fibre to enter the area at dumping prices, paying no duty or very little duty at the perimeter and then be given area treatment after manufacture into spun yarn, fabric or garments. Then, that dumped yarn will come in duty free and circulate in the area as printed or embroidered fabric or stockings; and it will be possible for all outer garments, and even embroidered cloth, to be based on Asiatic or other non-area fabric.
  The point I am trying to make is that there is a great fear that as far as the man-made fibre industry is concerned the main benefits of E.F.T.A. will accrue to non-area countries which will not incur the obligations imposed upon members and who are themselves protected by their own tariffs from retaliation by us.
  990
  Because of this I say that, paradoxically, it could mean, as far as the sector of industry about which I am speaking is concerned, that there would be a positive incentive for Common Market industrialists to remain outside the European Free Trade Association rather than negotiate some form of agreement and so have to face us on fair terms.
  If, for example, we look at the experience of 1958 as far as the man-made fibre industry is concerned, we find that there was a large excess capacity. This was true of all the major producing countries, and all of us who have any contact at all with this kind of industry know that the level of fixed and overhead costs is very high, with the consequence that once a surplus capacity comes into existence there is an incentive on the part of the producer to export his excess capacity at a very low cost indeed.
  This can occur in many ways. For example, there could at any time in this type of product be an excess of capacity in, say, German yarn. We should then find that that yarn could go to Switzerland and, by minimal processing, could be sold inside the Outer Seven as Swiss woven fabric to the six partners at what, in effect, could be dumping prices.
  To take an even more obvious example, we could have the situation in which Italian yarn, which could be produced very cheaply because it could be part of the excess capacity of Italian manufacturers, could be exported with very little carriage cost to Austria and there be made up by minimal processing into something like stockings. We should then have the serious situation of something which was processed dumped yarn coming out of Austria and circulating inside the Outer Seven to the serious detriment of our home industry.
  This type of danger prompts me to ask for some assurance from the Government that in taking these powers for the special treatment of manufactures from our six partners they will, in return, ensure not only that our partners do not take unfair advantage, but, perhaps even more important as far as the man-made fibre industry is concerned, that they will not allow unfair advantage to be taken by third parties, by, for example, Germany, Italy or Japan. Unless adequate safeguards are in existence it means

  991
  that the whole nylon industry in my constituency could be seriously affected by dumping.
  I am asking that there should be—indeed, must be—effective anti-dumping legislation not only in this country, but in the countries of our partners. This is particularly vital because, as we all understand, all seven members are not in any way comparable industrially and hence an immediate self-interest is not necessarily a community interest, in contrast to the Common Market position. This disparity in the level of industrialisation as between one country and another demands special vigilance on the part of the Government if the manmade fibre manufacturer in this country is not to receive a severe blow. Indeed, in this connection, I ask the Government, whether, perhaps, it will be necessary for them to consider the amendment of Section 8 of the Dumping and Subsidies Act. It may be that a new formula will have to be introduced if industry is to be adequately protected in this respect.
  I have no wish to repeat my point, but merely to stress the fact that in Pontypool we have built up, through the combined efforts of imaginative management, resourceful research workers and hardworking operators, a nylon industry which is the pride of Wales. That industry came to Wales as a consequence of direction by a Labour Government. It came, in no small measure, as a result of the activities of the father of my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who, today, is sitting on the Opposition Front Bench. We wish to avoid this great industry being severely damaged by a Tory Government taking this country into a European Free Association without safeguards. As matters stand, it is my view that the industry stands wide open to the abuse of dumped German, Italian or Japanese yarn.
  5.7 p.m.
  Sir John Vaughan-Morgan: I think that the hon. Member for Pontypool (Mr. Abse) will find that my hon. Friend the Economic Secretary to the Treasury will be able to give him quite adequate assurances when he winds up the debate. As the hon. Gentleman was speaking, I could not help feeling that when a comparable Bill to implement this Convention is going through the
  992
  Parliaments of the other member countries, similar complaints will be heard, probably directed against this country. I believe that we must retain a sense of proportion in the matter and realise that, if we are to lower barriers, there are bound to be such dangers as the hon. Gentleman has adumbrated, but sometimes the risks have to be taken in the interests of us all.
  I wish to reinforce what was said by my hon. Friend the Member for Birmingham, Yardley (Mr. Cleaver) and to congratulate him very warmly on the speech which he made today. I cannot help feeling that my hon. Friend the Minister of State, Board of Trade, who opened the debate, was a little optimistic in thinking that it would be confined to the technical matters contained in the Bill. I cannot see any justification for thinking that in a formal Second Reading debate we should not be able, with your agreement, Mr. Speaker, to raise wider issues.
  My right hon. Friend the Chancellor of the Exchequer made a statement—if one can call it such—in January in reply to Questions, but very little information has been available since the debate on 14th December. Having followed these matters closely for two years, and as I still follow them with great interest, I want to know a great deal more about what has been happening in these last eight weeks than we have been vouchsafed today. The Ministerial minuet has continued—a sort of conga line through the capitals—but we have been told very little in the House about what has really happened.
  When we discussed this matter in December, we heard a great deal about bridge building. Occasionally, the metaphor was varied and there were references to filling up a ditch. Some would think that a nearer parallel was digging a grave. The prospects of bridge building, or filling up ditches, has not, in my view, been improved by the entry of the United States of America into our discussions on this matter, an entry which has taken place after so long.
  I cannot but say that I find that the whole American approach to the free trade area is quite inexplicable. I pay a very warm tribute to America's generosity towards Europe during the years since the war. I pay warm tribute to the extent to which America has

  993
  liberalised her own trade, enabling us to make great inroads into her markets for our exports. I overlook for the moment such whacking great beams in the eye as Americans have in the shape of duty quota on woollen fabrics and a few other things. The fact remains that the United States does not understand Europe and has never attempted to understand our own peculiar position in these islands.
  America has always been well represented at all levels in this country by her Ambassadors and Ministers who, I am sure, always put forward our point of view to Washington sympathetically. But, looking back over the years, I feel that those representations must always have been ignored. The Americans have, as it were, a bias towards thinking that Europe must easily and automatically he united. Just because the Founding Fathers of the United States of America managed to achieve a union of thirteen States with a common tongue and a common seaboard, with a common enemy in ourselves, the Americans think that Europe, with all its complexities and differences, must do likewise. It would be as fair for us to reproach the Americas for not having made a political unity out of the Pan-American League. They never have understood the British approach to any of these matters, particularly our approach to the European Economic Community.
  For over two years, we have made it clear, ad nauseam, that, provided our ties with the Commonwealth are unimpaired, we are willing and eager to play our part in the movement towards European unity. I was delighted that my right hon. and learned Friend the Foreign Secretary, speaking at Strasbourg, emphasised the fact that we wish the Six very well in their progress towards making a reality of the Community.
  What is the American approach to that? We can sum it up by saying that at the moment America is strictly neutral and impartial on the side of the Six but against the Seven. The Americans appear to be for the Six because of the political content of the union of the Six, despite the fact that it is inevitably somewhat restrictionist and inward-looking—
  Major Legge-Bourke: But because it is federal.
  Sir J. Vaughan-Morgan: It is, of course, as my hon. and gallant Friend reminds me, federal, and that is the magic word. The Americans are against the Seven, apparently, because they thing, although they are wrong, that it has no political content, despite the fact that the Seven is outward-looking and far less discriminatory against American interests, inasmuch as the mean of six out of seven of the tariffs in the European Free Trade Association is lower than the harmonised tariff of the Six.
  The Americans are for the political unity of Europe but against the economic unity of Europe such as it was always put forward in the Free Trade Area negotiations, despite the fact that it is absolutely and completely consistent with the principles of G.A.T.T. which America is the first to invoke when it suits her book.
  I cannot help feeling that, if America had not been so blind two years ago, had seen where her true interest and the true interest of the whole of the free world lay, and had thrown her influence on the side of a free trade area in Europe, such a development would have become possible, because at that time America had great influence in the affairs of Europe. It is only now, when America's own interests are in danger, when her own economic situation has deteriorated, that she takes up a firm attitude against a free trade area.
  If we had had a statement about the negotiations, we might perhaps have heard that my fears were unfounded and that America really was beginning to appreciate the dangers of an economically divided Europe. Perhaps the Americans are beginning to understand that a Europe divided is far less able to help the under-developed countries and share the burdens which America, with some considerable assistance from ourselves, is now shouldering.
  The crowded and rather confusing calendar of conferences continues. The Twenty are to talk. The Seven are to talk. Presumably, the Six are permanently talking. So it goes on. It is my hope that sense will ultimately prevail and the barriers between the Six and the Seven will be lowered. I hope that the rumours that we may be putting forward proposals for wider G.A.T.T. reductions will be substantiated, but we have not been told.

  995
  Where do the Seven stand today? We have achieved our own Association, but, apart from that, we seem to be getting nowhere. Looking back over all the negotiations, I think that it is idle to pretend that the seven Powers in the European Free Trade Association have not suffered a series of rebuffs—and I mean the Seven, not the United Kingdom Government, because we are all in this together.
  To summarise the past history, we had stage one, the period of O.E.E.C. negotiations when we were led up the garden path by the French. We are now to have stage two, the Atlantic negotiations, when we are to be led into the wilderness by the Americans. There has been a further rebuff of a minor character. France has rejected the proposal to have the European Free Trade Association headquarters in Paris. It ought, at least, to go on record that that is, I think, the first time that any country has refused to have a headquarters. Usually, there is considerable competition to obtain their presence.
  It looks as though very little headway will be made in 1960. We are unlikely to obtain any concrete commitments in a year in which there is a Presidential election. What can the Seven do? First, we must continue to take part in all these discussions that are taking place within the Atlantic Community, but there should not be too much compromise on our original aim of obtaining a free trade area for the Six and the Seven. Secondly, we ought to carry out the intentions which my right hon. Friend the President of the Board of Trade had in mind when he said of the Free Trade Association:
  "Let us bring substance, reality, and meaning into it to make it a living and significant thing."—[OFFICIAL REPORT, 14th December, 1959; Vol. 615, c. 1176.]
  I had hoped that we would hear a little more about that today.
  Another point is that we might stop advertising the disadvantages of the European Free Trade Association. We might, as happened in the debate on 14th December, stop being apologetic or deprecating about the Association. My hon. Friend the Member for Halifax (Mr. Maurice Macmillan) put it very wittily when he said on 14th December that we all know that our club is not as good as
  996
  the other chap's club. That is quite true in many ways, but our club has a great many amenities which the other chap's club has not. It is outward-looking. It allows for the idiosyncrasies of the various nations taking part. It does not conflict in any way with our obligations to the Commonwealth. Above all, it is open to newcomers. So, in theory, is the Six, but in practice it would be nearly impossible for anyone to join the Community without a complete re-negotiation of the Treaty of Rome. That almost means that one could never have a new member in a club unless all the rules were redrafted which is not very practicable.
  What can we do to make a reality of the Free Trade Association as it exists today? I do not know what the Government have in mind to put forward at the meeting in Vienna, and I have only a few small suggestions to make. I hesitate to add to the various jaunts and jamborees that take place, but could there not be a conference of Parliamentarians, perhaps on the lines of the recent conference of N.A.T.O. Parliamentarians in Washington? I am not suggesting a formal assembly, but such a meeting would provide an opportunity for the exchange of ideas. The Commonwealth, with the consent of our partners, might be asked to send observers, and we might even have observers from some of our sympathisers within the Six, because we have many sympathisers.
  There are other forms of co-operation which might be looked into. The Federation of British Industries, in the vanguard as usual, has taken the initiative in forming an E.F.T.A. Council of Industrial Federations. There are other organisations in this country which might follow suit. Also—and this arises from a point which my hon. Friend the Member for Yardley mentioned—the secretariat of the E.F.T.A., when it is constituted, might consider steps which will lend themselves to harmonising the trading and social policies of the various countries of the Seven. The more that we make a reality of the Seven the easier we shall find it to come to an understanding with the Six, and with America as well.
  One of the advantages that the Six have against us at present is that under

  997
  the Treaty of Rome the harmonising of such matters as social policies is obligatory on them. We can do a great deal on the same lines. We can do something to see that our legislation on dumping or restrictive trade practices is uniform throughout the area. All these things can be done. They can and should be done by the secretariat as a matter of urgency.
  Although this is rather a depressing moment for those who want to see Europe united economically, I cannot help feeling optimistic about the ultimate prospects of a European agreement of one sort or another. The position is better in some respects than we might have anticipated. It looks as if the Six will be more liberal-minded and outward-looking than at one time we feared. Certainly at the present time I cannot say that our trade to Europe has suffered. For example, last year our exports to Germany showed a phenomenal increase which proves that trade can, and still will, flow across the barriers although not by as much as we would like. Nonetheless, we must continue to work for European unity—nothing else will suffice.
  I thought that the position in which we find ourselves was admirably put by Sir Oliver Franks in a speech that he made the other day. He said:
  "The true interest of the international community is to see that the existing two grouping merge in the end, so that the dream of the free movement of men, goods and ideas comes true in Western Europe, and, in addition, to work with the Six and the Seven, or the group that may emerge, so that together we progressively lower economic discrimination in the free world."
  The Bill before us is the first faltering step, and the next step is to make it work.
  5.27 p.m.
  Mr. John Hynd: I am sure that many hon. Members on both sides of the House are surprised at, and might even deplore, the strong strain of anti-Americanism in the speech made by the hon. Member for Reigate (Sir J. Vaughan-Morgan), and particularly those hon. Members who have followed closely the development both of the Six and the Seven and the efforts that have been made—to which the hon. Member paid tribute up to a point—by America to bring Europe together poli-
  998
  tically and economically. I was surprised to hear the hon. Member say that the cause of the trouble was the American failure to appreciate the importance of economic as well as political unity in Europe. I was even more surprised at the comparison which the hon. Member made. He said that when America criticised this country for having failed to bring about a merging between ourselves and the European countries in the federation, they were equally guilty in not having been successful in federating the Pan-American Union.
  The two situations are opposite to one another. In our case the failure to achieve the federation of Europe is not because we failed to persuade the others, but because the others failed to persuade us. On the other side, if the South American countries had made a combined move to invite America into a North-South American Federation with America as the dominant partner—as we would have been in Europe—the United States would probably have been only too glad to accept. A comparison between the two is hardly worth considering.
  The speech made by the hon. Member for Reigate, and those of other hon. Members, underlines the complaint that some of us made at the beginning, and to which I am sorry that the Minister did not fully respond, that because the Bill, which is the first instrument which has been presented to the House since the conclusion of the Stockholm Agreement, is a purely technical one, we have not been favoured by the Minister with some reflections on the wider considerations and developments that have taken place since the debate last December which have led to this stage where we are now bringing in a Bill to implement some of the agreements that have been made. Unless we know what is happening, unless we know where we are being led in these agreements of the Seven, some of us might find it difficult to support Measures that are brought in from time to time to make the agreements effective.
  We were told—this has been said repeatedly in the course of this short debate—that when the Stockholm Agreement was concluded it was an attempt to build a bridge between the

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  Six and the Seven. Other similes have been given. I heard one the other day from the Austrian Foreign Secretary, who described it by saying that the seven members of the Stockholm Agreement, having failed to persuade the Six to agree to a Free Trade Area, had formed themselves into a kind of trade union which would facilitate further efforts on our part to become associated with the Six on a wider Free Trade Area basis or something similar.
  If that is really the intention, the Government should be able to tell us at each stage how that trade union is functioning, what demands it has made upon the Six or what propositions it has put before them, and how, in fact, as a trade union, it is functioning for the purposes of creating this new joint community. We have not been given that information. I hope that before the debate concludes at seven o'clock, the Economic Secretary to the Treasury will have armed himself with sufficient information to reassure some of those hon. Members who, like myself, have strong reservations about proceeding further with this community of the Seven until we know precisely what is its basic purpose. It is not merely because we may have a predilection for the Common Market set-up.
  In this, I understand, we have had some recent support from the Government. I remember reading in The Times of, I think, 21st January that the Foreign Secretary himself had said publicly that he thought we had made a mistake in not becoming members of the Schuman Plan. That is progress, but it is progress in retrospect and it does not get us very far.
  One does not want to go over all the history again, but the fact is that there were good reasons why we hesitated to take part in the first conference on the Schuman Plan. Certain conditions were laid down for our attending that conference which most of us, on both sides, thought were asking a little too much and we were not prepared to go into the conference unconditionally. I should have thought that if the Foreign Secretary and the Government now believe that it would have been much more to our advantage had we accepted that offer, even with the risk that it involved,
  1000
  then, they have still less excuse for not having taken part in the Messina conference, where such conditions did not apply.
  General agreement is now spreading, I think, throughout the benches on both sides of the House, and even among the hierarchies of our political parties, that we made our biggest mistake when we did not play our full part in the Messina conference and tried to get, not the Common Market, not a Free Trade Area or Association but a community which would recognise all the difficulties of all the countries and all the special conditions, and which would have catered for any one member like ourselves, or like Sweden or Austria, and would have enabled members to join it without any difficulty or hesitation. We did not do that.
  As the hon. Member for Reigate has said, the Common Market Treaty as concluded now makes it exceedingly difficult for us, even if we so desired, to join now. That, again, is because we were not at the conference at which the conditions were laid down, when countries like France were able to get special provision made in the Treaty to meet their overseas and their agricultural problems. By implication, we might well have been able to get similar conditions to meet our special problems. When we refused to take part, we cannot complain that the final Treaty which came out of those conversations does not make adequate provision for the special problems of a country which refused to consider becoming a member or to join in the original discussion.
  What is the situation which now faces us? What worries me and a number of other hon. Members, apart from the ideological aspect, is the conception of a federation of the European countries, politically and economically, without us. There are practical considerations involved. It might well be that the explanation of America's present attitude to the Seven is a quite simple one. It might be a little difficult for hard-bitten Members of Parliament to swallow, but it might simply be that after the Second World War America saw the opportunity for bringing together into a federation the countries of Europe, friends and enemies of the past, eliminating all the disputes which had twice brought America into costly world wars, and

  1001
  that America was, therefore, prepared to put up with some of the difficulties which her trade might face in order to realise this conception. This might sound idealistic, but I believe that that is the simple explanation behind the American attitude. Now, however, we have gone beyond the consideration of the idealistic aspect and we are faced with a practical Bill giving practical effect to a practical situation.
  What is this practical situation? Great Britain is now linked with the Scandinavian countries and with Switzerland and Austria into the Community of the Seven. We have facing us the Community of the Six, large, important countries, contiguous to each other, which can form a combined and easily managed community, federal or otherwise, whereas we are a mixed bag picked up from odd corners of the map—Great Britain, with Sweden and Norway up there and Switzerland and Austria across and over the top of the Common Market bloc, not only geographically in a difficult position, but, in some cases, politically and economically in an extremely difficult and hazardous situation.
  Consider the case of Austria. Austria, quite clearly, has joined the Seven not out of preference, but because of the political implications if she tried to join the Community of the Six, where she would be much more at home economically, because the greater part of her foreign trade is done with Germany and the other members of the Six and only a small part is done with the Community of the Seven. That is apart altogether from the fact that we are so widely separated from her. But we all understand the political reason which has made it difficult, if not impossible, for Austria to associate with the Six.
  It is rather far-fetched to suggest that if Austria joined the Common Market group, of which Germany is also a member, this would be equivalent to reviving the old anschluss idea. Nevertheless, that is one of the considerations in the background of the Austrian attitude. One can understand it because of Austria's delicate position and her anxiety that she should maintain quite clearly before the whole world her neutral position. It is, however, an awkward situation which faces Austria.
  That is one of the reasons why I feel so strongly that every time we consider
  1002
  the question of the Free Trade Area Association, we should have in our minds how far this Association is moving towards eliminating those difficulties and bringing the two communities together. Unless we do that, we shall crystallise in our positions. We shall consolidate situations which, in the long run, will become impossible and intolerable, particularly for countries like Austria or even Switzerland, and make the division of Europe a fact both economically and politically.
  Without wanting to go too far into speculation on how far that could lead us, I would make this short reflection. On Wednesday and Thursday of last week, we had an impassioned debate about providing Germany with atomic weapons. Many views were urged as to whether we were prepared to allow Germany to have atomic weapons, and, if so, under what conditions.
  I did not hear a single word uttered about what might easily happen in the near future, namely that nobody will ask Britain's permission to provide Germany with atomic weapons. If the Community of the Six develops—and it may develop against us—it will become a federal community, certainly a political community; and with the present temper of President de Gaulle and his insistence upon developing his own atomic weapons—an insistence he underlined when the explosion took place, saying that this would enable the Community to provide its own atomic weapons—we may well face a position where France and the Community of the Six will have their own atomic weapons without any co-operation with us or opportunity of linking up with us. There might be a political position in Europe where France will be the dominant factor and where Germany, with or without Britain and America, will become a fully armed atomic member of the new Community.
  That is a reflection on what might develop out of this, and therefore, in all seriousness, I urge the Government not to ignore these factors and not to be satisfied with measures to implement just the steps towards developing the technical agreements. We expect to be told by the Government what progress is being made towards solving the differences between the two communities and towards providing a bridge between

  1003
  them and making a mutual trade agreement.
  I turn from general remarks to a couple of points about the Bill. Clause 1 says that
  "The Board of Trade may by regulations make provision as to … the evidence which is to be required or is to be sufficient for the purpose of showing that goods are or are not to be so treated."
  That is the question of certificates of origin. Clause 3 deals with the investigation of "certificates or other evidence." The Government are, therefore, to have power to make regulations as to the kind of evidence which is to be required, and that evidence, apparently, can include certificates or other evidence. I gather from the Minister's remarks that he does not think it is a very difficult thing to do.
  I should like a little more information about this, because my impression is that one of the biggest snags in the negotiations over the Free Trade Area was precisely how to satisfy all concerned that the system of certificates of origin could be adequately applied. That was one of the big difficulties. I know that some delegates said it could be overcome and that the certificate of origin system was a satisfactory one and could be an effective check, but others were not so happy about it, and I know that many groups of economic experts in this country are not yet satisfied that we can apply a watertight system of certificates of origin.
  Therefore, I hope that we shall be told a little more about that, because from the wording of the Bill one might be left to assume that there is no difficulty about it at all, and that regulations can be drafted by the Minister and that the problem will be solved. Perhaps whoever is to reply for the Government will tell us something more about how the system of certificates of origin is to be worked.
  Clause 1 (4) provides that regulations shall also be made by the Minister
  "for determining in what cases produce of the sea, or goods produced or manufactured there-from at sea, are to be treated as of Convention area origin"
  I say in all humility that I do not understand what this precisely means, but to me it reads as though the British Government under this Measure are going to
  1004
  take power unilaterally to decide what the conditions are, and what products from the sea and what goods produced or manufactured from the sea shall be regarded as having a Convention area origin. I can hardly imagine that that is the position, but that in fact any regulations or definitions will be made in agreement with the other Powers, and that there is no question here of unilateral decisions by ourselves without complete agreement with the other parties.
  Those are the two points on which I should like information about the Bill. I would finish on this point which my hon. Friend the Member for Pontypool (Mr. Abse) made, for I think it is worth underlining. If the Government are genuinely seeking—again, we hope for some more information about this—to bring the Six and the Seven closer together and to build a bridge, is there not some possibility that first steps can be taken in this direction, on the basis of what has already been suggested by implication in an earlier speech, of trying to get agreement between the two parties on common anti-dumping measures?
  A lot was said from the other side of the House about the dangers of our being faced with dumped goods from the Community of the Six or even other countries. The Rome Agreement provides against this and provides against monopolies. If the Rome Agreement does that, and the Stockholm Agreement countries want to do that, then it seems to me there should be no difficulty in getting together about it, to have a mutual agreement about dumping.
  The same applies to social regulations. The Six, the Common Market countries, have in their articles provided that one of the main purposes of their association shall be to raise the social standards of the various member countries and to bring them into line. I do not think any member of the Seven need feel that they are going to be left behind in the development of social conditions, particularly social security conditions. Therefore, I should have thought that here again was another link which we could adopt for building the bridge.
  I believe that if we cannot have the bridge built in one single operation, at least there are these different channels

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  through which we could proceed to get an understanding with the Community of the Six on matters on which, I should have thought, there would not be a great deal of difficulty, agreement on which would be mutually advantageous and which would help to reduce the strains and stresses which would otherwise develop between the two communities. I hope that when the Minister replies to the debate he can give us some information as to what the Government's intention may be in that connection, and whether any proposals of that kind may be implemented.
  5.47 p.m.
  Mr. Maurice Macmillan: I hope that the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) will forgive me if I do not follow him down the well-trodden path of ideological and historical speculation that he took us along today, as he has so often done before. It is true that this is a minor Bill of a technical nature implementing the Convention, but it is a Measure of great importance to many parts of British industry, as my hon. Friend the Member for Birmingham, Yardley (Mr. Cleaver) showed in a far from minor maiden speech.
  I think that in some ways the extent to which industry does welcome this Bill is remarkable, because there are sections which are damaged to some extent at least by the liberalisation implied in the Convention, and, certainly, even more sectors which are very fearful of some of the effects. This, I think, is particularly true of the textile industry.
  I should like, if I may, to congratulate all those who took part in the negotiations on their tenacity and skill in having at least most of the percentage rule taken away from textiles. Most of the range are now included in Schedule II to Annex B and governed entirely by the process rule, with the curious exception mentioned by the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison), whose lead I seem to follow as readily on textiles as I do on building societies.
  As far as I can see, it is only in Chapter 61 of Schedule II to Annex B that we have
  "Men's and boys' outer garments, complete and ready for wear"
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  and not, curiously enough, only
  "Women's, girls', and infants' outer garments"
  but
  "dresses, skirts, jackets, trousers"—
  I wonder what other forms of outer garments there are. The range is not inclusive and I should like to hear a little more about the various safeguards not only to this, but to other regulations under Clause 1. I am not particularly happy about the methods of dealing with the deflection of trade. I am not quite clear whether these apply to the home market only or to the re-export market.
  Taking the textile industry again as an example, most of the countries associated with the Seven are without a comprehensive textile trade and may well be importing on a low tariff part-manufactured goods, such as wool tops from Uruguay, and they will be re-exporting from there within the Seven these finished or semi-finished articles in competition with the United Kingdom. Arrangements under G.A.T.T. prevent their raising tariffs to meet this point at our request unless they do the same against tops exported from this country. Under Article 5 of the Convention there are provisions against unfair competition in home markets in this country—or any other country so affected—but I am not clear whether United Kingdom producers are in any way protected against such unfair competition in a joint export market, that is, in selling to a third country altogether.
  Again, I am not clear whether it is possible for a country to take action in the case of a third State being involved in dumping. There are various safeguards in Article 17, and Clause 3 reads as if it might be possible to take action. If member State A dumps goods in member State B, can member State C take action against the same goods even if its own industry is not affected by the dumping? I understand that under our legislation we are so empowered, but I am not clear whether other countries are or not. If they are not, is it the Government's intention to press for this kind of thing in the Council, as my hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) suggested among his many other constructive suggestions?
  The third point on which I should like some further reassurance from my hon.

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  Friend the Economic Secretary to the Treasury is on the special difficulties that may arise in particular sectors. Article 20 (1, ii) says that where there is a rise in unemployment which is due to decreased demand and that decreased demand is due to increased imports, and the increase in imports is caused by eliminating tariffs, and so on, the country so affected can limit its imports by quotas. Article 20 (1, ii) states that a country can take measures other than the restriction of imports only as the Council, by majority, may authorise.
  The hon. and learned Member for Kettering made the point here when he refered to Articles 13, 14 and 15 on Government aid, public undertakings and restrictive practices. Do Articles 13, 14 and 15, together with the qualification of a majority decision, mean that this country cannot take such action as is included in the Cotton Act to protect our industry without a majority decision of the Council?
  I am sure that we shall all be glad to have the provision in Clause 10 for the extension of the Free Trade Area to other countries. In this connection, the Paris meeting of the so-called Twenty has done some good work, but, in common with other hon. Members who have spoken, I should like to know from the Government what has been done and what plans they have for carrying on such work. Apparently, they have dealt or are dealing with the question of assistance to under-developed countries and the reorganisation of O.E.E.C. It is quite right that they should do so, because we cannot separate all these various negotiations and organisations one from the other and there is plenty of scope for different sorts of associations.
  I should like to see the new Free Trade Association as a model for the smaller area. I think that the time will come when the E.E.C. will be associated with the European Free Trade Association rather than the other way round, the Association being a wider and looser organisation which can have within its framework the E.E.C. and the Nordic community, and similarly associate through the United Kingdom with the Commonwealth in a way similar to that in which France associates the E.E.C. with its dependent territories and West Germany trades with East Germany.
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  I am sure that we all want the United States and Canada present, as well as the O.E.E.C. countries, in the talks in Paris. Like my hon. Friend the Member for Reigate, I am grateful for all the United States has done for us and for Europe in the past through Marshall Aid, and so on. I find the criticism of my hon. Friend the Member for Reigate that he is anti-American difficult to understand, because if our association with the United States is to have the strength and the power which association between true friends has, then we must at times be ready to criticise each other in detail without being accused of being hostile in general.
  I sympathise with the United States on the matter of balance of payments, but we have taken off tariffs and restrictions on dollar imports into this country. Representing the constituency I do, I can never forget that the United States has done nothing yet to remove the tariff quota on woollen goods. I hope that the pattern in future in the reorganisation of O.E.E.C. will lead not to restriction but to greater liberalisation.
  Visitors to Europe from the United States have expressed hostility to the whole idea of the European Free Trade Association. The United States prefers the Six for various reasons, among them that it dislikes any form of preferential area and, therefore will favour the smallest possible, and also because it is seen as a method of Franco-German rapprochement. There is great danger in that. It is all very well for Germany to say that she is equally seeking an approach between the Six and the Seven. There are indications that German policy is much more truly concerned with dominating Europe economically and building with France a powerful bloc. There is a grave danger that the present policy of the United States might encourage that tendency on the part of Germany.
  I would like to know what Her Majesty's Government are doing, because it is important that European free trade should not be swallowed up in the wider conception of Atlantic free trade, important thought that may be. I believe that this Convention will achieve three objects if it is exploited in the way it should be. First, it will confront the European Economic Community with an

  1009
  organised group, not implying any hostility towards the Community but implying a greater capacity to deal with it successfully.
  Secondly, it will prevent the Seven falling behind with the liberalisation of trade and with reductions in duty, a tendency which, if it were allowed, would seriously imperil any future link which I believe must come. The third object which the Association can achieve is to demonstrate the effectiveness of such an association, based on trade and economic considerations without necessarily close economic communication, which Austria, Switzerland and Sweden, to name only a few countries, cannot tolerate.
  In fact, it is not so much a bridge as a pier on which a series of bridges can be constructed. Keeping to this metaphor, I again plead with the President of the Board of Trade and the Government generally to emulate Julius Caesar and throw their bridges about a bit.
  6.2 p.m.
  Mr. Arthur Holt: I am glad to follow the hon. Gentleman the Member for Halifax (Mr. Maurice Macmillan) and later I will refer to one or two points he made. First, I will tell the Minister that I now understand the point about wallets and drawback. I realise that there would be a slightly unfair competitive position for country A if, where a tariff is on leather and drawback has been obtained, it would not be adjusted before export. As the Minister read it, it seemed as if there were two different principles involved.
  This underlines the fact that although we are setting out a Free Trade Area for the Seven, the first document which this House is asked to approve actually complicates trading and enlarges the bureaucracy connected with the Customs. Of course, it is only a small extension for this country because so much of our trade is already affected in this way. Whether the other countries of the Seven will be as unmoved when they find out by experience the complications in the working of certificates of origin I doubt.
  I want to ask a question on a technical matter. Is there any intention at an early date of some modest harmonising of the
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  tariffs of the Seven in certain sections of our tariff schedule? As the Minister will know, there are 21 of these under the 1958 Import Duties Act, drawn up on the Brussels nomenclature. Where there are tariffs on any one of those, which are more or less the same already, will there be any endeavour to bring those into line so that certificates of origin need not be shown in any trade done between the member countries in those articles, such as all the articles in Sections 1, 2 or 15? This may seem to be a small point but it may be useful, and it does not raise any great principle, provided that the tariffs are already near each other.
  I agree with much of what was said by the hon. Member for Reigate (Sir J. Vaughan-Morgan), particularly on the line that we should now take on the Seven. I so strongly disapproved of the proposal for the Seven that I voted against it, but now it is a fact, and I am as keen as anyone that if it is to be a bridge we should get on with building it. Obviously, the fact that we have the Seven means that we can build the bridge, but the Government must show a great deal more initiative and drive in the matter than they have done hitherto. It is time that this House exerted its influence on the Government, because I find a growing interest in the matter amongst hon. Members. A year or two ago, only a comparatively few hon. Members on both sides of the House were really interested in it, but there is a growing feeling that we have "missed the boat" and that the Government must be more active.
  I noted the speech made by the Foreign Secretary at Strasbourg on 21st January. The right hon. and learned Gentleman did not say, as the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) suggested, that it was a mistake that we did not go into the Coal and Steel Community. I think that the words used by the right hon. and learned Gentleman were that we made a mistake in not taking part in the negotiations which led to its formation. They may amount to the same thing, but they are not quite the same. That speech of the Foreign Secretary seemed to me to show a considerable advance on the part of the Government. It implied that, eventually, we would have found a way of joining the Coal and Steel Community. I

  1011
  believe that if we had entered into negotiations in a minor way the Community would be slightly different.
  The Foreign Secretary went on to say that our present arrangements of association with that Community are not working satisfactorily—I see the hon. Member for Reigate looking surprised.
  Sir J. Vaughan-Morgan: I did not want to interrupt the hon. Member, but I was so astonished to hear his remark that I could not help but look surprised. As one who took part in the meetings of the Association for two years, I would say that they worked very well.
  Mr. Holt: If the hon. Gentleman will refer to the report of the speech made by the Foreign Secretary, which is in the Library, I think that he will find that I am correct in what I say. Anyhow, I believe that the Foreign Office is moving a little in the right direction at last, and I hope that the Board of Trade and the Treasury will catch up rapidly, because we cannot afford to waste much more time.
  I shall ask some questions of the Economic Secretary instead of putting forward a policy, because there are many alternative lines they could take and it is a case of finding out whether they are taking some and getting a move on. Is it the intention of the Government, as was suggested by the hon. Member for Reigate, that they will try to develop the Seven in the direction of harmonising activities in social and economic affairs along the same lines as were made compulsory in the Treaty of the Six? Will they work towards doing this freely in the Seven, in the same way as this is being achieved in the Six?
  Will the Seven develop freely in such a way that the differences between those countries and the Six will narrow all the time, and on a suitable occasion the differences will be seen to be very small and we might get the Six and the Seven together? I know that the Government believe that the present time is not suitable. Will the Minister say whether this is the general line upon which the Government intend to act?
  I should like to know what is to happen to our obligations under the most-favoured-nation treaties. Does the very act of setting up the Seven auto-
  1012
  matically let us out of those obligations? When we make our first tariff reductions to the members of the Seven in July this year are we going to offer those same reductions to other countries with whom we have most-favoured-nation treaties?
  I would have hoped that we would do so, but if that is our intention do we also intend to get a quid pro quo from the other nations concerned, or are we going to act unilaterally, as a gesture? The Government should try to obtain a quid pro quo if possible, but time is getting a little short, and if they cannot do so there is another reason why they might decide that it would be a good thing to act unilaterally. Throughout this year they will no doubt do their best to keep down prices, and at this stage a reduction of about 20 per cent. in our general tariff barrier would be a very useful contribution towards keeping down prices on the home market. This old free trade argument would no doubt serve two purposes this year.
  Are the Government prepared to honour their treaty obligations to other countries in G.A.T.T. on their own, or only if the other members of the Seven do the same? We require answers to all the questions that I have raised, and I hope that, in spite of the earlier remarks of the Minister of State, we shall hear something about them in the debate tonight.
  6.12 p.m.
  Major H. Legge-Bourke: If hon. Members will read the Explanatory and Financial Memorandum to the Bill, they will see that Clause 1 provides
  "that the Board of Trade may make regulations for determining the circumstances in which goods are to be treated as grown, produced or manufactured in and consigned from the European Free Trade Association (E.F.T.A.) area ‖"
  The only hon. Member who has mentioned the question of grown produce is the hon. and learned Member for Kettering (Mr. Mitchison) who opened the debate for the Opposition. He touched upon the question of agriculture and then ran from it like a hare, spending the rest of his speech sitting in solitude on the Bass Rock, disguised as a puffin and surrounded by empty bottles of Danish lager.

  1013
  I am sorry that he ran away from the subject of agriculture, because in his few remarks on the subject he said something that had some relevance to the policy of the official Opposition and the Government. He said that he was in favour of complete freedom of choice in the matter of consumer goods—
  Mr. Mitchison: In the matter of beer.
  Major Legge-Bourke: It may be that beer is best—but if he believes in complete freedom in that direction he ought never to have supported the policy behind the 1947 Agriculture Act, introduced by Mr. Tom Williams. That is an artificial agricultural policy, which has been adopted by both parties. It involves a deliberate action by the Government to stimulate or to reduce production, and it means that our people can have only what the British farmer is encouraged to produce in sufficient quantities, plus what the Government—as in the old days—allow in from abroad. The Convention which the Bill seeks to implement contains some agricultural Articles, the most important of which is Article 21, which refers to a list in Annex D which deliberately excludes many possible agricultural importations from the agreement to reduce tariffs over the next ten years
  Only a few commodities have so far been brought in. The Anglo-Danish Agreement allows Danish bacon to come in duty-free after a period of ten years. This has caused very great consternation in agricultural circles, which is hardly surprising, in view of the fact that it involves the Government moving out of the field of control over importation whilst retaining the power to interfere in production which they have been enjoying under the Agricultural Acts of 1947 and 1957.
  I agree with the hon. Member for Bolton, West (Mr. Holt) that if we say, "Let us reduce tariffs", we must prevent the, Government interfering in production. It is no good saying that we shall have free trade on the one hand and the right of the Government to interfere on the other, because sooner or later the taxpayer will be involved as a result of that interference, and he will ask why he should foot the bill if the Government are allowing cheaper and sometimes better stuff to come in from abroad.
  1014
  I had supposed that in approving the policy behind the 1947 and 1957 Acts both parties had either agreed that there should be interference artificially to stimulate British agricultural production to such a degree as to ensure that those living in the countryside would be able to enjoy a standard of living comparable to that of those living in the rest of the country. For if that were not done those living in the countryside would enjoy a standard of living considerably below that of the rest of the country.
  A measure of the situation can be gained by a short visit to Southern Ireland, where the measure of Government support for agriculture is very small, and the agricultural wage is £5 a week instead of about £8, as it is here. It is only natural, therefore, that with this Anglo-Danish agreement, and the fact that the Government are removing their control on the importation of produce, the farmers will say, "Can the Government, over the years, sustain an agricultural policy of guarantees that both sides were agreed should be operated up to now, once they move out completely from the control of importation?" That is the question which is causing the greatest concern in the agricultural community.
  I do not want to refer to the debate that we had in December last. Many hon. Members have done so, and it may be that I am largely responsible by having obtained a Ruling from the Chair at the beginning of the debate. I am trying to show that there is one aspect of the matter which has had very little consideration and yet which is of the highest interest to a large section of the agricultural community.
  The disturbing thing about the Free Trade Association Convention is contained in the last sentence of the first paragraph of Article 21. The last sentence of the first paragraph of Article 21 says:
  "The Council may decide to amend the provisions of this paragraph and Annex D."
  When we look at the regulations to be introduced under this Bill, we find that they are subject only to the negative procedure in this House. I can foresee the day when we may find the Board of Trade introducing regulations which involve amending these Annexes because the Council, at some time or other, may

  1015
  decide that Annex D ought to have certain items extracted from it. In other words, their treatment may well be the same as is afforded to Danish bacon. If that happened, the results could be catastrophic for the agriculture industry.
  It seems to me that the form of negative procedure is not good enough for such a matter as this. The Government have to decide how long any Minister of Agriculture, Fisheries and Food who wishes to remain in one piece can put one foot on the tractor of the Annual Price Review which is grinding away in one direction and the other on the jet-propelled vehicle of free trade which is going in the opposite direction. At the moment, the Minister is giving a fine demonstration of the splits and I am wondering how long he can continue it. But it is horrid to watch and very disconcerting to those who live in and represent agricultural constituencies.
  Most hon. Members who have taken part in this debate have spoken for their constituencies, and I hope the House will forgive me for having spoken for mine. Although I believe that the European Free Trade Association is a much better form of association than the inherently federal idea of a common market, I maintain that by going into this Agreement we are jeopardising the whole agricultural policy of this country and both parties had better start thinking about that pretty quickly.
  6.21 p.m.
  Mr. John Biggs-Davison: Hon. Members are anxious to hear the replies of the Minister to questions which have been asked and I do not want to detain the House for long, but here we are in a half-day debate, with the President of the Board of Trade in Zurich, although I make no complaint of that, passing a Bill which departs radically from a principle which has long been held to be of the greatest importance in the Tory Party and the country, namely, the principle of Commonwealth preference in relation to industrial imports in the United Kingdom.
  I know that the Ottawa Agreements are obsolete and eroded. I know it will take time for the European Free Trade Association to come to fruition. It may not be a great matter that there are small boys in this country who play cricket
  1016
  with bats made in Pakistan. It may not be of great moment that there are still Canadian Ford cars imported into the United Kingdom which will lose their preference over cars imported from member countries of the European Free Trade Association. But it is the future which causes me concern.
  No longer is the Commonwealth composed of countries which are purely pastoral or agricultural or primary producing countries. Ahead of the Commonwealth there is a great industrial expansion, and I am anxious that we should not lose our share of it, that we should make sure of our Commonwealth trade and raw materials, and and also that we should not enter into such relationships with Continental countries as would cause a diversion of United Kingdom capital from the less advanced member countries of the Commonwealth.
  The President of the Board of Trade is reported to have stated that we had to recognise that part of the price for all this so far as manufactured industrial products were concerned would be that Commonwealth exports, though they would still come in free, would no longer have preference over European products which, in due course, would also almost come in free of duty. My right hon. Friend was further reported to have said that that particular sacrifice was worthwhile in the general cause of European unity.
  I am not one of those who see contradiction between the cause of Commonwealth unity and European unity, but it should not be our purpose to sacrifice the Commonwealth to Europe. The two causes must march together. It is only by co-operation between Commonwealth and European powers that great responsibilities in Africa and elsewhere can be discharged. A sacrifice of principle and position has been made—my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) has mentioned agriculture—but despite this sacrifice of principle and position we find ourselves in Europe at "sixes" and "sevens". That could be very harmful, not only to the general cause of European unity, but to the British and French community of interest, which I believe to be vital to the Commonwealth and to Europe North and South of the Mediterranean.

  1017
  I wish to say a word about France. They have often been attacked for their obduracy towards the European Free Trade Association. This has proved inconvenient to us, but I do not blame the French. After all, they had to swallow all the medicine which M. Jacques Rueff concocted for them. They accepted swingeing reforms in their national economy and devaluation of the franc to meet their obligations under the Treaty of Rome. I am not surprised that they do not want to expose themselves to even wider competition in a larger zone of free trade. Nor do I see how groups of nations like the European nations as a whole or like the Commonwealth—I think the phrase "mixed bag" was used by the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd)—jealous of their economic independence and political sovereignty can possibly combine in free trade areas or customs unions, interpreted in rigid, doctrinaire liberal terms.
  It is more than ten years ago, in September, 1949, that my right hon. Friend the Prime Minister spoke of a "low tariff area" which could "be created in Western Europe, to which such preferential systems as are enjoyed by the Commonwealth could be partially extended." In 1952 I was a witness of the passing in the Consultative Assembly of the Council of Europe of the Strasbourg Plan which would have provided for a preference for other European countries intermediate between the Ottawa and the most-favoured-nation rate. This has not been possible for the reason given last August in the Economist.
  "G.A.T.T. allows for customs unions and free trade areas with tariff barriers wholly removed inside. It makes no provision for 'preferential' zones, with the barriers only partly dismantled. Not for the first time the exigencies of the European grouping"—
  here we touch the question of reconciling the Six and the Seven—
  "seem to call for a revision of G.A.T.T."
  G.A.T.T. provides very well for the economic structure of a federated continental bloc like the United States or like the United States of Europe advocated by some Americans and some Europeans like M. Monet. It does not provide for the grouping of sovereign nations of varying resources and needs and unequal economic strength.
  1018
  For instance, France does not only look to the Continent; she looks across the Mediterranean. Germany does not only look to the Continent, she looks eastward. If we are thinking in terms of a real unity of Europe embracing countries now behind the Iron Curtain, its is certain that we cannot impose the economic liberalism of a Customs union, or even a Free Trade Area on the People's Democracies of the East.
  But what next for Western Europe? The Times of 18th December reported Herr Lange, the Norwegian Foreign Minister, as calling for further sacrifices from Britain. The Times interpreted this to mean in effect the end of Commonwealth preference. Herr Lange spoke as President of the Atlantic Council. I do not know whether he spoke for the United States, about which I find myself in great sympathy with much of what was said by my hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan).
  It seems that Western Europe is now divided into two trading blocs moving on parallel lines. The parallel lines do not meet in Europe, but somehow they twist round to meet in Washington. My right hon. Friend the Member for Reigate said that American policy was "inexplicable". Why was there this bias towards the Six? I hope it is not undue suspicion that suggests that the United States finds Europe easier to rule when it is divided.
  There have been suggestions for the dilution of O.E.E.C. so that it should be no longer a European organisation. The United States is said to insist that the benefits of an accommodation between the Six and the Seven must be extended to the Americans under the most-favoured-nation principle mentioned by the hon. Member for Bolton, West. In other words, it would seem that in some quarters there is an idea that the only solution is to be found in the merging of the Six and the Seven in a Free Trade Area Association of the Atlantic Community. Such a top-heavy arrangement would perpetuate the separation of the Western European nations from their fellow-Europeans behind the Iron Curtain and divide Britain from her Commonwealth partners. Such a solution should be strenuously resisted by European nations whose economic recovery is now achieved.
  Mr. Holt: What reason has the hon. Member for saying that it would divide Britain from her Commonwealth partners?
  Mr. Biggs-Davison: Because it would be quite impossible for many members of the Commonwealth, particularly the new and less developed Commonwealth countries, to enter a Free Trade Area with the United States, United Kingdom and Canada.
  As I wish to be brief and the House is eagerly waiting to hear the Minister, I conclude by saying that the Economist was right when, in the passage I have quoted, it said:
  "The exigencies of the European groupings seem to call for a revision of the General Agreement on Tariffs and Trade."
  To quote again from this impeccable Liberal source:
  "Any reasonably competent mid year student of economics can demonstrate with triumphant theoretical finality that any international trading system which has the peace and welfare of mankind at heart must be based upon these principles of multilateral convertibility and non discrimination. No sensible person would dispute that they represent polysyllabic perfection. They have only one defect; in the world as it is, they will not work."
  6.33 p.m.
  The Economic Secretary to the Treasury (Mr. Anthony Barber): Whatever differences of opinion there might be about the scope of this debate, no one will deny that it has been a very helpful one. As the hon. and learned Member for Kettering (Mr. Mitchison) said, there will be good opportunity during the Committee stage to discuss details of the various clauses. Certainly the speeches to which we have listened have ranged over a wide area.
  I should say at the outset that, although this Bill is concerned with the European Free Trade Association—with the Seven, and the Seven only—neither my hon. Friend the Minister of State nor I would doubt that it has been reasonable for hon. Members to express their views, not only on the technicalities of the Bill, but also on the wider and more fundamental question of European trading relationships. There will be ample opportunity, of course, as this is the season of Supply, for the Opposition to raise this question again if it so wishes.
  I think I can best describe the scope of the Bill by saying that it provides
  1020
  a rather limited extension of the powers given by the Import Duties Act, 1958, and the Customs and Excise Act, 1952. As the House will have seen, or as those hon. Members who have read the Bill with care will have seen, it is essentially a technical Measure to enable us to carry out in full the obligations we have assumed under the Convention which the House approved on 14th December. There is one point in this connection which might well be borne in mind. That is that the other members of the E.F.T.A. are making arrangements similar to those proposed in this Bill. The result, we hope, will be to ensure the smooth working of the E.F.T.A. system.
  The hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) was somewhat concerned about certificates of origin. He wondered whether the system would work and how complicated it was going to be. As my hon. Friend the Minister of State mentioned in opening, some people were a little surprised that we have been able to work out—and work out so quickly—such an effective system. At first sight, the actual mechanics of the system might seem to provide that the operation of the origin rules would be a complicated business with long inquiries when goods were bought and presented to the Customs and so on. I would assure the House, however, that this will not be so.
  We have done our best to ensure that there will be the maximum simplicity in Customs formalities and the form for traders' applications is to be as simple as possible. Each trader in each exporting country will be able to complete the declaration himself or, if he prefers, he can seek the assistance of a chamber of commerce or other authorised body and, when they are satisfied on the facts, a certificate can be issued. A further simple declaration is provided for, but it may be added to the normal invoice accompanying the goods.
  We do not expect that the provisions about certification and verification of origin will throw a large burden on Customs and Excise or on the administrations doing similar work in other countries. We are making every effort to ensure that this working of verification can be done effectively, but also economically, and that the inquiries shall be restricted to the bare essentials.

  1021
  Inevitably, there has to be some provision for the imposition of penalties in the event of false declaration of origin. It was agreed between the member countries that these penalties should be on the same scale as those imposed by the country concerned for Customs offences in relation to importing of goods. I am sure the House will agree that this is reasonable.
  The hon. and learned Member for Kettering declared a special interest—and I am bound to say I share it with him—in lager beer. I have looked into this vexed question. The hon. and learned Member read from paragraph 1 of Article 15 and said that so far apparently we had refrained from carrying out our obligations under that paragraph. He thought there should be something included in the Bill to deal with this point, but I draw his attention to paragraphs 2 and 3 of the same Article. I think that on reflection he will agree that in fact it is not necessary to make any such provision in this Bill.
  Mr. Mitchison: I totally disagree with the hon. Gentleman.
  Mr. Barber: I am sorry. Obviously the hon. and learned Member has made his speech. I can only tell him with great respect that there is nothing in Article 15 which requires the House to introduce any legislation in order that the United Kingdom Government should fulfil her obligations. There was reference by the hon. Member for Pontypool (Mr. Abse)—
  Mr. Mitchison: I am sorry, but the hon. Gentleman cannot leave the matter at that.
  Mr. Barber: I can only say this to the hon. and learned Member. No doubt, with the best will in the world, he said there was necessity for some provision to be included in the Bill to deal with Article 15. I have read the Article again and, with respect, I suggest that is not so. Paragraph 2 of Article 15 says:
  "If any practice of the kind described in paragraph 1 of this Article is referred to the Council …"
  It then goes on to say what will happen and, in paragraph 3 (a), it says:
  "In the light of experience gained, the Council shall consider not later than 31st December, 1964, and may consider at any time
  1022
  thereafter whether further or different provisions are necessary to deal with the effects …"
  Mr. Mitchison: Surely the existence of some default provisions, some penalty for not performing an obligation, is no reason why one should not perform it.
  Mr. Barber: I quite agree, but I do not think that adds to what the hon. and learned Member said earlier.
  The hon. Member for Pontypool was concerned about anti-dumping legislation in other E.F.T.A. countries. This is important. If a United Kingdom company is suffering from or threatened with material injury as a result of dumping into another E.F.T.A. country, that country is obliged at our request to examine the possibility of taking action to remedy the situation. This is laid down in Article 17 (3) of the Convention. We have no reason to suppose that our partners in the E.F.T.A. will not be prepared to treat any such request seriously.
  The hon. Member for Pontypool and other hon. Members made references to man-made fibres. If the disparities in the external duties of the member-countries lead to serious deflection of trade, we shall be prepared to seek an amendment of the origin rules, but we shall know whether this difficulty will arise only by experience of the working of the origin rules.
  The hon. and learned Member for Kettering referred to Clause 1 (1) and quoted,
  "as to the time by reference to which, in determining eligibility as aforesaid, the question whether goods are to be so treated is to be decided …"
  He asked why those words were included and why they were wider than previous legislation. The reason is that the words will allow for the origin rules to apply to goods which are made earlier than the date of the regulations. This was felt necessary in order to deal with cases in which the goods are manufactured before the Regulations come into force.
  Apart from certain general points which he raised, my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) asked certain questions which were of great importance not only to his constituency but to other areas of the country. They were questions of a somewhat technical character concerned

  1023
  not so much with the Bill as with the Convention. In view of their importance, I hope that he will forgive me if I do not reply to him in detail at this stage. Perhaps he will permit me to write to him and give him a considered answer.
  Both my hon. Friend the Member for Halifax and the hon. and learned Member for Kettering referred to the origin rules for outerwear, about which they were concerned. These qualifying processes for origin were agreed in order to permit the use of cloth from traditional non-area sources for making up into garments which qualify for Area treatment, provided that they contain a reasonable amount of workmanship carried out in the area. There is, however, an important safeguard: the rules about which my hon. Friend and the hon. and learned Member were concerned are at present experimental and will be reviewed in due course to see how they are working.
  My hon. Friend the Member for Chigwell (Mr. Biggs-Davison) made some comments about the effect of the Convention on the Commonwealth. This matter was debated at length on a previous occasion, but I remind him that throughout the discussions which have led to the E.F.T.A. the Commonwealth has been continuously informed. In May of last year, there were consultations on the proposed E.F.T.A. between the senior officials who attended the Commonwealth Economic Consultative Council. In September of that year there were further discussions at Ministerial level. In addition, the Commonwealth Liaison Committee provided frequent opportunities for discussing the negotiations as they proceeded.
  Although in some respects a minor Measure, the Bill is another and an essential step towards the removal of tariffs, quantitative restrictions and other barriers to trade in industrial goods between the seven countries of the European Free Trade Association. This liberalisation of trade will open a new prospect of prosperity for both consumers and producers. It will provide a stimulus and a challenge to the competitive spirit of British producers. As the House knows, our exporters are already looking for new trade openings
  1024
  in other E.F.T.A. countries. It is up to British industry to exploit the opportunities which the E.F.T.A. offers and to make it a reality.
  Mr. Mitchison: I am sorry to inter-the hon. Member, but if this is his peroration—and it sounds like it—may we first have an answer to a question which practically every right hon. and hon. Member has asked: what has happened by way of building the bridge between the Seven and the Six?
  Mr. Barber: The hon. and learned Member has not appreciated that I have three or four more pages of notes. He may well have heard me during the General Election, in which case I forgive his misunderstanding, for my peroration is sometimes long In any event, for reasons which I have already explained, I cannot say a great deal on the point which he has made.
  The opportunities offered by E.F.T.A. are considerable. The population of the seven countries is 88 million. It has been pointed out that the E.F.T.A. is little more than half as big as the Common Market in population, but there is another factor of significance. I will merely refer to it, because it was discussed at great length by the Chancellor when he spoke in the debate on the Convention. In terms of national income the E.F.T.A. is about two-thirds as big and in terms of foreign trade about three-quarters as big as the Six. The other countries of the E.F.T.A. are predominantly importers of manufactured goods. Their economies are not sufficiently diversified to satisfy all their requirements. Among them are some with the highest living standards outside North America. It is these high living standards which place them amongst the world's most desirable markets.
  The new Association will, of course, mean difficulties for a number of British industries. We have never denied that. The effect of freer trade must be to increase competition for our manufacturers in respect of those goods which are also produced by our partners in the Association. After all, if you expect to sell more to your friends, you must expect them to sell more to you. I have no doubt that on balance British industry as a whole will have a good deal to gain from this Association.

  1025
  I congratulate my hon. Friend the Member for Birmingham, Yardley (Mr. Cleaver) on his maiden speech, not only on coming through the delivery so well but, if I may say so, also on its content. He mentioned the importance of having a large market. This is precisely what we are trying to provide in the new Association. He said that he was not averse to competition if it were fair competition. It is a fact that although we shall have increased competition from the other six countries as a result of the implementation of the Convention, that in itself, and quite apart from other desirable aspects, should go some way to maintaining the stability of prices about which the Chancellor of the Exchequer has spoken during the last few months.
  The hon. and learned Gentleman the Member for Kettering seemed to assume that the sole purpose of E.F.T.A. was to form a bridge between the Six and the Seven. Certainly we hope it will help, but I hope—and I am sure he will agree—that this Association is in itself intrinsically advantageous for all the Seven countries. However, I shall say something of the developments in the wider field about which he was asking; but I should warn him that I cannot, for reasons I am sure he will understand, say a great deal on this particular aspect.
  The Special Economic Committee passed a resolution at its meeting on 12th and 13th of January. As he referred to it I shall not read it all, but the resolution included these words:
  "the need to examine, as a matter of priority, the relationship between the E.E.C. and the E.F.T.A. with due regard to the commercial interests of third countries and the responsibilities and obligations of the G.A.T.T."
  That resolution was endorsed by the meeting of the twenty Governments in Paris at the same time. As a result, this question will be dealt with by the Trade Committee, which we hope will meet shortly. I would certainly expect it to concern itself with the problem of the Six and the Seven. Meanwhile, this whole subject has been under consideration and has been discussed, as the hon. and learned Gentleman must know, last week by a meeting of senior officials of the Association in London.
  I am sure he will agree that the first thing we must try to do is tackle the dis-
  1026
  crimination which will arise on 1st July if nothing is done about it. This was something which was of particular concern to the hon. Member for Attercliffe. Certainly it is very important and is the immediate problem.
  At the meeting of the officials there was preliminary discussion to try to find ways of dealing with this matter. Because of its complexity, it will obviously require further consideration and, as the hon. and learned Gentleman knows, there is to be a Ministerial meeting of the Association in Vienna on 11th and 12th March.
  If we could cope with this problem of the discrimination between the Six and the Seven, arising chiefly from the tariff reductions which are to come in July, this would give us a breathing space of eighteen months before the next tariff reductions of the E.E.C. and the Association are due. I am sure the hon. and learned Gentleman will realise that while all these matters are being considered by the Seven it would be quite wrong for me, on the occasion of the Second Reading debate of a Bill which is concerned solely with the implementation of a Convention dealing with the Seven, to go any further than that.
  Mr. Mitchison: Without going into the merits of the matter, and while realising the hon. Gentleman's difficulty in making a statement now, surely this is remarkably slow moving. This matter has been under consideration for months and months and was treated on 14th January as a matter of priority. Is nothing to happen at Ministerial level until two months after that meeting?
  Mr. Barber: I can only say that we—and, I am quite sure, our partners in E.F.T.A.—would like to go as quickly as possible, but the hon. and learned Gentleman will know that there are difficulties to be overcome, consultations to take place, and various matters to be considered. At any rate, I repeat that the objective of the United Kingdom—and the objective, I am sure, of all our partners—remains the same: the establishment of a single European market including all the O.E.E.C. countries.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Chichester-Clarke.] Committee Tomorrow.

  EUROPEAN FREE TRADE ASSOCIATION [MONEY]
  [Queen's Recommendation signified.]
  Considered in Committee under Standing Order No. 84 (Money Committees).
  [SIR GORDON TOUCHE in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to make provision for matters arising out of the establishment of the European Free Trade Association, it is expedient to authorise the payment out of moneys provided by Parliament of the administrative expenses of any Government department under that Act.—[Mr. Erroll.]
  Resolution to be reported.
  Report to be received Tomorrow.

  NATIONAL INSURANCE (EARNINGS RULES)
  6.56 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Patricia Hornsby-Smith): I beg to move,
  That the National Insurance (Earnings) Regulations, 1960, a draft of which was laid before this House on 27th January, be approved.
  These Regulations, which are subject to affirmative Resolution, were laid and published on 27th January, and provide for an operative date of 21st March to allow time for the completion of the administrative arrangements, which involve, among other things, the printing and distribution of some 5 million leaflets.
  The purpose of the Regulations is to increase the amount which can be earned without loss of benefit by retirement pensioners and widow beneficiaries subject to the earnings rules of the National Insurance Scheme. They are proposed to be made under a power given by Section 2 of the National Insurance Act, 1956, which permits alteration of the scale of deductions on account of earnings and is limited to this purpose.
  The increase follows a pledge given in the Gracious Speech on 27th October. A fortnight afterwards preliminary draft regulations were referred to the National Insurance Advisory Committee which, after allowing the necessary time for representations to be received from interested bodies, reported to the Minister on 15th January. The Regulations were laid before Parliament on 27th January. There has, therefore, been no delay.
  The Regulations, which will be debated in both Houses during the course of this week, will, if passed, come into operation on 21st March. The question at issue tonight is the level provided by the earnings rules, which can, as now proposed, be amended by Regulation. The question of whether there should, or should not be, an earnings rule, is a much wider issue which does not fall within the ambit of the Regulations, and which would require legislation, and would challenge the long-accepted principle of the 1946 Act.

  1029
  The general principle underlying the earnings rule is that National Insurance benefits are not intended for those who can support themselves by their own earnings. In particular, retirement pensions are not paid automatically at the minimum age of 65 for men and 60 for women. They are paid to men under 70 and women under 65 only if they have retired from regular employment. Thus, apart from some 45,000 pensioners who fall to have their pensions reduced within the limits set by the earnings rule, there are also some 400,000 people of retirement age who have chosen to continue in full employment, earning increments but forgoing their pensions and those of their wives for the time being, until retirement. Without the limits imposed by these Regulations, they, too, would qualify for full pension together with their wages.
  The retirement principle on which these Regulations are based stems from the Beveridge Report and its aim, which is frequently forgotten, is to concentrate the available resources in the form of better benefits for those who most need them. The earnings rule is a necessary complement to this retirement principle, since without it it would be difficult to prevent a person going through the motions of retirement in order to get his pension and then returning again to full employment and wages.
  Similarly, the long-term widows' benefits under the National Insurance Scheme are not paid, like those under the old contributory pensions Acts, automatically on widowhood, but only to those classes of widows who cannot be expected to support themselves by their own earnings, that is, to women widowed when over 50 and those left with young children.
  As a corollary of this principle, the earnings rule ensures that if a woman within these categories is in fact able to support herself, the benefit is withdrawn. These fundamental principles of the Beveridge scheme and the 1946 Act have been accepted by all post-war Governments. The alternative would, among other things, necessitate substantially higher contributions.
  The last time the earnings limits were raised was in April, 1959; from 50s. to 60s. a week for pensioners and from 60s. to 80s. a week for widowed mothers.
  1030
  For earnings over those limits the pension is reduced by 6d. in the 1s. for the first £ earned and thereafter by 1s. for each 1s. earned. Under these new draft Regulations, it is proposed to raise the level of earnings at which the rule begins to operate to 70s. instead of 60s. a week for retirement and widow's pensions and to 100s. instead of 80s. for widowed mothers' allowances. The deduction of 6d. for each 1s. earned for the first 20s. and 1s. for each shilling earned thereafter continues to apply to earnings above the new limits.
  In the case of retirement pensioners, the rule applies only to men under 70 and women under 65 whose pensions are subject to retirement, while in the case of widowed mothers' allowances, the deductions are made only from the personal part of the widowed mother's allowance, the payments for her children being made whatever the mother's earnings. Those children's allowances, which are 5s. higher than for other dependent children under the National Insurance Scheme, are 20s. for the first child and 12s., in addition to family allowances, for others. Thus, a widow with three children receives £3 2s. for her children, regardless of her own allowance or earnings. It is not, I think, generally appreciated that the earnings taken into account are net earnings—after deduction of reasonable expenses which are incurred in connection with employment. These may include such things as fares, overalls and, in the case of a widowed mother, payments for the care of her children while she is at work.
  These Regulations, the House will know, have been considered and approved in draft by the National Insurance Advisory Committee, whose Report has been laid before Parliament together with the draft Regulations.
  The main justification for the changes made in 1959 was that since the Advisory Committee's 1956 Report on the Question of Earnings Limits for Benefits average full-time earnings had risen by 15 per cent. in the case of men and nearly 16 per cent. in the case of women. Moreover, the National Insurance Act, 1959, improved the pension increments, which could be earned by postponing retirement, from 1s. 6d. for 25 contributions to 1s. for 12 contributions. This improvement reinforced the case for relaxing the earnings rule by giving a

  1031
  greater inducement to persons of pensionable age to continue in full-time work rather than to retire and rely on the pension supplemented by earnings from part-time work. In its Report approving the 1959 Regulations, the Advisory Committee said specifically that increases greater than those then proposed would not have been justified.
  Since then, average earnings have increased, between October, 1958, and October, 1959, by about 5½ per cent. for men and 5 per cent. for women. Thus, these draft Regulations do more than adjust the earnings limits in respect of those changes. They provide an easement in the earnings rule and, as the Advisory Committee indicates in its Report, to this extent go beyond the Committee's previous recommendations. It is obvious from a reading of its Report that the Committee had some misgivings about whether the proposals go too far. The Committee says that it is anxious that its assent to this relaxation should not be taken as an indication that it no longer regards the earnings rule as important. Not unnaturally, the rule attracts a good deal of adverse criticism, although in the Committee's view mainly because its purpose is not well understood.
  The fact must be faced, however, that an earnings rule is indispensable so long as pensions are subject to a retirement condition. It is not for us, in the context of this debate, any more than it was for the Committee, to argue the case for the retirement principle. We need only observe, as they did, that it is one of the fundamental elements of the National Insurance Scheme and that for us to depart from it would have far-reaching consequences for the whole scheme.
  For those reasons, the Committee felt bound to say that in its opinion the earnings rule could not continue to be relaxed with impunity. As the Committee further pointed out, however, the extent to which the rules can be relaxed without jeopardising essential principles—which were contained in the 1946 legislation—is a matter of judgment and there is no exact point at which it can be said that the limit has been reached. In the Government's view, the earnings limits should be set as high as they possibly can, consistent with the
  1032
  purpose of the benefits to which they apply. The Government's judgment is that the proposed limits, while allowing the maximum freedom to earn, do not endanger the important principles underlying the benefits.
  It is entirely reasonable that some retirement pensioners who have given up their ordinary work should desire to undertake part-time work, both to engage their interest and to augment their material comforts. It would clearly be wrong to discourage them unnecessarily by keeping the earnings limit any lower than is required to maintain the retirement principle. The question which the House has to decide in considering these Regulations is how high the earnings limit can be set without endangering the important retirement principle which it supports. In the Government's judgment, the limit could be somewhat higher than at present without material risk, and that is the reason for the increase recommended in the Regulations.
  I must emphasise, however, that that does not mean that the new earnings limits would represent any departure from the fundamental principles laid down by the National Insurance Advisory Committee in 1956 and reaffirmed by the Committee in its Report on the 1960 Regulations in which it said:
  "As long as people claiming retirement pensions are required to show that they have retired from regular employment, it would be unreasonable to allow those who have ostensibly retired to return to work and continue to receive their full pension in addition to their normal earnings. The pension must in practice, be reduced as soon as the pensioner's earnings correspond to a substantial amount of work, and the maximum amount of earnings allowed, plus the pension itself, must not approach too closely the amount which the pensioner could earn from full time work."
  There is no exact point at which it could be said that the amount of disregarded earnings had reached the limit which would jeopardise the retirement principle. Clearly, an increase of 10s. in the amount of disregarded earnings would make little difference in the case of male pensioners, when average earnings of men in full-time employment were £13 2s. 11d. a week in April, 1959. Since the Committee reported, figures of average earnings, for October, 1959, have become available and show an increase to £13 10s. 9d. a week.

  1033
  With the proposed limit of £3 10s. as the earnings which are disregarded, a man's pension would be extinguished as soon as his earnings reached £6 10s. Disregarding allowed expenses, this is less than half the amount of the average earnings figure for men, so that there would still be a strong inducement for men who could do so to stay in full-time work, especially in view of the improved pension increments. The amount of earnings wholly disregarded, £3 10s., would be just over one-quarter of average earnings and the Advisory Committee's criterion is therefore met.
  As the Committee has always recognised, the position for women pensioners is very different. The average earnings of women in full employment in October, 1959, were £7 0s. 4d. a week. A very considerable number of women, particularly those with young children, do part-time work; and here the average earnings of part-time women employees were at April, 1959, £3 7s. 8d. a week. Thus, even with the present earnings limit, many women were able to do a substantial amount of work after 60 and receive their full pension in addition to earnings.
  Mrs. Eirene White: I am not quite clear about the precise period of work of the women to whom the hon. Lady has referred as earning £3 and some shillings.
  Miss Hornsby-Smith: Those are part-time weekly earnings.
  Mrs. White: What is the definition of "part-time"?
  Miss. Hornsby-Smith: Not whole-time. Generally speaking, it is half a day. Many women work half a shift in a factory.
  Mr. James Dempsey(Coathridge and Airdrie): Is it correct that the average earnings for women are £7 0s. 4d.?
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): That is for full-time work.
  Miss Hornsby-Smith: As I have said, with the present average earnings figure, many women are able to do a substantial amount of work after 60 and receive their full pension in addition to earnings. In the case of a widowed mother, she can earn under the proposed new
  1034
  limits £5 a week plus the expenses allowed—which can cover fares, and payments made to someone who looks after her children—and can still draw the 50s. personal part of her allowance, plus, of course, the allowances for her children. Thus, a widowed mother with three children, earning £5 net, would have, with her allowances, £10 12s. a week. A widowed mother under the proposed new Regulations will have to earn £8 net, compared with £6 10s. for a retirement or widow pensioner, before extinguishing her widowed mother's allowance entirely. We have thus come a long way, since the original earnings limit in the 1946 Act for widowed mothers—and at that time for widows—was 30s.
  Comparing the lot of a widowed mother with three children in 1951, when the Conservative Party took office, with the provisions now being debated, the earnings limit has risen from 60s. to the now proposed 100s., while allowances which then totalled £2 15s. are now £5 12s., and are, in fact, 55 per cent. higher in real terms. Further, the more favourable earnings rule for widowed mothers applies not only to those widows with dependent children but also to those with children living at home who have started work and are still under 18 years of age.
  It is not, I think, generally appreciated that the number of widows whose allowance or pension is affected by the earnings rule is comparatively small. There are about 145,000 women receiving the widowed mother's allowance. In June, 1959, less than one-fifth—under 29,000—of the widowed mothers were then having their personal benefit reduced as a result of the earnings rule. In fact, of course, the majority of widowed mothers prefer to do part-time work—which, generally speaking, is within the proposed £5 limit—so that they can be at home when their children return from school.
  There are about 250,000 widow pensioners. In June 1959, about 20 per cent. were then having their pensions adjusted by virtue of the earnings rule.
  With regard to women retirement pensioners, it is true that the new limit of £3 10s. gives them, comparatively speaking, a much higher limit than men, but both the Advisory Committee and the Phillips Committee have come to the

  1035
  conclusion that it would be impracticable to have a different earnings limit for women. Against this, the retirement rule, however, matters less for women because a much smaller proportion continue in full-time work after pension age, and most women qualify for pensions only on their husband's insurance. For these reasons, although the Committee was a little apprehensive about the rise in the earnings limit for women, it did not consider that it would of itself imperil the retirement principle.
  I should now like to say a few words about what is known as the 12-hour rule, which is frequently confused in people's minds with the earnings rule. If one has a "retirement" pension, one can deal with it in one of two ways. One can ruthlessly and very clearly make the criterion complete retirement and make it impossible for anyone in receipt of pension to take any form of employment at all. That is obviously undesirable. Alternatively, as has been done since the 1946 Act came into force, one can draw the line less rigidly and define "retirement" as a state in which, although the pensioner is required to give up full-time employment, he is permitted to be engaged in employment
  "occasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement."
  This rough yardstick operates on the claiming of pension. The National Insurance Commissioner has held that work is not "to an inconsiderable extent" if it is engaged in for more than 12 hours a week or for more than a quarter of the hours normally worked in the occupation in question. Although in some circumstances work for a greater number of hours can be treated as "not inconsistent with retirement", in many cases, as is so frequently brought to our attention by hon. Members, the determining factor is the 12-hour rule. That is quite separate and distinct from the earnings rule. It is only after the act of retirement has taken place that the earnings rule comes into operation.
  Though, strictly speaking, it is the level of the limit and not the principle of the earnings rule which is the point in issue tonight, we have to bear in mind that if the limit is put too high it would, at any rate for the lower-paid worker, be tantamount to aban-
  1036
  doning the earnings rule principle altogether.
  The effect of this limit is not only that a small number of retirement pensioners have their pensions decreased, though no decrease is made for their wives, but also, as I have said, that 400,000 people who have reached retirement age but who remain in full employment, do not while still so employed qualify for a pension at all, nor do their wives. Thus, the indirect effect of the limits that are imposed under these Regulations is more important than the direct impact on the comparative few whose earnings are touched by the earnings rule.
  Bearing all these points in mind, I believe the increases proposed in these Regulations conform to the basic principles laid down in the Beveridge Report and enshrined in the 1946 Act. They represent a real easement in terms of money for the admittedly limited but not inconsiderable number of people to whom they directly apply. They are deliberately more generous in respect of the widowed mother for whom the House has always expressed special concern.
  I hope, therefore, that the House will give approval to the Regulations tonight.
  7.19 p.m.
  Mr. Douglas Houghton: First, I congratulate the hon. Lady the Joint Parliamentary Secretary upon her clear statement of the Regulations—it is a complicated subject—and welcome her on behalf of my hon. Friends to our debates on National Insurance questions. Happily, she was spared the treadmill of the Standing Committee on the Pensions (Increase) Bill, which dealt with the graduated pensions scheme. However, I have no doubt that there are many chores in store for her, to put it no higher, on the administration side of the graduated pensions scheme, and I shall be very surprised if she has not many worries on her mind at the present time.
  The hon. Lady has said that we were debating similar draft Regulations less than a year ago—actually, on 18th March, 1959—so that this is the second time within a year that we have been discussing draft Regulations made possible under Section 2 of the National

  1037
  Insurance Act, 1956. We are not without advice on this difficult question of the earnings rule. In 1956, we had Command Paper 9752, a very long and informative report from the National Insurance Advisory Committee, entitled, "The Question of Earnings Limits for Benefits", a very comprehensive survey of the whole subject, and it was arising from that Report that the 1956 Act was passed.
  I should mention in passing that Professor Titmuss and Miss Spelman, both members of the National Insurance Advisory Committee at that time, wrote a dissenting note from the recommendations of their colleagues on the Committee. I think it is only right to point out that Professor Titmuss has carried his dissent not only to the Report of the National Insurance Advisory Committee of 4th March, 1959, but also to the more recent report of that Committee of 27th January, 1960. He dissents from the present structure of the earnings rule and argues in his dissenting note the case for very drastic alteration of the whole arrangement. I think it is proper that I should mention this, because when referring to the Report of the National Insurance Advisory Committee we had to take account of the rather unusual circumstance in which one member of it has persistently dissented since 1956.
  What do these Regulations propose to do? The hon. Lady has described to us their effects in terms of the lifting of the earnings which beneficiaries can have without penalty upon their rate of benefit. Since a year ago, we must remember in discussing the effect of these Regulations, we have altered the limit of earnings for retirement pensioners and widows from 50s. to 70s., and for widowed mothers from 60s. to 100s. In the course of three changes, we shall have widened the favourable difference in the earnings rule, in the case of the widowed mother, as compared with the childless widow and the retirement pensioner, from 10s. to 30s. in favour of the widowed mother. If my arithmetic is correct, that means that by the time these Regulations are approved we shall have increased the earnings limit for widows and retirement pensioners by 40 per cent within a year, and, in the case of widowed mothers, by 66 per cent. within a year.
  1038
  The House will agree that that increase in the earnings limit goes far beyond any increase in the level of earnings during that period. In fact, the hon. Lady pointed out that, since 1956, earnings have risen 15 per cent. in the case of men and 16 per cent. in the case of women. These percentage increases in earnings have to be put alongside the percentage increases in the earnings limits that we are now asked to approve.
  Miss Hornsby-Smith: If the hon. Gentleman will forgive me, and if I understood him rightly, he has said that the 15 and 16 per cent. gave rise to the present increases, but those were the percentages that justified the 1959 rises, and the figures now are 5 per cent. and 5½ per cent.
  Mr. Houghton: I beg the hon. Lady's pardon. The average earnings then, have risen about 20 per cent. over that period, and we propose to lift the earnings limit by double that percentage in the case of retirement pensioners, and more in the case of widowed mothers.
  The National Insurance Advisory Committee, in paragraph 4 of its recent Report, notices that—
  "The proposals in the present draft Regulations, though they would increase the earnings limit by similar amounts"—
  that is, similar to those of 1959—
  "are different from those we considered last year in that the relevant circumstances have not changed substantially since that time, We take it, therefore, that it is the Government's deliberate intention to make the earnings rules more generous than they are at present."
  I think the House will agree that that must be the inspiration behind the change which is now proposed.
  The hon. Lady said that a pledge was given in the Gracious Speech. That is quite true. A pledge was given during the General Election, if I remember correctly, on this question, and another pledge was given at the same time—that of keeping the level of benefits under careful and constant review. One would ask what has happened to that pledge, which certainly is not before the House at the present moment.
  The National Insurance Advisory Committee looking at the proposed level of the earnings limits, was naturally concerned whether these new limits would prejudice the maintenance of the

  1039
  principle of retirement, and said in paragraph 6:
  "How far the earnings rule can be relaxed without jeopardizing the retirement principle is, of course, a matter of judgment; there is no exact point at which it can be said that the limit has been reached."
  I think there has been a general feeling that some easement of the earnings rule would be justified, and it would certainly be welcome. The National Insurance Advisory Committee gave the impression in its Report that it believes that it is about as far as we can go for the present without weakening the retirement principle, and the Committee point a warning in paragraph 7:
  "We are bound to say that the earnings rule could not continue to be relaxed with impunity."
  We all agree with that. Whether we are adherents or abolitionists of the earnings rule, we all agree with what Professor Cairncross, who is an abolitionist, said in his dissenting note to the Phillips Committee Report, in paragraph 15 on page 88:
  "The retirement condition appears to command widespread support, the earnings rule equally widespread dislike, but the two are inseparable and stand or fall together."
  None would dispute that. If the earnings limits go, the retirement principle goes, and if the retirement principle goes, increments for postponed retirement go as well. In fact, the retirement pension would then become a birthday present, irrespective of work or wages, which is something which very few social security schemes in the world today grant to their beneficiaries. Earnings rules are not absolutely universal, but they are widespread indeed in social security systems in the Commonwealth, in the United States and mostly in countries in the Soviet bloc.
  What is worrying my right hon. and hon. Friends about all this is that the lifting of the earnings limits may in the Government's mind weaken to some extent the case for a higher level of retirement and widows' benefits. We believe that the pressure for the removal of the earnings rules and the case for relaxing them now spring from the fact that the pensions are too low. We believe that the real issue is not the level of earnings to be exempted from reduction, but the level of benefit. It is not that the earnings limits are too low; it is the fact that the benefits are too low that lies
  1040
  behind the upward movement that we are asked to approve tonight.
  I hope that this is not an unfair judgment of the Government's approach to social security benefits. My own conviction is that, by the improvement of National Assistance scales, by widening the scope of National Assistance, and by lifting the earnings limits, they hope to escape any need to raise the level of benefits. It rather looks as if the aim of the Government is to let those pensioners earn more who can, give better National Assistance to those who cannot, and let personal savings and vocational pension schemes take care of the rest. I hope that we can learn from the Minister a little more about what lies behind the proposals which he is asking the House to approve. There must be some reason for this which goes beyond the desire to ease the difficulties and anomalies of the earnings rules. I firmly believe that there is a wider strategy behind these proposals.
  I turn now to widowed mothers, with whose bereavement and problems the whole House has very deep sympathy. At this point, may I express my great regret that my hon. Friend the Member for Manchester, Exchange (Mr. W. Griffiths) is not able to be with us tonight. He is unfortunately suffering from the effects of an accident. I mention my hon. Friend particularly because he has a Private Member's Bill dealing with widowed mothers and earnings rules which was not reached the other Friday.
  Generally, a distinction is drawn between widows without young children and widowed mothers. That is why widows without young children are grouped with retirement pensioners for a lower earnings limit than widowed mothers. Another important distinction is that in the case of widowed mothers there is no retirement condition. Whereas only about 5 per cent. of retirement pensioners come up against the earnings rule, about 20 per cent. of those receiving widows' benefits suffer some reduction in their pensions on account of earnings. The draft Regulations give the widowed mother a still wider margin before the rule applies, and we understand fully that she can now earn up to £5 a week without penalty and up to £6 a week with a deduction of 10s.
  The National Insurance Advisory Committee had something to say on this

  1041
  question in paragraph 10 of its recent Report. It referred to those widowed mothers whom we must not overlook in this debate, namely, those who cannot go out to work and who will get no benefit from the higher level of earnings limit and, indeed, would get no benefit from its complete abolition. However much we sympathise, as we do, with the widowed mother who is able to go out to work, we must not ignore the widowed mother who is tied to the house by her family responsibilities, struggling to bring up her children, and who must either manage on what she has or go to the National Assistance Board. There are many such widows.
  I have not been able to discover just what proportion of widowed mothers, as distinct from widows generally, have to apply to the National Assistance Board for additional help. The figure is 20 per cent. for all widows, as the hon. Lady pointed out. I should be interested to hear what proportion of widowed mothers have recourse to National Assistance. If anything like 20 per cent. of them do, it means that 20 per cent. go to the National Assistance Board, another 20 per cent. avoid going to the National Assistance Board because they can go out to work, and the plight of the remainder we do not know.
  I have said before in debates on this subject that the House has not defined its position in relation to widows' benefits. What is the benefit supposed to be for? If it is to provide an adequate standard of life for the widow, with additional benefits for her children, so that in total she may have enough to live on, to bring up her family decently and happily without being forced out to work, the level of benefit is not enough. We take our stand on this principle, that the widowed mother should have a benefit adequate for her needs. She should not be forced out to work or to the National Assistance Board. She should be given free choice in the matter of work.
  I am the last person to suggest that widowed mothers do not feel at many times the need for association with others, at work and elsewhere, and wish to escape for a short time perhaps from the tedium of the home. None of us would wish to place restraints on the widowed mother who feels that she can do a useful job of work and at the same
  1042
  time look after her family efficiently and well. I have no doubt that at present a good deal of the case behind the movement for the abolition of the earnings limit for widowed mothers springs from the inadequacy of the widowed mothers' benefits.
  Mr. Speaker: Order. I admire greatly the hon. Gentleman's skill, but as this debate will obviously continue, I think that I had better indicate to the House my view about this matter. I do not think that it would be in order in this debate to urge the increase of a rate of benefit in any field. On the other hand, no doubt the rate of benefit is in order here in so far as it has a bearing upon the problem to what level the disregards should be permitted to rise. I apologise for having had to interrupt the hon. Gentleman, but I foresaw that other hon. Members would range too widely, although he would not.
  Mr. Houghton: I am very much obliged to you, Mr. Speaker. We are always in this difficulty when discussing draft Regulations of this kind, and I know that I must not trespass too much on your indulgence in stressing the inadequacy of benefits. I was making the point—in fact, I have made it—that in part the proposals for lifting the earnings limits rest on the unduly low level of the benefits paid. I am sure the House would agree that lifting the earnings rule is no substitute for the adequacy of benefits.
  I asked a question about the size of the problem in relation to the widowed mother having to seek additional assistance. The draft Regulations will help a great many more retirement pensioners, widows and widowed mothers to keep all they earn. If these limits were a little higher more people would keep all that they earned but, as the right hon. Lady pointed out, and as the Committee reminded us, we have to keep the thing in balance and have regard to the principle of retirement, which is a fundamental part of the National Insurance Scheme as we have it today.
  We on this side of the House will give our approval to these draft Regulations. We welcome the easement that they will give in many quarters, but we are bound to have the reservation in our minds that it would be better to tackle and define our attitude towards the main issue of

  1043
  the general level of benefits than to concentrate unduly our efforts and attentions on the marginal relief.
  7.41 p.m.
  Mr. Julian Ridsdale: Like the right hon. Lady, who made an excellent speech in opening this debate, I was spared the treadmill of the National Insurance Committee. Had I been a member of that Committee, I would have been able to grasp more quickly some of the poignant things that have been said about earnings limits for benefit in Cmd. 9752, to which the hon. Member for Sowerby (Mr. Houghton) referred.
  In the short time that I have been in politics, I have always found that it is a battle between doing what is ideally right and what is practically possible. Unfortunately, sometimes the Government have to compromise and bear on the side of doing what is practically possible. When one is in opposition one can bear much more on the side of what is ideally right. I support the Government because I realise that a difficult compromise has to be made on the earnings limit. It is important to keep the earnings limits what they are. If they were abolished the cost would be over £100 million, and there are other benefits, and other people, like the widowed mothers to whom the hon. Member for Sowerby referred, to whom that money could be paid.
  With those general remarks, I come down to the detail of the Report of the Committee. I was disappointed in the Report, because I do not think the Committee understood the position, especially in areas where there is high seasonal employment followed by high unemployment; areas where unemployment may be three times as high in the winter months as it is in the summer months. For example, in Clacton-on-Sea the rate of unemployment in summer is under 2 per cent., but in the winter it is between 5 and 6 per cent.
  The only way of helping the pensioner in those areas is by either averaging or aggregating earnings. Under the present system, if a pensioner works for 13 weeks—the only period during which he can get work—he is able to earn a disregard of £45 10s. In areas of high steady employment, a pensioner is able
  1044
  to earn over the year a disregard of £182. It is all very well in Yorkshire, Lancashire, and London, but there are other places in the country where, in the winter months, the employment rate is not as high as it is in the industrial areas.
  The pensioner who lives in an area where there is not a great deal of employment is in an unfair position. What did the Committee say about this? It said that it had examined the question of averages but it had not altered its view from the detailed report it made in 1956 on the earnings limit in Cmd. 9752. I have studied the Report, and the Committee's case against averaging and aggregating earnings. As far as I can make out, its case was based on one main consideration, though there were supplementary considerations as well. The main consideration which I wish to point out to the Minister, was that even where a pensioner gained on balance, he might be left without either pension or earnings at the end of the averageing period. This, the Committee says, is because pensions, like other benefits under the National Insurance Scheme, are a provision against expenditure week by week. The Committee says that the pensioner might be left in debt to the Fund at the end of the averaging period.
  But what does it matter if the pensioner is left in debt to the fund at the end of the averaging period? Does the Committee feel that the pensioner will not save up to meet that debt? In seasonal areas this is a problem which pensioners have had to face all their lives. The reason why a pensioner in a constituency like mine works is so that he may have a reserve to pay off his other commitments, such as an increase in the rates, or a rise in the price of other commodities such as coal and light. I hope that the Minister will deal with this aspect tonight. The Minister must give the pensioner who lives in these areas of seasonal employment the opportunity to earn and put something aside for the winter months when perhaps he faces an increase in prices. I hope that when the Minister reconsiders this problem he will consider it from a human angle and realise that there are people in outlying parts of the country who are like squirrels and put away their nut for the winter. They put their money away

  1045
  for the winter and against the rainy day that is coming along.
  This argument that the Committee has put forward looks very learned in the Report. Indeed, the Committee seemed to put up some arguments only in order to shoot them down again, but I hope that before they report again members of the Committee will come to areas such as I have been talking about and examine this problem against the background of the very high unemployment rates in the winter months. It could possibly be argued that the Government are using this matter of averaging to help themselves.
  When I approached the Board of Trade and suggested that in an area such as mine where there is a high seasonal unemployment the Government should consider introducing some light industries, I was told that the rate of employment has to be averaged to include the summer months, when the rate is high. The result is that my constituents are deprived of the opportunity of additional earnings in the winter. But paradoxically the Minister says that we cannot average pensioners' earnings. No wonder the unfortunate pensioner finds his position very disconcerting.
  The Minister has had to consider this problem before when I have presented it to him, but I hope that he will consider it again and that perhaps he can get round the problem of averaging where unemployment is above a certain figure for eight or nine months of the year.
  I hope that he will be able to do something more for the pensioners who find themselves in the predicament where they are unable to earn as they do in Lancashire, Yorkshire, London and the industrial areas; for the average wages in an area such as mine are not £13 but £8 a week, and the position of these people is much nearer the margin than is the position of many other people in the country. We say thanks to the Minister for a small relief, but I trust that he will look into the problem again and see whether he cannot do something more to help such pensioners as I have mentioned.
  7.52 p.m.
  Mrs. Eirene White: I wish very much indeed that we were discussing tonight not the question of the earn-
  1046
  ings rule but a Bill to increase the basic rates of benefit, because I am quite convinced that the people fully accepted after the Conservative Government were returned to power that they would pay some attention to what I think was on our side the most effective political argument in the social service field, which was this matter of the basic pension.
  I am perfectly aware that I cannot discuss this at any length, but it is only right to make clear that anything I say of the matter of earnings rules—and I think that I speak for all my hon. Friends—presupposes our very strong preference for something quite different from these Regulations, in other words, a Bill dealing with basic rates. I am fortified in this in dealing with a subject which I specially wish to mention tonight—the position of the widowed mother. It has been discussed on a number of occasions before in the House, but I make no apology for raising it again.
  Paragraphs in the Report of the National Advisory Committee concerning the widowed mother very properly make the point that what is really needed is an increase in the amount of benefit, because that would be of assistance not only to the widowed mother who goes out to work and is affected by the earnings rule, but to the widow who, for some reason or other, stays at home to look after her children. I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that one would vastly prefer to have an increase in benefit which would benefit all widowed mothers, whether they go out to work or not, to any alteration in the earnings rule. However, the draft Regulations before us deal only with the earnings rules and they follow the principle, which has been established now since my right hon. Friend the Member for Warrington (Dr. Summerskill) was Minister, of making a difference between the allowance for widowed mothers and that of other beneficiaries.
  We are now in a situation where the widowed mother can earn up to £5 a week, that is, 30s. more than other beneficiaries, before any deductions are made. But I must say again what I said frequently in the House when these matters have been before us, that this question of the widowed mother should be treated on a different basis altogether

  1047
  and that merely to give her rather more favourable terms, which we do once again in these Regulations, does not meet the situation.
  There is no question here of retirement. It is not that that principle is in any way relevant to any widowed mother, and therefore any arguments one may use about the necessity of an earnings rule in order to prove retirement have no relevance to this category of pensioner. One is dealing with a woman who, by definition, has to look after dependent children as well as herself. She has, therefore, to be a substitute in the family for the father who normally would be supporting the children. But that is not the whole story. About one-third of married women are at work anyway.
  The suggestion which underlies so much of the discussion of this matter—that a mother who loses her husband has not been working before and therefore what she has to do is to try to make up for her husband's earnings only—is not the whole story, because frequently she was herself already earning something. She is faced with a situation in which she is earning something and then her husband dies and his income is no longer there to sustain the family and she has to meet the needs of a family which is already accustomed to a certain standard of living. She is then told, "We will allow you to do this up to a certain point, but beyond that you are penalized". The point comes after £5, plus the various allowances, at which she is deprived of her earnings, and if she is a highly-paid person she may go beyond that point and be able to keep the income again.
  In considering the widowed mother, one ought to face the fact squarely that she was already earning and that she has to try to bridge the gap caused by her husband's death. This suggestion that her earning powers should be limited is not a wise one. It is remarkable that one-fifth of the widowed mothers concerned are affected by this earnings rule. That is a considerable proportion. Therefore, I suggest that there is here a serious social problem. It does not satisfy me in the least to be given figures of average earnings of £7 4s. in one case and about £3 in another.
  1048
  This is not the position of many women who are trying to keep up a standard of living for their children and who feel that the National Insurance which their husband has paid really is an insurance. I am perfectly well aware that there is a difference of opinion in official circles about this and that it is not really the principle behind this arrangement to regard it as an insurance in the ordinary sense of the word, but there is no doubt that many widows regard it as an insurance and that they feel that the community owes them something for the loss of the breadwinner in the family.
  There is that psychological element about it, but, apart from that, I have always argued that the woman who has children to look after should be encouraged to keep every penny she earns so that she has to earn for the least possible time and is not put in the position where, in order to earn something extra for her family because of the reductions under the earnings rule, she has to spend more time and more effort outside the home trying to earn extra.
  Although the earnings limit has now been raised quite substantially, of course it still will not affect the position of a number of women who are able and willing to add fairly substantially to their family incomes. If there were not this large number we should not have 29,000 who have been affected by the earnings rule. I do not know how many of these will be excluded by the proposed raising of the limit. One cannot tell. I do not know whether the Minister, when he replies, can give any indication of what he expects under the Regulations before us, but I am sure that he is very well aware that on this question of the widowed mothers there is very strong feeling indeed.
  There is, of course, the other injustice and anomaly in this matter to which Mrs. Jeger, when she was Member for Holborn and St. Pancras, South and gave very great attention to this subject, consistently drew attention, and that is the differentiation between the widowed mother coming under the National Insurance Regulations and the widow who may be drawing a pension because her husband died as a war casualty or through industrial illness or injury. One has this anomaly, which socially has

  1049
  really no justification whatsoever, of widows who may be living next door to each other, and in precisely the same circumstances, but because the husband of one died in the war or as the result of industrial injury or sickness she is completely free of earnings limitation, while the other one, whose husband died in different circumstances, but who has Precisely the same social needs, and whose children have exactly the same social needs, has to forfeit a proportion of her earnings.
  There is really no rhyme or reason why there should be this simple distinction between two widows with children living side by side, whether the husband was killed on the way to work, or after he reached the factory, when the needs of the two women and of their children are the same, and when, I would suggest, the social requirements of the community are just the same.
  It is really most disappointing, after the discussions which have gone on for the past few years, and after all the representations which have been made, that the Government still insist on keeping this earnings rule for this category of persons, who are really so different in their needs from the other categories we are dealing with.
  The Advisory Committee points out:
  "We find it difficult to reconcile these limits with the view that the widowed mother's personal allowance is provided because she is unable to support herself by her earnings, but if this concept is abandoned we see no other objective criterion by which to decide at what level the limit of earnings should be fixed."
  It is not just the woman we take into account when we discuss the widowed mother. We are surely thinking of the family situation as a whole. It is because of that that those of us who have campaigned for a long time now for the removal of the earnings rule for widowed mothers are deeply disappointed that the Government have not taken this opportunity, which they very easily could have taken, to deal with this problem.
  What they have done is to keep the differential, to extend the various allowances which are made for disregard, to extend the age up to which children should be regarded as dependent. In other words we have every kind of little adjustments here and there, but all the time the Government refuse to face the
  1050
  really basic fact that an earnings rule is quite unsuitable for the circumstances of widowed mothers.
  I repeat that the really serious thing about this is that the widowed mother should be encouraged to earn as much as she can in as short a time as possible and no deductions whatever should be made. She has enough to do as it is to try to support her family, and not merely financially, but also by keeping her children as little bereft as possible by the absence of their father. It is a considerable strain upon her personally, not merely financially.
  In those circumstances it is surely against social policy, it is against common sense, it is against the public interest, that we should say to such a woman, "For no justifiable reason, but just because there happens to be a differential under National Insurance so that other people have to have an earnings rule, therefore you have to have an earnings rule, too."
  I appeal to the Minister to think of this yet again. He knows perfectly well that the general body of opinion in the country would be with him if he were to take the opportunity not just of making a little extension here and there, not just nibbling at the problem, as he is, but to say once for all, "We recognise that widowed mothers are in a different position, and we will, therefore, not have these relatively minor differences but will abandon the earnings rule for them altogether."
  That, I repeat, is no substitute for an adequate basic benefit—
  Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): The hon. Lady makes me anxious lest she should go out of order when she seeks to relate this to the question of an adequate basic benefit.
  Mrs. White: I was merely referring to that, but it is an essential part of my argument that what the Government propose is not a substitute for an adequate basic benefit, and I do not think that one can logically complete that argument without stating that fact. I do not propose for a moment to develop it, but I think it is only fair, in speaking for myself and others, including my hon. Friend the Member for Manchester, Exchange (Mr. W. Griffiths) who is so

  1051
  regrettably unable to be with us, to make it perfectly clear that in our vehement opposition to the earnings rule for widowed mothers we have not lost sight of the needs of the other widows who cannot go out to earn at all.
  8.8 p.m.
  Mr. Arthur Tiley: I am very grateful for the opportunity of following the hon. Lady the Member for Flint, East (Mrs. White). I usually follow her in cinema debates. Now I am glad to follow her in a wider interest and possibly more important subjects. I, too, think it is a great pity—I agree with her—that we are debating this subject from 7 p.m. onwards. I hope pensions have not been put into the category of half-day subjects in this new Parliament.
  Mr. Houghton: The hon. Gentleman will remember that the last time he took part in a debate of this kind it began at 10.18 p.m. and finished at 12.14 in the morning, so we are slightly better off this time.
  Mr. Tiley: I thank the hon. Member for Sowerby (Mr. Houghton) for that helpful support.
  We had some notable debates in the last Parliament on this vast subject. I can remember seeing the same two familiar faces in the same two familiar places, and I can well remember at the conclusion of many debates the hon. Member for Coventry, East (Mr. Crossman) saying with great passion at that Dispatch Box for a period of two years, that we must let the country decide, that we must go to the country and ask it for its decision on pensions. We continued our pensions debates throughout the whole of October and we find that the country has given an overwhelming vote of confidence to my right hon. Friend. We seem to have had innumerable hours to spend in the House since we came back to discuss the affairs of the Scots and it is a great pity that we should be discussing pensions only from 7 p.m. onwards.
  The hon. Lady the Member for Flint, East has made some important points. I read Mrs. Jeger's recent article in the Guardian. There are certain anomalies in connection with the earnings rule concerning beneficiaries amongst the widowed mothers, but the argument for
  1052
  its complete removal, bearing in mind the cost of the earnings rule, to benefit those few simply does not hold good.
  I shall not be allowed to develop this theme, I know—
  Mr. E. G. WillisWhy not?
  Mr. Tiley:—because it would be out or order—but I believe that the total cost of £100 million which would be required to remove the earnings rule would give the benefit to those who now can earn most. We should certainly apply our thought and the money which is available to those widows who are incapable of working because of ill health or of family ties with young children.
  I would say to the hon. Member for Sowerby that the Government's policy remains the same—that is, that the resources of the nation should be channelled into those directions where the need is greatest. That is the policy for which we have stood and that is the policy we pursue. That is why the hon. Lady the Member for Flint, East said that the country expected that by this time we would have been discussing pension increases. Of course, that is what the people expected from a Conservative Government. They know our history and our record and they know full well that this question—
  Mr. Willis: On a point of order. I do not quite follow why it was out of order for my hon. Friend the Member for Flint, East (Mrs. White) to discuss the basic pensions but it seems now to be in order.
  Mr. Deputy-Speaker: I quite appreciate the hon. Member's point of order. The House knows how close to the margin of right or wrong we get in these debates and I hope that the hon. Member for Bradford, West (Mr. Tiley) will bear that in mind.
  Mr. Tiley: I am sorry, Mr. Deputy-Speaker. I felt that it would be out of order, but I had the feeling that it would make my speech a little more interesting. We must remember that our back benches are a little less in strength than formerly, because my hon. Friend the Member for Leeds, North-East (Sir K. Joseph) has now moved to a more exalted station and we must, therefore, do our best with the Members who remain.

  1053
  I was sorry to hear the hon. Member for Sowerby, who makes such great and notable speeches on these occasions, pour a little disparagement upon those who go for National Assistance benefit. The hon. Member for Flint, East instanced the case of a widow who can go out to work and whose earnings, because she has a pension from a certain source, are not affected, whereas another widow with children who lives nearby cannot have the same benefits.
  We must make it clear throughout the whole of our pensions debates that there is no smear in going for National Assistance. The country makes this added benefit available to those who cannot help the position in which they find themselves. I know that the hon. Member for Sowerby would not wish to disparage the National Assistance Board—
  Mr. Houghton: Why, then, does the hon Member say that I did? I did not, I had no intention of so doing, and I hope that the hon. Member will not pursue this. What I was saying was that under the National Insurance scheme, people should have an adequate pension as of right and should not be forced to go to the National Assistance Board for their needs. That is what I said. It is no disparagement.
  Mr. Tiley: If the hon. Member looks at the OFFICIAL REPORT tomorrow, he will see that he said that the Government are leaving a certain section of our citizens to go to the National Assistance Board, as if we are leaving them with a little smear—
  Mr. Houghton: No. I did not waggle my hand and grimace as the hon. Member is doing. He is importing prejudice into what I said. My words were not intended to convey that meaning. I ask the hon. Member to keep smiling, to keep his arms still and not to waggle 1hem and grimace as if there was an intention to import prejudice into my remarks.
  Mr. Tiley: The hon. Member will notice that I am waggling my right hand.
  I ought to declare, as I always do, my interest in pensions because of my connection with the pensions insurance market. I merely declare it because of a remark I wish to make later in this short speech. One of the greatest advantages
  1054
  of the Welfare State, a real advantage to the community, has been that we all live nearer to each other's problems. Through the medium of social legislation, there is a greater awareness of sufferings, sacrifices and injustice and there is a greater feeling in the community of responsibility for them. We are in the Welfare State together. We must either advance together or retreat together. Social legislation has probably made a greater influence in that sector of community living than the churches have been able to achieve in this generation.
  It is, therefore, necessary to examine each problem in its broader aspect and not narrowly. There is, of course, a defect in the social services to which many people point, and this ought to be said. When we bear in mind that the average wage throughout the country is now approximately £14 a week for men—
  Mr. Stan Awbery indicated dissent.
  Mr. Tiley: Yes, it is in the Report—it would be a good thing if husbands gave a little more attention whilst they are living to the needs of their families. If a man takes unto himself a wife and begets children, he has a responsibility for them first and foremost. It is right that somebody should say this. As the prosperity of all classes increases, more and more people should be encouraged to accept this personal responsibility. It is not an expensive thing to do. The cost of a couple of packets of cigarettes each week would remove from a family care and worry of a financial kind that death may bring.
  The broad problem is looked at by the National Insurance Advisory Committee, not from a party angle. The members of the Advisory Committee are not the Minister's lackeys. They are his advisers and they have accepted the Government's intention with a little disquiet. They say. for instance:
  "We take it, therefore, that it is the Government's deliberate intention to make the earnings rules more generous than they are at present."
  I am very glad that the hon. Member for Sowerby, on behalf of his right hon. and hon. Friends on the benches opposite, is prepared to accept that principle, because it surely is right that when there is need for older people who can do so

  1055
  to work in industry, and when men are fitter in these days, as undoubtedly they are, beyond the age of 65, it should not be the business of Government legislation to hamper the fact that they can still make a contribution to meeting our industrial problems.
  There follow in the Report some wise words about the earnings rule.
  "We have explained in our previous reports the earnings rule is necessary, so far as retirement pensions are concerned, in order to support the retirement principle."
  I believe, as do all those who take a forward view of the pensions problem, that eventually we shall see the earnings rule disappear, though this may take forty or 50 years. However, it will only go completely when there is no need for people to work in the later years of their lives. It will only go when, through State or private schemes or private savings, people can hope to enjoy a happy life in old age without the need to work. I believe that this position will come about in an expanding prosperity in a growing community, and as private savings and private schemes and the Government pension scheme increase their value.
  Therefore, it is right that before this moment arrives we must continue to make these improvements, and the Minister has a splendid record over pensions. As has been pointed out, my right hon. Friend has come to the House twice in the space of a year to make an improvement in this respect. I hope he will look at the twelve-hour rule because a definite direction is needed from the Minister. The rule is completely out-of-date. The National Insurance Advisory Committee is obviously uncomfortable about its present interpretation, and it is causing a great deal of disquiet in the minds of old people who know that they are working more than twelve hours.
  We all welcome the change for the widowed mothers. I agree with the hon. Lady the Member for Flint, East who made such a powerful plea in this respect. She pointed out that what we are able to award from the industry of our country should be directed into the channel where the need is greatest. We have just received the Report of the Albemarle Committee on the Youth Service in England and Wales which means so much to young people—
  Mr. Victor Yates: Oh.
  Mr. Tiley: If the hon. Gentleman wants to say something, will he get up?
  Mr. Yates: I was wondering how many other subjects the hon. Gentleman would discuss under this Motion. The Albemarle Report is not in order—
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order, order. No, indeed, it would be out of order to discuss the Albemarle Report, but to make a passing reference to it is permissible.
  Mr. Tiley: Thank you, Sir. I thought the hon. Gentleman was agreeably moved by my words but I can see that I was sadly mistaken.
  The impact of crime and juvenile delinquency stems from the fact that so many mothers go out to work. [Laughter] If hon. Gentlemen opposite laugh at that, they will not believe anything. The impact on home life and the break-up of so many homes is largely due to the fact that so many widowed mothers and mothers are having to go out to work, and it is one of the principal causes of the juvenile delinquency in our country. So what we have to offer, and what we give by way of benefits, should be directed to ensuring that widowed mothers with children are adequately pensioned so that they need not go out to work and can perform their prime duty of looking after their children.
  We welcome the improvements which my right hon. Friend has made. I am glad this change is taking place and I am glad to support it. I am glad also that the Regulations included an explanatory note, because I was able to understand them.
  8.24 p.m.
  Dr. Horace King: I am tempted to make passing reference to all the subjects to which the hon. Gentleman the Member for Bradford, West (Mr. Tiley) made passing reference, but I will mention only one. I thought the hon. Gentleman was singularly unfair to my hon. Friend the Member for Sowerby (Mr. Houghton) by suggesting that he was seeking to import an emotional disparagement into the discussion when referring to the National Assistance Board.

  1057
  The hon. Gentleman has attended many debates on this topic in the House of Commons and knows the high opinion which both sides of the House have of the National Assistance Board and the work it does. My hon. Friend was simply mentioning what would seem to be almost a platitude, that if any considerable part of this community has to have its basic income supplemented by National Assistance, there is something the matter with the basic figure. My hon. Friend was making that point as regards the widows, many of whom have to go to National Assistance because of the inadequacy of their basic pension.
  These Regulations are one more example of the keen and detailed and lively interest shown by the Minister of Pensions in the task he has undertaken on behalf of the Government. Although we differ fundamentally on many aspects of the work of his Department, and on certain basic principles, this is another example of a piece of useful work. I was glad that the hon. Lady the Joint Parliamentary Secretary, in ably introducing the Regulations, defended the fact that we must abandon the retirement principle, but that we are accepting the Regulations which increase permitted earnings and not abolishing the limit. This is not out of expediency, not because it would cost more to abolish them, but because there is something good in maintaining the retirement principle itself.
  We do not want people to work all their lives; at least, we do not want people to have to work all their lives. The conception of honourable leisure in old age is not something that we want lightly to throw aside. We on this side of the House want all the pensioners in the country some day to enjoy the prosperity in their old age of living, as super-annuitants do, on the income received from adequate superannuation. A combination of retirement and part-time work, undertaken to provide extra funds, but which can be dropped at any time, is not an unhappy combination. We believe, however, that every time we increase the earnings limit, every time we move towards the abolition of the earnings rule, we are making more difficult the achievement of an adequate basic rate of pension. This is the reason why we approach the Regulations not grudgingly but critically.
  1058
  The Regulations do a number of things. First they translate a little more accurately the permitted earnings into modern values. When the permitted earnings were first set into the insurance Measures of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) money was worth far more than it is today. As the Joint Parliamentary Secretary has pointed out, there must also be a rise in the permitted earnings to correspond to some extent with the rise in the average wage of the workers of the country. In addition, we should, as the Regulations do, ease a little the permitted earnings of a pensioner but, as my hon. Friend the Member for Sowerby pointed out, we must be careful how far we go along that line. Indeed, in the figures that we have before us we go about as far as we can without endangering the whole principle of retirement pensions.
  Ever since we introduced the conception of which this is an extension there has been a fear, in respect of certain features of pensions, non-retirement and part-time earnings after retirement, that the pensioner, with the amount of money the Minister allows him to earn plus his pension, could undercut those who are seeking to maintain their own wage when that is all they have to enjoy. That danger may have gone to some extent, but many workers still think it exists. There is also the danger that if we make it too easy for a man to draw a pension without retiring it may jeopardise the prospects of promotion for those coming behind.
  We are worried about the cost of abolition of the earnings rule, and of every advance in the permitted earnings, not because we object to increasing the amount of money which the Exchequer must provide, if that money is to go where it is most needed but because we would rather increase the basic pension Moreover, even as we look at these Regulations we must consider the danger that the extra incentives to go on working after the retiring age has been reached may encourage people who are not physically fit to go on working and shorten their lives, and in some professions it may much more seriously encourage people to go on working when they are no longer really capable of working and thereby do inadequately the job they are trying to do.

  1059
  In these Regulations we are considering not all pensioners but only those who are physically fit to go on with part-time work. Not all old-age pensioners can continue at the job they were doing, and after the age of 65 they are by no means strong enough or even willing to continue in part-time work, especially of the hard, physical kind. For such pensioners these Regulations provide nothing.
  Every time the earnings limit is raised, therefore, we are anxious lest this step will benefit only a group of pensioners, and will deflect the attention of the country from the real needs of all old-age pensioners. At the present time the best way of benefiting pensioners is not this, but by an increase in the basic pension. I hope the Minister will be able to tell us how many of those reaching retiring age will benefit from the relaxation which he has permitted in the earnings rule.
  I would say that almost none of these considerations about retirement apply to widows. No matter how much we raise the basic pension it can never provide an able-bodied childless widow with her previous standard of living. I welcome that part of the provisions which raises the amount which a widow, and especially a widowed mother, can earn. I pay tribute to the Minister for the dramatic increases he has made in the widowed mother's pension and the allowance which he gives to the children of the widowed mother, but dramatic as those increases are they are still not adequate; hardship still exists for widowed mothers and their children.
  I regard motherhood, during the time when the children are young, as a full-time job. I am distressed at the tendency for many mothers to go out to work when they should be looking after their children, and I am particularly unhappy about the child who has lost his or her father and whose mother, driven by the exigencies of economics, has to go out to work, so that he really loses both parents. The problem of widows, although to some extent met by these Regulations, cannot be completely met; more widows are seeking jobs than there are jobs available for them. I sometimes wish that we could earmark some jobs for them, just as I sometimes wish we could earmark jobs which able-bodied men are doing but which could
  1060
  be done by disabled men. A widow who has given her beauty, youth and energy to the job of looking after her husband and bringing up her family finds it much more difficult to be attractive enough to gain employment when she goes on to the employment market.
  I welcome the increase in the limit to £5 for another reason. It has been my experience that when widows have gone out to work they have sometimes had to work at cut rates, because there is a limit to the wage they can accept under the Statute and they work more hours for the same money for fear of losing the jobs. At any rate, this provision will benefit some widows, since it will mean that they will not find themselves employed on sweated labour.
  Again, however, the improvements that the Regulations make in the condition of widowed mothers who can earn wages are no substitute for an adequate basic pension. I once more appeal to the House and to the Minister to give further consideration to the question of how far we should recognise the economic and spiritual disaster of widowhood; how far we should recognise the needs of widowed mothers, and the need to limit the necessity of their having to go out to work to supplement their basic pension. We have done this for the war widows—and rightly so—but I believe that every committee examining this question has failed to grasp the gravity of the problem. I suggest that the Minister should set up another committee, composed of more women than men, and with some widows on it. So far this House has not done justice to the widow and the fatherless.
  8.38 p.m.
  Dame Irene Ward: Some very powerful speeches have been made about the earnings rule. I always listen with great attention to what is said by the hon. Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Bradford, West (Mr. Tiley), because I consider that they are both experts in their own spheres. Even though I am a supporter of the Government I enjoy hearing experts argue against Ministers who, to some extent, are dependent upon the advice given them by their civil servants and, in this case, the advice of the National Advisory Committee.

  1061
  My general comment is that every time we debate Regulations of this kind the pattern of the debate seems exactly the same. Though there are slight variations according to the recommendations embodied in the new Regulations, always the same pattern emerges. No one, perhaps not even the members of the Advisory Committee, ever takes very much notice of the informed opinion revealed in such a debate as this, or discusses the various problems arising from the general pattern which has continued to operate since the 1946 Act.
  I fully understand the need for maintaining the earnings rule, and I think that is generally accepted. But I wish that at some stage in our proceedings we could discern from the recommendations of the Advisory Committee to the Minister that problems which have been discussed by various hon. Members have penetrated into the minds of the members of the Committee and as a result there is a change in the pattern of discussion.
  I support what was said by my hon. Friend the Member for Harwich (Mr. Ridsdale) on the question of aggregations. In addition to representing a county borough, which is not so much affected by the new Regulations. I represent a seaside resort, and among my constituents there are a number of inshore fishermen. This problem of seasonal occupations is a very difficult one. I do not know, nor do I know how I can discover, whether members of the Advisory Committee—to whom we all owe a great debt of gratitude for their constant service and the advice they tender to the Minister from time to time—live in seaside resorts such as are represented by my hon. Friend the Member for Harwich and myself. I suspect that a great many of them live in the vicinity of London or in some industrial area. The whole question of retirement pensions and the earnings rule is focussed on the industrial areas and these fringe parts of the country get little recognition. Their problems are small in relation to the problem as a whole, but in these parts of the country they are very important.
  Time after time we raise these problems and the same old arguments are advanced. We never seem to advance forward an inch. Is it not possible to make an experiment? I was delighted to hear my hon. Friend the Member for
  1062
  Harwich say that he hoped that between now and any future amending of the Regulations some member of the Committee would come to Harwich and examine the situation there. But it is not just a question of going to Harwich or to Whitley Bay. It needs someone who lives in the area and who knows the general pattern of life which goes on there year after year and season after season.
  I am bitterly disappointed that once again, as it seems to me, my right hon. Friend feels obliged to accept what is stated by the Committee and that these people to whom I have referred are to be left in their unfortunate and very difficult circumstances. I do not know what arguments can be put forward about this, except to say that the House of Commons is supposed to be a place where grievances are remedied. These grievances to which I refer have been discussed for years, until everyone is thoroughly sick and tired of them, and yet still my right hon. Friend accepts what is said by the Advisory Committee. Because the Advisory Committee takes the view which it does, we get no further forward. I am extremely worried about that.
  That takes me to my next point about the widowed mother. My right hon. Friend would have great success if he could now say, on the decision of the Advisory Committee, coupled with the way in which it expresses its suggestions about the widowed mother, that he will now set up a committee composed of people who have a greater interest in this matter, who come from different parts of the country and have special knowledge of it to go into the whole question. I put this view to my right hon. Friend. The widowed mother who can go out to work and is in the fortunate position of having the earnings rule relaxed in relation to her allowance, could also have a private income. I am not quite so concerned about the position of the widowed mother as about the effect of this Regulation on the children of the widowed mother. I think that psychologically very important.
  I hope I shall not be out of order, Mr. Deputy Speaker, when I say that I think this House is in great difficulty in discussing matters of this kind because we are never able to discuss them over a very wide field. One of the difficulties

  1063
  in being a Member of Parliament is that one rather dislikes using one's personal experiences. I suppose it is a natural feeling that one would much rather not draw on one's own life and the way in which one has lived it, yet sometimes personal experiences can be used to help to drive home a point.
  Of course, it was years and years ago, as would be noticeable to everyone, that my mother was left a widow. When I was a quite small child my father died of T.B. and my mother was left a widow with a very small income. I happened to come of a family who were in very good circumstances, that is, the uncles and cousins. I well remember when I went to the same school as my cousins. When the question came of taking part in an expedition or a party abroad, or taking part in all this wonderful extension of life which children now enjoy, if one happened to be the daughter of a widow, one had to say no, whereas the wealthier members of the community could say yes.
  I have experienced that and I know what it means. Sometimes there is a tremendous danger of giving children a feeling of inferiority complex. They wonder why they should be deprived of some of the great advantages which come to other children. As the whole tendency of Government policy today is to bring about as happy an equality as we can, it seems extraordinary that in this new recommendation about the earnings rule it is the widowed mother who can go out to work and whose children will have the great advantage, whereas the widowed mother who stays at home and does not allow her children to become "latchkey children" is to be deprived of any increased benefit.
  This is very clearly brought out by the recommendation of the Advisory Committee, which I congratulate on having got so far. Whether that will penetrate to the mind of the Minister when he discusses these matters with the Chancellor of the Exchequer and with the Cabinet, I do not know.
  We have to make up our minds whether we want to encourage widowed mothers to go out to work and earn or whether we want to encourage them to stay at home and look after their children.
  1064
  I was discussing this today with someone very interested in the subject. He explained that when a widowed mother goes to work it is necessary for the school teachers to have two addresses. They must have the address and telephone number of the factory in order to contact the mother if the child is taken ill at school, because if the child has to be sent home from school she will find no one at home if her mother is out at work. I recognise that this argument also applies to mothers who are not widowed. The fact remains that the school teacher has to have the child's home address and also the address and telephone number of the factory. If anything happens to the child at school and the teacher wishes to contact the mother, she has to telephone the factory, and the mother must leave the factory to go home in order that her child should not be sent from school to an empty house.
  All these matters are very important when we are deciding whether the recommendation is sound. I cannot discuss the general situation of the widowed mother and her allowances in this debate, but I want to put on record one paragraph from the Report of the National Insurance Advisory Committee. The Minister, of course, knows what is in the Report, but I have a great belief in HANSARD, which is read by almost all social workers as well as by many other people. The report of this debate will be read much more widely than the Report of the Advisory Committee. In arguing the case it is, therefore, important to state what the National Insurance Advisory Committee said in advising the Minister. The Report reads:
  "There have been many suggestions that the earnings rule for widowed mothers should be abolished and any relaxation of the rule will doubtless be widely welcomed. A relaxation of this rule will, however, mainly benefit widows whose family circumstances permit them to undertake a substantial amount of work, or whose work is relatively well paid. It will not help the widow who cannot readily leave her children and go out to work. We should accordingly prefer to see any additional expenditure on this benefit go to increasing the basic allowances for the mother or her children."
  Mr. Deputy-Speaker: I am afraid the hon. Lady is going a little further than

  1065
  she should, because we are discussing the Regulations and not the Report of the Advisory Committee.
  Dame Irene Ward: I fully understand that, but I am bound to say that every other hon. Member has referred to the Report. The Minister takes his stand on the Report. It is a little difficult, therefore, if the information contained in it, on which the Minister asks us to accept the Regulations, cannot be quoted for inclusion in HANSARD. At a fairly late stage in the speech of the hon. Member for Sowerby (Mr. Houghton), Mr. Speaker drew attention to the fact that we must be very careful to keep within the terms of order. It is a little hard on back benchers to have him permitted to deploy his case and then, when they want to deploy their case, they cannot even read out what is contained in the Report. Though, of course, I bow to your Ruling, Mr. Deputy-Speaker, I am bound to say—
  Mr. Deputy-Speaker: I do not want to rise on a point of order which is not a true one. My anxiety is that the hon. Lady should not urge any increase in the basic rate of benefit.
  Dame Irene Ward: I was not going to urge that. I was merely pointing out what the Advisory Committee said. I would like to get that in HANSARD. There are two alternatives. Either I can quickly finish and say nothing more, or, if the Minister has anything to say about the Committee's Report, I can cause an interruption so that it will be recorded in HANSARD.
  If you, Sir, will allow me to finish this sentence so that it will be in HANSARD, I will bring my comments to an end. I will not then urge anything in the way of action, except that the Minister should bear in mind what his own Committee says. The Committee says:
  "It will not help the widow who cannot readily leave her children and go out to work. We should accordingly prefer to see any additional expenditure on this benefit"—
  this is the money we are voting—
  "go to increasing the basic allowances for the mother or her children. We understand, however, that the amount which the relaxation of till: earnings rule would cost would not be enough to improve the basic allowances significantly. In these circumstances we do not feel able to object to the proposed relaxation."
  1066
  I am sorry the Committee did not feel it could make some further substantial recommendation. Hon. Members have been in order in suggesting that we could have a committee to look into this whole matter so that we should have a chance of considering this subject more widely before the Minister emerges again with new regulations.
  I am, of course, delighted that he has been able to introduce these Regulations, but they are not very happily based in relation to the Report, so I ask my right hon. Friend not to skate round everything when he is replying. Now that I have this in HANSARD, I will not carry out the interruption.
  Various people have referred to the General Election. We said that we intended to improve the standards of those people who were not so well off, the small fixed income group, so that they might share in prosperity. This is a very important issue. Thank you, Sir, for not ruling me out of order again. I hope my right hon. Friend will pay attention to what is said in the Report so that we can ensure that the widowed mother who stays at home and looks after her children is not deprived of essentials which the widowed mother who can go out to work may be able to provide for her children.
  I hope my right hon. Friend will be able to say that he will have this matter examined and that those who carry out that examination will be people who know some of the facts of life.
  9.0 p.m.
  Mr. James Dempsey: I recognise that it is becoming more and more difficult to confine oneself to the subject of the debate, because of the several departures from the subject which have already been made. However, I shall do my best to confine my remarks to what are described as the National Insurance (Earnings) Regulations, 1960.
  The Regulations deal with the relaxation of earning limits and if I confine myself to that one aspect of National Insurance, I hope that it will be understood that I am not in any way detracting from the general argument of the Opposition on the need for bringing pensions up to proper living standards for all kinds of pensioners.

  1067
  Some hon. Members have discussed even crime and juvenile delinquency and I regret that juvenile delinquency has been attributed to the fact that many mothers go out to work. Some of us know of families where mothers do not go out to work and where there is still juvenile delinquency.
  The Minister is going in the right direction in making this adjustment, but I hope that he will not conclude that enough has been done to permit him to indulge in smug complacency. It must be remembered that although the allowances for a widowed mother are to be increased from 80s. to 100s. a week, an increase in earnings of 10s. will prejudice her entitlement to those allowances and after that figure, for every shilling she earns, 1s. will be deducted from her entitlement to pension.
  The Parliamentary Secretary said that the average earnings of women were now £7 0s. 4d. a week, but it does not necessarily follow that those are the average earnings of widowed mothers who are working. We have no figures to justify such a contention.
  If one studies areas where women are employed, one will find that many women earn more than £7 a week. That is especially true of the industrial belts of the country and in such areas a concession of 20s. a week is largely wiped out because of earnings. I hope that the Minister is fully congnisant of the actual earnings of widowed mothers. No one will deny that a widowed mother finds rearing a family a costly business.
  I am not unmindful of the substantial increase given to the dependants of widowed mothers, but in dealing with this problem we must not forget a fundamental factor. We seem to deal with this in terms of monetary influences and forget the important qualification that we are trying to compensate a woman and perhaps some children for the loss of a father, and, of course, no amount of money could compensate any child for the loss of its father. I honestly believe that a case can be made out for devising some scheme whereby we can look forward to the day when the earnings rule will not be applied to a widowed mother. If we cannot accomplish it in one year, I appeal to the Minister and his Joint Parliamentary Secretaries to apply their minds to
  1068
  phasing the eventual abolition of the earnings rule over a period of years. It is certainly an ideal towards which all of us should strive.
  I have been studying very carefully just what is envisaged in the Regulations. I am willing to concede that the Regulations should be welcomed by all hon. Members and that the Minister is taking a step in the right direction, but I appeal to the right hon. Gentleman to realise that the Regulations are not an end in themselves but are only a means to an end, and the end must be the eventual elimination of the earnings rule.
  I ask the Minister to look once again at the earnings rule in relation to retirement pensions. He suggests that a person who is in employment will be allowed to earn 70s. a week. I hope I have the figure right.
  Mr. Boyd-Carpenter: That is correct.
  Mr. Dempsey: That is, in essence, an increase in the earnings rule of 10s. a week. It is not unusual to calculate National Insurance benefits in terms of daily quantities. That is, indeed, done in almost every aspect of our National Insurance system. I would point out that 10s. per week really means only that we are allowing the retirement pensioner to earn 1s. 8d. a day. Surely that is an infinitesimal allowance for a retirement pensioner.
  I was earnestly hoping that the right hon. Gentleman would take into consideration not merely the views of the National Insurance Advisory Committee but some of the views of the local insurance advisory committees. I was a member of a very active local insurance advisory committee for many years, and I can assure the right hon. Gentleman that we always appreciated the courtesy that we received from him and his excellent staff of officers in Lanarkshire. In co-operation, help, guidance and assistance they are wonderful people, and no one could ask for better.
  I feel that some of the views which have been expressed by local insurance advisory committees in years gone by should have been given some consideration. I honestly believe that if those views had been given sufficient consideration the right hon. Gentleman might have made a braver effort than

  1069
  merely to increase the earnings allowance by 10s. a week. I ask the right hon. Gentleman to appreciate that most of the persons for whom I am appealing have been paying insurance contributions for many years—some for 20 or even 30 years—and the least they might expect in return is something more tangible than 1s. 8d. a day or 10s. a week.
  I hope that the right hon. Gentleman, when replying, will be able to give me some logical reasons why he has, as Minister, arrived at the increased allowance of 10s. a week. I recognise that he has difficulties, that he has an insurance fund which has to be solvent, that he has to have regard to the views of his National Insurance Advisory Committee and that he has a host of other considerations. Frankly, however, retired pensioners, people who have in one field or another, or perhaps in both the industrial and the military fields, given their life to the country, ought when they reach the twilight of their career to be able to look forward to much more than a paltry 1s. 8d. a day increase in the actual earning allowance before their pension becomes prejudiced.
  I earnestly appeal to the right hon. Gentleman and his Parliamentary Secretaries to look at the matter in that light, and to try to do their very utmost to ensure that in these Regulations they will provide reasonable allowances with which pensions might become more enjoyable for these sections of society.
  I conclude by saying that I have heard all sorts of arguments in the Chamber tonight, both for and against, and that I respect the difficulties with which the Minister is confronted. Such difficulties exist only to be overcome, and I am convinced that where there's a will there's a way. I think that the Minister has the will to overcome these difficulties, and to ensure that the earnings allowances for people coming within these categories of retirement pension will be much greater than the figures proposed in these Regulations.
  9.12 p.m.
  Mr. Percy Browne: I have listened to the whole of this debate, and I have been amazed at the wide range which it has succeeded in covering, considering that we are supposed to be talking about one specific point.
  1070
  It appears that none of us likes the earnings rule, but that all agree that in the circumstances it is better that we should concentrate help where it is most needed; that is, on those who cannot work because of a lack of employment, sickness or family commitments. A lot has been said about widowed mothers, and I will say no more, except that I am perfectly certain that my right hon. Friend, who has brought such a human touch to his very difficult job, will bear in mind the remarks made by the National Insurance Advisory Committee in paragraph 10 of its Report.
  I should like to mention two specific points. The first is one which was dealt with by my hon. Friend the Member for Bradford, West (Mr. Tiley), when he spoke of the 12-hour rule in the retirement conditions. It is all very well for my right hon. Friend and the Parliamentary Secretary to talk about the average wages throughout the country, but in the West Country, in places like those my hon. Friend the Member for Harwich (Mr. Ridsdale) mentioned, the average wages are nearer £8 per week than £13. It means that a man has to work probably for half a week, or for twenty-four hours, in order to earn his £3 10s., and, of course, the discrepancy is even greater in the case of women. While we must have some sort of yardstick, I wonder if my right hon. Friend would consider raising the limit perhaps to twenty hours. Although I realise that many of his officers are lenient in the interpretation of this rule, it would help many pensioners if the limit could now be raised to twenty hours.
  I have to join forces again with my hon. Friend the Member for Harwich in riding a hobby horse which we have both been riding for some time. It concerns the problem of seasonal employment and the question of averages. Here again, in places with seasonal employment, such as we have in North Devon, where wages are low, a man may get work for only four months of the year, and probably earn £8 per week during that time. If he could average those earnings over the year his pension would not be extinguished or touched at all, but, as it is, he will lose his pension entirely for those four months.
  This horse is said by my right hon. Friend to be a non-starter, although I can tell him that even odder horses than

  1071
  this have won races. He says that it is a non-starter, first because every pensioner would have to report any earnings made during any week irrespective of whether they came up to the earnings limit and, secondly, because at the end of the year the pensioner might owe the Exchequer money. My right hon. Friend having been given this example of places of high seasonal unemployment, will he, as my hon. Friend the Member for Tynemouth (Dame Irene Ward) suggested, try a pilot scheme to find if it is possible to do something about it?
  Every other subject about which I wished to speak has been touched on. I think that I can get away with it in the last few moments if I say that when my right hon. Friend takes a bite at the cherry he should look at the basic retirement pension.
  9.16 p.m.
  Mr. Charles Mapp: There has been one very useful contribution from the hon. Member for Tynemouth (Dame Irene Ward) in regard to aggregation. Apart from the general merits of the document before us, I felt on a second reading of it that in terms of departmental neatness, friction and difficulties to persons qualifying there was a case for aggregation of earnings on its merits without necessarily taking into account the seasonal employment feature. That only reinforces the need for aggregation rather than taking the literal words in the First Schedule about earnings in the previous week.
  Being confined to talking about the earnings limitation means that one must deal with this on a most unsatisfactory basis. What astounds me—I appreciate that I have been a Member of the House of Commons for only a few months—is that these Regulations will authorise the Minister to make variations in the schemes, but they do not give any information about the costs involved. The House is being asked to agree to a series of apparent improvements without having any basic information with which to test the priorities of such improvements. The Committee in making a Report of this kind should reinforce hon. Members with the degree and extent of the finances involved.
  I now turn to the question of widowed mothers. I am particularly interested in this subject. I had hoped that a
  1072
  figure might have been forthcoming in which we did not necessarily take the earnings ceiling from them altogether but left it so high as to be nearly insignificant. Widowed mothers should be left entirely out of the context of retirement regulations. The word "retirement" is pure irony when applied to widowed mothers. They are quite separate and should have absolutely separate treatment.
  Today we heard an announcement by the Minister of Aviation. I do not wish to be controversial but to draw attention to the rather niggardly approach of the Minister and the Government to the problem that we are discussing. In the other subject about which we heard this afternoon, and to which I have just referred, the expenditure of public money assumed a totally different pattern. I do not wish to be out of order, but I wish to say that the House should keep a balance in regard to its priorities.
  Though I do not like the word, I suppose our society today could be regarded as affluent. It is a society that can allow for margins and can afford to plan ahead with some degree of confidence—perhaps with reservations here and there. This afternoon the Government announced their plans for one of the major industries of this country. I am therefore entitled to say to the Minister and to the Government that widowed mothers, above all others, are entitled to some reward from our society for their loneliness and their great work in keeping and maintaining their families. We should be far more generous to them than we have been in the past.
  I am not denying that the Minister is progressive. If we could divide these Regulations into two parts, one part of which dealt with widowed mothers, I would vote against the Government tonight. However, as the Bill is intended to deal with the general picture I am bound to give it limited support.
  May I conclude by criticising a detail of the Bill? The irony is that the incidence of 6d. being taken off each 1s. for the first 20s. and then the deduction of 1s. for 1s. after that, disposes of the standard rate of pension. As I see it, if a widowed mother with one child now earns £5 10s. her pension is reduced from 50s. to 45s. With the child's allowance figure her income is £8 7s.,

  1073
  of which she earns £5 10s., but she must earn more than £8 before she gets a single penny for her additional activities. I beg the Minister to consider spreading the deduction more fairly. Instead of a deduction of 6s. per 1s. for the first 20s., I would suggest 3d. per 1s. I cannot see any justification for deducting 1s. for 1s. That should be changed and in that case it should be 6d. for 1s. without any ceiling.
  Special circumstances apply in the case of widowed mothers and this severity on the part of the Government is not justified. I beg the Minister to look at this again.
  9.24 p.m.
  Mr. Peter Emery: While welcoming the Regulations, which raise the level of the earnings rule, I would like to refer to the matter of the 12-hour rule, to which my right hon. Friend the Parliamentary Secretary referred in opening the debate. My right hon. Friend said that this rule applied only when somebody was retired. In logic, of course, that is true, but it must be realised that before people start to draw their retirement pension, they consider ways in which their pension can be supplemented.
  It must also be realised that most people, quite rightly desire to supplement their pension and would much rather do so by having a part-time job than by going to the National Assistance Board. This we would all wish to encourage. Therefore, when people consider whether they should start drawing their pension, they consider how to supplement it.
  Rightly or wrongly, most people do not realise that the 12-hour rule has exceptions. From the information that many people are given before they begin to draw their pension, they learn only of the operation of the 12-hour rule. They do not realise that there can be appeal against it and they are deterred from drawing their pension because of it. It is, therefore, true to say that the rule applies even before people become pensioners.
  I would enlarge my argument by saying that many people find it increasingly difficult to obtain the type of part-time employment which we would want them to have when they are limited to twelve hours and to twelve hours alone. I
  1074
  would like my right hon. Friend the Minister, when he replies, to say whether it is not within his power to direct his officials throughout the country to treat this matter slightly more sympahetically and to relax it a little more wherever possible.
  I do not necessarily urge my right hon. Friend immediately to extend the limit to twenty hours, as did my hon. Friend the Member for Torrington (Mr. P. Browne), although I would, perhaps, suggest fifteen hours. Cannot my right hon. Friend understand the difficulty that may well arise among people who hope to be able to earn the 70s. The Regulations make allowance, but there are many who are not of the requisite calibre to obtain a job allowing them to earn 5s. 10d. an hour? That is a rate which they cannot expect to earn, and that is the rate which is envisaged by the figure of 70s. under the 12-hour rule.
  I think particularly of some of the people who live alone. It is of great service to them to have a part-time job to help them going during their retirement. I know of somebody who is appealing and who wants to work only fifteen hours, three hours a day over a five-day week, as a waitress. This would allow her to work from, say, midday until three o'clock. That is a sufficient period during the week for her to have a reasonable job and to do a service in an area in which there is a great labour shortage. As well she will be useful to the community and creating an interest for herself. In this type of case, there is great need of understanding not only by the Minister, but by his officials, in dealing with this type of problem.
  I am sure that if there is any way in which my right hon. Friend can deal with that kind of problem, it would have the agreement of Members on all sides and would be welcomed particularly by pensioners. In welcoming these proposals, the only thing that would please the pensioners more would be if the overall rates pension rates were to be given a general increase.
  9.30 p.m.
  Mr. R. H. S. Crossman: I should like first of all to support very strongly what the hon. Member for Reading (Mr. Emery) has just said about the 12-hour rule. I would remind the

  1075
  House of what my hon. Friend the Member for Sowerby (Mr. Houghton) quoted originally on this subect, and refer again to the Advisory Committee and how strongly once again it is on the side of those of us here who are urging that quite obviously as the average wage rises so does the discrepancy in the application of this rule. All of us on this side would like to hear an assurance from the Minister that even if the rule cannot be abolished it will be revised.
  We have had again as we always do have on this subject an extremely good and well-informed debate, and tonight we have had the pleasure of having some new people with us and the pleasure of seeing the right hon. Lady at that Box speaking on the subject. I would thank her for the really admirable introduction which she gave us to the debate because she presented us with the facts succinctly and clearly. I know perfectly well how difficult it is to be accurate and consistently precise, as she was.
  I shall not prolong the debate very long myself because I think this is a debate in which the back benchers, in addition to my hon. Friend the Member for Sowerby, have made the overwhelming majority of points to which we should like the Minister to reply. I should like to take up a point made by my hon. Friend the Member for Oldham, East (Mr. Mapp) who spoke last on this side. He expressed something we all on this side feel, and that is our difficulty that we are not, of course, going to oppose the Regulations—we are going to support the Regulations—but there are things in them with which we profoundly disagree. More than that, for although we support the Regulations themselves, the policy behind them is one which fills us with very grave and increasing alarm.
  If it is possible I should like to reinforce what my hon. Friend the Member for Sowerby said because this is the point of view on which we want to conclude in debating with the Minister. We all agree with what is done here. It is the circumstances in which it is done, and the policy and the general framework within which it is done, to which we object. Every debate we have on this subject shows more unanimous agreement of doubt about
  1076
  the whole principle of the retirement rule and the earnings rule applied to the overwhelming majority of the widowed mothers and all widows.
  The retirement rule, the earnings rule, is something fundamental to our present scheme, it is always said. I have never understood why this should be so. It seems to me to be only something in the scheme. How can one say it is fundamental when it applies to women up to 65 and to men up to 70 and not after that? This cannot be fundamental. What is true is that it would cost money to abolish it. It would cost—what is it?—I think the Minister told us last time about £100 million to abolish it in toto, a very considerable charge.
  We, therefore, see it from two points of view, that we should like to see it continued, and secondly, from the point of view of what priority we would give to abolishing it, if we have to weigh up the cost of benefiting the pensioners in other ways. I want to look at it from both those points of view in considering the limit.
  From the point of view of principle, I must say that I would think that we have now completely outgrown the psychology and philosophy which insisted on the retirement rule. I have just been reading—it is coming out next month—the new life of Ernest Bevin. We all know that he was one of the first who thought out the philosophy of retirement pensions in relation to retirement. He did that as a trade union leader faced with mass unemployment in the 'thirties, and essentially he felt that any pension scheme must be in relation to retiring as early as possible from industry because of the prevalence—almost the predominance as it was then in those days—of unemployment.
  I would suggest that the whole necessity of the earnings rule is coupled with the fear of unemployment. When one thinks in terms of a fully employed economy there is not the intrinsic reason for the necessity of the retirement rule or the earnings rule. We are glad to see that the T.U.C. and those who are concerned with the trade unions are no longer expressing the fears they were expressing ten years ago about abolishing the earnings rule. This fear, which was a real and horrible fear even ten years ago, is now no longer there.

  1077
  Once again we are getting into the climate where we ought to be considering looking forward beyond the earnings rule—to put it quite bluntly—to the kind of pension which the middle-class and professional people have taken for granted for themselves.
  Let us not forget that there are no retirement or earnings rules for civil servants or for people on private superannuation. These are not rules which they think of. When the better-off sections of the population think of their old age, they are not burdened by these conditions. That is why we were glad in the superannuation scheme put forward from this side of the House to look forward and say that intrinsically in that scheme people got the money and qualified for it at a certain age, just as is the case in an ordinary industrial or life insurance policy.
  We would say, "You earned it. It is yours. You have it." That seems to me the aim we have today. This has been achieved already in New Zealand. I hope, therefore, that we shall not have too much talk about how fundamental earnings rules and retirement rules are. They are not fundamental at all. They were brought in because of that fear of unemployment in the 1930s.
  When I look at the Minister's work in the last ten years in connection with retirement and earnings rules, I have to thank him for a reductio ad absurdum of the retirement rule, firstly, by changing it twice in twelve months and secondly by frankly saying that there was no reason except that he wanted to help people a bit. That is why he changed National Assistance last September—not, as he would say, that there was a case for it but because he wanted to be more generous. I am interested in the Government wanting to be more generous about National Assistance; and if they are more reluctant about pensions and the earnings rule it may be because pensions cost a little more to increase. But we are getting to the point where those of us who do not much like the earnings rule find that the Government, by amending the Regulations, are producing this reductio ad absurdum which is already reached in the case of the widowed mother. We have gone through the ceiling, as it were, with generosity of treatment.
  1078
  The hon. Lady the Parliamentary Secretary was very candid, and so was the Committee, in pointing out that we have reached a point where the concession is so high that it makes it ridiculous and administratively burdensome to continue any kind of earnings rule in the case of the widowed mother. She is the first person to qualify by pushing up through to the top. We hope that before long the widow will follow suit as the Government find that this is a cheap way of giving largesse, because the cost of this sort of concession is a negligible fraction of what the benefit would cost if the pension were increased.
  But the result of doing it in this way is to increase the anomalies enormously. I was very interested in what the hon. Lady the Member for Tynemouth (Dame Irene Ward) said. I agreed with her except for what she said about a committee. She is not usually so kind to the Minister as she was in her remarks tonight, but surely we have had enough committees. We know all the facts about widowed mothers and widows.
  Dame Irene Ward: I had to bring in the committee in order to get my remarks in order.
  Mr. Speaker: It would be a very dangerous illusion to suppose that the fact that the committee had discussed something made it in order on this occasion.
  Mr. Crossman: I am afraid that the intervention of the hon. Lady has now embarrassed me in the course of my speech. I suggest to her that we do not need to investigate the problem any more. The point is now reached when we can do something or not do something. We shall reach the point, perhaps in the next two years, when the Minister will find himself constrained by his generosity to start legislating to get rid of the ceiling instead of merely raising the ceiling on every occasion. As he does it, as his Committee has pointed out, so the anomalies increase.
  It is important to get clear what is wrong with the kind of thing we are doing this evening. This was put admirably by Professor Titmuss in the minority Report of the National Insurance Advisory Committee of 1956. I will read two or three sentences of his objection to what we are doing this

  1079
  evening, which Professor Titmuss made with great premonition then. He wrote:
  "With the addition of a complicated incentive scheme … we foresee more public misunderstanding and confusion; more inconsistencies in regard to the respective and changing situations of husbands and wives; more possibilities of evasion, and much more detailed administrative work."
  That was said about the original ideas. We are now modifying them, and each time we pass Regulations we impose great administrative burdens for less and less real results. The Professor continued:
  "The Committee has not, in our opinion, sufficiently considered the relationship of the earnings rule and the computation of earnings to other types of public and private pensions. This is another source of public confusion …"
  If it was a source of public confusion in 1956 it has grown a great deal in the last three years into an even larger source. Professor Titmuss continued:
  "… because of the rapid spread of these pensions in recent years they would seem to be partly responsible for the sense of injustice expressed in some of the written evidence we have received … we believe that the Committee's proposals, superimposed on an already complex system, will add greatly to the burden of administrative work. … One representation received by the Committee from an individual put the present problem in these terms: 'The great mischief of this limitation is that nobody understands the reason for it. … Elderly women refuse urgently needed work "so as to be on the safe side"' … Apart from this, there is evidence to suggest that the present system of rules is accompanied by widespread deceit and evasion."
  This was all written in 1956, and since then we have had one increase in the basic pension, two changes in the rules and one increase of National Assistance. All these changes are increasing the complexity, increasing the sense of injustice, and making the situation more and more absurd. We want to bring home to the Minister this feeling. I believe that the country is now ready for another step to be taken and added to the Statute Book, because the Minister should take notice of the fact that the anomalies have increased.
  My last point is that the alarm and dislike of doing things this way is increased by the grave suspicion of the Government's motives for behaving in this way. In January, 1958, we had the increase of pension to 50s. and a promise that the pension would be reviewed. Since then we have had, in the spring of last year and again today, these two
  1080
  increases in the alleviations of the earnings rule, and in between the increase of National Assistance. In all cases we have been told expressly that the improvements are not justified by any increase in average earnings, they are genuine concessions.
  We were told this in the case of the National Assistance Regulations. We were told that the improvement was greater than was required by the cost of living but that the Government were genuinely giving a share of the rising national prosperity. I say to the Minister that the people on National Assistance get a share of the rising national prosperity, the tiny minority of pensioners who earn are given a share in the rising national prosperity, but the great number of people on pension who, through no fault of their own, do not earn and who are not on National Assistance, do not get any share of the rising national prosperity.
  The Minister is condemned out of his own mouth, for if he can concede that everybody on National Assistance deserves a share of the rising national prosperity and gets it by an improved rate; if the widowed mother deserves her share and gets it; if those who are earning deserve their share and get it, why do not those who are not earning and who deserve their share get it?
  I can tell the Minister why. It is because they are the great majority, because they are the overwhelming number, and it costs a lot of money.
  Mr. Cyril Osborne: How much?
  Mr. Crossman: We know the figure. By a curious accident, it is roughly £100 million for the 10s. suggested. We know that the ancillary benefits take the figure to £180 million.
  Mr. Speaker: I have been listening carefully to the hon. Member, and I shall be glad if he can explain how the subject to which he is now referring relates to these Regulations. In fairness to other hon. Members, I cannot otherwise allow him to continue.
  Mr. Crossman: I should be very ashamed if I could not do so, Mr. Speaker. I am discussing the Government's motives in raising the standard of National Assistance and giving specific benefits to those who earn, on the ground

  1081
  that they should share in the rising national prosperity, without giving corollary benefits to those who do not earn. I indicated the Government's policy of doing things on the cheap, and leaving out the great majority of pensioners.
  This is the vital matter which the House must discuss. Before we decide to agree to the Regulations we must realise that, although we want to improve the conditions of those who earn, the Regulations prove the case for an immediate rise in the basic rate of pension.
  Mr. Speaker: I am trying very hard to judge the rightness of the proposition which the hon. Member puts, with ingenuity. [Laughter] I am being quite serious. I understand that the Regulations relate to those who earn, and I have great difficulty in seeing how it is possible to relate the issues arising out of them to what might be done for persons who do not earn. The Regulations seem merely to raise the level of earnings to be disregarded. I will hear the hon. Member further if he wants to urge his argument.
  Mr. Crossman: I did not want to prolong my speech, Mr. Speaker. It would be a lengthy process to explain the relationship between our obligations to pensioners who do not earn and our obligations to those who do. We have discussed this matter at length this evening, and I can leave it there, simply summing up our argument by saying that we are glad the Government have conceded substantial increases to those on National Assistance and some slight alleviation in the intolerable situation of those who can earn, but we would remind them that in doing this they are doing a very cheap and easy thing, a thing which makes nonsense of the pensions system and which, soon, they will not be able to carry on. They will not for ever be able to postpone the case for a 10s. increase in the old-age pension.
  9.47 p.m.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): This has been an extremely interesting debate. I heard every minute of it. It was interesting for the artistic shades and contrasts which were to be detected in it. There was the contrast between the approach of the Advisory Committee,
  1082
  whose Report I can sum up as suggesting that we were going too far, if anything, and the comments of certain hon. Members to the effect that we were not going far enough. There was also a very interesting contrast between the approach of the hon. Member for Sowerby (Mr. Houghton), who opened for the Opposition, and that of the hon. Member for Coventry, East (Mr. Crossman), who wound up for them, in regard to the retirement principle and the earnings rule.
  There is a form of navigational instrument by which, if one wants to steer a safe and prudent course, one takes a bearing from one angle and then a bearing from another, and steers between them. If that be our navigational procedure in conducting these Regulations I think that they have a good chance of coming safely to port. Despite the baits dangled enticingly before me by both hon. Members on the Opposition Front Bench, I do not wish to be led into a lengthy disquisition upon Government social policy as a whole, which I am sure you would rule out of order, Mr. Speaker; nor do I wish to be led into discussing all kinds of other matters. I would only say that these proposals are put forward on their merits for reasons that I will attempt briefly to explain in a moment. They do not in any degree qualify or diminish undertakings and pledges given by Her Majesty's Government with respect to other matters.
  The policy embodied in them is simple to describe. It is, while retaining the retirement principle which, as was clearly said by an hon. Member opposite earlier, necessitates an earnings rule, to seek to use the powers which Parliament gave us in the 1956 Act to secure that the limit is fixed at no lower figure than is necessary to safeguard the purpose of the rule. And, as the Advisory Committee properly said in its Report, there is no hard and fast mathematical or statistical method of saying what is exactly the right point. As the Committee says, it is a matter of judgment. And so I willingly acknowledge that if in applying our judgment to this matter we have erred, we have erred on the side of generosity. I do not think that is altogether a bad thing.
  I do not think I am called upon tonight, despite the temptations dangled before me, to debate the retirement

  1083
  principle in general. In the first place, we cannot deal with that by Regulations. It is a matter of statute and, when the time comes, it will be dealt with by legislation. Here, if the House approves, we are engaged in exercising powers of delegated legislation relating solely to the amounts to be fixed.
  Here I wish to pay tribute to my hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) whose initiative in bringing forward a Private Member's Bill in 1956 has given us the power to proceed by this quick and expeditious procedure in a way which previously would have involved legislation.
  On the general question of the retirement principle I would only say something at which the hon. Member for Coventry, East himself hinted. Whatever the broad principles being discussed—no doubt they would make a fascinating subject for debate—there is—I pick up the hon. Gentleman's words—a serious question of priorities. It is accepted that complete abolition would cost the National Insurance Fund about £100 million a year. Apart from any question of principles, and I am not in any sense throwing them overboard, but from a practical point of view, if £100 million more were available for the beneficiaries of National Insurance, almost I would have thought the last direction in which the money could properly be used would be in paying full pensions to those who are making substantial earnings. The claims of others are so far ahead of them that I do not need to take up any time in dealing with that matter.
  May I deal with some of the general points which have arisen in this debate, because my right hon. Friend the Joint Parliamentary Secretary so clearly expressed the effect of these Regulations and the policy we are following that I should be guilty of tedious repetition were I to go over that ground again. I wish specifically to attempt to answer the points which have been made in the debate.
  My hon. Friend the Member for Harwich (Mr. Ridsdale) and my hon. Friend the Member for Torrington (Mr. P. Browne) and my hon. Friend the Member for Tynemouth (Dame Irene Ward) all raised—not, as they will recall, for
  1084
  the first time—the question of the possibility of some spread of the earnings rule to deal with the difficulties, which we all acknowledge, of seasonal employment in certain coastal areas. My hon. Friend the Member for Harwich has argued this with great force and persuasiveness on a good many occasions. But I am bound to say that it appears to me that the Advisory Committee is right for the reasons it set out fully in 1956, and with great brevity—I think my hon. Friend almost complained of the brevity—in its Report which I laid the other day in connection with these changes in the earnings rule.
  I concede at once that some workers would benefit; but my hon. Friend must, I think, concede that others would lose; because one of the merits of the present rule is that however much a pensioner earns in a particular week it does not prejudice his pension save in the week immediately following, and at no other time
  Therefore, I shall not weary the House with the calculations. While my hon. Friend can show, quite rightly and fairly that some workers would benefit, others would lose and would be left—this is a serious matter—facing certain weeks with neither earnings nor National Insurance benefits. I do not think it is a complete answer to say that his constituents are so prudent as to be certain that they would save to deal with the contingency. When we are dealing with what is, after all, an important payment towards weekly maintenance spread universally throughout the country, I do not think we can take the chance of leaving people in some weeks without either earnings or benefit.
  There is the further very real difficulty, as any mathematical calculation in this respect makes clear, that in any average all the earnings have to be taken in. At present, if a pensioner earns less than £3 a week—or, after the House has approved the Regulations, £3 10s.—he or she does not have to take steps to report those earnings. Any earnings would have to go into the average, however, and would have to be reported. That would be an intolerable burden to place on pensioners of quite modest earnings.
  I now come to what is colloquially called the 12-hour rule, referred to by the Committee and referred to also by

  1085
  my hon. Friend the Member for Torrington, the hon. Member for Coventry, East, my hon. Friend the Member for Bradford, West (Mr. Tiley) and my hon. Friend the Member for Reading (Mr. Emery). There is, I think, a little confusion about the 12-hour rule. It is not an additional limitation affecting the earnings of those who have retired; it is one of the alternative tests of retirement. It arises from the construction which the National Insurance Commissioner, who is the ultimate authority on the construction of the National Insurance Acts, places upon certain words in Section 20 of the Act of 1946. Perhaps I might quote those words:
  "notwithstanding that he is engaged or intends to engage in a gainful occupation, if he is engaged or intends to engage therein only occasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement."
  The 12-hour rule is a construction placed by the Commissioner on one of these—I was about to commit the solecism of saying "three alternatives"—three possible tests of retirement, the one of "an inconsiderable extent". I emphasise, as my hon. Friend the Member for Reading made clear, that it is not the only test and there are certainly cases in which retirement has been accepted when the pensioner is intending to work for a longer period, because the statutory authorities have found that he is within the predominant condition of "not inconsistent with retirement"
  That is the background. This is a matter which arises at the retirement stage and not when retirement, as a process, has been gone through. The Report refers to this problem and, as I told the hon. Member for Sowerby some months ago when he put down a Question on the matter, there is certainly a possibility that this quite long-standing problem could be aggravated by the increase in the earnings limit embodied in the present Regulations. As I told the hon. Member, I think it was on 2nd November, I intend to keep a close eye on this. The Advisory Committee asked me in the light of the new rates to look at it afresh, and that I propose to do.
  The hon. Member for Southampton, lichen (Dr. King) asked me for the numbers affected by the changes in these Regulations. He will appreciate, for he knows a lot about these subjects, that
  1086
  any figures which I can give him are only approximate and are based substantially on those who are having pension either reduced or, in the ultimate case, eliminated as a result of the existing rule. They do not make allowance for any changes in the amounts of work done.
  Of the retirement pensioners, other than the late-age entrants, about 45,000 will be affected. Among the late-age entrants there will be about 50,000. Because of the special factors which apply to them, and the very generous terms on which they receive their pension, their position is a little different; that is why I gave the figure separately. The figure for widows is about 50,000, and for widowed mothers it is about 25,000.
  My hon. Friend the Member for Bradford, West, the hon. Member for Itchen and several others, notably the hon. Lady the Member for Flint, East (Mrs. White), spoke of the general position of the widowed mother. These Regulations embody, within the framework which I have been attempting to set out, our approach to her special problems. While maintaining the principle of an earnings limitation for reasons about which I shall say a word in a moment—we raise the figure for her substantially above that provided for retirement pensioners. Indeed, we raise it to an extent which caused the hon. Member for Coventry, East, unlike the hon. Lady the Member for Flint, East, to feel that we were virtually abolishing the earnings limit in this case.
  I agree entirely on this subject with what was said in the Advisory Committee's Report in a passage which, with her habitual dexterity, my hon. Friend the Member for Tynemouth succeeded in quoting. As she said, she quoted it with some determination in order to put it in HANSARD. The effect of that passage was that the Advisory Committee saw the limitations of what we could do by way of adjustment of the earnings limit. In fact, the Advisory Committee indicated that it would rather see the available money spent on the rates of benefit.
  I shall incur your disapproval, Mr. Speaker, if I go further than to say, as the hon. Member for Itchen said in a most generous speech, that that concentration on the rates of benefit in respect

  1087
  of widowed mothers is on record as conspicuously a feature of the policy which this Government have pursued. The increases there have been quite out of line with those over the remainder of the National Insurance field. As the hon. Member knows, this has been a matter of deliberate policy. But that is no reason why we should not also make, if we can, a substantial alleviation in respect of that limited number who earn. This is my argument on these Regulations.
  I do not propose to lay down any general principles as to whether a widowed mother ought or ought not to go out to work, although one hon. Member invited me to do so. That is a decision for her to take in the light of her circumstances—the age, number and health of her children, her own health, where she lives and so on. There is an infinite variety of circumstances. It is for her to decide and not for Governments to lay down a principle either way. By raising the limits to £5 we propose to give what I think the House will agree is a very substantial relief.
  May I put it this way? She will be able to earn £5 in future, without any diminution of her pension, draw on top of that her personal allowance, £2 10s., and if there are, as in the case quoted by my right hon. Friend, three children, another £3 2s. on top of that, which brings her up, without suffering any diminution of pension, to £10 12s. a week.
  Dr. King: The right hon. Gentleman says that he believes that whether a widow should or should not go out to work is a matter for her own deliberate choice. Does he not realise that it is the view of many, including everybody on this side of the House, that economic necessity still drives mothers out to work who want to stay at home and look after their children?
  Mr. Boyd-Carpenter: I have tried, within the rules of order, to express a great deal of sympathy, backed by a practical demonstration of our policy, with all that the hon. Member has said, but I do not think I can pursue that argument further. I must confine myself to what we are doing on the narrow front in respect of the minority who both go out to work and have fairly substantial earnings.
  1088
  Another way of looking at the figures is that before the personal allowance is wholly lost, the earnings must go up to £8. It is important also to recognise that whatever the widowed mother earns does not affect at all the additional provision for her children.
  Dame Irene Ward: Would my right hon. Friend give an explanation? He say that it is not for the House to decide whether a widow should go out to work or not, and I agree. When we want to recruit nurses we increase their salaries to make nursing more attractive. Why should we not, in the case of widowed mothers whom we think might stay at home and look after the children, also pay something towards helping them in exactly the same way as we do in recruiting people to various forms of work?
  Mr. Boyd-Carpenter: The difficulty is, as my hon. Friend knows, that we are discussing earnings rules Regulations. I have said all that I can say within the rules of order on the rates of benefit without incurring the same sort of difficulty as the hon. Member for Coventry, East; and, of course, I lack his skill and adroitness in skirting the inner perimeter of the rules of order. The fact remains that this is a substantial increase when looked at against the average earnings of the women in industry, the figure which my right hon. Friend gave as £7 0s. 4d. a week. The kind of figures I have quoted show that we are giving very substantial relief.
  It would be very difficult—and here again we come up against the general principle—to go very much further than that. There would be very real difficulties in having any earnings limit for widowed mothers separately from the main structure of the scheme.
  After all, she does not stay a widowed mother for ever. At 50 she may become a widow pensioner. At 60 she becomes a retirement pensioner. There would be very real difficulty in applying extra restrictions on her earnings at the moment of her transition from a widowed mother to a widow or retirement pensioner—at a time when she was receiving less from the National Insurance scheme.
  We must look at the machinery of this scheme as a complete whole, and we cannot, as the hon. Lady the

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  Member for Flint, East urged us so eloquently and persuasively, deal separately with the widowed mother from the point of view of principle; but we are certainly doing so by the amount, as she herself recognised.
  Mrs. White: Am I correct in deducing, by comparison with the right hon. Lady's figures, that there are now only 4,000 widowed mothers who will be affected—the difference between 25,000 and 29,000—and that we are coping with all these Regulations and difficulties for those women who would be primarily nurses, teachers and so forth?
  Mr. Boyd-Carpenter: I am glad that, think the hon. Lady can draw any such deduction. I gave the figures of the numbers at present affected and I was not suggesting that would primarily reduce the numbers. The numbers will be very much as I suggested in reply to the hon. Member for Itchen
  Mrs. White: In that case, I misunderstood the right hon. Gentleman.
  Mr. Boyd-Carpenter: I am glad that ill the hon. Lady so misunderstood me, I have had the opportunity to be de-misunderstood.
  The hon. Lady asked why we should have an earnings limit for the National
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  Insurance widow pensioner when we did not have such a limit for the war widow or the industrial injury widow. The schemes are on different bases. The House has always accepted priority for the war pensioner, which is why the rates of pension for the war widow are higher. The industrial injury widow has inherited the fact that the Industrial Injuries Acts replace the rates payable in respect of injured and dead workers under the old workmen's compensation scheme. The fact that there are different histories for the schemes and thus different provisions does not throw very much light on the problem with which we have to deal.
  The debate has shown that the House as a whole is well-disposed to this further relaxation. It is no bad thing for a Minister in commending a policy to the House to know that some would pull him one way and some the other, because he can at any rate rest on the hope that both will pull the Regulations, not on to the Statute Book, but into the law of the land.
  Question put and agreed to.
  Resolved,
  That the National Insurance (Earnings) Regulations, 1960, a draft of which was laid before this House on 27th January, be approved

  ST. HELEN HOSPITAL, BARNSLEY
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]
  10.11 p.m.
  Mr. Roy Mason: My intention this evening is to draw the attention of the Minister to what may be regarded as a purely constituency matter, but what to me is nevertheless very important, namely, the urgent need to build an extension to St. Helen Hospital, Barnsley, as quickly as possible.
  I understand that this was first projected in 1956. At that time, the extension was intended to cost £1¾ million, but, because of the delay, I understand that the cost will now be £2 million. To date, there does not appear to have been any progress. Following my many queries on this subject, I have had the tediously repetitive reply that consultations are still taking place. I must inform the Minister that the situation in Barnsley is getting rapidly worse.
  I queried the start of this project in March, 1958, again in February, 1959, and then in May, 1959, when I received from the Minister the reply that discussions were still continuing. I asked about people waiting for beds in May, 1959, and I was informed that there were 1,900 people then on the waiting list. When I asked what plans there were to cut back that figure, I was informed that there was a shortage of accommodation which would be relieved when the extension was built.
  I remind the House of the statement which the Minister of Health made on 16th November last year. The right hon. and learned Gentleman made a very long and detailed statement about the hospital building programme for the year 1960–61 when it was intended that £31 million would be spent. The statement did not specifically mention St. Helen Hospital, but correspondence which the hon. Lady has had with one of my colleagues specifically states that St. Helen Hospital, Barnsley, is included in the centrally financed programme of major building schemes announced by the Minister on 16th November. I hold the Minister particularly to that statement.
  1092
  Bringing the picture more up to date, on 4th February this year I again asked how many people in Barnsley and district were waiting for beds and, particularly, awaiting operations. I was given the most disturbing figures. I was told that 2,541 people are now waiting for beds, and 2,417 of them are awaiting operations, an increase in the numbers waiting for beds of 641 in seven months. This is a most alarming situation, and the Minister ought at least to be making some attempt to draw the attention of the Sheffield Regional Hospital Board to this most alarming growth in the number of people waiting for hospital beds.
  How does this affect the people of Barnsley and district? To begin with, the constituency is a heavy industrial one, being concerned mainly with coal mining. There are light industries, such as glass, rubber and light engineering, but because of the other heavy industry, coal mining in particular, many industrial workers have been on the waiting list for many months, especially for hernia and cartillage operations.
  If only 1,000 out of the figure of 2,417 waiting for operations are miners in need of hernia and cartillage operations—they are highly-skilled, highly-productive operatives from the coal face who have been relegated in status because of their slight injury—we have in respect of that body of men alone lost 300,000 tons of coal per year. Secondly, if those men had been earning at £18 a week at the coalface and are now relegated in status to a non-cost operation somewhere in the district, they will probably be earning an average of £10 a week. Therefore, in respect of those 1,000 men we are immediately losing £8,000 per week in purchasing power, and the trade of the town suffers because of that.
  It may also be that some of them, because of the nature of their injuries, are on Industrial Injuries pay, which is another expense and financial burden for the State. In any case, all the 1,000 will be in need of special hardship allowance, which will represent a pouring out of £1,700 per week in respect of the 1,000 men. It seems farcical that in attempting to cut down this growing list of people in need of operations we have to pour out finance in this respect, lose such a tonnage of coal and also cause the trade of the town to suffer.

  1093
  Above all, 552 of the 2,541 people waiting for beds are having to wait an average of seventeen months before they can be admitted to hospital, and a further 750 are having to wait an average of sixteen months. Also, apart from dentistry, all of us are having to wait at least ten months. Is this not a very grim picture indeed, and one which should cause the Ministry some concern?
  I have dealt with the problem of how this affects the manual worker. What about the women? There are 451 women who are awaiting gynaecological operations. They are having to wait at least seventeen months before they can be admitted. The number may be more than 451, because the consultant may have a list of his own. It is possible That patients who think they are in need of an operation will go to a consultant immediately for an examination and he may put them on a private list of his own. Therefore, to begin with, these patients are ripe for exploitation. They all fear a deterioration in their health, and they view with alarm the time they are having to wait. I would remind the Minister that some of these women may have early cancerous conditions.
  What prospects have they when they enter the hospital in seventeen months' time? Many of them will be suffering from a prolapse of the womb or fibroids of the womb, suffering much irritation and pain, and yet nothing is being done to alleviate the situation and to cut back this growing waiting list.
  What of the children? There are 552 children in the Barnsley district who urgently require operations for tonsils and adenoids, but who have to wait on average seventeen months before they can be admitted to hospital. One parent recently informed me that his doctor had said that his son was in danger of having his hearing impaired if he did not get an operation quickly. This is a situation ripe for exploitation. Parents, fearing that their children's hearing was affected or fearing that their own hearing might be affected because of this long waiting time, go to a specialist, pay a consultant's fees for an operation and use the pay bed in order to get the operation carried out. These people are being forced into a situation in which they pay consultants in order to get into hospital, and this is a very serious situation.
  1094
  The new extension to the hospital is planned also to take in a chest clinic. I would remind the hon. Lady that many people in Barnsley suffer from pneumoconiosis and silicosis because of the industrial nature of the town through coal mining, and also because there are large estates where raw coal is burnt because many of the tenants have the concessionary coal allowance. We have these conditions which are ripe for the aggravation of respiratory diseases.
  Our chest clinic is overwhelmed. It is an old house. The medical superintendent, the doctor who is responsible, is working in terrible conditions. His X-ray equipment, his desk and his filing system are in one room of this old house. This just cannot go on, and we urgently require this extension as well as the chest clinic as soon as possible.
  What does the Minister intend to do about this? I understand from questioning him here on 4th February that there are now three plans in existence. I should like to know something about them. How quickly is he making progress? Is it possible to give us a date of commencement, and what is to be the planned expansion in the town itself, particularly regarding the number of beds? How many are we going to gain? Even with the rate of progress which the hon. Lady mentions in this letter under this centrally-financed programme for 1960–61, even if it was started then, it will take until 1964 at least to complete. If we get along at only half the present rate of growth in the waiting list, we shall have five thousand people on the waiting list in Barnsley by 1964—I repeat, even at only half the rate of the present growth.
  I think that this situation demands an immediate investigation, either by the Sheffield Regional Hospital Board or indeed by the Ministry itself. It is serious enough for Ministerial intervention. Someone should be sent into Barnsley to examine all the possibilities of using all the ward capacity of the hospitals to the full in order to cut back immediately this waiting list of people requiring operations. We cannot allow this situation to go on any longer.
  Finally, I feel so disturbed about this matter, having questioned the Minister on it for two or three years in this House,

  1095
  and being filled with alarm at the growing waiting list of people urgently in need of beds in Barnsley hospitals, that I tell the hon. Lady, with respect, that I shall continue to harangue and pester and use all possible forms of pressure, both on the Sheffield Regional Hospital Board and herself, until we get these badly needed extensions.
  10.25 p.m.
  The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): The hon. Member for Barnsley (Mr. Mason), as he has twice reminded the House, has been assiduous in following up the case for extra beds in his constituency. I should like to say at once that we know that there is a shortage and that there has been delay, not all of it avoidable, and I am extremely sorry to find that the waiting list in this area is very long. We have been well aware of the deficiencies of the hospital services in Barnsley, and there is a shortage of beds for acute cases, the chronic sick and for maternity cases. It was for this reason that the extension of St. Helen Hospital for acute cases and for maternity cases was one of the first of the major hospital projects to be centrally financed. This was announced, as the hon. Gentleman reminded the House, in December, 1956.
  The hon. Gentleman asked me why there was no specific mention of the St. Helen project when my right hon. and learned Friend gave a list to the House in November of other major projects. That was an additional list. It does not mean in the slightest that St. Helen is removed from its first priority of being part of the first list in 1956. There have been subsequent difficulties which I suspect the hon. Gentleman knows as well as I do, but since he has invited me to tell him what the plans are I will go over a little of the back history.
  The present position is that acute cases in Barnsley are treated at the St. Helen Hospital and the Beckett Hospital. The proposed scheme is for doubling the size of the 224-bed St. Helen Hospital and concentrating the acute work there, and ultimately to use the 174 beds in Beckett Hospital mainly for the chronic sick. As regards immediate provision for the chronic sick, a tender has just been approved and accepted within the
  1096
  last two or three weeks for the provision of 90 chronic sick beds at Mount Vernon Hospital at an estimated cost of £250,000. This will relieve the pressure on St. Helen, where acute beds tend to be blocked by patients who otherwise could be transferred to chronic sick beds elsewhere.
  Figures of the waiting list are as the hon. Member has given to the House, and I will not take time by repeating them, but I should add that emergencies are dealt with without any delay, and these, I would most certainly except to find, would include any woman with a carcinoma condition, to which the hon. Gentleman referred specifically. The waiting lists and waiting time in Barnsley illustrate the need for more beds. This is why the extension of St. Helens Hospital has been included in the major hospital building programme. Equally, waiting lists and waiting time in neighbouring areas have been the reason for planning new hospital projects in Doncaster and Sheffield. The hon. Gentleman asked me to draw the attention of the Sheffield Regional Hospital Board to the alarming growth of the waiting list. There is no need to do that, because the Board is well aware of it and I believe has been greatly exercised by the waiting lists in Barnsley and has carried out a number of improvements to the existing hospital.
  The provision of the chronic sick beds at Mount Vernon will afford some relief, but unfortunately it will not be felt for some time. We might be asked to consider the transfer of patients to other areas, but I believe that in this region that is limited by the other areas, own needs. The Ministry's officers will willingly undertake urgent consultations with the Board, and this answers the final plea of the hon. Gentleman that we should explore every possible means of finding some immediate relief, but in the long run only new building can provide an adequate solution.
  When the hon. Gentleman asked in the House a year ago about progress with the scheme, the then Parliamentary Secretary informed him that the time taken since December, 1956, had been due to the size of the project, which was estimated to be around £2 million, and to the need for deciding what existing buildings should be kept, for making site tests and for determining what precise

  1097
  new accommodation should be provided. The regional board originally proposed the provision of over 500 beds, including maternity beds, but in the general financial circumstances of the time, and in the light of competing needs elsewhere, it was reluctantly decided to limit the new provision to 350 acute beds and 94 maternity beds.
  On this basis, the Board prepared schedules of accommodation—the detailed proposals for all the accommodation in the proposed new building, the contents of the ward blocks, operating theatres, out-patients, X-ray, pathological and other ancillary departments, a new boiler house, kitchen and dining rooms. At the same time, in view of the dangers in this area of subsidence, the board commissioned consulting engineers to make trial borings and site tests.
  The report of the trial borings, received in March, 1958, indicated old filled-in excavations on the proposed site of the main ward block and necessitated reconsideration of the suggested block plan. In August that year, mining subsidence under the north-west corner of the site was revealed when an operating theatre developed cracks soon after Installation in one of the existing hospital buildings. Consideration of the schedules of accommodation proceeded, however, while the general method of using the site was under consideration and, as the hon. Member has been informed, these have now been settled.
  To understand the planning difficulties, we must look back to the 1880s, when the builders of the original institution, who in their time and day knew their job, chose a fine site on rising ground and crowned it with a well-spaced building in a manner worthy of the citizens of Barnsley. The site they chose was the right one. This was partly a general hospital and partly a hospital for the elderly and infirm.
  In 1948, it was divided into St. Helen hospital, as it is now known, and The Limes residential home administered by the Barnsley Corporation. In consequence, the regional board have, in effect, had to attempt the erection of a modern hospital on half a site which is crumbling at the edges. The architect commissioned by the regional hospital board for the scheme prepared sketch plans on the basis of the agreed schedule
  1098
  of accommodation, but reached the conclusion that it was not possible to produce a satisfactory hospital plan within the limitations imposed by the site condition and the position of the existing buildings. The result would be a huddle of new buildings with awkward internal communications at the lower extremities of the site and abutting too closely to the neighbouring houses.
  The board was accordingly faced with a decision whether to accept a second-best plan or to face the expense disturbance and delay involved in demolishing and replacing the existing blocks. At that time, two new major factors emerged. First, with the passage of time, the need for additional beds to bring the hospital up to the ultimate size of about 525 beds pressed more strongly. Secondly, it was learned that the Barnsley Corporation was contemplating the replacement of The Limes and the disposal of its site and buildings. If the rest of the original hospital site could be obtained without undue delay and without adding too much to the cost of the project, the worst obstacle to the planning of a satisfactory hospital would be overcome.
  The regional hospital board had, in the meantime, discussed with the Ministry three possible plans for the development of the site. One was the retention of the existing hospital buildings indefinitely, the second necessitated the demolition and replacement of the existing buildings and the third would make use of The Limes site. I assure the hon. Member that I have studied the plans. I have brought them with me, and if he likes to spare a few moments after this debate, I will be glad to show them to him. Our comments on each of these plans were conveyed to the board on 2nd February with the general observation that the advantage of using The Limes site warranted the immediate exploration of the possibility of its acquisition. The board is accordingly obtaining a valuation.
  We have been deeply concerned at the progress of this scheme in view of the urgency of the need for better hospital service in the area, but these issues have to be faced. The board could proceed with a hospital which could meet the need, and if The Limes does not become available Barnsley can,

  1099
  and will, have a hospital which will be adequate though not the best in terms of site and layout.
  It would be our intention to bring the total beds up to the 525 which, it is agreed, is now the estimated requirement, but much depends on whether we can buy The Limes site and whether the Corporation will be able to rehouse its welfare residents and release the site by the time that the board wants it.
  On the other hand, if The Limes site could be obtained without prohibitive
  1100
  cost and could be released by the Corporation within a reasonable time, the new part of the hospital could be built without disturbing the present one, provision of further beds could follow without undue dislocation and we should be able to provide Barnsley with a twentieth century hospital worthy of its tradition. That is what we want to do.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes to Eleven o'clock.