Commons Sitting of 1 May 1961

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH TRANSPORT COMMISSION BILL
  As amended, considered; to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  GOVERNMENT INFORMATION SERVICES

    Low-Priced Books Scheme
    Mr. Mayhewasked the Chancellor of the Duchy of Lancaster what progress has been made with his scheme for selling low-priced books overseas.
    The Chancellor of the Duchy of Lancaster (Dr. Charles Hill): Since my answer to the hon. Gentleman on 6th February, and that to the hon. Member for Dundee, East (Mr. G. M. Thomson) on 20th February, our low-priced university textbooks have begun selling in India. Already repeat orders are coming in. Five further low-priced textbooks are now being produced. I will circulate their titles in the OFFICIAL REPORT.
    We shall shortly begin producing our groups of books to aid the study of English. Initial printings of these should amount to some 400,000 copies.
    To complement our low-priced books scheme, we have decided to produce an annotated catalogue of British books selected because of their particular value to overseas readers.
    Mr. Mayhew: Will the Minister say how many books we sold and how many he expects to have sold by the end of the year? What precautions is he taking to prevent a black market from being created in these books?
    Dr. Hill: It is early to give a figure for the number of books sold. The returns are not yet in, although it is known that a number of repeat orders are coming. The estimate for this year remains the same as that which I gave the hon. Member for Dundee, East. On the third point, while one can never be certain that it will not occur, there is a widespread campaign of publicity about the prices. We are taking such steps as we can to prevent these books from being sold at prices different from those shown on the books. We will watch the position very carefully.
    Following is the information:
    Hydraulics and Fluid Mechanics—Lewitt.
    Workshop Technology—Chapman.
    Part I
    Part II
    Part III
    Textbook of Inorganic Chemistry—
    Partington.
    Physical Chemistry—Mee.
    Economics of Welfare—Pigou.

    Communist Propaganda
    Mr. Mayhewasked the Chancellor of the Duchy of Lancaster what overall directives he has issued concerning the policy to be adopted by the Overseas Information Service in response to the Communist propaganda theme of competitive coexistence.
    Dr. Hill: I do not issue overall directives. Ministers—and particularly the Foreign Secretary—have made plain the Government's views on this subject, and the Overseas Information Services have reflected and explained those views.
    Mr. Mayhew: Does the Minister agree that while the Communist conception of co-existence is wide open to attack, it might be as well, apart from just attacking it, if one or two non-Communist countries made clear our conception of co-existence, which is superior to and different from the Communist conception?
    Dr. Hill: I take note of what the hon. Member said, but in essence he is questioning policy, and such questions should more properly be put to my right hon. Friend the Lord Privy Seal.
    Mr. Emrys Hughes: Will the Minister tell us what is wrong with competitive co-existence? Is it not a great deal better than mutual suicide? If he seeks

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    to alter his line of propaganda, will he keep in mind the statement made by the Prime Minister at the Embassy in Moscow during his visit when he said about Russia,
    "The rate and quality of your progress are indeed extraordinary and, so far as I know, unparalleled in history"?
    Is he also aware that the Prime Minister said,
    "Across the Steppes glows the furnace of industry beckoning to a promised land."
    Why not put that in his propaganda if he is to do anything?
    Dr. Hill: I will not comment on the differences between the hon. Member for South Ayrshire (Mr. Emrys Hughes) and his hon. Friend the Member for Woolwich, East (Mr. Mayhew). They can sort them out between themselves.

  PENSIONS AND NATIONAL INSURANCE

    Death Grant
    Mr. Prenticeasked the Minister of Pensions and National Insurance whether he will amend the contributions conditions relating to death grants, so that, upon the death of a mentally-defective adult person, who had been unable to work, a grant will be payable to the parents or guardians.
    The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): No, Sir. I would refer the hon. Member to the Report of the National Insurance Advisory Committee, Cmnd. 33, on this point. As he will no doubt be aware, I accepted the advice of the Committee that such persons be covered for death grant on their parents' insurance up to the age of 18, and a provision to raise the age to this figure was approved by Parliament in the National Insurance Act, 1957.
    Mr. Prentice: Will not the Minister ask the Advisory Committee to have another look at this question? Will he bear in mind the recent case from East Ham which I sent to him in which a man died who had been mentally defective all his life, had never been able to work and had been dependent on his parents for everything? Surely in a case such as that the death grant ought to be paid as in the case of the
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    death of a child? Will not he ask the Committee to look at this question to see whether some amendment is possible?
    Mr. Boyd-Carpenter: The distinction is that up to the age of 18 a person can be treated as a child and dealt with for various benefit purposes on his parents' insurance. Beyond 18 he is not a child. I do not think that this is a question for contributory provision.

    Pneumoconiosis
    Mr. Stonesasked the Minister of Pensions and National Insurance how many appeals were made, under the National Insurance (Industrial Injuries) Acts, 1946 to 1960, to the Commissioner during the period of the last three years, in cases where conflicting medical evidence was submitted as to whether pneumoconiosis was a contributory cause of death, by the dependants of the deceased and by the local insurance officer, respectively; and how many of such appeals were upheld or rejected in each of the two categories.
    Mr. Boyd-Carpenter: In the three years ended 31st December, 1960, there were 143 appeals to the Commissioner in connection with claims for death benefit under the Industrial Injuries Acts on the question whether pneumoconiosis was a contributory factor in the cause of death. One hundred of these appeals were made by dependants of the deceased and forty-three by the insurance officer; four of the dependants' appeals were successful and forty-two of those of the insurance officer. Whilst medical evidence must play an important part in the decision of these cases, it would be wrong to assume that there was a conflict of such evidence on every appeal.
    Mr. Stones: Whilst thanking the right hon. Gentleman for the information he has given, may I ask if I am right in assuming that, provided the prescribed procedure has been properly followed in such cases as referred to in my original Question, the decision of the Commissioner is absolutely final and there can be no redress in the law courts?
    Mr. Boyd-Carpenter: The hon. Member is quite right. The Commissioner's decision on these cases is final.

    National Health Service Charges (Refunds)
    Mr. Walkerasked the Minister of Pensions and National Insurance whether he will simplify the form that is used in respect of applications for refunds of National Health Service charges.
    Mr. Boyd-Carpenter: The form of application available in chemists' shops and dispensaries requires of the applicant no more than his name and reference number or address. The layout of the form has been improved and supplies of the new form will shortly be available.
    Mr. Walker: Is my right hon. Friend aware that there are nearly 1,000 words on this form? As the form is used mainly by people who may be suffering from poor eyesight, could he look into the question of reducing the number of words?
    Mr. Boyd-Carpenter: The form has to cope with three different categories, the war pensioner, the person in regular receipt of National Assistance and the person not in regular receipt of National Assistance. While I share the desire of my hon. Friend to keep it simple, if we cut out too much we should be charged, quite rightly, with not giving full and necessary information to those concerned.
    Mr. Houghton: Is the right hon. Gentleman aware that the main anxiety of the House is about the refund of prescription charges to those who are not war pensioners and not in regular receipt of National Assistance? Both those categories are perhaps aware of their rights, but for those on the border-line of National Assistance hardship may exist. Would he agree that perhaps the use being made of this form for refunds would be an index of how effective the arrangements are? Could he say when he would be ready to reply to a question on how many refunds are being made to persons not in the two categories I have mentioned?
    Mr. Boyd-Carpenter: I am not quite sure how long the time lag in respect of these figures will be, although, as the hon. Member will recall, I have given them for past periods from time to time. I agree with the hon. Member that the
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    most difficult category is that of people who are not in receipt of assistance and who are not war pensioners. On the other hand, from the point of view of this form they are numerically much the smallest number of the three.
    Mr. Walkerasked the Minister of Pensions and National Insurance whether he will send copies of the simple leaflet explaining the system of refunds under the National Health Service to all doctors and to all persons at present benefiting under National Assistance.
    Mr. Boyd-Carpenter: My right hon. Friend the Minister of Health arranged for all doctors in the National Health Service to receive copies of the leaflet during the first half of April. Persons on assistance are already informed by the Board about the refund procedure.

    National Assistance
    Mr. Jegerasked the Minister of Pensions and National Insurance how many National Assistance recipients suffered a reduction in supplementary grants when their retirement pensions were increased in April.
    Mr. Boyd-Carpenter: About 1,079,000.
    Mr. Jeger: Is that not really disgraceful? Will the Minister look at this question again in conjunction with the National Assistance scales? Is he not aware that many old-age pensioners, amounting, as he himself said, to more than 1 million, expected from the Government's propaganda and information that they would receive a 7s. 6d. or 12s. 6d. a week increase? They now discover that they receive anything from 6d. to 3s. 6d. per week. Since this hits hardest the poorest section of the community, will not the right hon. Gentleman immediately take steps to increase the scale rates under which they are allowed National Assistance?
    Mr. Boyd-Carpenter: The hon. Member will be aware that the procedure follows that taken on previous occasions, except that by ensuring that assistance scales were increased simultaneously with National Insurance scales it has been possible to secure that all supplemented persons, if their circumstances remained the same, received an increase in their total income from the two sources. The hon. Member will also be

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    aware that, comparing the situation with what it was in 1958, when the last general change of both benefits took place, the total increase in income is greater and a little higher for the supplemented than for the non-supplemented cases. Finally, the hon. Member's supplementary question is quite out of line with the complaint perpetually made from the benches opposite about the proportion of persons receiving supplementation.

  MINISTRY OF POWER

    Power Stations, Durham County
    Mr. Pentlandasked the Minister of Power whether his attention has been drawn to a report, issued on 28th March, 1961, by the North Regional Board for Industry, regarding the unsuitability of the siting of power stations in the County of Durham; and if, in view of the urgent need for consideration to be given to the siting of a new power station, or power stations, on or near the Durham coalfield, he will make a statement of his policy in the light of the report.
    The Minister of Power (Mr. Richard Wood): The choice of sites for new power stations is a matter for the Central Electricity Generating Board. The Board is building a station at Blyth, which will be completed in 1965, and has no immediate plans for another new station in Durham or Northumberland.
    Mr. Pentland: Is the right hon. Gentleman aware that when it became known through this report that his Ministry had decided that the County of Durham was geographically unsuitable for power stations it caused widespread dismay, to say the least, in the county? In view of the fact that this decision cannot be substantiated on those grounds in any way, will the right hon. Gentleman have another look at it to see about siting a power station in the county near the coalfield?
    Mr. Wood: I should like to make clear that the advice from my Department never suggested that there were no suitable sites for power stations in the county but merely said that the problem of building power stations was not so easy as it looked. The Department did not recommend that no power station should be built there. As the hon.
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    Member knows, the National Coal Board and the Central Electricity Generating Board are continually in touch and no doubt will take notice of what he has said.
    Mr. Pentland: Could we have a categorical assurance now that the Central Electricity Generating Board will at least consider siting a station on the Durham coalfield?
    Mr. Wood: It will no doubt take notice of what the hon. Member has said.

  MINISTRY OF AVIATION

    Transatlantic Passenger Traffic
    Mr. Farrasked the Minister of Aviation what percentage of air passenger traffic between the United Kingdom and the United States of America was carried by British operators and United States operators, respectively, during the last full year for which figures are available.
    The Minister of Aviation (Mr. Peter Thorneycroft): I do not think that I should publish commercial information that could be of competitive significance.
    Mr. Farr: While appreciating my right hon. Friend's point of view, may I ask him to resist any blandishments of the American airlines through the Civil Aeronautics Board to reduce any percentage of B.O.A.C. traffic obtained by pooling arrangements with Commonwealth airlines at the moment?
    Mr. Thorneycroft: I am aware of these points. That is one of the reasons why I do not want to go into publication. There is no agreed basis for these statistics. They are always very controversial in negotiations.

    Internal Services
    Mr. A. Robertsasked the Minister of Aviation if comprehensive plans have been prepared by his Department for the development of internal air services between the cities of the United Kingdom.
    Mr. Thorneycroft: No, Sir. The Ministry of Aviation does not operate air services.
    Mr. Roberts: Does the Minister intend in the near future to give financial aid to some of our domestic airports? He

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    will appreciate that there are one or two airports in the north of England which require financial assistance from the Ministry for which he is responsible.
    Mr. Thorneycroft: At present, the airports as a whole in this country are being run at a loss—remedied somewhat, we hope, by the very proper decision to put up landing charges—but no one can say that they are not receiving some form of Government assistance at present.
    Mr. P. Williams: Is my right hon. Friend aware that there is a certain dissatisfaction with the services presently provided by B.E.A. on a monopoly basis? Should not these things be looked into in due course by the new Licensing Board?
    Mr. Thorneycroft: The decision of Parliament to establish the Air Transport Licensing Board is, of course, the answer to any suggestion of a monopoly position.

    Croydon Aerodrome
    Mr. Goughasked the Minister of Aviation if he will make a statement on his plans for developing Croydon Aerodrome as a centre for business and private aviation.
    Mr. Thorneycroft: My right hon. Friend the Minister of Housing and Local Government is considering the represenations made at the public inquiry held in October, 1960. These included suggestions that the aerodrome should be operated by a commercial organisation for use by executive aircraft.
    Mr. Gough: Yes, but is my right hon. Friend aware that the Minister of Housing and Local Government has now taken several months? Is he fighting the battle on behalf of aviation in this connection? Does he realise that since the end of the war 18 airfields in the vicinity of London have been closed down and that it would be a calamity if Croydon also were closed down?
    Mr. Thorneycroft: I appreciate my hon. Friend's view, but it is not the only view which has been expressed about Croydon. I think it right that full consideration should be given to these matters. A number of technical aviation points were raised at the inquiry and it
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    may be necessary to have some further inquiry into these.
    Sir A. V. Harvey: If Croydon is not allowed to remain open, will my right hon. Friend consider backing a syndicate which proposes to try to purchase Blackbushe Airport, which has many facilities of great use to executive and private aircraft?
    Mr. Thorneycroft: That raises a separate point. Perhaps my hon. Friend would put down a separate Question.
    Mr. Gough: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall endeavour to raise the matter on the Adjournment.

    Airport Facilities, Tees-side and South Durham
    Mr. Slaterasked the Minister of Aviation if he will list the civilian airports in England; how many are operated by charter companies; and what plans he has for making civil airport facilities available for Tees-side and South Durham.
    Mr. Thorneycroft: Of the 71 civil aerodromes in England, 14 are operated by companies which also provide either scheduled or charter air services. I will, with permission, circulate a list of the aerodromes in the OFFICIAL REPORT. The provision of an aerodrome for the local needs of Tees-side and South Durham is a matter for the local authorities.
    Mr. Slater: Is the right hon. Gentleman aware that I am not sure whether he knows this area to which I am referring, but from the point of view of the provision of airport facilities it has been neglected for a long time? Is he aware that we once had such facilities at Greatham, but they were closed down? Is he aware of the growth which has taken place in the population and the gathering momentum of public opinion on Tees-side? In view of this, does not he think that the time has come when he should enter into consultations with the local authorities and attempt to provide the accommodation which is needed in the North-East, especially in view of the concentration of such facilities in other parts of the country?
    Mr. Thorneycroft: The North-East is a fairly large area. There are a number of local authorities around Newcastle which are combining in establishing or developing aerodromes, and with regard to areas further south, I should have thought that the initiative ought to come from the local authorities.
    Mr. Slater: Is the Minister aware that I endeavoured to direct my question to him from the point of view of the local authorities? I asked whether he was prepared to invite local authorities

    AERODROMES IN ENGLAND (1ST MAY, 1961)

    AERODROMES OPERATED BY THE MINISTRY OF AVIATION

    London (Heathrow)

    Bournemouth

    London (Gatwick)

    Land's End

    Stansted

    Scilly Isles

    Blackpool

    Southampton

    Accident, Southend
    Mr. Cooperasked the Minister of Aviation if he intends to order an inquiry into the circumstances surrounding the accident to an aircraft belonging to Air Condor Ltd. at Southend on 22nd April, 1960.
    The Parliamentary Secretary to the Ministry of Aviation (Mr. Geoffrey Rippon): No formal inquiry was held, but the Ministry looked into the circumstances of the accident and followed up those matters where action was required in the interests of safety.
    Mr. Cooper: Is my hon. Friend aware that that answer is wholly unsatisfactory?
    to consultations on the technical points involved in order to try to provide the necessary facilities?
    Mr. Thorneycroft: I am never averse to consultation with anyone who chooses to approach me in this matter, but it would be very wrong to give the impression that the Ministry or the Government are prepared to support the provision of a local airport whenever a suggestion is made. That would be indeed a very expensive project.
    Following is the list:
    Is not he aware that the most serious allegations have been made concerning this flight, that the aircraft was understaffed and the pilot had flown in excess of the permitted hours? Is not it in the best interests of the flying public that an accident of this sort should be properly investigated?
    Mr. Rippon: It was an accident in which there were no serious injuries. The question of the pilot's competency and whether there was a breach of Air Navigation Regulations was inquired into. The Director of Public Prosecutions looked at the matter and decided to take no action, though we sent a warning letter to the operator. All these

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    matters were looked into most carefully and the necessary administrative action taken. I cannot believe that it is really necessary to have an inquiry all over again.
    Mr. McAdden: Does my hon. Friend realise that the inquiry made one hundred per cent. clear that no responsibility or blame rested on the administration at Southend Airport?
    Mr. Rippon: Well, there were some matters to which we drew the attention of the Southend Corporation, in particular to the delay in the dispatch of fire and rescue vehicles. I think that action has now been taken to ensure that this will not happen again.
    Mr. Cooper: In view of the unsatisfactory nature of the reply, I beg to give notice that I propose to raise this matter on the Adjournment.

    London Airport (Passenger Accommodation)
    Sir A. V. Harveyasked the Minister of Aviation what steps he is taking to provide additional passenger accommodation for internal airline traffic at London Airport.
    Mr. Thorneycroft: The concourse and the airside waiting room are being enlarged. The work will be completed by the end of this month.
    Sir A. V. Harvey: May I thank my right hon. Friend for what he has said. Has he received a request from B.E.A. to erect its own facilities at London Airport, and, if so, when does he expect to give the Corporation a reply?
    Mr. Thorneycroft: This raises a slightly different point. We are extending the present facilities at London Airport and there is a suggestion from B.E.A. that it might provide its own. This would, I think, have to be looked at in the context of any decision taken with regard to the general question of management at London Airport.
    Mr. Rankin: Is the right hon. Gentleman satisfied that the present extension will be adequate for the immense increase which is now taking place in internal traffic?
    Mr. Thorneycroft: Certainly not adequate for all time. If air traffic continues to grow, as we hope it will,
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    obviously we shall be continually faced with the need for more accommodation; but this is a proper increase to meet the present problem and will, I think, assist in the matter.

    Abbotsinch Airport
    Mr. Rankinasked the Minister of Aviation whether he has yet appointed an architect to proceed with the planning of Abbotsinch Airport.
    Mr. Rippon: I regret that this has taken rather longer than we had hoped, but I can assure the hon. Member that my right hon. Friend will make the appointment as soon as possible.
    Mr. Rankin: May I assure the hon. Gentleman that I regret it too, because in February of this year, which is quite a long time ago, the hon. Gentleman told me—[HON. MEMBERS: "Question."]—the hon. Gentleman told me—[HON. MEMBERS: "Question."]—
    Mr. Ross: Wait for it.
    Mr. Rankin: I started with a question—
    Mr. Speaker: Order. The hon. Gentleman is giving a reason for requiring some information and I do not think he is out of order yet.
    Mr. Rankin: I was asking the hon. Gentleman whether he remembered that, from the Government Dispatch Box in the month of February, quite a long time ago now, he told me that an architect would be shortly appointed. Does he think that three months is a short period, and can he now say when the architect will be appointed? Will his right hon. Friend stand by the statement made at the Government Dispatch Box by his predecessor that Abbotsinch Airport will be available for use in 1963? Does he still stand by that promise even though so far he has broken his promise about the architect?
    Mr. Rippon: Perhaps the last part of the supplementary question is the most important—
    Mr. Rankin: Yes.
    Mr. Rippon: We have no reason to believe that the airport will not be ready when required at the stated date. The hon. Member will recall that before we can appoint an architect we must draw

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    up the detailed requirements for the airport as a whole. The architect is primarily concerned with the terminal building which has to be established in relation to the whole of the facilities. There have had to be a considerable number of discussions with other people. These preliminary matters should be dealt with in a matter of weeks.

    British European Airways and British United Airways
    Mr. Rankinasked the Minister of Aviation to what extent it is his policy that British European Airways and British United Airways should come to a private arrangement with regard to certain British airways routes.
    Mr. Thorneycroft: Such arrangements form no part of the responsibility of the Ministry of Aviation. There are no legal objections to such arrangements. There is equally no obligation on the Air Licensing Board to adopt them.
    Mr. Rankin: Is the right hon. Gentleman aware that in reports in the Press he has been attached to these negotiations and they have been successful with B.O.A.C.? Is it the case that pressure is being put on B.E.A. in order that the independent operators may get a slice of its existing traffic, and does the Minister say that he is not in any way lending his authority and influence to these proceedings and that they will go de novo to the Licensing Board in due course?
    Mr. Thorneycroft: I have nothing to do with them at all.

  HOSPITALS

    Solihull Hospital
    Mr. Lindsayasked the Minister of Health if he will give the expenditure on repairs and improvements to Solihull Hospital during the three five-year periods 1946–51, 1951–56 and 1956–61.
    The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): My right hon. Friend has no record before 5th July, 1948; expenditure was £21,345 from that date to March, 1951; £59,823 in 1951–56 and £109,900 in 1956–61.
    Mr. Lindsay: Is the Minister not aware that this is pitifully little expenditure in view of the importance of this hospital?
    Miss Pitt: It is nearly £200,000 over the period. My hon. Friend will no doubt be glad to learn that the Regional Hospital Board is preparing long-term plans which include provision for a maternity unit to cost £370,000 and, later on, for a new hospital estimated to cost £800,000. I know this hospital and that it is old and needs further improvement.

    Hammersmith Hospital (Appointment)
    Mr. K. Robinsonasked the Minister of Health if he is aware of the widespread dissatisfaction among hospital administrators following the recent appointment of a house governor without previous hospital experience at Hammersmith Hospital; whether he regards this appointment as consonant with the recommendations of Sir Noel Hall as accepted by him; and if he will make a statement.
    Mrs. Butlerasked the Minister of Health, in view of the continuing concern in the hospital service about this matter, if he will set up a committee of inquiry into the circumstances in which the appointment of a new secretary to the Board of Governors of the Hammersmith Post-Graduate Teaching Hospital Group came to be made; and if he will make a statement.
    The Minister of Health (Mr. Enoch Powell): The Institute of Hospital Administrators have expressed to me concern about the circumstances of this appointment and have asked for a committee of inquiry. I will announce my decision as soon as possible.
    Mr. Robinson: While no one objects to the introduction of fresh blood into the hospital service, is the Minister aware that this is one of the twenty or thirty top jobs in the Service? Is it not a fact that this appointment was made by the narrowest majority and against the advice of the assessors, and will he, when considering this matter, let us have his decision at the earliest date?
    Mr. Powell: For the reasons given in my Answer, I should not add to it at this stage.
    Mrs. Butler: May I add my representation that the Minister should make a decision on this matter as quickly as possible in view of the concern at all

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    levels in the hospital service at the nature of this appointment, which seems to suggest that knowledge of hospital administration is no longer a prerequisite for a top hospital appointment?
    Mr. Powell: I shall not avoidably delay my decision.

    Mental Nurses
    Mr. K. Robinsonasked the Minister of Health if he is aware that his recently announced policy on the future of the mental hospitals has given rise to anxiety on the part of mental nurses, and has had an adverse effect upon recruitment; and what steps he intends to take to restore the confidence of the mental nursing profession in their future career prospects.
    Mr. Powell: I have no evidence of any fall in recruitment. As I told the hon. Member on 13th March, there is no reason to anticipate a diminution in the total effort needing to be devoted to mental treatment.
    Mr. Robinson: Is the Minister aware that my information is that not only has recruitment fallen off but that mental nurses are beginning to leave the Service because of their fears for the future? Does the Minister not appreciate that his whole policy of modernisation in our mental hospital service, which we on these benches support, will be in jeopardy if this trend continues, and will he take every opportunity of allaying these anxieties?
    Mr. Powell: These anxieties are indeed, as the hon. Member says, quite groundless, and I am glad of any opportunities so far as they exist of helping to dispel them.
    Mr. Paget: Is the right hon. Gentleman aware that whether they be groundless or not, I and others have received a delegation from mental nurses in my constituency who have very real, even if groundless, anxieties on this subject, and does not he feel that something more ought to be done about it, because we want nurses?
    Mr. Powell: I am not aware of the approach to the hon. and learned Gentleman. If he cares to pass the representations on to me, I shall endeavour to answer them.
    Mrs. Castle: Is the Minister aware that, as my hon. and learned Friend said, many hon. Members have been approached on this matter and that the fears among mental nurses are genuine and widespread? Does not he think that he should supplement his speech on 5th March by stating at some length in a public statement at an early date how he visualises the detailed effects upon the staff of his now policy?
    Mr. Powell: I lose no opportunity of illustrating and enlarging upon what I regard as one of the most important developments in the whole of the National Health Service. I am sure that as this becomes more fully understood such fears as exist will be allayed.

  MINISTRY OF HEALTH

    District Nurses and Midwives, Devon
    Mr. P. Browneasked the Minister of Health if he is aware that there is a shortage of district nurses in North Devon; and if he will take steps to ensure that pay and conditions of district nurses are improved.
    Miss Pitt: My right hon. Friend is aware of the shortage. The salaries and conditions of service of district nurses are matters for the Nurses and Midwives Whitley Council.
    Mr. Browne: Is my hon. Friend aware that in my part of the world, although a house is available in many cases and there has been a considerable amount of advertising, it has been impossible to get district nurses? Is not this a very serious situation? Cannot the hon. Lady or her right hon. Friend try to improve the conditions and pay? Is it not a fact that most of these people would rather go into the routine hospital service than the district nursing association in view of the increased expense of running a car and so on?
    Miss Pitt: I am aware of the shortage in Devon, but it is the case that the Whitley Council reviewed the salaries of nurses and midwives in 1959 as well as the grading, and increases were given of 25 per cent. at the maximum to district nurses, who also benefited from the 5 per cent. increase in December last year.
    Mr. P. Browneasked the Minister of Health if he is aware that there is a shortage of midwives in Devon, that one Bideford nursing home has had to close down and that there is a danger of a maternity hospital in the area closing shortly; and what further proposals he has for dealing with the situation.
    Miss Pitt: A nursing home has closed temporarily owing to staff sickness, but cases booked there have been accepted elsewhere. Vacancies for the matron and midwife at Torrington Cottage Hospital which has four maternity beds, arise at the end of May, and the posts have been advertised.
    Mr. Browne: This does not help very much. Is my hon. Friend aware that one midwife whom I know in my constituency worked for 72 hours and was paid for a 48-hour week and chat she left this hospital because the Whitley Committee said that she could not be paid for the overtime? Is it not time that something was done about this? Has my hon. Friend had an answer to the memorandum sent out to the hospital authorities, which she mentioned in reply to a Question by my hon. and gallant Friend the Member for Ripon (Sir M. Stoddart-Scott) on 6th February?
    Miss Pitt: The memorandum to which my hon. Friend refers has gone to all hospital authorities and all domiciliary employing authorities and they have been asked to report back to us by the end of the year. Perhaps it would help if I sent my hon. Friend a copy of the memorandum.

    Prescription Charges
    Mr. Prenticeasked the Minister of Health what reply he has sent to the letter he received recently from the East Ham National Health Executive Council recommending that all retirement pensioners should be able to claim the refund of prescription charges from the Post Office, and drawing attention to the large number of cases of hardship which would not be relieved by the existing arrangements.
    Mr. Powell: I am sending the hon. Member a copy of my reply.
    Mr. Prentice: Will the Minister acknowledge that this letter has come to him from a body of people of all political views and no political views, including
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    doctors and others of day-to-day experience in dealing with Health Service matters, and would he not at least acknowledge that it adds to the growing volume of informed opinion that the present arrangements are hopelessly inadequate from the point of view of preventing hardship?
    Mr. Powell: I am seeing the Association of Executive Councils later this month.
    Mr. K. Robinson: Will the Minister give an assurance that he will, in conjunction with the Minister of Pensions and National Insurance, keep these arrangements for dealing with hardship under review and look at them again in six months' time to see whether they are really doing the job of alleviating hardship?
    Mr. Powell: I am willing to look at them at any time without waiting for six months, and if there are any improvements which can be made which are practical and fair, I shall not close my mind to them.
    Mr. Monslow: Would the Minister not agree that it would be far better if we had an income scale fixed below which no prescription rates would be paid?
    Mr. Powell: The present arrangements are based on scales which are designed to ascertain hardship, and I think that that is the right approach.

  UNITED NATIONS (REGIONAL ARRANGEMENTS AND AGENCIES)
  Mr. Warbeyasked the Lord Privy Seal if he will furnish a list of the regional arrangements or agencies at present operating under Articles 52 to 54 of the United Nations Charter, giving in each case the date of their registration as such with the Secretary General of the United Nations.
  The Lord Privy Seal (Mr. Edward Heath): These articles of the United Nations Charter do not require such registration and no arrangement or agency of the kind envisaged in them is registered as such.
  Mr. Warbey: Does that mean that the Organisation of American States, to which the right hon. Gentleman referred last week as an agency within the United Nations competent to deal with the

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  Cuban situation, in fact is not competent to deal with it at all and that this is really only a pretence, or, if that is not the case, will he in any event bear in mind that nothing in Article 52 impairs the right of the Security Council to deal with any situation likely to lead to international friction?
  Mr. Heath: No, Sir. It means nothing of the sort. It means that there can be an organisation or agency which can act under Articles 52 to 54 but they do not have to be registered in accordance with the United Nations procedure.
  Mr. P. Noel-Baker: Does the Lord Privy Seal not accept the point of my hon. Friend that Article 52 lays it down in terms—
  "This Article in no way impairs the application of Articles 34 and 35".
  In other words, an attempt to refer a dispute to the Organisation of American States cannot override the absolute right of a State to have its dispute heard by the Security Council or the Assembly of the United Nations?
  Mr. Heath: That is perfectly true, but if the right hon. Gentleman also looks at Section 3 of Article 52 he will see that States are encouraged to settle their disputes through the regional organisations.

  CONGO (U.N. OPERATIONS)
  Mr. C. Johnsonasked the Lord Privy Seal if he will make a statement on the financing of the United Nations operation in the Congo to date.
  Mr. Heath: Since the reply is long, I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Johnson: I recognise the heavy burden that has already been accepted by this country, but in view of the very real danger that the whole Congo operation may break down through lack of funds, would Her Majesty's Government be prepared to consider making an additional grant over and above the usual United Nations percentage for this special purpose?
  Mr. Heath: If the procedure outlined in the Resolution passed by the Assembly on 21st April is followed, I hope that that will satisfactorily deal with the financing of the operation in the present
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  year. We did give an undertaking that we will contribute another 2 million dollars provided that the other countries undertake their obligations.
  Mr. Fell: As my right hon. Friend's figures will show that this country is bearing a very large part of the burden of the cost of the Congo operations, will he immediately make the most urgent representations to Mr. Hammarskjoeld to intervene in the release of Mr. Tshombe, otherwise Katanga as well may collapse?
  Mr. Heath: That is a much wider question, but as this conference has been taking place at Coquilhatville, as we have no representation there, and as I understand that the leaders have not yet returned to Leopoldville, it has not been possible to find out exactly what the situation is. As soon as we do so, we shall naturally consider what action should be taken.
  Mr. Healey: Is the right hon. Gentleman aware that many of us are more concerned with the fate of the two missing British officers of the United Nations forces than with the fate of Mr. Tshombe? Has the Lord Privy Seal any information on this matter?
  Mr. Heath: We are naturally most concerned about it. We have as yet no information.
  Mr. Biggs-Davison: On the narrower question of the financing of the United Nations operation, will the Government give urgent consideration to stopping any further payment of British money which may go to those United Nations forces whose presence in Katanga has been subverting the régime of President Tshombe, has indirectly let to the deaths of the British officers referred to by the hon. Member for Leeds, East (Mr. Healey), and has also led to the subversion of the Katanga experiment in non-racial partnership and the endangering of the frontiers of British territories in Central Africa?
  Mr. Heath: If my hon. Friend tables a Question of that nature. I will deal with it in detail.
  Mr. Paget: Without going into any question of the rights and wrongs of the régime in Katanga, have not we sufficient interest in the United Nations task in the Congo to make very strong representations that the kidnapping of the head of

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  a province who was attending a conference under safe conduct in the capacity of a herald is a most disgraceful thing and certainly ought not to be done?
  Mr. Heath: I told the House that we are awaiting full information about this, but we have constantly urged that there should be a meeting of leaders from the Congo in order to reach agreement about the future of that country. Anything which interferes with conciliation between leaders is regrettable.
  Following is the reply:
  The United Nations Operation in the Congo has been under way since July 1960; its financing therefore falls under two United Nations financial years—1960 and 1961.
  1960
  The General Assembly, by its resolution 1583 of last December, acknowledged that the 1960 costs of the operation, reduced by airlift waivers from $60 million to $48·5 million, were expenses of the Organisation and apportioned them among Member States according to the percentage payable by them to the regular budget of the Organisation. In addition, this resolution provided that the burden on the poorer Members should be lessened by partial rebates, met from voluntary contributions announced by certain Members.
  1961
  The Resumed Session of the General Assembly resolved on the 21st of April to finance the costs of the operation for the first ten months of 1961, estimated at $100 million, by opening a new ad hoc account and apportioning these expenses among Member States according to the percentage they contribute to the regular budget but with provision for rebates to be granted to the poorer members. The resolution adopted stated that these expenses were essentially different from expenses under the regular budget and, therefore, subject to a different financing procedure. It urged Permanent Members of the Security Council to make sizeable additional contributions, sought voluntary contributions and called upon the Belgian Government to make a sizeable contribution. The voluntary funds from these sources were to be used to offset the cost of the rebates of from fifty to eighty per cent. provided for in the resolution for the poorer members.

  DISARMAMENT
  Mr. C. Johnsonasked the Lord Privy Seal to what extent it is still Her Majesty's Government's policy to seek agreement on the control and limitation of arms and forces in an agreed area of Europe.
  Mr. Heath: Her Majesty's Government stand by the proposals for the control of arms and forces in an agreed zone in Europe put forward in the Western Peace Plan at the Geneva Foreign Ministers' Conference in May, 1959.
  Mr. Johnson: Arising from that reply, is the right hon. Gentleman aware that the Conservative Party Election Manifesto in 1959 contained an undertaking that the Conservatives would work in Europe for the inspection and reduction of armaments in areas to be agreed? Is there any substantial evidence that a very real effort has been made to achieve that since the election?
  Mr. Heath: I think that we have made a very real effort not only to deal with this, but also to deal with disarmament problems in general.
  Mr. Healey: As there are now proposals before N.A.T.O. for the control of arms and forces on the Western side of the Iron Curtain, would it not be a good idea to make this arrangement multilateral and try to reach agreement with the Russians about controlling arms and forces on both sides of the Iron Curtain?
  Mr. Heath: That is a matter which can be considered.

  UNITED NATIONS (CHINA)
  Mr. Marshasked the Lord Privy Seal (1) What progress he has made towards agreement on seating the Peking Government in the United Nations;
  (2) in view of recent statements by the Chinese Foreign Minister, if he will state the current policy of Her Majesty's Government concerning the representation of Formosa in the United Nations.
  Mr. Heath: The views of Her Majesty's Government on the general question of Formosa were given by my hon. Friend in the House on 12th December last. As regards the general question of Chinese representation, I have nothing to add to the reply given by my right hon. Friend the Prime Minister on 18th April to the hon. Member for Louth (Mr. C. Osborne).
  Mr. Marsh: Is not the right hon. Gentleman aware that many people in this country are fast coming to the conclusion that Her Majesty's Government

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  ought to have a policy in this matter and that, having decided on a policy, they should pursue it actively? Does he not agree that if the British Government were to press for the admission of the Peking Government to the United Nations it would have a far more beneficial effect upon Asian opinion than the recent pachydermatous activities of the Foreign Secretary in India?
  Mr. Heath: I shall ignore the remarks made by the hon. Gentleman at the end of his sentence. The position of the British Government as regards the Chinese seat in the United Nations has been broadly stated on a number of occasions in the House. It is not, in our view, appropriate that on a matter which will be discussed again in the autumn I shall make a further detailed statement at this stage.
  Mr. Marsh: We are not asking the right hon. Gentleman to make a detailed statement at this stage. Five months ago the British Government said that they believed that the admission of the Chinese Government would be to the advantage of world peace. So far they have done nothing about it. We are merely asking when they are going to do something about it.
  Mr. Heath: The hon. Gentleman has absolutely no justification for saying that Her Majesty's Government have done nothing about it.

  LAOS
  Mr. Healeyasked the Lord Privy Seal whether Her Majesty's Government and the Soviet Government have yet invited the international Commission to enter Laos.
  Mr. Heath: The Commission has now met in Delhi and completed its initial report which we have not yet received. The Commission is ready to proceed to Laos. The arrangement between the two Co-Chairmen on which the Soviet Government have insisted, however, is that it must await the entry into force of the ceasefire.
  Mr. Healey: Whilst strongly condemning the continuation of the fighting in Laos now that an appeal for a cease-fire has been issued, in view of the uncertainty about the exact military situation
  900
  in Laos and the known unreliability of some of the sources of information about that situation, is there not an overwhelming case for getting the International Commission into Laos immediately in order to report on the exact state of affairs?
  Mr. Heath: For our part we would be very willing for the Control Commission to go straight to Laos, but that is not the view of the other co-Chairman and his Government.
  Mr. Warbeyasked the Lord Privy Seal if he will make a further statement on the situation in Laos, with special reference to the cease-fire arrangements.
  Mr. Heath: A cease-fire has not yet been arranged. On 25th April, Prince Souvanna Phouma, claiming to speak as Prime Minister of Laos, invited the Royal Laotian Government to send representatives to the Pathet Lao Headquarters at Xieng Khouang; while the Royal Laotian Government at the same time invited the Pathet Lao to hold talks at the Royal capital of Luang Prabang which remains in their hands. In order to resolve this deadlock, the Royal Laotian Government then suggested that the other side send military representatives under a flag of truce to Ban Vang Khi between the two lines on the road north of Vientiane. No Pathet Lao representative appeared and the Government reiterated their offer for eight o'clock this morning.
  I do not yet know whether this meeting took place. This is doubtful, however, as Prince Souvanna Phouma has now proposed a meeting at another place in the same area of no-man's-land, Ban Na Mon. Unfortunately, he proposes that the purpose of the meeting should be to consider the formation of a government as well as to arrange a cease-fire. This can only lead to delays while difficult political matters are discussed. The purpose of any truce meeting should be to put an immediate stop to the fighting; other internal matters should be left for discussion between the Laotian leaders as soon as the ceasefire is in force. The Royal Government have not yet reacted to this appeal.
  As far as the military situation is concerned, the Pathet Lao forces continued their pressure on a number of fronts after the Co-Chairmen's appeal for a

  901
  cease-fire. Their forces have made gains to the north of Luang Prabang, and in the south of the country they have captured some ground which would facilitate an advance. On the Vientiane sector their recent gains leave them in a position to threaten the capital. While no serious fighting is going on at present, the Pathet Lao appear to be seeking to establish positions from which they could drive forward towards the Mekong River on several sectors if they decided to open an all-out assault, although there is no evidence that this is their intention at present
  Mr. Warbey: Is not the latest proposal of Prince Souvanna Phouma for a meeting place for cease-fire negotiations a perfectly reasonable and suitable one, and is it at all clear that Prince Souvanna Phouma is insisting that the negotiations for a cease-fire should be conditional upon there being negotiations for the formation of a new Government? Is not all that he is proposing that these matters should be dealt with successively? Therefore, can we not still hope that a cease-fire may very soon be announced; and, in the meantime, will the Lord Privy Seal deprecate all this alarmist talk of U.S. or S.E.A.T.O. intervention?
  Mr. Heath: The proposal of Prince Boun Oum and General Phoumi Nosavan for a meeting in a place in no man's land in the first instance was a perfectly reasonable proposition. Now that both sides have moved away from their original proposals for a meeting in their respective capitals, Luang Prabang and Xieng Khouang, to two places which are comparatively close together in no man's land, I very much hope that it will be practicable for the two sides to meet. At the same time, I do not think that it will be practicable at this sort of meeting to have discussions on the wider question of a broader-based Government. We believe that the most urgent question is that of cease-fire, and that negotiations between the Laotian political leaders could follow.
  Mr. P. Williams: Will my right hon. Friend say whether the statement he did not make on the Congo was longer or shorter than the one he did make on Laos?
  Mr. Healey: While I strongly agree that it would be a great mistake to mix
  902
  political questions concerned with the future of the Laotian Government with the particularly urgent question of establishing a cease-fire, may I ask whether the right hon. Gentleman is aware that the statement made by his noble Friend in another place on Wednesday, namely, that the airlift by Soviet aeroplanes to the Pathet Lao forces had ceased from last Saturday, was contradicted the same day by Mr. Dean Rusk, speaking in Washington? Do the British Government still maintain that the Soviet airlift has stopped?
  Mr. Heath: As far as we can find out from the best sources of information available to us, the Soviet airlift has been continuing intermittently since the co-Chairmen called for a cease-fire.

  OMAN
  Mr. D. Healeyasked the Lord Privy Seal if he will make a statement on the recent discussions between officials of Her Majesty's Government and representatives of the Imam of Oman.
  Mr. Heath: I welcome this opportunity of drawing attention to the statement which I made in answer to a Written Question by the right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) on 15th March, to which I have nothing to add.
  Mr. Healey: But does not the Lord Privy Seal really agree that it is an absurd anachronism that British troops should be supporting a local ruler in Southern Arabia in what is purely a personal and private war? Can the right hon. Gentleman tell the House whether any serious discussions are under way with the Government of Saudi Arabia and other interested Governments in order to solve the problem in the Buraimi oasis, which is really the key to the whole of the British policy in Southern Arabia?
  Mr. Heath: First of all, there are no British troops permanently stationed in Oman. The Sultan has his own forces there. As is known, we give some assistance to him both for civil development and for the purposes of his forces. The Buraimi oasis is not the key to this problem; there are two separate problems. With a view to finding a solution

  903
  to the problem there were these talks earlier in the year to which I referred in my statement, which were broken off at the time by the rebels. If the rebels say they are prepared to begin them again I am sure that we would welcome a solution.
  Mr. P. Noel-Baker: Will the Lord Privy Seal secure the publication of the Treaty of Sib on which the relations of the Imam of Oman to the Sultan of Muscat are based? Since we have twice sent British troops into battle in support of the Sultan, is it not desirable that we should know what the Treaty contains?
  Mr. Heath: The treaty is an internal document of the Sultan of Muscat covering the internal arrangements between him and the Shiekhs responsible in that area.
  Mr. P. Noel-Baker: Since we have twice sent British troops into battle in alleged support of the arrangements contained in the document, ought we not to know what the document says?
  Mr. Heath: It is a very much wider question than sending troops into Oman in support of an internal arrangement. That is not the question at all.
  Mr. Healey: Is it not the case that the whole issue is whether or not the Sultan of Muscat has sovereignty over the Imam of Oman? Is not the Lord Privy Seal aware that the British Government have repeatedly given armed support to the Sultan in pursuing his claim to sovereignty, and is it not the right hon. Gentleman's duty to publish to the House, so that the country may know whether, in fact, the claim which the Government are supporting is a just one?
  Mr. Heath: There is no question about the sovereignty of the Sultan of Muscat and Oman over the whole country of the Imam of Oman. The Treaty of Sib deals with internal arrangements under that sovereignty.
  Mr. P. Noel-Baker: What have the Government to hide by refusing publication of this Treaty?
  Mr. Heath: The Government have nothing to hide.

  NATIONAL FINANCE

    United States Service Men (Motor Cars)
    Mr. Lindsayasked the Chancellor of the Exchequer whether, so that United Kingdom sales of motor cars to United States service men can continue, he will seek an alternative method for the control of Purchase Tax exemption in place of the existing method under which exemption for a period exceeding one year can only be obtained if the order is placed through PX.
    The Economic Secretary to the Treasury (Mr. Anthony Barber): The history of this matter goes back to 1949. My right hon. and learned Friend has written to my hon. Friend setting out the Government's views at length.
    Mr. Lindsay: Is my hon. Friend aware that I am very much obliged to the Chancellor of the Exchequer for the very full letter he wrote to me when he saw my Question on the Order Paper? Is my hon. Friend aware that the point is that while the twelve months exemption is adequate in the case of the American Service man who can take the car back to America with him and not pay Purchase Tax, it is quite useless for those who are over here for two or three years and who will not, therefore, take the British car and pay Purchase Tax when they can take an American car without Purchase Tax or duty? Therefore, not only because we want these sales to go up but because of their good advertisement value, would my hon. Friend be good enough to ask his right hon. and learned Friend to look closely into the matter?
    Mr. Barber: As my right hon. and learned Friend has explained to my hon. Friend the Member for Solihull (Mr. Lindsay), the provision in Section 22 of the Finance Act of 1946 concerning temporary residents in this country who wish to purchase motor cars here but intend to export them was an exceptional provision. To extend the period of such use beyond one year would really be a major extension of what is, as I say, already an exceptional provision. As at present advised, my right hon. and learned Friend does not feel able to agree to such an extension. I am sorry that I do not feel able to go any further than that, but my right hon.

    905
    and learned Friend shares the concern of my hon. Friend at the action that has been taken by the United States Government. I think the next thing is to see what will be the result of the approach that has been made to them.

    Central Office of Information (Press Information)
    Mr. Sydney Irvingasked the Secretary to the Treasury what Press clippings service is maintained by the Central Office of Information; which fields this covers; and how many staff are involved.
    The Financial Secretary to the Treasury (Sir Edward Boyle): No central Press cutting service is maintained: but the regional offices of the Central Office of Information supply Departments with cuttings from local newspapers. No staff is exclusively employed on this work.
    Mr. Irving: Is not the Financial Secretary aware that he rejected the suggestion I made in February to negotiate the purchase of the News Chronicle Press clippings service because he said that the Central Office of Information arrangements were adequate for the twenty-four Government Departments and the House of Commons Library? In view of his Answer today, is the hon. Gentleman still satisfied with that previous Answer, and will he not look at this again?
    Sir E. Boyle: I thought that the hon. Gentleman might raise that point, but, in fact, my two Answers can easily be reconciled. Most Departments have a special staff for dealing with cuttings on a daily basis, but look to the Central Office of Information for coverage of provincial newspapers and so on. I believe that the present system does work satisfactorily; I have made inquiries into this since the hon. Gentleman put down his original Question.

  HOME DEPARTMENT

    Judges' Rules (Review)
    Mr. Fletcherasked the Secretary of State for the Home Department whether he will now give an assurance that, in connection with the review now being conducted by Her Majesty's
    906
    judges of the Judges' Rules, those desirous of making representations on the subject will have an opportunity of doing so; and what procedure is contemplated for this purpose.
    The Joint Under-Secretary of State for the Home Department (Mr. David Renton): Yes, Sir. As my right hon. Friend undertook in his reply to the hon. Member on 30th March, he has been in touch with the Lord Chief Justice. The Lord Chief Justice has authorised my right hon. Friend to say that while the judges—who have themselves the widest experience of the operation of the existing Rules—do not propose to invite evidence, they will take account of any representations which may be made to them in writing, through the Secretary to the Lord Chief Justice at the Royal Courts of Justice.
    Mr. Fletcher: While appreciating that reply, may I ask the Joint Undersecretary to consider the desirability of people who so desire making verbal representations to the judges, in the same way as they would have been able to do if this matter had been left within the purview of the Royal Commission on the Police?
    Mr. Renton: No, this would not have been appropriate. This is not a public inquiry. It is the desire of, my right hon. Friend to obtain the opinion of the judges about this matter in the light of their own very great experience, but if anybody has any information which he thinks may be of help to the judges and delivers it to them in writing, the judges will be glad to consider it.
    Mr. S. Silverman: Is the hon. and learned Gentleman aware that this matter has certain urgency and is of very wide public interest? Has his attention been called, for instance, to a recent capital case in which the defendants were ultimately acquitted, in which a principal police officer confessed in the witness box, and defended his action, that he had refused to allow the defendants' solicitor or counsel to interview them except in his presence? Does this not show a very wide ignorance of what even the existing Rules are?
    Mr. Renton: I should have thought that we could safely assume that the judges will not ignore that case.

QUESTIONS TO MINISTERS
Mr. Lipton: On a point of order, Mr. Speaker. May I invite your attention to Question No. 45? The point that I want to submit for your consideration is this. The Question was originally accepted by the Table Office and appeared on the Order Paper as a Question to the Attorney-General, who normally answers for his right hon. and learned Friend the Lord Chancellor in matters relating to the Lord Chancellor's jurisdiction. This Question has been transferred from the Attorney-General to the Minister of Housing and Local Government.
I recognise, of course, that you have ruled on more than one occasion that it is within the discretion of the Departments or the Ministers concerned to transfer Questions as they think fit and that you have no locus standi in the matter. Nevertheless, I want to submit that this particular instance represents a novel and undesirable extension of that convention; that in connection with the gravel chalk pit in Essex the conduct of the Minister of Housing and Local Government was called into question, and, as a consequence, was referred to the Lord Chancellor by the Council on Tribunals, that the Lord Chancellor, in his quasi-judicial capacity, made a statement on the subject and, as a matter of fact, is still considering the matter at the request of the Council on Tribunals.
In those circumstances, I feel that it is quite reprehensible that a Minister whose conduct has been called into question by the Lord Chancellor, acting in his quasi-judicial capacity, should have this very matter transferred to him for answer by him, as one of the parties implicated in the case. I want strongly to urge upon you, Mr. Speaker, that this kind of practice ought not to be tolerated, that where Questions addressed to the Attorney-General about the activities of the Lord Chancellor are accepted by the Table, those Questions should not be transferred to a Minister who is directly implicated in the matter so referred.
Mr. Speaker: The hon. Gentleman has so accurately stated the position of the Chair in the matter that I need not add to what he has pointed out—the fact that it is all nothing to do with me.
Mr. M, Stewart: May I respectfully submit to you, Mr. Speaker, that when it is a question of transferring Questions for administrative convenience, or because the Question appears to relate more properly to one Department than another, we all agree that it is a matter for Ministers and not at all for the Chair; but when a Question which has a judicial nature is transferred from a Law Officer to a Minister who, with respect to him, is in the position of the accused, as in this matter, does not that make it something in the nature of an abuse of the procedure of the House and, therefore, a matter for the Chair?
Mr. Speaker: No, I do not accept that it is a matter for the Chair, and I do not intend to involve the Chair in judging about the propriety or impropriety of transfers. That is a matter for those who procure the transfer. I wish to adhere to that view, because there are circumstances when the Chair would not have enough information or knowledge to be able to judge of a matter of that kind. That is why I want to adhere to the rule without deviation of any sort or kind.
Mr. S. Silverman: Further to that point of order, Mr. Speaker. May I draw your attention to a slightly different aspect of the same point? As I understand from the Question on the Order Paper, this was a Question about something that the Lord Chancellor had done and the original Question was addressed to the Attorney-General for that reason. If the Question had originally been put down to the Minister of Housing and Local Government, it would, presumbably, have been refused by the Table as being addressed to a Minister who had no responsibility for what the Lord Chancellor or the Attorney-General had done. Is it not a little outside the custom of the House, or even the right of Ministers, to refer a Question to a Minister who has so little responsibility in the matter that if the Question had been originally put down to him it would not have been allowed?
Mr. Speaker: I am so sorry to be firmly insistent, I hope without discourtesy. I do not propose to rule at all on a hypothetical situation whether or no the Question would have been accepted had it been put down to some

909
other Minister in some other circumstances. What I am saying is that I will not accept—I do not think that I ought to—any responsibility for transfer which does not rest with me.
Mr. G. Brown: I think that we all understand the position that you are seeking to uphold here, Mr. Speaker. Nevertheless, may I submit to you, further to the point of order, that there is an issue of considerable importance to the House, especially to those on this side of the House. This is not the normal sort of case of transfer. This is is a special case, a case which is exciting great interest and a great deal of concern in the country. A Question is put down to a Law Officer and it has become a matter for the Law Officer. That is transferred by Government mechanism to the Minister who, as my hon. Friend has said, is in the position of being the accused.
You may—I understand why—want to preserve the rights of the Chair. Therefore, would it not be a good thing if the Leader of the House were to take note of these exchanges and undertake to look into this absurd situation in which one cannot ask a Law Officer of the Crown about the actions of a Minister whose conduct is under examination not only in the House, but in the country at large?
Mr. Speaker: Here, really, is the difficulty. I have tried to be indulgent, but I cannot allow hon. Members to make speeches about the merits as they conceive them to be in this matter on the basis of getting me to reject what is the position of the Chair to which I must adhere firmly. I dare say that everything they have said has been noted by those present, but what the Leader of the House should or should not take notice of in this field is also not a matter for me, for the same reason.
The Secretary of State for the Home Department (Mr. R. A. Butler): I had no notice of this objection by the hon. Member for Brixton (Mr. Lipton), or the point raised by the right hon. Member for Belper (Mr. G. Brown). The best thing I can say, in the circumstances, is that I ought to look into it, and I will certainly do so.
Mr. Speaker: Mr. Gresham Cooke.
Mr. Lipton: On another point of order, Mr. Speaker. May I ask whether your permission has been sought by the Minister of Housing and Local Government now to answer Question No. 45?
Mr. Speaker: It has not been so sought.

LONDON DOCK STRIKE
Mr. Gresham Cooke (by Private Notice)asked the Minister of Labour whether he will make a statement about the London dock strike.
The Minister of Labour (Mr. John Hare): Yes, Sir. I have personally satisfied myself that the London Dock Labour Board was entirely within its rights in permitting the use of listed labour, and it appears to be the fact that the strikers themselves accept this. At the same time, given the resumption of normal work, there is nothing to prevent the men from raising through their union any objection with the Board, including their wish for a further investigation of their complaint about Lower Oliver's wharf.
I am informed that this is the advice the men have been given by their union. I understand that the immediate reason for the stoppage, that is, the use of listed men at Lower Oliver's wharf, has disappeared for the time being, as no unloading work is taking place there at present; in fact, the work involved is only two days a month, or, occasionally, two days every three weeks.
In the interest of the country, the men, and the future of the Port of London, I would, therefore, urge the strikers to return to work at once and take up the matter through constitutional channels.
Mr. Gresham Cooke: Will my right hon. Friend bear in mind that this unofficial strike of 13,000 men is, of course, contrary to an arrangement made with the Dock Labour Board, on which the trade union representatives were consulted and to which they agreed, and that, as a result of the strike, an immense quantity of food and vegetables is slowly going to rot and our exports are being held up?
Will my right hon. Friend bear in mind that there is a strong feeling in the country that, to avoid a repetition of the experience we had with the tally clerks'

911
strike, which lasted 27 days, the Government should not allow things to drift and will before long have to step in and do something about it?
Mr. Hare: I think that the whole House will agree that strikes which are unconstitutional are highly regrettable not only from the point of view of the employers and the men themselves, but for the country as a whole. I think that that view is shared by most hon. Members on both sides of the House.
The situation is that within the docks there are about 30,000 tons of food in all, but at the moment the only commodities for which immediate concern is felt are onions, oranges and lemons. Of course, if the situation continues to develop adversely, the food situation will be more serious.
Mr. Lindsay: With the appalling waste of these recurrent unofficial stoppages not only in the docks, but also in the motor industry, are not we reaching the position when, however reluctantly, we should consider whether the State should underwrite agreements between employers and labour so that when employers break agreements the companies will be fined, and when labour breaks agreements the workers will not be able to draw P.A.Y.E. refunds, strike pay, unemployment benefit, or National Assistance?
Mr. Hare: I think that we should be very careful what we say. Dealing with the situation as we find it today, I think that both sides of the House must surely have this in common, that we are anxious that these men should be given a chance of responding to the call of their union.
Mr. Mellish: The right hon. Gentleman will understand that almost everything that he has said is warmly supported on this side of the House. He is looking, as I am sure we all are, for a formula for these men to go back to work. Nevertheless, reverting to the point he made about an investigation, may I put this to him—without, I hope, causing embarrassment to anyone who is trying to do a very difficult job at the moment?
I believe that this particular firm has quite a history. Would it not be a good thing if the Minister would be a little more forthright on the question of an
912
inquiry, not only on the question of this particular strike, but, as it were, on earlier activities? If he were to emphasise that, and get such an inquiry going, is it not likely that the men would go back first thing in the morning?
Mr. Hare: I have already made it clear that if the men go back, they will have every right to take up their desire for an investigation with their union leaders.
Sir P. Agnew: In spite of the fact that some of these perishable foodstuffs may have been dumped here and to that extent are injuring our own horitcultural producers, will my right hon. Friend nevertheless take note that the public are very gravely inconvenienced by this strike, and will he consult with his colleagues in the Government with a view to taking a more robust attitude about this matter which, in the time of the Labour Government, culminated in their putting the Services in so that the public of London and the rest of the country were not put to this very great inconvenience?
Mr. Hare: I assure my hon. Friend that our desire at the moment must be to get the men back; but, of course, if the situation deteriorates the Government will watch it extremely carefully and will take the measures which the particular circumstances indicate are necessary.
Mr. G. Brown: May I express to the Minister our hope that he will stand up robustly to those on his side of the House who are giving him advice which would turn out to be quite disastrous in this situation? Those of us who know Mr. O'Leary know that he is standing up very courageously in a very difficult situation. Will the Minister continue to support the claims of those who are trying to work through the proper machinery, because, in the long run, that will pay us much better than what looks like more courageous action now?
Mr. Hare: Yes, the right hon. Gentleman will realise from what I said in my original Answer that that is my view. Against that, it is our duty, as a Government, to watch the situation very carefully. If it does deteriorate, it may be necessary for us to take action which, obviously, is not applicable to the present moment.

PERSONAL STATEMENT
Mr. G. Johnson Smith: With your permission, Mr. Speaker, and that of the House, I wish to make a personal statement.
On Thursday, 27th April, at a meeting of the Primrose League, I made some remarks intended to be of a purely humorous character about hon. Members on the opposite side of the House. These remarks of mine had no malicious intent whatsover. However, I very much regret it if they have caused any offence or hurt, and I withdraw them unreservedly. I particularly wish to apologise to those hon. Members opposite to whom my remarks applied. I hope that the House will accept my apology.

ORDERS OF THE DAY

  NORTH ATLANTIC SHIPPING BILL
  Order for Second Reading read.
  3.47 p.m.
  The Minister of Transport (Mr. Ernest Marples): I beg to move, That the Bill be now read a Second time.
  For many years, the Cunard Steamship Co., Ltd., has operated an express weekly passenger service across the Atlantic with the two vessels which are known as the "Queen" ships, the "Queen Mary" and the "Queen Elizabeth". The "Queen Mary" first sailed in 1936, and the end of her life is expected in 1965, in four years. The "Queen Elizabeth" is four years younger and, therefore, ought to last at least a further four years.
  The story started two or three years ago, when Cunard told the Government that it could not find enough capital, either from its own resources or by borrowing on the market, to replace the "Queen Mary" by a ship of the same class at current shipbuilding prices. The choice facing the Government was quite clear. Sooner or later, our express passenger service across the Atlantic would cease or Government assistance to build a successor ship to the "Queen Mary" would be necessary.
  At this point, it might be convenient to the House to examine the facts and nature of the express passenger North Atlantic service. I wish to distinguish between that express passenger service and the ordinary service across the Atlantic, because the express passenger service takes the cream of the passengers who go across the Atlantic by ship. In most of my speech, I shall be referring to the express service rather than the slower service.
  In the first place, it is the most travelled long sea route in the world. Secondly, it is the best known service in the world, and it gives British shipping and shipbuilding a unique chance to prove their worth in maritime activities, be they shipping services or shipbuilding skills.
  Thirdly, it is the most heavily subsidised service in the world, and, later, I will give details of the subsidies which various Governments give to their ships.

  915
  Fourthly, this route earns currency of all sorts—hard currency, dollar currency, and so on—for this country, which assists our balance of payments.
  Therefore, the previous Administration made two decisions. First, that this unique British service should not be allowed to die out because Cunard could not itself raise all the capital. The Government decided to assist, provided—and I said provided—there were genuine commercial prospects of a successful service, and provided, also, that reasonable financial arrangements could be made with Cunard. Accordingly, in the 1959 General Election Manifesto, the previous Government announced that, if returned, they would support the continuation of the North Atlantic British express passenger service. That was the first action they took. They pledged themselves, subject to these two provisos.
  Secondly, in September, 1959, the Government appointed a Committee under the chairmanship of Viscount Chandos to advise them on all the complicated issues involved. These included many questions, for example, what were the commercial prospects, what was the best size and type of ship, and what should be the extent and form of the Government's assistance. Lord Chandos was the Chairman of that Committee, which took evidence from Cunard, from other ship-owners and from many other interests.
  The Committee used the Economist Intelligence Unit to make a long-term survey of the probable trends in sea traffic. It asked Research Services, Limited, to analyse the reasons why passengers travel by sea, and also to assess whether those reasons might continue to prevail in the future. With the help of the Yarrow Admiralty Research Department, known as Y.A.R.D., it examined several different types and sizes of ship and various types and patterns of service. Many technical aspects were given exhaustive study.
  I think that it would be appropriate, at this stage, if I said that the Government are very grateful for the thorough way in which this Committee tackled a rather difficult job, with all its complications and complex issues.
  Mr. E, Shinwell: Why did you not publish the Report?
  Mr. Marples: That question was addressed to Mr. Speaker, and not to me, but I can say that the Report was not published because, when he was given the terms of reference, Viscount Chandos was told that the evidence would be confidential, and that the Report would be confidential, too. If Viscount Chandos and his Committee took evidence in confidence, and, if afterwards, they were to break that confidence, that is something which the right hon. Gentleman will surely know is a breach of faith. I am sure that he will be the last person to say that a breach of faith of that sort should be committed, and I am quite certain that I shall carry him with me in that particular respect.
  Mr. R. J. Mellish: On this very important point about the Chandos Committee, would the right hon. Gentleman tell us why, in the terms of reference of that Committee, it was not allowed to go into other aspects of this problem?
  Mr. Marples: The terms of reference were announced and were accepted by the House, and the Committee went to work on these terms of reference. It is rather pointless now to say that the terms of reference should be altered. They were accepted by the House, and it was made quite clear to Lord Chandos, who carried out these terms of reference, that that is what the Committee was asked to do.
  Sir Peter Agnew: My right hon. Friend has said that the terms of reference were accepted by the House. Was there ever a Motion before the House?
  Mr. Marples: The Government announced the terms of reference to the House in the time of the previous Administration, and the time to raise objections was then, and not after the Committee had reported. After it has reported is rather too late. Therefore, I say that the Government are grateful for the thorough manner in which the Committee tackled its task.
  On 1st June, 1960, a summary of the recommendations was circulated in HANSARD. In brief, the Committee recommended a ship of 75,000 gross tons, with a service speed of 29½ knots, 990 feet overall length, and with a passenger capacity of 2,270. The total cost was not to exceed £30 million, Cunard providing

  917
  £12 million and the Government the remaining £18 million as a loan bearing 4½ per cent. interest from the date when the ship came into service. There were provisions dealing also with depreciation, the security of the Government loan and its redemption.
  Finally, the Committee recommended the construction of the ship by competitive tender. These recommendations were acceptable to Cunard. All this made it clear that the Government could redeem their election pledge and ensure the continuation of the Atlantic service on reasonable terms. The Government accepted the recommendations subject to some financial modifications which I will explain later. In November, 1960, the details of the Government's decision were announced to the House.
  In Clause I of the Bill, the Government seek Parliamentary authority to give effect to that decision, and the way in which the Government propose to use that authority is explained in the White Paper, which sets out the memorandum of points of agreement—what I call the heads of agreement—between Cunard and the Government. The final details of the legal formal agreement will be laid before Parliament, and will, of course, be based upon the memorandum in the White Paper.
  At this stage, I should like to compare the Chandos Committee recommendations and the Government's proposals. The recommendations about the characteristics of the new ship and the basis of tendering are accepted as they stand, and I will explain them later. The new ship will be owned by a separate company, and this will be Cunard White Star, Limited, an existing wholly-owned subsidiary, but the ship will be maintained and operated by Cunard. That is important. The agreement will provide for the maintenance of British control of both Cunard and Cunard White Star, Limited, and in view of the take-over bids from other countries, it is necessary to have these provisions in our agreement.
  There were four modifications to the Chandos Committee's financial recommendations, and I should like to explain them. First, on the form the assistance should take, the Committee recommended that the loan should bear
  918
  interest at 4½ per cent. per annum. The subsidy element is obviously the difference between 4½ per cent. and the rate of interest normally charged by the Public Works Loan Board. The Government agreed that the amount of assistance should be calculated in this way, but we considered that the expedient of giving an artificially low rate of interest was, in effect, concealing the actual subsidy. We did not wish to conceal the subsidy, and, therefore, we prefer the usual interest at the rate normally charged by the Public Works Loan Board. The difference between that rate and the 4½ per cent. recommended would be given to Cunard by way of an outright grant. In this way, the size of the assistance is not concealed. It is there for all to see. As recommended by the Committee, Cunard would get the amount of assistance recommended, but in another form. It is not concealed. Everybody can see it, and I am sure that it is better, if a subsidy is given, that we should all know what the sum is, rather than that it should be at an artificially low rate of interest. In practice, this is how it would work.
  Let us assume that the total cost is £30 million, and that the Government loan is up to £18 million. The £18 million loaned by the Government will not bear interest at 4½ per cent., as suggested by the Chandos Committee. It would be split into two parts. First, a loan of £14¾ millions at 6¼ per cent., which is the rate now ruling, and, secondly, an outright grant of £3¼ million, which would enable Cunard to have its subsidy.
  The second alteration was on how to meet the cost of the ship, which, as the House will recall, was estimated to be not more than £30 million. The recommendation of the Committee was that Cunard would pay a fixed sum of £12 million and that the Government would raise the rest of the cost up to a maximum of £18 million. The new arrangement is that the Government and Cunard will contribute in the proportion of three to two up to a maximum of £30 million. If it costs more than £30 million, Cunard will pay the excess, so that under the new arrangement it is in the interests of the Cunard Company to keep down the cost of the ship. That did not apply in the arrangement suggested by the Committee.

  919
  The third alteration was concerning the date when payment of the interest on the loan was to start. The recommendation of the Committee was, broadly, that it should start from the date when the ship entered service. The new arrangement is that interest will be charged from the date when the cash is actually advanced, and I think that this is a much more businesslike arrangement than the one the Committee recommended. But as the ship cannot earn anything until it is in service, the interest accruing during construction will be added to the loan and will be repayable on the same terms.
  The fourth alteration was this. The Committee recommended that if profits on Cunard's investment were less than 3 per cent. per annum there should be a reduction of the interest charges received by the Government. This has been abandoned. Now there will be no reduction in the Government's rate of interest, even if the Cunard's investment earns less than 3 per cent. The Committee also recommended that if profits were greater than 7 per cent. repayments of capital should be accelerated. This rate of 7 per cent. has been raised to 7½ per cent., partly as a quid pro quo for the previous concession. Apart from these differences, depreciation and redemption of and security for the Government loan are as recommended.
  Those are what I call the facts of the story. I should like to examine in greater detail some aspects of that story. First, I wish to deal with the size and type of ship and the type of service which should be provided. It has been suggested in many quarters that the new ship should be smaller. Critics have put forward differing sizes, ranging from 30,000 tons to 70,000 tons. On this question we must bear in mind what is our object. It is to provide a weekly service with two ships or a fortnightly service with one ship. This is the standard of the express passenger service provided by the "United States" and the "France" as well as by the existing "Queens". To provide a weekly service means that a crossing must take five days or less because of the time taken in the turn round. A five day crossing of the Atlantic requires a high service speed. This can be attained only by a ship of about 1,000 feet in length if we want reasonable passenger comfort especially in the winter.
  920
  A technical formula which can be understood by laymen was set out in the leading article in the Shipbuilding and Shipping Record of 13th April. It is that the square root of the length in feet should be not less than the speed in knots. That is easy to work out. A speed of 30 knots demands a minimum length of 900 feet. The "United States" is 917 feet in length and has a normal service speed of 30 knots, although she can do more than that. The "France" will be 1,035 feet in length and will also have a service speed of about 30 knots. The new ship which we propose will be 990 feet in length, with a speed of 29½ knots.
  The Chandos Committee examined every possibility concerning the size of ship with the aid of the Yarrow Admiralty Research Department. For example, it examined the possibility of a ship of 52,000 tons, which would be the largest and, therefore, the most economic ship propelled by twin screws. This was unsatisfactory in several ways. The reduction in capital and operating costs would not be sufficient to offset the decrease in accommodation and earning capacity. Moreover, it could not be relied upon to keep a decent service in the winter. A smaller ship with the same engine power would be even less economic. A smaller ship with a reduced engine power and, therefore, reduced cruising speed could not provide an express passenger service of the same standard as that now provided either by Cunard or by its main competitors.
  These considerations also rule out a dual-purpose ship operating, shall we say, on winter cruises. Many people suggested that we should have a ship of a certain size which, in winter, could take people on "summer cruises" to the West Indies. But if it was to be used for summer cruises to the West Indies and berth at certain places it would not be able to fulfil the requirements of a ship crossing the North Atlantic. Any ship which can operate on the Atlantic express passenger service is bound to be unsuitable for other trades.
  Another suggestion is that nuclear propulsion should be used. I wish that this were possible, but it is not. Nuclear

  921
  propulsion is not yet sufficiently developed and we cannot delay the building of the new ship because the life of the present ship, the "Queen Mary", will be finished in 1965 and she will become extremely expensive to operate after that date. The main initiative and responsibility rests with Cunard. Its long experience of the Atlantic makes it the best judge of what is wanted, and the technical assistance provided by the Admiralty Research Department will help in making sure that a really fine ship is built.
  I think that it would be right if I made a comparison between the subsidies which are paid by various nations on this specialised express service. We must remember that if we ask a private enterprise firm here to compete with other ships which are heavily subsidised and say to it, "We will give you no subsidy", it is obvious that it will not live in the competitive race. We must bear that in mind. There was a letter in The Times today which asked why a firm should have a subsidy. We must compare like with like. If it is to meet competition which is subsidised, it is folly to think that it can do so without a subsidy. [Interruption.] If the right hon. Member for Easington (Mr. Shinwell) will contain himself for a moment, which he always does so easily in the House, I will try to analyse the subsidies which are paid.
  Subsidies can be of two sorts: first, on the capital costs; and, secondly, on the running costs. First, I wish to deal with subsidies on the capital costs. America provides a subsidy of 58 per cent. of the capital costs of her ships. France is providing 20 per cent. of the capital costs. The subsidy which we propose under the Bill, £3¼ million, is equal to a subsidy of 11 per cent. of the capital costs. By no stretch of the imagination can it be said that we are subsidising Cunard excessively compared with other countries abroad.
  Mr. John Diamond: Will the right hon. Gentleman clear up one relevant point concerning the comparisons that he is making? Are the cases that he has mentioned strictly comparable? I bear in mind particularly such things as investment allowances. Do they apply in other countries?
  Mr. Marples: The hon. Member, who has been a member of the Institute of Chartered Accountants, knows very well that an analysis of the position in America, France and this country would take several hours. From the point of view of the cash given to this company by way of subsidy on capital costs, it is obvious that we are giving far less than is given by our competitors abroad.
  Mr. Shinwell: Can the right hon. Gentleman tell us the assets of the United States and French companies compared with the assets of the Cunard White Star?
  Mr. Marples: That is a very complicated thing to deal with by question and answer across the Floor of the House. The right hon. Gentleman has had plenty of time to table a Question on the matter. Although I am not responsible for the assets of the American and French companies, if he tables a Question I will do my best to enlighten him if he does not know the answer.
  Mr. Mellish: The right hon. Gentleman is making the fair argument that it is necessary and right that this ship should be subsidised by the Government. May we take it from that that it is being said from the Government Front Bench that all future shipbuilding in this country will carry a subsidy?
  Mr. Marples: If the hon. Gentleman believes that, he will believe anything. What I said was that this is an express passenger service across the Atlantic which is unique, because every other country subsidises this route more heavily than any other route in the world. We therefore have either to get out of the route or to give a subsidy which, at any rate, gives the private enterprise firm a chance to compete with the higher subsidies given by other countries. I hope that the hon. Gentleman will not read into what I have said the interpretation that he indicated. I shall be very disappointed if he does.
  So much for the capital costs of the ship. A ship has running costs, too. The Americans subsidise the running costs of their ship, the "United States", to the extent of 28 per cent. The French provide a sum equal to any losses of the company. In our case, we are providing nothing for running costs. Therefore, I

  923
  think that it can be said that the subsidy which we are giving for this ship is less than the subsidy given by other countries for their ships, in respect of capital costs. We give nothing for running costs, and they give various amounts. While we may argue about subsidies, therefore, it is clear that the arrangement which has been made is a hardish bargain by the Government in these circumstances. The present subsidy is roughly comparable with the 1934 subsidy to the present "Queens".
  The Atlantic crossing has always been subsidised, from the "Lusitania" and the "Mauretania" onwards. In the special circumstances of this route, we cannot expect Cunard, without a little subsidy towards the cost of the ship, to compete with France and America, who give a much bigger subsidy on the capital cost and also a subsidy on running costs, which we do not give.
  I turn to the question of the security and the repayment with interest of the Government loan. The first half of the new ship's life is likely to be the most profitable, and by the end of that time the earnings of the ship should have been enough to provide cover for repayment of almost all of the Government loan, in addition to the interest due. Until the loan has been repaid the return on the equity capital payable to the Cunard shareholders is pegged at a level of 7½ per cent. less Income Tax, and any excess will accelerate repayment of the Government loan. The Government will have a specific charge on the ship itself and the depreciation fund, too, and a floating charge on all the other assets of the Cunard White Star Company. The one exception to this is the revenue of the depreciation fund, on which the Government will have a floating charge and not a fixed charge.
  It has been suggested that the Government should take an equity interest in the new company, but we do not want to expose the taxpayers' money to any greater degree of risk than is necessary to secure the Government's object, which is the continuation of this service. In fact, with the insecurities which lie ahead the terms which have been secured are a good deal more favourable to the Government than any equity interest which would rank on equal terms with the Cunard equity shareholding.
  924
  I turn to the tenders. The Committee recommended that the ship should go to competitive tender to all the appropriate yards in this country, and invitations to tender were sent out by Cunard at the end of March to the six appropriate shipyards in this country—John Brown's and Fairfield's, on the Clyde; Harland and Wolff, of Belfast; Cammell Laird, of Birkenhead; and Swan Hunter's and Vickers-Armstrongs, on the Tyne. The Ministry, again with the advice of the Yarrow Admiralty Research Department, will be associated with Cunard in the assessment of the tenders received and the contract will be given to the firm which submits the best tender. The best tender will not necessarily be the lowest priced. It will be the best all-round proposition in terms of value for money. There are such things as delivery dates and many other technical details to take into account, and the acceptance of any tender depends upon Parliament passing this Bill.
  Mr. Ernest Popplewell: Will the right hon. Gentleman be a little more explicit? He has said that it will not necessarily be the lowest price and that all kinds of conditions may be attached. Recently, he announced in the House that another facet would be that the shipyard must be sited in a local unemployment area. Does that still apply? If a shipyard is sited adjacent to a local unemployment area, such as Swan Hunter's, will it be considered equally with the others?
  Mr. Marples: The hon. Member's basic question is made on a false assumption. In answer to a supplementary question I said that the normal procedure for a Government contract was that, other things being equal, it should go to an area scheduled as an area which required more employment.
  This is not a Government contract. It is being given by Cunard with the assistance of the Government. In any case, in a ship of this complexity and size it is highly improbable that other things will be equal. I am certain that some firm will produce a tender which will be acceptable, and I cannot believe that in so complex a ship costing £30 million two tenders will be identical. I hope that that relieves the hon. Member's anxiety.
  Mr. Cyril Bence: In answering a Question a few weeks ago the Minister suggested that Cunard would have the final word in deciding the acceptance of the tender. May we be assured that Cunard will have the decisive say in which tender it will accept?
  Mr. Marples: If the Government are giving a loan of this sort, Cunard will naturally initiate it and will decide it, but Cunard will have the assistance of the Ministry and the Admiralty Research Department; and, naturally, we shall all have to reach an agreement together. Where £18 million of Government money are involved, we must be certain that the tender goes to the right person.
  Dame Irene Ward rose—
  Mr. Popplewell: This is every important.
  Dame Irene Ward: The hon. Member has had one go.
  Mr. Popplewell: Do I understand that the Minister is renouncing the impression which he created in the country a little while ago when he said that the decisive factor would be the siting of work within a local unemployment area? Is he withdrawing that? Does he mean that those yards which are not within such an area, but are adjacent to it, will be considered on equal terms with all the rest?
  Mr. Marples: That point arose many weeks ago. I will send the hon. Member the record in HANSARD, SO that he can study it. It was said many weeks ago. The hon. Member has not read his HANSARD; otherwise, he would not ask that question.
  Mr. Popplewell rose—
  Mr. Marples: I give way now to my hon. Friend the Member for Tynemouth (Dame Irene Ward).
  Dame Irene Ward: I thank my right hon. Friend for giving way to me. How much will the House of Commons know when the tenders are received and when the decision has been taken? How much information are we to be given so that we may be assured that the tender has been awarded on the basis which my right hon. Friend outlined to us? This is
  926
  a very important matter to all rivers, and we want as much information as we can possibly be given.
  Mr. Marples: Tenders coming to the Government are always treated as confidential. This is the usual practice of all Governments on contracts, whether for roads, houses, schools, or anything else, and this will be treated in precisely the same way. The final form of legal agreement will be presented to the House and the House will be able to see it.
  May I turn from the North-East Coast to the insurance of these ships? The Government have provided insurance for both Queens.
  Mr. Percy Collick: The impression prevailing in shipyards throughout the country is that the sole criterion is price. On the basis of the Minister's previous statement, the empression was that the decision about the tender would be given by the Government solely on price. I am sure that many of my colleagues will agree that that was the opinion in the country, whatever it may be in the Government. The opinion is that the decision on the tender would be on price. Today, the Minister has added one or two other considerations. He ought to make it abundantly clear to the country what the other considerations are.
  Mr. Marples: The impression has never been created that it was solely a matter of price. It is a matter of value for money. If a certain yard, on a £30 million contract, tendered £10,000 cheaper and a five-year longer delivery date, does the hon. Member imagine that the Government would accept the lowest price? Not on your life. The Government will accept the tender which is the best value for money, technically and in terms of delivery date and in terms of price, quality and many other things. I do not wish to take too long on this matter, because the House has not very long to debate it.
  I turn to the question of insurance. The Government provided insurance on these lines for both the "Queen Mary" and the "Queen Elizabeth". From Clause 2 it will be seen that the value of the new ships will be such that it is likely that the normal insurance market will be unable to cover all the insurance. Therefore, the Government intend to

  927
  provide insurance for such part of the value of the ship as the normal insurance market cannot cover. This will apply to the usual marine risks on the hull and the machinery and also to war risks and third party liability risks. Normal commercial rates will be charged and that is precisely what happened with the "Queen Mary" and the "Queen Elizabeth". That arrangement was a separate arrangement from the financial assistance which the Government provided some four years later by way of subsidy in 1934, and it turned out that the Government made a considerable profit from their insurance of those ships.
  I must emphasise that the insurance proposals do not constitute financial assistance to the Cunard Company since full payment will be charged for risks underwritten by the Government. Nor will the Government be competing in any way with the normal insurance market. The market will have first refusal of the business, and the Government will only underwrite such part of the risk as the market is unable to accept. The insurance agreement will be subject to affirmative Resolution of both Houses of Parliament.
  I have concentrated on this issue of a subsidy for a North Atlantic ship and the Cunard Company. It has been asked if the Government are committed to a second ship. The proposed arrangements relate only to the replacement of the "Queen Mary". The "Queen Elizabeth" will have several years of life even after the new ship enters service. The question of her replacement will not, therefore, arise for some time. The Chandos Committee explicitly refrained from making any recommendation on a second ship because it recognised that by the time it became necessary to make a decision about it conditions might be quite different in two respects. First, the commercial prospects of the service and, secondly, in the type of ship which it might be feasible to introduce. The present proposed arrangements for the replacement of the "Queen Mary" therefore leave the question of the "Queen Elizabeth" entirely open. The Government have entered into no commitment on the point, stated or implied.
  I would finish by saying that it would be wrong to draw from the Bill—and
  928
  this is the answer to the hon. Member for Bermondsey (Mr. Mellish)—any far-reaching conclusion on the Government's policy either towards the shipping industry or on the general question of investment in private industry.
  The object of the Bill is to secure the continuance of the British express passenger service across the North Atlantic, and the Government have considered this to be a proper object of national policy. This North Atlantic express passenger service is a unique matter in both the intensity of subsidised competition and the peculiar significance to the nation of the express service which the Cunard Company has for so long and so splendidly maintained.
  I have tried to cover as many of the points as I could in this Second Reading speech in the shortest possible time. I hope that I have explained it reasonably fully, but I want to make it quite clear that this ship, we are convinced, will make a contribution. The crucial part is the first half of its life. The Chandos Committee did think that this trend to travel by sea would continue for some time. Naturally, more people will go by air, but the point is that more people are travelling more frequently; in the affluent society they tend to spend more money on travel.
  Therefore, the Chandos Committee, consisting of very eminent and distinguished people, and backed by expensive research, was convinced that it would be possible for the sea to attract a number of passengers over the next ten to fifteen years. Some people go for a holiday for health reasons and go because they like, for instance, to get away from the telephone. It is fortunate that my right hon. Friend the Postmaster-General is not here, but sometimes it is a comfort to be away for five days and not have the telephone ringing.
  Mr. Shinwell: Will there be no telephones in the new ship?
  Mr. Marples: Yes, there will be telephones there, but they will be so expensive that people will not use them.
  Having explored this subject exhaustively, and having gone into all the technical aspects of what I consider the reasonably good terms, I hope that the House will give the Bill a Second Reading without a Division.
  4.25 p.m.
  Mr. G. R. Strauss: We have listened with interest to the speech of the right hon. Gentleman, but I do not think that I have ever heard a speech by a Minister, speaking from that Front Bench, which was received with as little enthusiasm from his supporters behind him as this one. There was not one murmur of approval when the right hon. Gentleman sat down. Indeed, there was what has been called "a resounding silence", which was most impressive.
  I wonder what we shall hear during the rest of the debate. We know from past experience—on Wednesday afternoons—that a number of hon. Gentlemen on the other side of the House axe critical of the proposal, as they have been sniping at the Minister at Question Time at every opportunity. Today, looking at the serried ranks of hostile faces behind him, and seeing that nearly all hon. Members opposite have speech notes in their hands, we wonder whether we are to witness a grand assault. It will be very enjoyable to us on this side of the House to witness this new split in the Conservative Party.
  I suppose, from the fact that the Chancellor of the Exchequer is sitting next to the Minister of Transport, that it is he who will answer this debate. He will find that he will have a number of important and difficult questions to answer, some of which I hope to put to him, and others by my hon. Friends, and some which will, no doubt, be put to him from hon. Members sitting behind him. We had rather hoped—anyhow, I had, personally—that the new Joint Parliamentary Secretary to the Ministry of Transport would have taken his plunge today as a Front Bench speaker and given us his views.
  However, although the is not to speak, apparently, I should like to take this opportunity of congratulating him warmly on his promotion—[HON. MEMBERS: "Hear, hear."]—which, in the opinion of all of us, I think, is well deserved, not only on the ground of the qualities he has shown as a Parliamentarian, but because of his distinguished naval career. We hope that he will be able to inject into his Ministry a sense of urgency on the problems concerning the shipping and shipbuilding industry, a sense of urgency which seems to so many of us, I think on both sides of the
  930
  House, to have been so gravely lacking during recent years. What we hope to get from the Ministry in future is action and not excuses for inaction.
  Some of the underlying troubles of the shipbuilding and shipping industry will, no doubt, be raised during the debate this afternoon by hon. Members, but I propose to confine myself to the substance of the Bill before us in the hope that we shall be able to have, before long, another debate in which we can concentrate on the broader problems of these industries.
  We are being asked to endorse a Government proposal to grant a subsidy and a loan to the Cunard Company to enable it to replace the "Queen Mary" by another prestige North Atlantic liner of the same type. Two questions arise, therefore, which have to be considered today. Is it wise, in these days, to use substantial national resources for such a purpose at all, and, if so, are the financial terms of which the Government propose to do so fair to the taxpayer?
  Let us consider, first, the wisdom of building a new ship of the "Queen" class. The Minister told us the grounds on which he and the Government believe this to be desirable, but when we are considering this matter it is important to appreciate the manner and the timing of the Government's decision. The Government have developed the strange habit of making a decision on highly technical matters, announcing them, and subsequently appointing an authoritative and expert committee to consider the wisdom of the decision and its consequences.
  They have recently done that on two occasions. They did so over the break-up of the British Transport Commission. The Prime Minister announced that in the Government's view it was desirable to alter the structure of British Railways. He announced that, as far as we know, out of the blue. It was contrary to the subsequently published views of the Select Committee that was sitting on the matter at the time.
  The announcement was made and then, afterwards, the right hon. Gentleman set up the expert Stedeford Committee to consider how this could be done. Again, another bad habit of the Government in this matter is that when such an expert committee is set up the

  931
  House of Commons is deprived of an opportunity to study its report and is so put at a great disadvantage. The Government have behaved similarly in the matter which is before us today. Without, as far as we are aware, seeking the advice of any independent authority, the Prime Minister announced—in the course of the General Election, be it noted—that the Government had decided to give financial support for the replacement of the "Queens".
  Mr. Bence: The Prime Minister said that in Glasgow.
  Mr. Strauss: At the same time, the right hon. Gentleman announced that an expert committee was to be set up, consisting of a senior partner in a shipping company and of a chartered accountant, with Lord Chandos as chairman, to report on the "best and fairest" way—those were the words used—of giving this financial support.
  As I have said, this decision was announced during the course of the General Election. No doubt, the right hon. Gentleman was largely concerned at the time in putting forward in the election manifesto some matter which appeared attractive to the electorate. But it is all the more necessary now, when we are in calmer political waters, to examine very carefully the merits of the proposals then put forward and to consider, in particular, whether, since that announcement was made, events have not developed which cast doubts on the wisdom of the original decision.
  The success of the North Atlantic passenger sea transport service depends primarily on the number of passengers who, during the next twenty years or so, are likely to cross it in luxury liners. An article in the Daily Telegraph last week, which some hon. Members may have read, recited the pessimistic forecast, which later proved to be false, when the Government, in 1934, agreed to help with financial resources the completion of the "Queen Mary". Since then, conditions have changed fundamentally. We are now living in an age of air transport, and all experience shows that this is not only growing with amazing speed, but it is steadily displacing the more leisurely form of transport by sea. This is particularly true of the North Atlantic crossing.
  932
  Let us consider some of the figures which have been published recently. In 1948, 637,000 people crossed the North Atlantic by sea and only 240,000 by air. Ten years later, in 1958, more people crossed by air than by sea. The number of sea passengers was 958,000 and the number of air passengers 1,193,000. The change since 1958 from sea transport to air transport has accelerated considerably, and it is an important factor to bear in mind that this acceleration has been particularly marked since 1959, when the Prime Minister announced the Government's decision.
  Sir James Duncan: Are these international figures or British figures, and are they confined to luxury liners?
  Mr. Strauss: I am quoting them from a letter which appeared a little while ago in The Times and which have not been contradicted by anybody. I accept them as correct. If they are false, no doubt the hon. Gentleman will give other figures.
  According to that same source, during last year the number of air passengers rose to nearly 2 million while the number of sea passengers crossing the North Atlantic dropped to 866,000. There is, therefore, a decline in the number of sea passengers crossing the North Atlantic and it is also stated in the same letter, and I assume it to be correct, that the number of passengers who crossed in the "Queens" last year dropped by 6 per cent.
  Mr. F. A. Burden: The right hon. Gentleman should remember, in relation to that last quotation, that the dock strike had a considerable effect on the number of passengers on the "Queens" last year.
  Mr. Strauss: That may be so, but even taking that into account I think that the trend is quite clear and I do not think that anyone will deny that it will continue and probably accelerate considerably during the coming years.
  Mr. John Howard: I have figures from Southampton Docks. The passengers going to the United States and Canada in 1959 and 1960 were 163,000 and 169,000 respectively.
  Mr. Strauss: I was talking about the double journey.
  Mr. Howard: These figures relate to the double journey.
  Mr. Strauss: It may be that the hon. Gentleman's figures are correct. I have been quoting from the letter in The Times, which has not been contradicted and which said that there has been a 6 per cent. fall.
  The House will have noted that in view of the greater desire of passengers crossing the Atlantic to travel faster by air in greater numbers, air fares are coming down rapidly. They have been reduced and are to be reduced further. According to the proposals of many of the airlines they will be reduced substantially in the next year or two. One must therefore accept the fact that the chances of increasing the number of passengers on ships crossing the Atlantic in the next twenty years or so are very bleak indeed.
  The Minister of Transport made a number of points in favour of the Government's proposals. He said that all other countries subsidise the trans-Atlantic passenger service.
  Mr. Marples: The express services.
  Mr. Strauss: If we want to compete, we must do it, also. I do not think that anyone can deny that. I certainly do not. America, France and Italy do so, and I understand that Russia is now likely to try to put a ship in this service. But this means that with the new ships built by these countries there is likely to be increased capacity on the North Atlantic to meet a falling number of passengers. Competition therefore will be more difficult and more intense than ever.
  Mr. John Rankin: Does my right hon. Friend not recollect that his own figures have shown that the total number crossing the North Atlantic by air and by sea has vastly increased since 1947 and that the figures which he has given show that the traffic is there?
  Mr. Strauss: I will give figures year by year if my hon. Friend would like to have them, but I have tried to show that the sea crossings have fallen. [HON. MEMBERS: "NO."] All right, perhaps somebody will give authoritative figures later which will be contrary to mine.
  934
  The question is whether, in view of all this, it is desirable to compete in this trade or to leave this very hazardous business to other countries and to use our resources on more modern ventures which are likely to be commercially more successful and in every way nationally more advantageous.
  The same considerations apply to the arguments put forward by the Minister of Transport, and others outside the House, about the prestige of maintaining this service. Many maintain that it is desirable, for these purposes, for Britain to have these ships. I wonder? Compared with other potential achievements, will Britain really gain so much by having a fine, possibly the finest, liner on the North Atlantic route? Is it really worth trying to maintain what has been described as an "out-moded status symbol"? One has the feeling that people who think that way are living in the past, are indulging in nostalgic images of bygone glories—with their minds attuned to the first part, rather than to the second part, of the twentieth century.
  Mr. Howard: Would the right hon. Member not agree that, according to his argument, the Canadians and the Americans are apparently living in the past, although they provide 70 per cent. of the passengers for the "Queens"?
  Mr. Strauss: If they are indulging in folly, that is no reason why we should do likewise. [HON. MEMBERS: "Oh."] Whatever may be said, I know that the view is taken by many hon. Gentlemen opposite that this form of investment in the present age is very doubtful.
  Mr. Bence: May I inform my right hon. Friend that the "Empress of Britain" sailed on her maiden voyage from Greenock last week, and that she was loaded with passengers?
  Mr. Strauss: That may be so, but I do not know what subsidy the "Empress of Britain" received in her building. We are at the moment considering the placing of our resources, and, of course, of the taxpayers' money, on a particular venture.
  I believe that Britain's prestige in the eyes of the world will depend in the coming years on such things as our social and cultural achievements: our attitude to commonwealth and world affairs and

  935
  our contribution to the advancement of science, rather than to the maintenance of our competitive position in this highly difficult and contracting business.
  Two arguments advanced by the Minister must receive special consideration. First, in spite of what appear to be the highly unfavourable economic prospects of any new North Atlantic luxury ships, the Cunard Company takes a different view, since it is prepared to invest £12 million of its shareholders' money in this enterprise, on condition, of course, that the Government put up a large sum with a subsidy attached. If this proposal is such a good commercial proposition I wonder whether it would not have been possible for the Cunard Company to have put up all the money that was required for this venture. It is clear, from a study of the company's last balance sheet, that its reserves for ship replacement and other general purposes amounts to £38 million. It seems that the company is not short of money, or at least its credit is good, and that if it wanted to borrow the necessary money it could have done so.
  The other argument in favour of the Bill is a powerful one, that the building of a "Queen" replacement will provide badly needed work in one of our shipyards and additional work for many of the ancillary shipbuilding trades. We are all aware that the prospects for our shipbuilding and ancillary industries over the next five years are poor. The cause of this sorry state of affairs has been due in part to world conditions over which our industry had no control and, in part, to internal defects for which responsibility does rest with the industry and which, we hope, Government pressure will soon remedy.
  But whatever the causes, the fact remains that the tonnage likely to be built in Britain's shipyards during the next five years will be well below capacity, and some of the yards may be wholly or partially idle. This, of course, will have serious consequences to those who work in them, many of whom may not be able to get employment elsewhere.
  For this reason alone, we propose not to vote against the Second Reading of the Bill, but to try to remove most of its objectionable features at a later stage. In this connection, the first question we
  936
  would like to be answered is whether it would not have been better for the interests of the shipbuilding industry, if those interests rather than sentiment motivated the Government, to have built several smaller ships, so spreading the work to a number of shipbuilding yards.
  Many people in the shipbuilding industry support the view that a number of first-class smaller ships might have served their interests better. Two fine liners, the "Canberra" and the "Orion" have recently been built by P. & O. at a cost of £30 million—without that company having to obtain any subsidy from the Exchequer.
  If the major consideration of the Government is to help the British shipbuilding industry, hon. Gentlemen are bound to be wondering whether that help could have been given by a number of other means, such as fiscal policy, which would not have singled out one company for assistance, and such policy would have obviated the need for a Government subsidy which we so deplore when indulged in by other Governments.
  Sir John Vaughan-Morgan: The right hon. Gentleman is deploying his argument against the Bill in a masterly way, yet he has told the House that he does not intend to vote against the Second Reading.
  Mr. Strauss: The value of the Bill to the nation is in grave doubt. Nevertheless, it has some favourable objectives, one of which is the work it will provide for our shipbuilding industry.
  Sir J. Vaughan-Morgan: The right hon. Gentleman is no doubt aware that his party is not given to honouring an election pledge. That is where the right hon. Gentleman is luckier than are we.
  Mr. Strauss: The hon. Member made an exceptionally important statement in that last remark. The Conservative Party is bound by a pledge given at election time, possibly partly for electioneering purposes, and although subsequent events have produced arguments contrary to that pledge the Conservative Party feels bound to proceed with the matter. That does not prevent hon. Gentlemen on this side of the House from feeling free to criticise the Bill. Because of certain advantages which will accrue from the passing of the Bill, my hon. Friends and I do not propose to

  937
  vote against its Second Reading, out we hope to remove many of its objectionable features at a later stage.
  Mr. John Peyton: Am I correct in thinking that the sole reason for the right hon. Gentleman taking a neutral attitude towards the Bill is for employment considerations in the shipbuilding industry? If that is the case, it would seem a very locally confined view to be taking.
  Mr. Strauss: Definitely yes, as far as I am concerned. The employment factor is so important that we feel we cannot oppose the Bill.
  Mr. John Rodgers: While the right hon. Gentleman says that his main consideration is that of employment in the shipbuilding industry, can he say what concessions he hopes to wrest from the Minister which will meet the objections that he has to the Bill?
  Mr. Strauss: We hope to improve the Bill by altering for example, its financial provisions which, we think, are entirely wrong, although I will deal with that matter later. It seems to us that there are other ways in which the Government could have helped the industry if they had so desired, but that would not have contained the many objections which this Bill possesses.
  I turn now to the financial side of the Government's proposal. In spite of what the Minister said, we must anticipate that in a few years' time the Cunard Company will come to us with very strong arguments for demanding a similar subsidy for a second Queen. The reason why it will do that is one known to everyone connected with the shipping industry. It has been stated by the Cunard Company spokesman that to run an express North Atlantic service successfully two ships are necessary. For that reason, the American Government are at the moment authorising the building of a sister ship to the "United States". We must, therefore, anticipate that before long the Cunard Company will ask for a further subsidy. The Government may not give it, but when we are considering the financial provisions in this case we must assume that we shall be asked to agree to similar financial provisions for another ship.
  938
  The £18 million which the Government will provide by way of loan and subsidy amounts to about 60 per cent. of the cost of the ship. My first comment is that at the proposed 4½ per cent. rate of interest—if one considers it solely from the interest point of view—the terms are far more favourable than the Government are prepared to accept for financing the nationalised industries or local authorities for essential public services.
  The next point—we must bear this in mind when considering this proposal—is that this is another example, a striking one, of the different attitudes which the Government take to the spending of public money for social purposes and for helping private industry. Patients under the National Health Service will now have to pay more out of their own pockets for the drugs that they need when they are ill, but the Treasury can always find sufficient money to help private industry. No doubt this is all good Conservative doctrine. The Government are certainly applying it to a rapidly increasing extent.
  The Economist, in its 22nd April issue, gave some interesting figures which serve as a background for this debate. It did so in an article entitled appropriately "Public assistance to industry". It showed that in the previous Budget £378 million was provided for this purpose, and that this year—of course, nothing is included for the "Queens"—the figure has risen to £401 million. Most of this goes to the farming industry, but of particular significance in relation to this debate is that the aid given this year to industry proper amounts to £77 million, which is six times greater than the amount actually paid out three years ago. The present Administration may, therefore, be "of the people and by the people", but it is certainly "for big business".
  The objection that we have to the Government helping industry by loan or subsidy is not so much that it does so, but the way it does so. The worst features of the Bill are the terms, so patently disadvantageous to the nation, on which the Exchequer support is to be provided. In no previous case, as far as I am aware, with the possible exception of Colvilles, has it been so shameless. If the State provides 60 per cent. of the money—without which the ship could not be built—if, as the

  939
  Cunard Company presumably believes, this venture is likely to prove profitable, why should not the State participate in those profits? Why should there not be real partnership between the State and private industry?
  The Minister of Transport dealt with that point, in passing, in, I thought, a most extraordinary way. He said that he refuses to accept this principle, because he does not want to "expose taxpayers' money to any greater degree of risk than necessary". This is really most extraordinary. If a finance house in the City proposed a big scheme for financing an industrial development, it would never accept the terms which the Chancellor has accepted in this case.
  I could give the House many examples of the quite proper demands of banks and finance houses undertaking financing operations of this sort which ask for—and have their demands accepted—some equity in the venture and some chance of getting the money back and making a little profit if the venture succeeds.
  Mr. J. Howard: This is interesting. Can the right hon. Gentleman tell us the names of the finance houses in the City which ask for a share in the equity and, at the same time, guarantee not only as a first charge the repayment of the mortgage, but for equity shareholders the repayment of the £18 million as a first charge?
  Mr. Strauss: I think that I can help the Government from my own knowledge. A little time ago, just before the iron and steel industry was nationalised, the Steel Company of Wales required £35 million, a sum similar to that required for the building of the new "Queen". The Finance Corporation of Industry said that it would advance this money on debentures, but on the condition that it had an option on equity shares. That condition was accepted. The result of the condition was that the State had to pay the Finance Corporation of Industry, when it nationalised the industry £2¼ million, the value of the equity shares which it had acquired as a result of the condition it had laid down. That is a complete answer to the hon. Gentleman and also a complete answer to the Government.
  Mr. Howard: It is nothing of the sort. That was an option to acquire equity
  940
  shares. In the case of the Cunard Company it is a guarantee by the Cunard Company that in the event of the Cunard White Star, the subsidiary company, being unable to repay the whole of the £18 million, the Cunard Company, the parent company, will repay the funds.
  Mr. Strauss: The fact is that in the case that I mentioned there were debentures which the Finance Corporation of Industry held, and on top of that—I could give hon. Members opposite other examples—an equity interest was demanded. Sometimes that is demanded in participating debenture shares. If it is right for the Finance Corporation of Industry, which is a semi-public body, to make such a request, why is it not right for the Government to do so, too?
  What reason can there be for putting such huge sums of the taxpayers' money in a venture of this sort and saying that if it turns out profitably the profits are to go only to those people who put up 40 per cent. of the money? It seems to me to be utterly inexcusable. The Minister's statement that he does not want to risk the taxpayer's money unduly is wholly irrelevant. There is no greater risk in asking for an option of this sort or in demanding participating debentures.
  I must add, because this is an exceedingly important point, that the Government's refusal to ask for some participation in possible profits has—the Minister probably knows this, and the Chancellor of the Exchequer, too—surprised most respectable pillars of the Conservative Party. I should like to quote comments by The Times and the Financial Times on this matter. I think that in this respect I could not be in more respectable company.
  The Shipping Correspondent of The Times wrote on 1st July, 1959, which was before the announcement of the Government's decision:
  "If the new Queens are built with Government money the only proper method would be to detach them from the remainder of the Cunarder Group. Either the Government could build the ships and let the Cunard manage them, or a new company could be set up with Cunard and the Government sharing the equity."
  The Financial Times said, on 6th June, 1960:
  "If there is a prospect of a profit why should not the Government participate in the

  941
  equity? Once again, as in the £50 million loan to Colvilles, it appears that public loan capital is providing gearing for the equity. A change of plan here would go a long way to allaying any public disquiet which may develop in the matter."
  Public disquiet has developed, and we hope and believe that the House will support us in the view that, in this respect, the agreement reached between the Government and the Cunard Company is highly objectionable and utterly indefensible.
  To sum up. We doubt the wisdom of providing millions of pounds from our national resources in building a replacement for the "Queen Mary". The Chandos Committee considered the trends in the numbers of passengers who are using the "Queens", but we wonder whether that Committee took into account the latest figures available, which show the trends to be unfavourable. We feel that it is an anachronism to spend so much money in building this new ship in this age of air transport, and that there might be better ways, with greater long-term effects, of helping the shipping industry, perhaps at less cost to the taxpayer. We have, also, strong objection to the financial provisions of the Bill, which we consider to be an unjustifiable betrayal of the public interest in favour of private industry.
  5.2 p.m.
  Sir John Vaughan-Morgan: Talk about the vote following the voice! The speech of the right hon. Member for Vauxhall (Mr. Strauss) was the strongest speech for a Motion of censure which is not to be followed by a vote that I have ever heard. He gave a long list of objections and, in his view, only one minor advantage in favour of voting for the Bill. Many of us who dislike this Bill intensely—our dislike is no secret to my right hon. Friend the Minister of Transport—feel ourselves very much hampered by the General Election pledge, and, if it had not been for that pledge in our manifesto and in the speeches that were made at the election, my right hon. Friend would have had to face a vote at the end of this debate. But the right hon. Member for Vauxhall has no such ground for disliking the Bill as we have.
  Mr. Collick: May I remind the hon. Gentleman that the right hon. Member for Woodford (Sir W. Churchill) made
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  the case in this House when he said that nothing stuck in the Tory election manifesto committed an incoming Tory Government?
  Sir J. Vaughan-Morgan: I am afraid that I do not feel like that. No doubt the hon. Member for Birkenhead (Mr. Collick) will be able to make a speech on this subject. I must be frank. Many of us think that the Conservative Party's election manifesto's pledge on this subject was entered into lightly and irresponsibly, and that should be said here and now from these benches. Many of my hon. Friends entirely agree with me in that view.
  I agree with those who hold that a subsidy to any industry, public or private, should be regarded with suspicion, though not all are bad.
  Mr. Bence: What about agriculture?
  Sir J. Vaughan-Morgan: Is it the Labour Party's policy to disagree with agricultural subsidies? As I was saying, many subsidies to industry are bad, and many are good, but they should all be examined with a tooth-comb for their economic, social or political purposes, to see if they are entirely justified.
  Most of the subsidies which Parliament approves—and this applies to agriculture—are general subsidies. The one we are discussing, however, is to go to a particular firm and not to an industry as a whole. It is for a particular company, a particular route and a particular ship. If it had been the question of a general subsidy to the shipbuilding industry, tiding it over a difficult period of reconstruction in order to make it more efficient—as, in the opinion of many experts, it conspicuously is not—there would be a very different case, as there was for the Cotton Industry Act. But it is not, however, and the answer to the right hon. Member for Vauxhall about unemployment is that this means one order which will keep one yard busy and still leave the rest with the dwindling order books of today.
  My right hon. Friend will have some support from hon. Members who have shipyards in their constituencies, but one of the things he may have noticed today is that he will get into trouble when the order is placed in one yard and the other yards have not got a slice. So let him

  943
  be careful of those who might support him at the moment. I am as delighted as everybody at the appointment of my hon. Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) as Joint Parliamentary Secretary to the Ministry of Transport. It is a brilliant piece of posting, but it will not be an adequate compensation to those yards that are not to get a crack at the £3¼ million involved.
  If this Bill were to help the shipping industry as a whole to fight the discrimination and the unfair competition which it is having so disgracefully to face on the high seas, it would be a different matter. I, for one, would not question a Bill or a Vote that would help that industry which is, frankly, suffering so unjustly at the present time. But this Bill is not of that nature. It favours one line, leaving the others to struggle unaided.
  Of course, we must recognise, as my right hon. Friend said, that there is a long tradition of subsidy for the Cunard Company. It has been in receipt of Government subventions of one sort or another for fifty-eight years. Amongst all the respectable matrons of the shipping industry, it stands out as the one scarlet woman. Can it be any surprise that the Chamber of Shipping, speaking for the respectable matrons, is beginning to wonder whether the wages of sin are not worth while after all. No wonder, in its report, after stating what is to be done for the Cunard Company, it says:
  "It follows that the Government should consider other cases where equally urgent reasons can be shown for Government help."
  Perhaps my right hon. and learned Friend the Chancellor of the Exchequer, when he winds up the debate, will say whether he supports that view. If so, he will have a very big bill to face, because this is not the only route that is subsidised. My right hon. Friend the Minister of Transport said that it was the most highly subsidised, but there are others which have subsidies. What is the policy to be towards them?
  Of course, this proposal will receive much support from the shipbuilding areas, and I do not blame them. I would take the same view if I represented a shipbuilding area. It will also
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  receive support from my hon. Friend the Member for Southampton, Test (Mr. J. Howard), for Southampton, not unnaturally, has some interest in the future of the Cunard Company. He is a friend of mine of many years standing, and also a constituent. I hope that after today I shall still retain both his friendship and his franchise.
  What are the other arguments deployed in this matter? One is that it will help the tourist industry. That is fair enough, at a price, and I do not want to enter into an argument about statistics. Perhaps we can have more accurate ones before the end of the debate. But it is worth remembering, if we are to subsidise the Cunard Company, that not all of the Cunard passengers come to England. Many of them go to France, and many of the passengers on the other subsidised ships come to Britain at the expense of the taxpayers of other countries. But I still agree that shipping has an important, if dwindling, contribution percentagewise to make to the tourist traffic over the next ten years.
  As other hon. Members have said, more and more people turn to travelling by air. I speak with some slight knowledge of and interest in trans-Atlantic travel. I and my family have been crossing the Atlantic for over twenty-five years. Perhaps I should explain that America is my mother-in-law country. At least one of my family goes over every year. I have a sentimental regard for the Cunarders. I went over on the "Britannic" to get married, and I have travelled on nearly all the ships.
  As I have said, one or other of my family goes over to America almost every year, but for ten years or more we have not gone by boat. Last year I crossed the Atlantic by air in six hours which was less time than my wife once spent on New York dock waiting to get through the American Customs. That is what is known as progress.
  My right hon. Friend referred in his speech, and in a rather surprising answer to a Parliamentary Question the other day, to the fact that many people travel for health reasons. That is a rather surprising one to me—this added burden to the National Health Service. It is true enough that many businessmen, having found in America that exporting is not fun but absolute agony, choose this form

  945
  of travel for the purpose of relaxation, and, I suspect, as a further respite from the household chores. But is it really for the taxpayer to subsidise the transportation across the Atlantic of tired tycoons?
  Coming back to the tourist trade, could not my right hon. Friend the President of the Board of Trade use the money many times over to far better purpose? Could he not use an even more increased subvention for the British Tourist Association? Could we not give some help to improving conditions at London Airport, an improvement which is much needed? Should we, in fact, subsidise tourism any way, whether by sea or by air? The best comment on that matter came from my right hon. Friend the Minister of Aviation on 21st November last year when he said in another context:
  "However I am certain that airlines have to pay their own terminal charges. We cannot make them part of the Welfare State…"—[OFFICIAL REPORT. 21st November, 1960; Vol. 630, c.750.]
  That was my right hon. Friend the Minister of Aviation, and I think that what he then said goes for the Cunarder of my right hon. Friend the Minister of Transport as well.
  If we are committed to this subsidy—ship or ships; I am not quite certain which after hearing my right hon. Friend's speech—is this the right size of ship or not?
  Mr. Diamond: Will the hon. Gentleman give way? This is a most important point. The hon. Gentleman is saying that he is not going to vote against the Bill because of an election pledge, but the election pledge was to replace the "Queen" liners in the plural.
  Sir J. Vaughan-Morgan: I agree. I am asking my right hon. Friend to clarify what the future position is.
  Is this the right size of ship any way? Are we, frankly, catering for the right kind of traffic? In a year in which the "Oriana" has been launched—a brilliant credit to British craftsmanship and design, and a dollar-earner unsubsidised—we come forward with a project for a larger ship with no greater carrying capacity.
  The reason given, which I must say I sometimes find a little perplexing, is that one needs more room when crossing the
  946
  Atlantic than when crossing the Pacific, which is a longer journey. One of my hon. Friends has been into this point in great detail. It is quite true that a certain cubic footage per passenger has to be provided on the Atlantic run to compete with the other lines. As far as I can make out, it boils down to this. If people travel on the Atlantic, they must all have their meals at one sitting whereas if people travel on the Pacific they can have their meals at two sittings. Quite candidly, is that really what we should be subsidising? Is it really true that we have to have this enormous amount of accommodation?
  My right hon. Friend talked about it being necessary to provide comfortable conditions in the winter. But the "Queen" liners are half empty in the winter. There is plenty of room any way. Incidentally, if any hon. Member ever wants to travel on a "Queen" liner on the cheap, the thing to do is to book on one of the other Cunarders. The sailing is usually can celled at the last moment and one finds oneself travelling on a "Queen" much cheaper. That, of course, is strictly with in these four walls, and I hope that not too many hon. Members—
  Mr. Burden: Of course, that is a very good advertisement for the big ship which sails on time.
  Sir J. Vaughan-Morgan: I am all for travelling on the big ship—it does not always arrive on time even if it sails on time—but not, if I may say so, at the taxpayers' expense.
  Quite frankly, I think that we are completely missing the boat with the tourists of today. Cheap transportation is what is needed—and for which there is a demand—in competition with air travel. The American tourist of fifty years ago who went abroad for three months with several of those enormous cabin trunks still exists, but frankly, he is not the important factor that he was. Why subsidise him, or the tired tycoon? Why not concentrate on the new tourist?
  The other argument is the need to maintain a weekly service. I hope that my right hon. and learned Friend the Chancellor will deal more fully with this point when he winds up. I suspect that that is outmoded too. Surely the weekly service was a necessity in the days when the mails were carried by the Cunarders.

  947
  Was not that the primary object of the weekly service, and does it now apply to the same extent, if at all? To comply with this business of the weekly sailing and with this curious matter of the accommodation, we have to have a ship that will be empty half the winter and which will not take part in the profitable winter trade. In short, I think that we are backing the wrong horse. It has been entered in the wrong race any way, and probably we ought not to indulge in betting.
  Then there is the argument about prestige, which it is very difficult to assess. The Russians launch a man into space and the British launch a white elephant on to the ocean. Is our prestige really enhanced by this? My right hon. Friend referred to the "Queen Mary" and the "Queen Elizabeth". I was in New York in those early days of 1940 when the Queen Elizabeth arrived on its maiden voyage, at the beginning of four or five years of wonderful national service. But those arguments do not apply now, however, and I question very much whether our prestige is really enhanced by just trying to have a bigger boat on the Round Pond than the other boys. If the Americans and the French choose to spend their money in this way, I see no reason why we should necessarily follow suit. We started the business of subsidisation and we are the people who ought to take the lead in getting out of the contest.
  My hon. Friend the Member for Sevenoaks (Mr. J. Rodgers) summed it all up when he described this as an obsolescent status symbol. We could all find ways of spending £3½ million to that end. When all is said and done, as far as I am concerned there is only the one reason of the election manifesto. I could not vote for the Bill in any circumstances. I would abstain if there were a vote, but I could not agree that it was a good or a wise Bill. We have this millstone round our necks and some of us feel very unhappy about it.
  To turn to the details of the Bill, I give enormous credit to my right hon. Friend for what he has done to improve upon the recommendations of the Chandos Report. My half-term report is, "Marples has done well, but could do better if he tried". Many of us on this side look forward to co-operating
  948
  with my right hon. Friend in Committee, perhaps to improve the Bill even further.
  We must remember that Lord Chandos was probably inhibited by his terms of reference. I regret very much that we are not to see the Chandos Report. I respect the reasons, but I should have thought that it would be worth while publishing at least a bowdlerised report, if that is the right word. My right hon. Friend has, however, produced a better bargain than was originally put forward.
  I regret the Bill very much indeed, but let me end on another note. However much we may criticise this project, if it goes through and the ship is built let us wish success and prosperity to all who sail in her.
  5.23 p.m.
  Mr. E. Shinwell: I join with other hon. Members in congratulating the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) on his elevation to Ministerial appointment. It is, however, within the recollection of hon. Members that for a considerable time, in reply to Questions in the House, the Minister of Transport claimed that he could undertake the whole of our transport responsibilities without assistance. It would appear that he must have accepted the appointment of the hon. and gallant Member for Croydon, North-East with considerable reluctance. The purpose for which he proposes to use the hon. and gallant Member is not quite clear. In due course, we shall have to have the Parliamentary Secretary's responsibilities defined.
  It is obvious why the Government produced the Bill. It was because a reference to it was contained in the Tory Party's election manifesto. It was obviously a vote-catching device. There was fear of a recession in Belfast and there was the prospect of unemployment on the Clyde, on the Mersey and on the Tyne, in our great shipbuilding centres. Therefore, the Government produced this item in their election manifesto to provide some assurance to those concerned with the shipbuilding industry in the places I have mentioned by a promise that some day a new "Queen" would be constructed.
  People in Belfast, on the Tyne, the Mersey and elsewhere all expected that

  949
  when the "Queen" was constructed, they would have the sole responsibility. Now, we have this squalid competition. What is to be the end of it all? Whoever gets the tender, there will be trouble for the Government. Possibly, Belfast may get it. I would say that on the whole, because of the dim prospects that face Harland & Wolff, who have hardly anything on their order book, and because of their vast capacity and the growing unemployment in Northern Ireland, their claim to have the construction of the new Cunarder is probably greater than the claims represented by other shipbuilding centres.
  Suppose that Harland & Wolff secure the order. What will happen? They may be precluded from undertaking other orders for smaller vessels which might have come their way, and in four or five years' time, when they have constructed the "Queen", there will be an even more serious recession in Northern Ireland. From the point of view of Harland & Wolff, it would be far better to search for business elsewhere for the construction of smaller vessels than to undertake the construction of a "Queen".
  I want to say categorically and emphatically that I am unreservedly and without qualification opposed to the Bill and I wish that my party would join me in that declaration. We had an excellent speech from my right hon. Friend the Member for Vauxhall (Mr. Strauss), who made a vicious, devastating attack upon the proposals in the Bill. I respect his opinion that the only reason why we support the Bill is because it will provide employment somewhere or other. I can imagine a much better way of spending the taxpayers' money to provide employment. Some day, we shall have a debate on shipping and shipbuilding. We cannot in the course of this debate discuss all the consequences of the recession that has accompanied these twin industries for several years.
  There has been a gradual dwindling of our strength and influence in shipping and shipbuilding over the past half-dozen years. Our share of world trade, for example, has diminished substantially. The facts are well known to hon. Members. Our capacity in shipbuilding is vast and it can undertake a
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  vast number of additional orders, but they are not available. This is because of the competition from foreign shipbuilding centres.
  What is the situation as regards the advantage obtained by foreign shipbuilding interests? The facts are simple. Foreign shipbuilding firms in Scandinavia and elsewhere on the Continent can offer credit terms much more favourable than the terms offered in this country. I understand that many of the foreign shipbuilding firms can offer credit facilities of 80 to 85 per cent. over a period of eight years. The very best we can find in this country is around 30 per cent. for a period of five years. Obviously, advantage accrues to the foreign shipbuilder and British shipbuilding interests are suffering very seriously.
  However, we are not to discuss the general question of shipping and shipbuilding in this debate. I want to concentrate, as other hon. Members have, on the proposal that the Cunard line should have the opportunity of constructing this vessel. The question is: does it need this subvention, this form of national assistance? That is what it is. Hon. Members opposite turn up their noses when it is a question of providing National Assistance for poor folk and question the propriety of spending vast sums of taxpayers' money in that way, but this is a form of national assistance. The question is, does the Cunard line need it?
  I have availed myself of some statistics. They are bound to be accurate because they are extracted from the balance sheets of the Cunard line. Reference was made by my right hon. Friend who opened the debate from this side of the House to the vast reserves at the disposal of the Cunard line, but there are some particulars which he did not mention. One is that its investments at the latest available date were £15½ million. Those are substantial investments, but that is not all. It is not often that one finds an item of this kind in contemporary balance sheets. Cash at bank equals almost £6 million. I presume that that is available after depredation has been provided for.
  That is not all. Properties owned by Cunard White Star amount to nearly £4 million. Cunard White Star owns a considerable amount of real estate in the

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  United States, the United Kingdom, Italy and other parts of the world. Much of that—I use the expression used by the hon. Member for Reigate (Sir J. Vaughan-Morgan)—consists of "white elephants" where very little business is done, but they are maintained in order to preserve prestige. No doubt they contribute to increased overhead costs. These are some of the facts.
  Mr. J. Howard: Before the right hon. Member leaves those very interesting figures, can he tell us about liners already under construction to which these capital commitments may apply?
  Mr. Shinwell: I shall do my best to furnish the information about future capital ships replacements. The company has vast reserves for that purpose, but, as far as I can gather, it is not building many ships.
  Mr. Burden: I am sure the right hon. Member would not like to mislead the House. In fact the Cunard Company has spent £30 million on building new ships, quite apart from the "Queens", since the war.
  Mr. Shinwell: Is that remarkable? It is quite obvious that the hon. Member is not acquainted with the shipping position in this country. Take the case of the Royal Mail Line. That company is not obtaining a subsidy from the Government or anyone else. It has to raise capital in the open market, but in the last few years it has had three ships constructed by Harland and Wolff at a cost of more than £16 million. The British Commonwealth Line, associated with the P. & O., has spent vast sums—I believe much more than Cunard has spent since the war—in the construction of its vessels.
  Mr. Stanley R. McMaster: I think that earlier the right hon. Member was implying that no further passenger liners would be built by any company when the "Queen" is finished.
  Mr. Shinwell: I admit that that is an assumption, but it is probably well founded in view of the inability of British shipbuilders to obtain further orders from ship-owners, for reasons I shall advance in a moment, and because they are in keen competition with builders
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  abroad. These are facts which are established. It is not certain that ship-owners will be busily employed in the coming years. I wish it were otherwise, but we have to face the facts, which are very unpalatable.
  Mr. Kenneth Lewis: At the beginning of his speech, the right hon. Member considered that it might be well if the shipyards gave up this order for the new Cunard liner, because they might get other orders. Now he is saying that they could not get other orders.
  Mr. Shinwell: I shall come to that in a moment. Remind me of it if I do not do so. I want to maintain the sequence in my remarks, in spite of these interruptions.
  I was about to ask: who are the best judges of the future of the Cunard line on the matter of ships? I should say that they are the Cunard line directors themselves. I say that because the line is now going into the air business, very substantially, with Eagle Airways. Perhaps I had better quote from what the company said, because that may reinforce the case which was presented by the hon. Member for Reigate. I had better also say a word about the directors. How do they fare in this business? On the last available date they had £130,000 in emoluments. That is not bad. That was the average over a period of years. They do quite well.
  They are in process of acquiring Eagle Airways Limited and associated companies and one of the leading private aircraft operators in the United Kingdom. This is what they said:
  "The Eagle have converted an extensive international network of scheduled services in Europe and in addition are operating an extensive route network in the Western Hemisphere."
  The company is going in for aircraft on a grand scale and trying to attract passengers who travel by air in competition with itself. I think that hon. Members can depend upon it that, one of these days, when air travel has been further developed and fares have been reduced—as is certain to happen because our aircraft industry is in competition with air services of other countries—the Cunard line will reduce its fares for travelling by sea. Then losses will be sustained and it will come to the Government and say, "We are very sorry,

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  but we cannot pay what we owe you. What about another subvention?" By that time we shall have had another General Election and, without a doubt, the Government will again promise assistance to the company.
  Are we concerned about the Cunard line in isolation, or are we concerned about the well-being of the shipbuilding industry as a whole? I maintain that the generality of hon. Members are concerned about the latter. I have said elsewhere, and repeat here, that if we have money to spend clearly it would be far better to provide as part of our shipbuilding policy—only as part of our shipbuilding policy—some subvention in the form provided in the Bill on reduced interest rates instead of going into the market and paying 6½ per cent.—interest rates of 4½ per cent. backed by the Government, which is a subsidy—for some of the other shipping companies.
  From the point of view of Belfast, the Tyne, the Mersey and the Clyde it would be much better in the next few years to have the opportunity of building a vessel of 22,000 tons, 23,000 tons or 24,000 tons when, as under this Bill, some of them would be excluded. Three out of the four will be excluded from participating in the construction of the new Cunarder. That is one way to deal with the position.
  Moreover, it seems to me that, if they can find subventions of this kind, the time has come when the Government might consider the position of some of the smaller shipbuilding companies and ship-owning firms. Here may I quote a passage, to which the hon. Member for Reigate referred, from the Chamber of Shipping Report. I think it should be placed on record, so that the public, or at any rate hon. Members, may know what the Chamber thinks about this proposal in relation to the general position of the shipbuilding industry:
  "An example is that of the Cunard Steam-Ship Company Ltd. in relation to the maintenance of an express passenger service on the North Atlantic. With the heavily-subsidised competition which the Cunard Company has to face in the North Atlantic, British ship-owners were not surprised that the company found it necessary to place its position before the Government."
  Here I pause to make this observation. Reference has been made to this country having subsidised shipbuilding and
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  shipping long before other countries. That is not true. Many years ago, indeed before the First World War, I recollect that Matson, one of the United States lines, was heavily subsidised by the United States Government which has gone on subsidising its shipping ever since. Without heavy subsidies, United States shipping would find it impossible to carry on, as is well known. But it is obvious that when we in this country are faced with heavily subsidised foreign competition, something has to be done for our industry.
  I want to make it clear that I do not regard it as inherently unsound for the Government to provide subsidies, even for private industry, if that be in the national interest. I would rather see the Government take over the industry and administer it, but looking at this assembly, and at hon. Members opposite, I shall not cry for the moon. I know that such a state of affairs is unlikely for a long time, but some time it will come. In a way, this proposal is the beginning and that is troubling some hon. Members opposite. They are afraid that if subsidies are provided, the question of control will arise. If a measure of control is agreed upon, then the question of ownership arises, and that is what hon. Members opposite are afraid of. I can understand it. In the future more firms will be concerned. Do not let us make any mistake about that. The quotation continues:
  "There are, however, other British shipping interests which are having growing difficulty in meeting government-aided competition in one form or another and equally have had, or will be required to incur, very great capital expenditure for the construction of new tonnage The General Council submits that the Government having decided that aid to the Cunard Company is desirable in the national interest, it follows that the Government should be ready to consider other cases where equally cogent reasons can be shown for Government help. The General Council considers that it is logical and reasonable to suggest that, although one British shipping company may have problems greater than another, the Government cannot, justifiably, assist one interest within an independent industry without being prepared to consider, on merits, the need to help others."
  I think that that is a logical position. Why single out this particular company, with its huge reserves, with its substantial investments and with its property interests—and all for the purpose of building another vessel which in the course of the

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  next ten years, may, as was rightly said by the hon. Member for Reigate, become a white elephant?
  In those circumstances, one might expect that hon. Members opposite opposed to this proposal will vote against it. I tell the House frankly that the reason I cannot vote against it is that my party has for cogent reasons, relating to the need for providing more employment, and on an assumption which I believe to be false, decided not to vote against it. What is the position of hon. Members opposite? The hon. Member for Reigate told us truthfully—I pay tribute to him for stating the facts as he knows them—that the reason why many hon. Members opposite, although opposed to its provisions are not prepared to vote against the Bill—despite the fact that they dislike the Bill and its financial provisions—is that in 1957 or 1958, or some time or other whenever it was, the Tory Party issued an election manifesto and promised that a vessel of this kind would be constructed; so that on the Merseyside, on the Clyde and on the Tyne—and in Belfast—people thought that they were going to have the opportunity to build it. What a shocking state of affairs.
  I do not believe that it will be possible to make much amendment of this Bill during the Committee stage. I am not much concerned about the financial details. Probably they are as good as any that could have been devised. But I enter one caveat. I cannot understand—the Government having appointed the Chandos Committee which went into the matter thoroughly, and they must have expected repercussions from this scheme on the shipbuilding industry as a whole—why we cannot be provided with a copy of the report so that we may understand exactly what was discussed. There must be some reason for the concealment
  The Minister adopted in his speech that flighty manner which he usually adopts as if he knows more than anybody else. I sometimes wish that I were as clever as the right hon. Gentleman thinks he is. He has a style to which we are habituated. Sometimes it goes very well and sometimes it is a bit boring. But when the right hon. Gentleman says that the Chandos Report was confidential one might suppose that it was a defence matter; that he was a defence
  956
  Minister telling us that in the interests of security we cannot see what is in the report. The next will be that when it comes to parking meters the right hon. Gentleman will say, "I cannot tell you the reason why we have parking meters in this street and not in the other, because it is confidential."
  I am not opposed to this Bill because I am opposed to the subsidy. We have become used to subsidies. They are provided for the agriculture industry, and private industry must have subsidies. We cannot carry on without them—State assistance, national assistance, hon Members may call it what they like. The fact is that, as the years go by, Governments of whatever complexion are bound to come to the assistance of industry. It is happening all over the world. It will happen more and more in this country. So I do not object to that. But do not let us pretend that this will solve the problems of the shipping and shipbuilding industry. One of these days, perhaps as a result of the appointment of the hon. and gallant Member for Croydon, North-East as a Joint Parliamentary Secretary to the Minister of Transport, we may yet see the formulation of a much more satisfactory and reasonable policy within the Ministry than we have had from the right hon. Gentleman.
  5.49 p.m.
  Mr. Paul Williams: The House always throroughly enjoys a contribution from the right hon. Member from Easington (Mr. Shinwell) on the subject of shipping and shipbuilding, more especially as he always attempts to promote British interests in this matter. I hope, in that connection, to be able in some degree to follow the right hon. Gentleman. Unlike him, I oppose the general principle of State finance being provided for private industry. To me, that seems wrong in principle and unfortunate in practice, because when there is a private subsidy of this nature inefficiency tends to creep in and sterilise that dynamic form of management which one would hope to see in private industry.
  My right hon. Friend the Minister of Transport referred to the inability of the Cunard Company to provide the capital for this development out of its own resources. Perhaps it would be worth while looking for a moment at this state

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  of affairs in a little more detail. How is it that the Cunard Company cannot find the capital needed for this development? Is it because the cost of replacement is so much higher than the original historic cost? If this is so, surely that shows in some small measure that our economy, more particularly in relation to shipping companies, is so over-taxed that the replacement of ships at the normal rate is now well-nigh impossible.
  There is a very strong feeling—I hope that my right hon. and learned Friend the Chancellor of the Exchequer will take note of it, in preparation for his next Budget—that the chances of replacing ships now is small as a result of punitive taxation over the years. Indeed, the shipping industry must be grateful for the Chancellor's confirmation of the 40 per cent. investment allowance in this Budget, and of its continuance over the lifetime of this Parliament. It was a notable step that he committed himself or any future Chancellor for the lifetime of this Parliament.
  But the point surely is that British shipping now is so highly taxed that the chance of replacing the ships is reduced very considerably. For British shipping, and this is true of British industry in general, we are building up such a highly taxed economy that it is beyond the ability of industry, of shipbuilders, ship-owners, engineering, whatever hon. Members wish—to replace and modernise at a competitive rate of knots by comparison with our foreign competitors.
  If we accept the principle, as apparently the Government do, that private industry deserves a subsidy—that is a principle which I personally do not accept—they have not yet, to my mind, sufficiently accepted the point made by the right hon. Member for Easington, which, I think, was a very valid one, that they are discriminating in favour of one particular company over and above other types of transport and other types of companies within the shipping industry. To me, that is a thoroughly repulsive doctrine. It is as though we singled out one hon. Member of this House and treated him preferentially in relation to his Parliamentary salary because he takes a particular interest in promoting the tourist industry, or something of that nature. It is a complete non sequitur to pick out one firm within one industry.
  958
  If the shipbuilding industry deserves support, and if one can accept the Government's offer, surely it would be better to try to find some way of supporting success—supporting those companies which out of their own resources, manage to provide replacements, such as the P. & O. line with the "Canberra" and the "Oriana". If we are to enter this field of support for private industry, surely it is all the better to support the successful rather than the less successful.
  Mr. Bence: Does the hon. Member realise that this and previous Administrations have subsidised MacBraynes?
  Mr. Williams: Of course I do, and it is for a particular social purpose and a very limited parochial Scottish purpose.
  One looks at the whole question of the Cunard Company from the point of view of this principle. Cunard's take the view that the trans-Atlantic service, which is an express service, is, in fact, itself a profitable venture. I should like to hear whether that is true; I am told that it is. If it is a profitable venture, this removes completely, lock stock and barrel, every argument for subsidy for this venture. If it is profitable, surely the Cunard Company could have found some other way of raising the money, either from the resources which the right hon. Member for Easington read out from the Stock Exchange card—I note that he uses the Stock Exchange card for reliable information—or have gone elsewhere to finance its venture.
  What I find more difficult than anything else to understand is that at a time when the State is putting money into the Cunard Company to build ships the company is putting its own money into aviation to buy up an air company and, presumably, to buy new aircraft, because it cannot possibly go on operating with the aircraft that the Eagle Company had before. It seems to me that it is a completely illogical position into which the Government and the Cunard Company have got themselves.
  The Cunard Company has come to the Government for money to build ships while, at the same time, using its own money, resources and management to get into the air. I would have thought that this alone excuses the Government, if they really want an excuse, from any embarrassment which they may have felt

  959
  about their election pledge. The situation has changed since the election of 1959. Since then, the Cunard Company has got into the air and this, I believe, wipes the slate clean of the election pledge. I had considerable doubts about the consultations that went on, and whether or not they went on within the Conservative Party. I think that we want a better justification from the Government as to why they want to put their money, and, therefore, the taxpayers' money, into the Cunard Company when Cunard's is using its own money to get into the air.
  Mr. Burden: I am grateful to my hon. Friend for giving way, but he is not quite accurate in giving the impression that he has tried to do. Practically every shipping company has gone into the air. The Cunard Company is unique in regard to ships.
  Mr. Williams: My hon. Friend knows a great deal about Cunard Eagle. He says that every shipping company of size is going into the air. That is true, but they are doing it with their own money and not with the taxpayers' money. My hon. Friend says that the Cunard Company is not doing it with the taxpayers' money. Apparently there is a difference between taking the taxpayers' money for building ships and using its own resources for getting into the air.
  That is the point on which the House should stick. It should demand a better explanation from the Government why they did not inquire a little more into this matter. I do not want to elaborate further on this question of the Cunard Company except to say that I think there was a time, and I think that this may have changed last week, when there was danger of the Government shuffling off their general responsibility for shipping and shipbuilding by saying, "We provide this subsidy and support for the Cunard Company". For too long our administrators have had too little regard for the general maritime interests of the nation. I hope, like right hon. and hon. Members on both sides of the House, that we shall have a general debate on shipping and shipbuilding in the near future. In the meantime, this Bill can only be a sop to shipping and shipbuilding.
  960
  In welcoming the appointment of my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) to his position as Joint Parliamentary Secretary, I hope that he will support the general view that this matter should not be treated as an excuse for taking no further interest in British shipping and shipbuilding, but as a spur to providing a dynamic policy which will face up to the flag discrimination policies, to flags of convenience, or more insultingly, the flags of necessity policies and the taxation and other policies used by other nations. I hope that we shall see a more positive view of help for British shipping and shipbuilding. For this reason, I could not ever possibly support the Bill and I should like to think that it may well be strangled in Committee.
  5.59 p.m.
  Mr. Ernest Popplewell: We have heard quite a lot today from hon. Members opposite to the effect that the only reason why they support the Bill is because of an election promise. That is not the reason, and they know it. That is simply the excuse they are giving, because, as my hon. Friend the Member for Birkenhead (Mr. Collick) reminded the House a little while ago, their own leader said that an election promise given during an election does not bind a Government when in power. They accepted that philosophy when the Labour Party was in office during the Second Reading of the Iron and Steel Bill. Now they are in some difficulty. They want a shield to prevent the world at large knowing the intense bitterness and difference of opinion they have with the occupants of their own Front Bench, and they are now utilising the outworn adage of saying, "If it were not for the election pledges".
  We have some serious charges to make against the Government on this matter. I, with some of my right hon. and hon. Friends, strongly resent the Government appointing committees to examine the affairs of industry or other undertakings and giving the committees terms of reference so narrow that when they report the Government can say that they are acting in accordance with the recommendations of the committees, without giving Parliament the opportunity of knowing what the committees have recommended.

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  As one of my hon. Friends has already said, we have been bought twice like this. There is the example of the transport system, in regard to which the Stedeford Committee made certain recommendations. When this brilliant mouthpiece called Marples at the Ministry of Transport—where is he?—he is missing from his duties—wanted to defend the break-up of the transport system, he hid behind the Stedeford Committee. Now when he wants to defend giving a huge sum of money to private enterprise, he shields himself behind the Chandos Committee and says what the Government are now doing is broadly in accord with the recommendations of that Committee.
  Parliament is entitled to much more courtesy than that. It is obvious from its investments that the Cunard Company is profitable. Indeed, it has been able to branch out from its normal trading activities and engage in air traffic. It has sought still further avenues of high profitability. In these circumstances, the nation should know why it is necessary for a huge sum of public money to be given to this company.
  Under the Bill the Government will provide 60 per cent. of the cash involved in building the new "Queen". They will provide £18 million out of the total of £30 million. In an unguarded moment the Minister of Transport said that the rate of interest would be 4½ per cent. We are told that the Chandos Committee recommended the same rate. When challenged that this is exceedingly unfair to publicly-owned undertakings, which have to borrow money for modernisation at the market rate of 6½ per cent., the Minister rather altered his tone and said that the money advanced to build the new "Queen" would be at the current market rate. That was a complete change.
  According to the Bill, the Minister's words are technically correct. It says that if Cunard's borrowing has to take place at current market rates of interest, the Government will subsidise the difference between 4½ per cent. and the current market rate. This takes us back to the Minister's original statement. In effect, the Cunard Company will get this subsidy at 4½ per cent., whereas publicly-owned and local authority undertakings have to borrow on the open market at 6½ per cent.
  962
  We on this side have a very deep-rooted objection to such a procedure.
  The Minister then said that it has always been usual for the shipping industry, or the Cunard Company, to be subsidised in providing these wonderful ships. He said that this has been so through the ages. He took refuge in that. However, in addition to the subsidy, there is also the fantastic fact that the Government will be the insurers of the vessel. They will be the underwriters. They will accept all construction insurance risks. They will accept the operational insurance risks. This is additional assistance to a company which is engaging in outside activities and showing a good profit.
  My hon. Friends and I feel that there is a case for a new "Queen" of this size. We must face the fact that the "United States" and the "Ile de France" are wonderful ships. The present "Queens" are facing keen competition from these ships in trying to maintain their share of Atlantic traffic.
  There is a lucrative traffic backwards and forwards across the Atlantic, and it is likely to continue for a considerable time. I say this with due deference to my right hon. Friend the Member for Vauxhall (Mr. Strauss); but the figures he quoted showed that there is a general increase in travel, both in air travel and in sea travel. The present trend, which is likely to continue, is that travel by sea is not increasing at the same rate as travel by air.
  In spite of this, I think that there is a case, and will be for some time to come, for a ship such as this operating on the North Atlantic route. Anyone who has travelled on this type of ship will undoubtedly agree that it is a very good type of ship on which to travel. Therefore, there is a case for such a ship, apart altogether from its prestige value.
  If shipping companies find it difficult to produce the capital themselves, why should the Government subsidise such a company to the tune of £18 million? Under the articles of agreement for operating the ship, a new company called the Q.3 Company will be established specifically to operate the new ship. Why cannot the Government themselves build the new ship? Why cannot they provide all the cash, instead of 60 per cent. of it? Why cannot they allow a shipbuilding company to act as agent for them, in the same way as the

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  Minister of Transport employs various companies to act as his agents in connection with his new roads? Where public money is involved to this extent, why should not all the profit resulting from the venture go back to the taxpayer, who is providing the bulk of the money? Why should not the taxpayer receive the profits which are likely to accrue? Neither Cunard nor any other shipping company would undertake such a venture if it did not expect profits to result from it.
  What intrigues me more than any thing is the opposition from the Government back benches. "Election pledge" is just an excuse, and the Government know it. The cause of the opposition from the other side is the pressure being brought on those back benchers by interests that know they will not share in the rake-off from Government money. They do not like the idea of public money going to a single company and not to the industry as a whole—
  Mr. P. Williams: Would the hon. Member be rather more specific about what he has said? He is using rather wild phrases which to me are absolutely meaningless.
  Mr. Popplewell: The hon. Gentleman knows quite well what I mean. He has been subjected to much pressure from that direction, as have most hon. Members opposite. It is no good their acting as injured innocents; most hon. Members have been subject to this sort of pressure. That is the real root of that trouble.
  I share the general opposition to subsidies for industry as a whole that has been expressed by the hon. Member for Sunderland, South (Mr. P. Williams). The transport subsidy is entirely unnecessary, and the responsibility for that rests squarely on the shoulders of the present Administration. I oppose the whole idea of subsidies for private enterprise. It is not even necessary in this case. Even if financial assistance were necessary to get a prestige ship to withstand the unfair discrimination shown by other nations, the whole of the cash should be found by the Government. This should be a Government undertaking, and a company should run the vessel in the same way that the special Q.3 Company is to run this show.
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  I wholeheartedly agree that this is not the way to deal with shipping as a whole, and I do not think that the Government themselves think that it is. It is a special instance, but instead of their handing out the taxpayers' money to private enterprise in this way, I would have preferred the Government to have put forward proposals that would have shown their interest in trying to get some world agreement on the problem of flags of discrimination, and so place our shipping on terms equal to those enjoyed by the shipping of other nations.
  The Minister of Transport said this afternoon that the U.S.A. is providing 58 per cent. of capital costs. He mentioned that in connection with our guaranteeing 60 per cent. of the capital cost of the new "Queen". He said that France guarantees 20 per cent. of capital costs, but added that it was rather difficult to estimate exactly how much subsidy goes into the running costs of the shipping undertakings of the various nations. Far from his having difficulty in estimating the figures, I hope that he has the information in his Department, and that, before very long, the House will have an opportunity of getting down to the basic difficulties of our shipping industry.
  We can, do and will produce passenger-carrying ships second to none in the world. Even today we can far outstrip any of our foreign competitors in the production of passenger liners and that type of vessel. As a whole, the shipbuilding industry suffers more from competition in the production of the tanker class, where so many difficulties and semi-skilled jobs are involved. When it comes to construction needing the skilled craftsman, the skilled tradesman, we can still compete in price, in quality of commodity, in delivery times and all the rest, even in the face of the favourable terms given by other nations to their shipbuilding industries.
  I wish that the Government had taken a wider view instead of saying that Government assistance in the building of a new "Queen" was an election pledge. That idea was hurriedly thought up during "MacWonder's" election tour of Scotland. It was the sort of sop that we are used to from this Government. Instead of presenting us with this Measure, I would rather the Government had come forward with proposals

  965
  to deal with the biggest evil attaching to the shipping industry—the concessions and flags of discrimination, which present a greater threat than do flags of convenience—and I hope that as a result of today's debate we may soon have an opportunity to discuss that aspect.
  I have no hesitation in saying that had there been a vote tonight I would, for the reasons I have given, have supported this Measure. I do not agree with the Government's method, but there is a case for Britain to own a vessel that can challenge the "United States"—the American trans-Atlantic flagship; that can challenge the "Ile de France", the flagship of the French line, and which will not only uphold the nation's prestige—there is more than that involved—but which will prove remunerative. Only in this way can we get and keep our fair share of the market.
  6.18 p.m.
  Mr. Fergus Montgomery: First, I should like to offer my congratulations to my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) on his appointment as a Joint Parliamentary Secretary to the Ministry of Transport with a special interest in shipping and shipbuilding. I left school in 1946 and went into the Navy. I was a very humble ordinary seaman who had not been home on leave at all until some of us were offered five days' leave if we went on a course in what was then the new Electrical Branch. I went to that branch, in which my hon. and gallant Friend was my absolute superior officer.
  I eventually got the title of P.E.M. and went home on leave. A friend asked my mother how I was getting on. My mother said, "He's doing famously—he is a P.E.M., you know." When her friend asked what that meant, my mother had to admit that she did not really know, and shouted upstairs to me, "What does P.E.M. stand for?" When I answered, "Probationary Electrician's Mate," it stopped her ever again boasting about my naval prowess.
  I am surprised that some of my hon. Friends object to the Bill, because our election manifesto said that we intended to support the building of a new "Queen"—
  Mr. Strauss: "Queens".
  Mr. Montgomery: I beg pardon—"Queens".
  There is a very famous shipyard in my constituency, and I used that fact in my election manifesto to help me in my campaign—[Interruption.] Well, my majority is still only 98—hon. Members cannot really begrudge me that. That being so, if the Government had not implemented this pledge I am afraid that I would have been on their bones just as much as some hon. Members are now.
  Several hon. Members oppose the Bill on the ground that aircraft will destroy the economy of fast passenger ships. I am not altogether convinced by this argument, because I believe that there will always be some people who will prefer to travel by sea. I had the good fortune, last summer, to go to America as a guest of the American Government. I had to travel on an American ship, because the Americans were paying my fare. The ship was absolutely crammed, and there were many people who had travelled from America to Europe on the "Queen Mary" and the "Queen Elizabeth" and who were returning to America on the "United States". Many of them were loud in their praise of the "Queens", which they preferred to the "United States", which was, perhaps, jazzier and bigger, but not better.
  One has heard the argument that two airliners costing £4 million could carry more passengers across the Atlantic in a year than an expensive ship, and much more quickly. This is not a straightforward argument, because allowance is not made for the fact that one good ship is worth ten airliners.
  I should declare my interest in that I have in my constituency a Vickers naval yard, one of the firms tendering for this contract. One of the wonderful things that has happened in connection with this venture is that Vickers naval yard, together with their traditional rivals, Swan Hunter & Wigham Richardson, have joined together to submit a joint tender for this contract, and I believe that this good will and co-operation which has been devised with the object of ensuring that the Tyne builds the next "Queen" liner is a good thing. It also shows the determination of Tyneside to

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  do all in its power to get this contract on to our river.
  I would not say that we have been altogether helped by certain statements which have been made. The Minister's statement on 29th March, that if the tenders were equal the contract would go to a development district, which would exclude the merger of Swan Hunter & Wigham Richardson and Vickers-Armstrong, caused a furore on Tyne-side. I was delighted when the Minister recanted and, on 11th April, said that the best tender would be accepted and this would be determined by purely commercial considerations.
  It is necessary that that should be said, because there was also another unfortunate statement by Sir John Brocklebank, the Chairman of the Cunard Line, who said that he expected that John Brown, Clydebank, would be asked to reserve a berth for the Cunarder. I think that was a remiss statement, to give the impression that it was a foregone conclusion that John Brown would get this contract. It should be made clear that John Brown has no divine right to build the next "Queen" liner.
  If the Cunard Line had supplied all the money, it could be said that the choice should automatically rest with that company, but, as has been said, a great deal of public money is to be spent and, therefore, in all fairness, we must ensure that there is no favouritism, and all that the other shipbuilding companies are asking is that they shall have a fair chance to tender for this contract.
  It has been said by some people that Swan Hunter & Wigham Richardson and Vickers-Armstrong may have less experience of building passenger liners than other firms, but that is not necessarily so. Both of these shipyards have an excellent record. Swan Hunter & Wigham Richardson have built such fine ships as the "Dominion Monarch" and, in fact, they built the original "Mauretania". Vickers-Armstrong built the "Empress of England"—
  Mr. Shinwell: Suppose that Belfast were to get the order. Would the hon. Gentleman be in favour of the contract going there?
  Mr. Montgomery: Yes, provided that I believed that the tender which came
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  from Belfast was the best one. I believe that most shipbuilders will support that view. All they want to be sure of is that it will all be fair and square and that one particular area will not get an unfair advantage over another.
  Recently, Vickers-Armstrong built a new liner called the "Empress of Canada". A well-known shipping journalist has described this as the finest fittted out ship that he has visited for twenty years. I dare say that he has also visited Clydeside in the last twenty years, so this is quite a feather in the cap for Tyneside. Vickers-Armstrong and Swan Hunter have spent a lot of money on modernising their plant and facilities, and without doubt they are amongst the most modern and progressive concerns anywhere.
  All that the shipyards ask is that they shall get a fair deal, that the tenders are judged according to merit and price, and that justice will not only be done, but will be seen to be done. At this point, I wish to make a plea to my right hon. Friend. I suggest that a small independent committee should be set up to examine these tenders and to award the contract.
  I welcome the Bill because I believe that, all things being equal, Tyneside can produce a highly competitive tender. I also believe that if awarded the contract Tyneside would build a ship of which not only the North-East but the whole of Britain could be proud, because we have the skill, the resources and the necessary ability to do the job. All that we ask from this Bill is a chance to prove our ability.
  6.27 p.m.
  Mr. John Diamond: The City of Gloucester has many obvious advantages, but it does not include among them shipbuilding facilities of the kind which have been mentioned by several hon. Members. It indeed has a very fine river, the River Severn, but, so far as I am aware, nothing larger than petrol tankers use it. Therefore, I may perhaps address myself to the Bill with a little more objectivity than can some speakers.
  It is clear that until the hon. Member for Newcastle-upon-Tyne, East (Mr. Montgomery) spoke, there were at least two reasons for supporting this Bill. The first was the election pledge, and the

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  second was the Chandos Report. We can now add a third reason, the fact that we are indebted to this Bill for the hon. Member's presence. Had the election pledge not been made we should have been denied his presence and we should have had with us the gentleman who previously represented the constituency.
  Perhaps we should consider the two main arguments to see where they lead us. The first one intrigues me because it is the first time, so far as I am aware, that a Minister has said that the reason for introducing a Bill has been an election pledge. According to the right hon. Gentleman the Minister of Transport, it was said by the Prime Minister, and it was included in the election manifesto. But this is not accurate, and we should get it cleared up. What the Prime Minister said and what the election pledge said was that the two "Queen" liners—in the plural—would be replaced. The right hon. Gentleman has made a long and careful speech demonstrating that, although he is in favour of this Bill which deals with the replacement of one "Queen" liner, he wants it to be clearly understood that this is not to be taken as an argument for replacing the second one which has another five years' life and, therefore, consideration need not be given to that for the time being.
  We should like from the Government Front Bench an authoritative reply as to where we stand. Whose word weighs the more—that of the Prime Minister and the election pledge, or that of the Minister of Transport? Or are we going to be driven to the new Conservative philosophy that we should in all circumstances carry out precisely 50 per cent. of our election pledges?
  Mr. Burden: That is a very naive argument. The hon. Gentleman knows that there is and there will be no question of replacing the second "Queen" until after the next election anyhow, so it is quite clear now that only one can be dealt with.
  Mr. Diamond: We understand the niceties of pledges. We understand that no Government can pledge their successor. We understand also that there is here not a question of a Government but of a party at election time making a promise to the electorate, on the basis of which a candidate in a particular constituency might be returned. Indeed,
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  the hon. Member for Newcastle-upon-Tyne, East told us that as a result of this pledge he secured the considerable majority of 98 at the election. I am not pulling his leg when I say that. I sat in the House at one time with a majority of 42. I regard a majority of 98 as very substantial. We should have clear what the Tory Party said in its pledge and what it intended by what was said in its manifesto. It is still the same Conservative Party, and it will, presumably, put forward candidates at the next election. We want to know what reliance is to be placed on Conservative Party pledges at election time.
  The second argument is based on the Chandos Report. The right hon. Gentleman really cannot expect us to put much weight on this Report, for several reasons. In the first place, as he knows very well, it was not a report on what should be done. It was a report on how a particular decision should be carried out, a totally different thing. The election pledge had been made, and the terms of reference were, "We have made this promise. Which is the best way of carrying it out?" No consideration, therefore, could be given to whether it was a wise promise or not, to alternative means of travel, to how much time had elapsed since the promise was made, and so forth. There were many fundamental considerations to be taken into account which anyone examining the matter would have wished to consider. That is the first reason why we cannot place much reliance on the Chandos Report.
  Secondly, the Minister really cannot have it both ways. Either one has a report and puts it on the table so that hon. Members may look at it, or one does not rely on it. Hon. Members are charged with the responsibility of reading reports and making up their minds on the basis of evidence put before them. It is not our job merely to follow behind the Minister because he says that he has read a report, the report says such-and-such and comes to certain conclusions. We are entitled to see the evidence. We are entitled to know exactly on what considerations the conclusions were based. We cannot perform our functions as Members of Parliament unless we do those things, and the right hon. Gentleman must not be disappointed if nobody places great weight on the Report. (a) because of the

  971
  narrow terms of reference, and (b) because we are not allowed to see it. Therefore, the two arguments which have been advanced in favour of the Bill seem to be very thin indeed.
  Several arguments have been advanced against the Bill. I shall not go through them all. It is within everyone's knowledge that the matter is full of doubt. It would be very difficult for anyone without the fullest possible direct first-hand information to decide a whole host of difficult questions about, for instance, whether it ought to be a ship or an aircraft which should be built, whether it ought to be a ship of this size or of another size, whether the money to help relieve unemployment could be used much better in other ways, and so forth. A host of fundamental questions require answering. I have mentioned some of them, and I am not at all satisfied that the answer we have before us is correct.
  I am perfectly satisfied, however, that the means for implementing the Government's decision are wholly objectionable and inadequate. It seems that the Conservative Party realises from time to time that there has to be public subsidy for private enterprise. We accept and understand that and we have developed machinery for giving it effect. The Conservative Party is always in the philosophical difficulty that, having decided that it is necessary, it rejects or recoils from accepting the means to give effect to the decision. What is put before us now must be judged by Tory philosophy, not by ours. Our philosophy would have moved us to approach the matter in a different way. That is understood, as my right hon. Friend the Member for Easington (Mr. Shinwell) explained, and there is no point in crying for the moon and trying to persuade hon. Members opposite to accept what we say because, obviously, they quite sincerely cannot do so. However, let us judge what is proposed by Tory philosophy.
  We have before us a proposal to build a ship. The proposal has been examined, and the report has been that it is worth while. We are told not that it is not worth while but that it is worth while building the ship. Why does not the company which wants to build a ship like this get on with it? The answer is
  972
  that the Government, apparently, are prepared to subsidise it, but not on any social grounds, not for reasons of unemployment, not on some grounds as were present in regard to steel or Colvilles, where it was said that the new facilities would not be put where they were, that is, in areas where there was unemployment, unless the Government were prepared to assist, because it would be uneconomic to do so. Those are not the reasons advanced here. According to the right hon. Gentleman, the matter is to be dealt with on a purely commercial basis.
  We are told that the winning tender will be decided on purely a commercial basis. Then why is not the contract to follow a purely commercial basis? The purely commercial basis, as the Minister knows, would mean, "Heads I win, tails I lose". It would not mean, as this contract means, "Tails I lose, and heads I cannot possibly win". It will be "Tails I lose" because, of course, if the venture does not succeed, if the new ship is not a success, the Government will lose their money, that is to say, the taxpayer will lose his money. They will lose some money. It is impossible to say how much. Certainly, they will lose up to £3¼ million if the venture is not a success, and that is taxpayers' money.
  Incidentally, the £3¼ million, it should be noticed, is just about the right amount which Cunard Eagle would require to buy two American aeroplanes in which to carry across the Atlantic all the passengers which it is proposed should be carried by this new £30 million ship.
  Mr. Burden: Nonsense.
  Mr. Diamond: If the hon. Gentleman says that, will he say what the right figure is?
  Mr. Burden: When the hon. Member talks of aircraft in the same sense as he talks of shipping, he should remember the capital investment. He must take into consideration the life of the aircraft, the cost of replacement, etc. All manner of other considerations should be taken into account. He is an accountant and he should realise that very well.
  Mr. Diamond: It is true that a ship lasts longer than an aircraft, but aircraft last a great deal of time, as anyone interested in the second-hand aircraft

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  market knows. There are a great many aircraft available for sale on the secondhand market, and aircraft last a long time.
  Mr. Burden: There again, the hon. Member is on a false point. There are so many second-hand obsolescent aircraft for sale because people are not buying them.
  Mr. Diamond: One of the reasons why aircraft are for sale second-hand is that people are not buying them. I merely make the point quite simply that aircraft do last rather longer than one might have expected. They become obsolete but not worn out. They become obsolete because there are new models, new designs, with new speeds, and so forth, but they do not wear out quickly. They last a very long time. If the hon. Member wants to be technical—he appeals to me on that basis—he should take into account the fact that aircraft last a long time, although they do not last so long as ocean-going liners.
  The fact remains—the hon. Member for Gillingham (Mr. Burden) has not denied it, and I understand that he is a director of Cunard Eagle himself, so he should have the information—that the amount of the subsidy now proposed is sufficient to buy two American aeroplanes of a size suitable to transport across the Atlantic in one year precisely the same number of passengers as it is suggested are likely to be transported by the "Queens", and the total amount involved in the new "Queen" is £30 million as opposed to the £3¼ million involved in the subsidy.
  I return to the main terms on which this is being negotiated. The terms are that in certain circumstances the Government and the taxpayer will lose. The terms are that in no circumstances can the Government or the taxpayer win—in no circumstances at all. If the scheme is utterly successful, if the ship is utterly successful, if an American company or a Greep ship-owner buys it out or takes over Cunard, whatever the circumstances which one can envisage, the most that can happen is that the Government will receive back their money—the loan and the subsidy. That is the best that can possibly happen. The worst thing that can possibly happen is that the whole lot will be lost.
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  There is the probability that only the subsidy will be lost—the £3¼ million—but nobody can tell. It is precisely because nobody can tell that I fail to understand why the Government are not prepared to do what would be done in any ordinary commercial transaction; that is, to say "We cannot foresee the future with certainty; it may be brighter than we think, or it may be less bright than we think, but we want this new ship built for a variety of reasons"—which I personally cannot accept—and that we should be doing it on the basis that if things do not go quite well, the Government, which has contributed and which has in fact been persuaded of the need to build the ship, will lose, but if things go well the Government should share in the profits. What is wrong with a simple commercial contract like that?
  Mr. J. Howard: I wish to refer to only one of the remarks of the hon. Member for Gloucester (Mr. Diamond), and that is when he said that we may lose the whole of the money put into this transaction. If he will refer to the Memorandum in paragraph 3, he will see that the Cunard Company will pay to the Government the amount of the deficiency. He will surely agree that in these circumstances the Cunard Company stands to lose a very great deal of money, and that the Government are in fact indemnified?
  Mr. Diamond: I heard the hon. Gentleman make that remark earlier in an intervention. I do not know where that is, and if he can tell me where it is—
  Mr. Howard: On page 3, at the end of paragraph 3.
  Mr. Diamond: The paragraph says:
  "Cunard will undertake with H. M. Government that if the Q.3 Company are unable to pay the full amount which they may be required to pay as aforesaid, Cunard will pay H.M. Government the amount of the deficiency."
  The terms of the transaction as set out clearly show, and perhaps the right hon. Gentleman will correct me if I am wrong, that in certain circumstances the parent company guarantees the repayment of the loan, but only in certain circumstances. These circumstances are, for example, purchase by an outside

  975
  body, but only in these circumstances is it guaranteed. It is not guaranteed in all events.
  I hope the right hon. Gentleman will contradict me if I am wrong, but as I read it, it is only in a limited set of circumstances that the guarantee of the parent company subsists, and, in the generality of circumstances, if the money is lost through trading or in a variety of ways other than special ways, the guarantee does not come into effect. Therefore, I hope the hon. Gentleman agrees with me that there are many circumstances in which the whole of the money might be lost, and that there is not a single circumstance in which the Government can gain any advantage whatsoever.
  I say to the right hon. Gentleman that that needs explanation according to Tory philosophy. He needs to explain to us why, if it is right to enter into a commercial contract for tenders which will be decided by commercial grounds, and not on full employment or other social welfare grounds, it is necessary to have an agreement under which, if things go one way, the Government lose, and if they go the other way, the Government cannot possibly gain.
  I think there are other points to be considered. There is nothing whatever here about representation on the Board of the new company. Why not? What is the difficulty about that? Here is a new company, as I understand it, specially incorporated for the purpose of running this ship. Its accounts and activities can easily be identified and separated from all the other activities of the Cunard Company, and it is not to be confused, as this is subsidy money, with the air activities which have been undertaken by Cunard with its own money and with no assistance from the Government. The whole of the profits of these air activities will go to the Cunard shareholders, because it is a separate organisation. What is the difficulty about having an interest in this separate organisation? What is the difficulty of having seats on the board of a separate organisation? We still have our directors on B.P.; I am not aware that they have all resigned. If we are putting public money into this, why not have directors there also?
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  Let me repeat, in case anybody did not hear what my right hon. Friend said, that I know of no finance house that would think of putting up money on terms like this without requiring, not only a seat on the board, but the possibility of controlling the board, and some interest in the equity in the form either of convertible debentures or some real interest in the equity, so that if things go well the people putting up the risk money, albeit with some kind of security, will get a share in a successful business being carried on. I do not understand at all why the right hon. Gentleman chose to speak so shortly today and why he hardly dealt with this point at all. It is a perfectly valid point on perfectly good commercial grounds. I hope that we shall get a full answer. There are other points which can be dealt with on the Committee stage more fully, and I will not detain the House with them now, but will leave it there with these few comments, with the request that the Minister should give the fullest attention to what has been said.
  6.46 p.m.
  Mr. John Rodgers: As the House is aware, I have the gravest doubts and misgivings about the Bill. I am sorry that the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) is not present, because the misgivings and doubts which I express have nothing whatever to do with any pressure brought to bear on me from any quarter whatever. I am sure that that is the view of every hon. Member on this side of the House, whatever view he takes about the Bill. I had hoped that the time had long since passed when the Opposition would impute base motives to hon. Members on this side. It is a childish thing to do, and in this case I am convinced that it is not true.
  My hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), in what I thought was an extremely brilliant, witty and somewhat devastating speech, deployed all the arguments that I would wish to deploy against the Bill, and, therefore, I do not wish to detain the House very long. I wish, in summarising my opposition to the Bill, to join hon. Members on both sides of the House in congratulating my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), who is the new Joint Parliamentary Secretary to the

  977
  Ministry of Transport, on sitting for the first time on the Front Bench, and on joining the Ministry on the shipping side.
  My right hon. Friend the Minister kept referring to the fact that this subvention to the Cunard Company in replacement of one of the "Queens" was really historical. We have done it before, therefore it was nothing new, and there was no reason why we should not go on doing it again, but this is not quite the case. There are many differences now from the time when we agreed to build the "Queen Mary". Then, there was mass unemployment, and anything which would create employment was to be welcomed. There was the strategic concept, which might justify the subvention, and the idea that the ship could be used as a troop carrier if war came. No such necessity arises in this case.
  Again, air travel had not developed to anything like the extent to which it has developed now. When one boils down the arguments of my right hon. Friend I must say that I see no reason whatsoever for Government subvention, except on the grounds of pure prestige—that we ought to keep our place in the trans-Atlantic shipping industry. But we are already losing it. In the last ten years Cunard's share of the trans-Atlantic trade has dropped from 60 to 30 per cent., while that of all the other main lines has increased. What is the reason for this?
  I am not a shipping man, but I am worried because nearly all the other shipping companies which are doing much better than the Cunard Company are operating ships which are much smaller than the "Queens". We are told that the ship proposed is the only sized ship which can maintain a regular express service across the Atlantic. However, as far as I know, the United States lines have never missed a sailing yet. They may have been delayed for a few hours. I do not understand why the French, the Italians and the United States can operate ships which are much smaller than the "Queens" and still, first, make bigger profits, secondly, get more of the traffic, and, thirdly, keep regular sailings.
  Mr. J. Howard: In 1955, 201,000 people crossed the Atlantic, 84,000 of them in the "Queens". That is 42 per cent. of the total. In 1960, 169,000 people crossed the Atlantic, 73,000 of
  978
  them in the "Queens". That is 43 per cent. of the total. Over those five years there has been a slight increase in the percentage of people carried by the "Queens", but, no doubt, figures can be made to mean anything.
  Mr. Rodgers: Today, I have been foxed by statistics given from both sides of the House. I propose to produce some quite different figures which I believe to be accurate. They are based mainly on Board of Trade figures and therefore, I have some belief in them. According to my information, in the last full year, 750,000 people have crossed the Atlantic by air and less than half that number have gone by sea. It would, therefore, appear that the number of people travelling by air is going up while the number travelling by sea is going down all the time. [HON. MEMBERS: "No."] All right, the number travelling by sea is not increasing at the same rate as the number travelling by air. Far more people are travelling by air than by sea. I do not think that anyone will quibble with that.
  The number of people travelling in the "Queens" last year fell by 6 per cent. The total decline in Cunard passengers was 21,286, which is a quite substantial decline, while over the same period the number of people travelling by air increased by 24 per cent.
  Sir J. Duncan: My hon. Friend will, I am sure, realise that there was a long strike in America.
  Mr. Rodgers: That would equally affect the other ships, like the "United States".
  I have on a previous occasion referred to this vessel as an obsolescent national status symbol, and I think that that is what it is. A ship of this size could be used on no route other than the North Atlantic route. It has no alternative use. I believe that, if the facts were examined objectively, it would not be proceeded with. It is obsolete before it sails. One reason for this is that the number of passengers travelling by air is increasing and the other reason is that far more tourist class as against first-class passengers are crossing the Atlantic by sea and air. This also has to be borne in mind. If the ship is proceeded with—and I am afraid that it will be—I hope that it will not be called after Her Majesty. It

  979
  would be much more fitting if it were called the "Queen Anne".
  If the argument is that the reason for the Government wanting to give a new subvention is to help shipbuilding, I agree with the right hon. Member for Easington (Mr. Shinwell) that this is not the right way to tackle it. If my right hon. Friend were asked candidly how he would use the £18 million to benefit the shipbuilding industry, I am sure that he would not for one moment say that this is the way to do it. He is far too intelligent to believe that this proposal will be of real assistance to the shipbuilding industry. It is true that it will help a particular shipbuilding firm, or firms, in one area for a very limited time, but there is a need for us to tackle the whole problem of shipbuilding and shipping industry and to marry these two industries.
  In my view, the concern of the Government should be directed at the reorganisation of the shipbuilding and shipping industries and to bringing them together. They should ensure that management is improved and they should encourage amalgamations, much though it is disliked by hon. Members opposite. They should ensure that the restrictive practices which bedevil the industries are abolished so that we can produce ships at competitive prices. All this should be the concern of a Minister of Shipping and of his colleagues, not this miserable subsidy.
  I believe that the Bill should be rejected. I shall not vote against it. Apparently no one is to propose that it should be rejected and, therefore, I shall probably abstain. In view of the speeches which we have heard from hon. Members opposite, I fail to understand why they did not move the rejection of the Bill.
  Mr. James Callaghan: Let us do it now.
  Mr. Rodgers: I think that I have said enough to show why I object on principle to the subsidy to the Cunard White Star, particularly because it has enough assets to pay for this ship itself. As many hon. Members have said, it is spending millions of pounds on Boeing aircraft and is expanding in the aircraft industry with its own money. Yet it expects the Government to provide some
  980
  of the capital for the "Queens". If we go ahead with the Bill I hope that, in Committee, we will modify the financial terms which have been suggested. One possibility is to make the £3½ million subsidy, a straight gift, as a loan at the same rate of interest as is granted by the Public Works Loan Board.
  Secondly, I do not understand why the assets of Cunard White Star could not be set off as collateral against the loan and not, as proposed, only in the event of it being taken over by a foreign owner. I believe that the whole of the assets of the Cunard Line should be set off against the Government loan.
  Although I am utterly opposed to the Bill, I have nothing against Cunard White Star Limited. I have often travelled both to and from America on both "Queens" and I have enjoyed my visits. Nowadays, I travel much more often by air. On Friday, I am going to the United States by air. I think that the Cunard Company provides the best service of any shipping company whose ships cross the Atlantic, but I also believe that the time for the "Queens" to flourish is finished and done with.
  6.58 p.m.
  Mr. Cyril Bence: I have a little regret in that I feel myself compelled to support a Measure for subsidising private enterprise by giving it a preferential rate of interest, but I console myself with the fact that, if this is the beginning of a principle by which when this House or any responsible body in the country decides that some social wealth should be created or something should be created by loans at a modified or differential interest rate, I am all in favour of it.
  We need many new houses and hospitals. It would be for the prestige of this country if we increased our building of hospitals and the redevelopment of our towns by giving a loan at a 4½ per cent. interest rate instead of forcing local authorities on to the market. After all, we have taken Cunard off the market because we think that this ship is highly desirable. Looal authorities cannot hold reserves.
  We are told that the Cunard Company has £38 million in reserve. We must not, however, think that it can spend this money on one ship for the North Atlantic

  981
  run. It has many obligations concerning the replacement of cargo boats and marine services all over the world. This reserve of £38 million must cover a large number of replacement responsibilities in other directions. For goodness' sake, let us be fair to the Cunard Company.
  I enjoyed tremendously the speech of the hon. Member for Reigate (Sir J. Vaughan-Morgan). It was an extraordinarily witty Parliamentary performance. The hon. Member suggested, however, that he travelled by air unsubsidised. I have done a lot of work for the aircraft industry since 1920, and everyone knows that the whole of that industry has been built by the pouring in of thousands of millions of pounds in the construction of aircraft.
  Sir J. Vaughan-Morgan: I must plead innocent to the accusation. I did not say that air travel was unsubsidised.
  Mr. Bence: You objected to travel ling in a subsidised ship, but you travel by air—
  Mr. Speaker: The hon. Member must address his observations to the Chair, otherwise we get into a muddle.
  Mr. Bence: I beg pardon, Mr. Speaker.
  When talking about subsidising the Cunard Company, it should not be forgotten that the aircraft industry, one of the greatest competitors of shipbuilding, has reached its peak only because it has had thousands of millions of pounds of public money poured into this development. Sixty years ago, our shipbuilding industry had the advantage of a huge Navy and huge naval development and research, which the shipbuilding firms could use and pass over to the merchant shipping industry. Those days have gone for this country. Now, we have reached the stage where the Government are compelled, over an ever-widening field, to subsidise private enterprise in some form or other.
  Every industrial nation in the West is living in an age when the so-called organisation of production by private enterprise is failing in every direction. Government finance has to come in. The old traditional measures of financing industry are breaking down. Sir Nicholas Cayzer spoke at the launching of a ship
  982
  at John Brown's, Clydebank. I forget the name of this fine big ship. They are all fine big ships from John Brown's, and the bigger they are the finer they are. Sir Nicholas Cayzer said that the vast majority of international trade and merchant shipping relationships were inter-governmental. All over the world Governments are dominating the shipping policies of their respective nations. Many of the agencies with which traders have to trade are semi-Government institutions. This is happening all over the world.
  I remember the deflation of 1922, when the City of Cardiff was called the city of broken millionaires. The big shipping companies were bankrupt. One of the shipping magnates, Sir Daniel Ratcliffe, shot himself. He was a millionaire one day and was broke the next. He blew his brains out. We seem to have passed the age of voluntary liquidation. Industrial organisations on a big scale in this country do not go into liquidation. They bring the begging bowl to the Treasury to get money to carry them through. Whether it is because the banks and insurance companies have such heavy portfolios of industrial shares, I do not know, but it seems that the age of voluntary liquidation and the writing down of capital has gone. We live in an age when Governments come to the rescue of firms or of whole industries which are in difficulties.
  Nevertheless, I understand some of the opposition from merchant shipping about this subsidy to Cunard. We have had it said here this afternoon—
  Mr. Peyton: The hon. Member is making a wholly unjustifiable statement. In speaking of the opposition from merchant shipping, he is falling into a mistake which already has been made by hon. Members on his side of the House that speeches from these benches are made on grounds of merchant shipping. One of the reasons why I look with disfavour upon the Bill is that the consequence of this kind of action is likely to be a large queue for similar subsidies. The hon. Member must get that right.
  Mr. Bence: I was making the point that there is opposition in the country by merchant snipping houses—
  Mr. Peyton: Which ones?
  Mr. Bence: Runciman's oppose it, do they not?
  Mr. Peyton: I do not believe that the hon. Member has any evidence to suggest that any merchant shipping firm is opposed to it.
  Mr. Bence: All right. It has been said here today that there are strong objections to giving these terms to a specific company, Cunard. It has been said outside this House as well that there are strong objections to the whole principle of the Bill. I am only repeating what has been said.
  Mr. Peyton: The hon. Member must get this clear. The objections do not come from the industry. The industry, I understand, is very much inclined to support the Bill, hoping for a few crumbs to be left over from it.
  Mr. Bence: I have listened to objections from an individual connected with merchant shipping criticising the terms of giving Cunard a special favour. I do not put it any higher than that. It may not be organised opposition, but there are individuals connected with merchant shipping who object to this being done for the Cunard Company.
  I was surprised at the Minister telling us that it was not desirable for the Government to hold any equity interest in the new ship, because we might lose the lot. That is fantastic. The Cunard Company has reserves of £38 million, which may cover the cost of replacing twenty or thirty cargo ships of all kinds. It has other merchant vessels besides the two crossing the Atlantic. It has vast obligations apart from two "Queens". So we must not take the whole of the £38 million. The £12 million that Cunard is putting up is as much as it can spare from those reserves for this re placement. Cunard must have a fleet of 70 or 80 vessels—
  Mr. Shinwell: It is no use my hon. Friend assuming that the Cunard line contemplates, from its £38 million less the £12 million involved in the Bill, building a number of cargo vessels. Why does he assume that?
  Mr. Bence: Cunard has a fleet of 70 or 100 merchant vessels. Some of them may be ten or twenty years old and replacements will be coming along. The "Britannic" was to be replaced a few
  984
  years ago, and the Company was to finance it, but it was cancelled. I am only making the general commercial assumption that any big company with reserves has a lot of obligations outside one ship. That is a fair assumption to make.
  Why cannot we hold an equity share interest in this venture? I was at the launching of the "British Queen", a 50,000-ton oil tanker, from John Brown's. It was launched for B.P. I understand that the Government are an equity shareholder in B.P.
  Mr. Shinwell: They have been for years.
  Mr. Bence: The Government hold 53 per cent., I believe, of the equity shares. I hope that I shall have the pleasure of being invited to the launching of the "Prince Charles", not the "Queen Anne".
  Why cannot we hold equity shares in it? Are the Government preparing for the taxpayer to lose money? I agree with my hon. Friend the Member for Gloucester (Mr. Diamond) about not taking equities in it because we might lose the money. In any event, we shall lose the money that we put in. The Government are making a completely wrong assumption. I am surprised that we cannot take an equity interest in this new Cunarder when she is built, especially when we have equities in B.P.
  I want to discuss the tenders for the ship and its possibilities in the future as against air travel. I agree with the Minister that such a venture as this, costing £30 million, must be on what the Minister called a commercial basis. Whatever tender is accepted, however, the ship which comes off the drawing board, from any shipyard, must show techniques in design and in amenities within the ship well ahead of anything that is afloat today. It is better to pay a little more for a ship that is a tremendous improvement on anything now being built or afloat than to pay less money for something similar to what is now being built or afloat.
  Success in an enterprise such as this, carrying across the highly competitive North Atlantic ferry, will go to the nation which puts into service the ship which is at least half a decade ahead of anything at present sailing. If that is what the right hon. Gentleman means by

  985
  a commercial proposition, I agree with him wholeheartedly. Something more than price is involved in this contract. It is not necessarily the lowest price which will provide the ship which will capture—which is what the ship has got to do—the seagoing traffic across the North Atlantic ferry. This is why I am all in favour of the Bill and support it, and support the British mercantile marine wherever it is.
  Since 1945 the British mercantile marine has been under very heavy pressure from the United States and even from India and Argentina. All those nations now want their own merchant fleets. To them a merchant fleet is a kind of symbol, an oceanic symbol, of sovereignty. It is no good, for instance, telling the Indian Government that P. & O. or British India or the Commonwealth Line can do the job more economically than they can. They want their own merchant fleet.
  We are being driven back. The United States, by their subsidising policies, are driving us back. It seems to me that some hon. Gentlemen opposite want to retreat. I do not want to retreat. Although I am a landlubber, I love the sea and ships. I suppose that to every Britisher a ship is a symbol of Britain. I want to see a strong mercantile marine. I believe it is necessary.
  Carriage by sea is to this island nation as vital as agriculture. I believe it is absolutely vital to us, and that we all of us as taxpayers should make sacrifices if need be to maintain our merchant fleet and to show the world that we are not prepared to retreat or to become a fifth or sixth rate maritime nation and that we are determined to hold our own and do all we are capable of in sea transport.
  Mr. Diamond: I apologise to my hon. Friend for this intervention, but his mention of agriculture reminds us all that agriculture is helped not by putting the whole of the eggs in one basket, not by giving to one farmer in respect of one cow or pedigree bull £20 million.
  Mr. Bence: It is perfectly true that the Government have put thousands of millions of eggs into the aircraft basket—for jet aircraft, passenger airliners—but up to the present have put nothing in the shipping basket. It is true that
  986
  over sixty years there have been general financial arrangements with Cunard, and the only Cunarder not built by John Brown was the "Mauretania", which was built at Newcastle-upon-Tyne. That order was given to Newcastle-upon-Tyne because John Brown had not a berth vacant at the time.
  Mr. McMaster: I am sure the hon. Member does not want to give a wrong impression. Many liners were built at Belfast by Harland and Wolff for the White Star Line which later became part of the Cunard Company.
  Mr. Bence: That was before 1920 or 1921, and I was talking about Cunarders.
  However, in supporting this Measure, and notwithstanding that it may well be the forerunner of further Government help to the shipbuilding industry—as, indeed, I hope it is—I hope that we shall hear no more of this nonsense that if it is successful the Government will deny themselves the privilege of taking an equity holding in the project, so that if there is any benefit only the shareholders will get it and the taxpayers only pay the piper. That seems to me quite wrong. But I certainly do wholeheartedly support this Measure, and I hope that the firm which produces the best design at a reasonable price gets the contract, because I know very well that, if that is so, John Brown's will get it.
  7.15 p.m.
  Mr. F. A. Burden: One thing which is perfectly clear is that the new "Queen" will not sail from the Medway and it will not be built in Chatham Dockyard. I was very interested to see, in the General Election Manifesto of the Conservative Party, the statement that
  "We also intended to support the replacement of the Queen liners."
  At that time, of course, we in Chatham were, as we still are, interested in building a new type of vessel in this country, a nuclear submarine, and I give my hon. and gallant Friend notice that we shall press on the case for that as strongly as possible.
  Some of my right hon. and hon. Friends have today produced, against these proposals for the construction of the new "Queen", arguments on the basis that they are most strongly opposed to the

  987
  subsidy, and some of them have criticised the proposals on the ground that such a ship as this projected one will be obsolescent before it is built. Those arguments, however, were just as strong and just as valid during the General Election as they are now, but not once did I find that my hon. and right hon. Friends raise these criticisms during the election. Their arguments, which they have put forward today, were just as valid at that time when they fought the election on that election manifesto.
  Mr. Geoffrey Hirst: Is my hon. Friend trying to say that nobody in the party at any time in the election disapproved this part of the manifesto, because, in fact, I did?
  Mr. Burden: That appears to me to be an absolutely lone voice in the wilderness. I do not know that there was any general objection at that time. If I had felt so passionately about it as my hon. Friend apparently now feels I should have had to consider very seriously whether I could support a Government who proposed something to which I was so violently and passionately opposed.
  Mr. Diamond rose—
  Mr. Burden: Will the hon. Member allow me to go on just for a little while? Then I will give way.
  Mr. Shinwell: But my hon. Friend only wants to pour oil on the troubled waters opposite.
  Mr. Burden: Now I, also, want to disclose my own position quite frankly. During the election and after it, when this proposal was made, neither I nor the Government nor the Cunard Company had any idea that the Cunard Company would have any interest whatsoever in Eagle Airways, now Cunard Eagle Airways, nor did I have any idea that I should be associated with Eagle Airways, which, ultimately, became Cunard Eagle Airways. I want to make that position perfectly clear. The Chandos Committee and others took this matter into consideration long before there was any question of Cunard taking any interest in Eagle Airways.
  What happened is this. I think that we have to consider these facts. Then, I think, many of my right hon. and hon.
  988
  Friends will come to the conclusion to which I have come. It was perfectly clear that the Cunard Company came to the situation where they said, "The life of the 'Queen Mary' is now coming to an end, the useful economic life of the 'Queen Mary' on the Atlantic, and we have to consider what we are to do in the future." They saw the simple economic fact with which they were faced, and the board considered that, in the circumstances, it could not undertake, with its other commitments, the spending in one sum of an amount sufficient to finance a new "Queen" costing about £30 million. The Cunard Company estimated, quite properly, I believe, that it was just not a proposition without some Government help.
  Mr. Shinwell: Why?
  Mr. Burden: Because it is responsible for running a big shipping company with considerable commitments which it is far better able to judge, with respect, than the right hon. Gentleman.
  Mr. Shinwell: The assumption underlying the hon. Member's argument is that when the ship is constructed the company will have to pay £30 million. Are we to understand that there is no shipbuilding company which is prepared to provide credit facilities, not similar to those provided by foreign builders but approaching them? For example, it could pay the £30 million over a period of years.
  Mr. Burden: Certainly not, and that, obviously, was one of the reasons which were considered when this matter was discussed at top level in the Cunard Company. Then the Cunard people, with all their experience of the North Atlantic, considered the alternatives of smaller vessels as a replacement, but it was perfectly clear to them that it was impossible to replace the "Queen", to do the job for which she was intended, by a very much smaller vessel. In the light of their considerable experience, they decided that it was essential to go ahead with a big liner, but in the present circumstances of the finance required for a vessel of that kind they decided that they must consult the Government, place the facts of the situation before them, and ask that those facts be considered.
  In view of what has been said in the House today, it is perfectly obvious that

  989
  the Cunard Company would have preferred to remain master entirely in its own house and not to have to go to the Government in any way for assistance or guidance in this matter. It is also perfectly clear that the Government were absolutely free to refuse to do anything whatever. No doubt some right hon. and hon. Members consider that that is what they should have done. But it is clear that it is a matter of great national interest that this country should remain in the North Atlantic, and that if it does not, then very cogent reasons should be given at Government level for the refusal of the Government to enable the country so to remain. The Government quite properly considered that Cunard had a case and they decided to take certain action.
  In the first place, in assessing this action, it should be remembered that the "Queen Mary" was laid down, in 1932, at an estimated cost of about £4½ million and that the Inland Revenue allowed a depreciation of roughly 100 per cent. on the historic cost over twenty years, but the estimated replacement cost of the vessel today to do an identical job is not £4½ million, but £30 million.
  It should also be remembered by the House that the Cunard company would have been in a very much better position had it not been for the fact that during the seven best years of the life of the "Queen Elizabeth" and of the "Queen Mary" it was denied the services of those vessels in a commercial capacity and the ships were going across the Atlantic on their strategic duties. They were hired to the Government for 5 per cent. for depreciation plus 2½ per cent. It seems likely that if, in addition to the money that could have been earned by these ships at that time, the Inland Revenue had allowed a realistic figure for the general cost of replacement, the Cunard company would have been in a perfectly adequate position and would have been quite able to construct this new ship out of the company's resources.
  The Government, quite properly, did not promise out of hand to help. The House would have been most upset if the Government had done so. The Government decided to carry out a thorough investigation of the whole position and they set up a Committee under a man well known to the House and very much respected for his ability,
  990
  integrity and business acumen—the present Lord Chandos. The terms of reference of that Committee set up in September, 1959, may be summarised as to consider how best the British express passenger service across the Atlantic could be maintained. I have heard some of my hon. Friends criticise the circumstances, but I do not think that any of my hon. Friends who were here when Lord Chandos was a Minister in the House, and who have seen his record since, would do other than accept that he would go into the matter absolutely thoroughly and would produce an accurate and objective report.
  Mr. Hirst: According to the terms of reference.
  Mr. Burden: But I think that hon. Members know Lord Chandos well enough to realise that if he thought that this project was not a runner at any cost he would have made that perfectly clear to the Government and to everybody concerned. Lord Chandos has shown in his Report that he and his Committee are widely favourable to Government participation in the construction of the new "Queen". Nor would anyone suggest that the Committee did not thoroughly investigate all the scientific and other factors that might be germane to the decision to construct the new vessel.
  We can take it that Lord Chandos considered whether we should build an express trans-Atlantic liner of the largest size possible, or a smaller one. He no doubt considered all aspects relating to size, cost, operation and subsidised foreign shipping. He no doubt also considered to some extent—and we may well be given some information on this today—the likely impact on North Atlantic shipping of the increase in air travel.
  This is a matter of interest not only to the Cunard Company and the Government at this stage, but to the country as a whole. Some of my right hon. and hon. Friends take the view, I believe quite wrongly, that the rate of increase in air travel will create in some way or another a situation in which sea travel practically disappears. I do not believe that. They are quite wrong. What is happening, in fact, is that air travel is making people more travel-minded generally and, complementary with that, the standard of living on both sides of

  991
  the Atlantic has increased. Although the number of people travelling by air has increased at a greater rate than the percentage of travellers by sea, I believe that the number of sea passengers will increase considerably in the years ahead.
  I can perhaps illustrate this by an incident that happened to me today. An American client was speaking to me in my office and he had no idea that I intended to take part in this debate, or even that a debate was to take place. He said, voluntarily, that he had always in the past flown to and from Europe on his business trips. He found, after flying, that it took him nearly a week to recover when he returned to America. He said, "I have been in eight European capitals in thirteen days. I shall travel home by sea". He said that he intended to make the sea journey in the "America", and he told me, "I shall be going home by sea because I shall be able to get down to my work more quickly after a relaxing sea voyage."
  That is likely to be the trend in future. As more and more people travel across the Atlantic, many of them will come to realise that by far the best method of traversing this route is to journey one way by air and the other way by sea. People are getting longer vacations and they are finding that two weeks is sufficient to visit a country, and they will use the remainder of their holiday to travel home by sea, which in itself is a holiday.
  Mr. Nicholas Ridley: The Minister gave some figures earlier which showed that in the past four years the number of sea travellers had declined by 18 per cent., but over that same period the number of air travellers had increased by nearly 50 per cent.
  Mr. Burden: I am discussing this matter from a long-term point of view. There has been a considerable recovery in the number of sea travellers during the last year or so, and in the past twelve months, out of 169,000 people crossing the Atlantic by sea, 73,000 of them were carried by the "Queens". That is a point we must keep in perspective when discussing this subject. Of course, that is a great number of passengers. They not only pay their fares to travel by sea, but many
  992
  thousands of them stay in British hotels and spend a lot of money in British shops.
  During our debate today there has been quite a lot of criticism from what I might term the "armchair critics", who really have little or no expert knowledge of this matter. They certainly have not got the knowledge or experience that is possessed by the expertise of the Cunard Company or of the Chandos Committee. How many hon. Members could put as much time and study into this matter as did the experts in Cunard and the Chandos Committee? Those experts spent months carefully investigating the many facets of this subject and, with respect, my hon. Friend the Member for Sunder-land, South (Mr. P. Williams) cannot claim to have done nearly as much research as did the members of that Committee.
  Mr. P. Williams: Nor have the vast majority of hon. Members of this House. The Government have put before us proposals for the distribution of money. Surely hon. Members are permitted to discuss the matter, even as a matter of political principle.
  Mr. Burden: My hon. Friend has expressed an opinion without having the facts to back up his view.
  The Chandos Committee carefully went into the question of the size and type of vessel that should replace the "Queen" and they were not alone in their recommendations. The Naval Research Establishment came to precisely the same conclusion with regard to the type of vessel. Looking at the facts and figures that are available to any hon. Member who wishes to study this subject, over the last forty years the general trend in shipping has been to use fewer, but larger, ships, and to replace a considerable number of smaller ships with bigger ones. It will be obvious to all hon. Members that in doing this the manning overheads are less costly, operating costs generally are lower and maintenance costs are cheaper. These larger vessels also have a much greater passenger carrying capacity.
  If two vessels are required for the North Atlantic passenger service, both vessels must be capable of speeds of 29½ knots. Thus, they cannot be small ships. It is

  993
  estimated that 900 feet is the minimum length for a ship with the power to produce a speed of 29½ knots and, if the right hon. Member for Easington (Mr. Shinwell) doubts that estimate, his hon. Friends in the shipping industry will assure him of its accuracy. Passenger accommodation on these vessels must be comparable with, or better than, any other ship of a comparable nature on this route flying a foreign flag.
  Many hon. Members have argued the case for a smaller ship. At the moment, the French are building a ship of 68,000 tons for the North Atlantic express passenger service. Does any hon. Gentleman wish to suggest that the French, the Cunard line, the Chandos Committee, as well as the Naval Research Establishment, are wrong in suggesting a ship of the size proposed? No other long seat route connects two parts of the world that are so thickly travelled, so highly industrialised and so prosperous as does the North Atlantic and Western European shipping route.
  It is recognised by the maritime countries of the world as the shop-window in which to display their maritime and engineering abilities and their shipbuilding knowledge and generally to reflect the efficiency and ability of their industries. Why have those other countries subsidised the route? It is for that very reason—because they believe that is absolutely vital to their general shipping interests that they should be on that great waterway.
  It has also been for us a vast earner of foreign exchange. Since 1947, the two "Queens" have earned no less than 320 million dollars. In addition to that money spent on fares, we have to add the very considerable sums spent by visitors in our hotels and shops throughout our country.
  Sir John Barlow: That figure of dollar earnings is most interesting. Can my hon. Friend give the net dollar profit?
  Mr. Burden: I am sorry that I cannot give that figure, but it can probably be obtained. It will be realised that one of the important things that we wish to do is to obtain dollars. To arrive at the figure my hon. Friend wants we must also work out the amount spent by visitors in
  994
  our hotels and shops, and so on, in order to ascertain the complete benefit.
  Sir J. Barlow rose—
  Mr. Burden: I cannot give way again. I am sure that my hon. Friend will have every opportunity of being called later, and he will then probably be able to argue that point.
  Some of my hon. Friends argue that this vessel will probably be obsolescent before she is built. They think of nuclear propulsion, and believe that it is just around the corner. But it is really a very considerable way off. No doubt the members of the Chandos Committee, the Naval Research Establishment and the Government considered the possibilities of nuclear propulsion in the near future, but they have given the go-ahead to this traditionally propelled liner. Other hon. Members have argued about the air, but I think that I have made my view on that very clear.
  There is one other point which has not been mentioned in the debate and which I believe to be very important when we are questioning the advisability of constructing another "Queen", and that is the very great and growing importance of fast sea freight. There is possible a very considerable extension of trade between this country and America, and I hope and believe that it will continue to grow. More and more people are sending their goods, particularly consumer goods, by air, but there is a restriction on that because, obviously, articles must be light in weight and not bulky and of a high cost ratio to make air freight pay.
  But there is also a much greater desire nowadays to buy smaller and buy more often, and, thus, fast sea freight is becoming more important than it has ever been. Already, the "Queens" play a very important part in increasing Anglo-American trade. The weekly fast freight service of the "Queens", with all the knowledge that is behind this type of freight by Cunard, can not only help to pay for the "Queens" themselves, but can also help in a very considerable way the general industry and export trade of this country to America.
  When we are considering this matter, we ought also to think of the situation in the British shipbuilding industry.

  995
  As every right hon. and hon. Member knows, the graph of unemployment among the 178,000 shipyard workers is, unfortunately, rising. The new "Queen" will provide work for about 5,000 men for some time, and I believe that that must also be taken into consideration when we are discussing these matters.
  The Government decided, I believe, to grant the Cunard Company help because it was clear that the vessel would not otherwise be built, and this is nothing more than a specific subsidy for a specific ship built for a specific purpose. That is the point which should be remembered by my hon. Friends who object bitterly from the subsidy point of view.
  Outside Britain, the ship will earn us a great deal of foreign exchange in fares, and we must not forget the money which will be spent in hotels, restaurants and shops in this country. When people wish to travel by ship it is surely desirable that they should travel in the finest trans-Atlantic passenger ship in the world, and I believe it is imperative that that ship should be British-built. I believe that the Government were right in giving a promise in their election manifesto, and I believe that they are no less right in implementing it. The opposition among my colleagues has been very vociferous, but I believe that generally today there is very much more support than opposition for the proposal.
  7.47 p.m.
  Mr. John Rankin: If in the orthodox fashion which is alleged to prevail in this Chamber the votes had to follow the voices on both sides, then I suppose that when we came to ten o'clock tonight the Minister's Bill would be in a very perilous position. I assure the Minister right away that he has my support for the Bill, and that may somewhat lighten the burden which both sides have placed upon his shoulders during the debate.
  I declare my interest right away. As the hon. Member for Gillingham (Mr. Burden) said, we cannot at this stage and with this Bill before us ignore the position of the shipbuilding industry, and although we are promised much fuller debate about the industry at some future date, there is no reason why it should not at this stage, even if only superficially,
  996
  engage our attention. The Shipbuilding Conference issued its statistics last week. These show the most serious condition of this great industry. At the end of March, 1957, they had on their books about 6 million gross tons of shipbuilding orders, but by the end of March this year the figure had been reduced to 3 million gross tons.
  That is a most disturbing position. It is one which the House cannot afford to ignore and one which I certainly cannot ignore as the representative of one of the biggest shipbuilding areas in the United Kingdom—Govan, Where nearly 10,000 people are engaged in three great shipbuilding yards. Naturally the continuing decline in the strength of the order books disturbs not only those who are concerned in the work of the yards but those who are dealing, at management level, with the problems involved in shipbuilding.
  Like right hon. and hon. Members on both sides of the House, I have taken the trouble to consult those persons who enjoy top-level appointments in this industry, who direct its fortunes for good and ill. Their view is not the one which, in some respects, has been put forward today by the Minister. He said that nuclear propulsion had not yet been sufficiently developed. I am certain that, in putting forward that view, he is fortified by substantial advice, but I must put against it advice which I think is equally substantial. It comes from those who are engaged in this work and who have a proposition before the Government, which, I assume, has engaged his attention.
  They believe that nuclear propulsion is with us now, that a nuclear propelled ship is a possibility, and that in this advance in the propulsion of ships, we at the moment have the chance of a leadership which, if we neglect it, we may never again have an equal opportunity to achieve. I hope that the Minister will look again at the question of nuclear propulsion and keep before him the proposition deployed by Fairfield Yard in my division.
  Again, he said that the object of the Bill was to secure the continuance of the Atlantic passenger service. As he pointed out, and as we all know, there are two ships now operating that service, and we assume that it will be necessary for two ships to continue to carry on the

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  service, if it is to be carried on as it presently is. That means that the Government must now, to some extent, be looking to the future.
  When the "Queen Elizabeth" reaches the period where her service no longer is economic, then, if the pledge which was given at the General Election, and about which we have heard something today, is carried out, I take it that there will be a successor to the "Queen Elizabeth", just as there will probably be a successor to the "Queen Mary". I do not believe that is looking too far ahead, because, if two ships are necessary to carry on the service now, I think that it will be more than difficult to find one ship which could carry out the work of two ships on this route. Perhaps the right hon. Gentleman may be tempted to prospect a little on that point, or may refer it to the Chancellor of the Exchequer, who might be invited to look at it when he comes to reply.
  Something has been said about the impact of air travel on the North Atlantic transit of passengers. That is a matter which has engaged the attention of those of us who take an active interest in the work of the Ministry of Aviation. I was interested in the figures given by my right hon. Friend the Member for Vauxhall (Mr. Strauss), which clearly show that there is a greater and greater number of people travelling by air than by sea. I do not think that anyone will dispute the fact that there has been a big transfer from sea travel to air travel.
  My right hon. Friend, if I got his figures correctly, pointed out that in 1948 the number who travelled by sea was 647,000 and the number who travelled by air was 240,000. He said that in 1961—perhaps there is a little obscurity at this point—
  Mr. Strauss: I said 1960.
  Mr. Rankin: Then the fault was mine. My right hon. Friend said that the number who travelled by air in 1960 was 2 million and the number who travelled by sea was 860,000. His figures clearly demonstrate that the number of persons who crossed the Atlantic in toto during 1948 was about 887,000, but that the number who crossed last year was around 2,860,000. That is a vast change, and there lies the opportunity for ships.
  Only a week ago last Saturday I explored that aspect of the problem with
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  one of the executives who—it is no secret—will be very interested in this new ship. He said that, in his view, there is a continuing market for a ship of this quality and size on the North Atlantic route. He went so far as to say that there is room for two ships, just as we have two today. He said that the traffic is there and that it is our business to get it.
  While, admittedly, air travel may still continue to be an active competitor, and a very serious one, because the introduction of the DC.8 and the Boeing 707 has attracted, and must continue to attract, an increasing number of people to it, the total market is also expanding, and that is the reason why, in my view—and I am interested in both developments—there is room and ample scope not only for our new types of aircraft but also for our new types of ship.
  I do not want to go into technical details of the type of ship which is necessary for this job. I do not think that it is my business. I am certain that the Minister has considered the matter very carefully. I am sure that he has received the best possible advice, and I should not in any way seek to oppose anything he said in that regard, because it has been substantiated by the advice which I have received. But I should like to ask one question of the right hon. Gentleman about a matter which occurs in Clause 1 (9) and again in Clause 2 (9) of the Bill. Reference is made there to the fact that
  "the Minister shall, not later than the end of November following the year, send the account to the Comptroller and Auditor-General who shall examine, certify and report on the account and lay copies of it, together with his report, before each House of Parliament."
  In a matter of this kind it seems to me that a long time will elapse between the termination of the financial year and the rendering of accounts and their appearance in this House for the information and guidance of hon. Members. There may be a substantial reason for that; I do not know. But I hope that the Minister will tell us why such an apparently long time should elapse before this financial information comes under the scrutiny of hon. Members.
  There has been a good deal or argument about the propriety of the subsidy. I find it rather interesting, in view of the fact that for the first time the Treasury has issued a memorandum giving us exact

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  details of all the subsidies and loans given by this Government, without any obvious objection whatever from hon. Members opposite. They cover a vast part of the economic life of this country. As was said by my right hon. Friend the Member for Vauxhall, these amount to £400·9 million. My right hon. Friend said £401 million, but what is a decimal point when one is discussing sums of that nature? It is strange that when we discuss a subsidy of £18 million it has caused all the bruhaha—I hope that word is understood by hon. Members opposite; all the tumult and shouting—if I may translate it into ordinary dictionary English—which has ensued. There is all this acquiescence abouts£401 million of subsidy and loans, and all this noise about a subsidy of £18 million.
  Mr. Marples: It is £3,750,000.
  Mr. Rankin: One may call it £3,750,000, but we are to find the substantial sum of £18 million.
  Mr. Marples: As a loan.
  Mr. Rankin: All right. The right hon. Gentleman has not been listening as carefully as he usually listens. I said that the £401 million was subsidies and loans. I hope I said that quite clearly. And the £18 million is in exactly the same position. I hope I am not wrong about that. There is both subsidy and loan embodied in the £18 million. I was trying to compare like with like. If I had not done so, I should have been challenged by hon. Members opposite.
  I wonder why there is all the criticism, all the seemingly implied threat about the advances on this issue, from hon. Members opposite. What is the story behind it all? Will no one talk freely about it? Why should they oppose this bill? Why the emphasis? I myself emphasised the point referred to by the hon. Member for Gillingham. He said that this was a specific subsidy for a specific ship built for a specific purpose, and that is true. I interrupted the right hon. Gentleman to say, "For this particular ship". That was a remark in his aid because of the boisterous unwelcome which was accompanying certain parts of his speech.
  Hon. Members on this side of the House have perfectly clear consciences
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  about subsidies and loans. I believe in them. I believe that the resources of this nation should always be placed behind any project which is essential in the national interest in order to tide it over hard times. But, as was said by my right hon. Friend the Member for Easington (Mr. Shinwell), I do not believe in just giving away money without receiving some obligation in return. If we are to help by providing loans and subsidies. I demand some form of control.
  I will go a step beyond control. If private industry cannot run its own business properly, efficiently and effectively in the national interest, the Government, on behalf of the nation, are bound to step in and assume the ownership of whatever industry is failing in its purpose. The Government must keep the people of this country employed and keep industry going. Industry must not be run for profit alone. That is the source of the whole trouble. Today industry is being run in order to create private profit. It is not being run in the interests of the nation as a whole.
  We have to face a farcical situation which the Minister of Aviation has had to face in another respect, and which was outlined again by my right hon. Friend the Member for Easington, and I agree with what he said. We are to give aid in the form of subsidy and loan to a project of the Cunard Company, which is backing the Eagle Aircraft Company to the tune of nearly £2 million in order to compete with a nationalised industry, British European Airways, which at least at one time was subsidised by the Government in order that it might gain a footing in a very keen market.
  This is rather an absurd position. As a Member of this House one must weigh up all the pros and cons of the situation and it may possibly be difficult to reach a decision. But I have reached mine, after weighing them up and judging them as I see them. I said to the Minister when I began my speech that I would ease his mind, which probably was seriously troubled in the earlier part of the debate. He has my support in this matter for what it is worth. In my division there is danger of unemployment, and, in my view, unemployment and its cost is a graver consequence to the nation than would be the subsidising

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  of the Cunard Company. Therefore, I support the Bill for this and the other reasons I have given.
  8.11 p.m.
  Mr. John Henderson: I agreed with the speech of the hon. Member for Glasgow, Govan (Mr. Rankin) until he began to introduce support for further nationalisation by claiming that the Government should have some control and eventually complete ownership of a great industry such as shipbuilding. The hon. Gentleman and myself must part company.
  Mr. Rankin: The hon. Member has misunderstood me. I was dealing at that point not with the shipbuilding, but with the ship-owning aspect. The Cunard Company is not a shipbuilding company.
  Mr. Henderson: There is very little difference between the shipbuilding industry and ship owning. If he is advocating control of ownership of either, then I repeat that we must part company.
  The hon. Member also touched upon the question of election pledges. Almost every right hon. and hon. Member has introduced that subject into his speech. When all is said and done, any Government that fail to put into effect their election promises ought to be turned out at the opportunity. The inference is made that, apart from the merits of the building of this great liner, and apart from the merits of the subsidy—it was implied that these merits did not exist—it was only because of the election pledge that the Bill was brought forward. I dissociate myself from those innuendoes or suggestions.
  I believe that the Minister and the Government are looking forward to keen competition for the existing traffic between America and this country and that they have been honest in their efforts to face up to the responsibility of making provision for the future. The question that the full Report of the Chandos Committee has not been submitted to Members of the House has been raised more than once. I am in perfect agreement with the Minister. I do not think that it is desirable that a most confidential document, the findings of this very important Committee comprising experts presided over by one of the most eminent industrialists in this country if not in the
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  world, should be made public to hon. Members or to the public. Firms are competing one with the other and a tremendous amount of damage could be done to their future prospects if confidential information contained in the Report were made public. I think that the Minister is perfectly justified in withholding the Report from hon. Members and the public.
  A good deal of heavy weather has been made by some hon. Members because of the interest of the Cunard Company in an airline. I think that the explanation of that is comparatively simple. Any great shipping company or any airline wants to have relationship one with the other. To provide transport for passengers coming by liner it is bound to face up to the fact that it may be necessary to provide airline facilities for them.
  The hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) introduced for the first time the various areas interested in securing this order—Northern Ireland, Tyneside and Clydeside. I hope that the Minister will not merely take into account the cheapest offer; I am sure that he will not. I am sure that he will take the best offer; and that does not necessarily mean the cheapest offer. I think that he must also take into account the record of the firms tendering for this huge order. All the firms are firms of first-class importance. In one area, Clydeside, there is a certain amount of unemployment building up. The same, unfortunately, applies to Northern Ireland, and, to a lesser degree, perhaps, to the North-East Coast of England.
  I suggest to the Minister that when he takes into account the question of unemployment, the question of the prestige associated with the building of a great liner like this, and the question of building a fast-going liner between this country and America, he should give special consideration to the record of the firms which have done such great work in the past. I hope that the House will approve the Bill, that the expectations of those engaged in shipbuilding will be fulfilled, and that this country will again put out on the waters between England and America a ship built by the best craftsmen, built by the best skill, a ship that will not only serve the seas but will be a testimony to the craftsmanship, ingenuity and skill of those who build her.
  8.19 p.m.
  Mr. William Small: I listened with interest to the comments which the hon. Member for Glasgow, Cathcart (Mr. J. Henderson) made, but the timing of this Bill is of interest. When I look back on my entry into the House, I recall that I made my maiden speech in a debate on shipping. In the General Election manifesto the question of the Cunard was trotted around the Clyde, Merseyside, the Tyne and Belfast as a vote catcher. The Government have now no alternative because although the Local Employment Bill was supposed to do so much, the depreciation in the shipbuilding areas is greater now than at the time of the introduction of that Bill. The shrinkage in terms of craftsmen in the Clyde area has been from 10,000 to 9,000, and there is a comparable decrease in apprentices.
  In advancing the case for the Bill, the Minister spoke about value for money. This consideration must be related to the question whether we are to pay unemployment benefit or whether we are to create opportunity. Although the position as regards the interest charges is not as satisfactory as I would like, I must support the Bill, because it is the only instrument at present available which will create any future prospect of a big job in any shipbuilding yard.
  The long-term return is that technicians, craftsmen, skilled men and apprentices in the successful shipbuilding yard will have promotion prospects, and this will help to preserve the shipbuilding craft. Many people come to me and ask me to advise them whether they should stay in shipbuilding or take their skills elsewhere. In view of the migration from the North and other areas to other Continents, there is a need for creative effort of this character.
  One or two people, apart from people within the shipbuilding industry, have spoken to me about their right to tender. The Cunard Company has laid it down that there will be five competitive tenders. Since there is so much public money involved, people in the electrical and plastic industries who have the right to quote for most things want to know what their rights are to quote. How expensive are the tenders? Who determines the schedules? Is this exclusive to Swan, Hunter and Wigham Richardson and John Brown? If public money
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  is involved, people will want to know how expensive the schedules will be and to which areas they will go so that they may quote on the basis of a fair return. Clause 1 (4) says:
  "The total of any advances made by way of grant by virtue of subsection (3) of this section shall not exceed three and a quarter million pounds:
  Provided that the Minister may by order contained in a statutory instrument of which a draft has been laid before the Commons House of Parliament and approved by a resolution of that House, substitute for the reference in this subsection to three and a quarter million pounds a reference to such greater sum as may be specified in the order."
  What circumstances would justify an increase of the £3¼ million by Statutory Instrument? What circumstances are envisaged? Why cannot the Bill lay down clearly and specifically that the grant is to be £3¼ million?
  In view of the position and needs of shipbuilding yards, the Bill has my support.
  8.23 p.m.
  Mr. Stanley R. McMaster: It is with pleasure that I follow the hon. Member for Glasgow, Scotstoun (Mr. Small), who spoke with such feeling on the fall in employment in shipbuilding yards.
  I want to say one brief word of welcome to my hon. and gallant Friend the Joint Parliamentary Secretary. I join with more senior Members of the House and say how glad I am as a junior Member to see him on the Front Bench tonight.
  We have heard some interesting speeches in this debate. An attack was made from this side of the House on the Government's policy of subsidising the Cunard Company. I am in agreement with the speakers on this side of the House who criticised the policy of subsidising private enterprise. I agree with the comment of the General Council of the Chamber of Shipping that the subsidy is not the long-term answer to the problems of the shipping or shipbuilding industries. The Council said, however, that it is important to note that there should be an exception in the case of foreign competition when that is subsidised.
  The main purpose of the Government should surely be to end all international subsidy, which can so often lead to a

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  war between different countries to see which can subsidise the most. My right hon. Friend told us how the Americans are heavily subsidising not only the passenger lines but all other lines. They are subsidising them in two ways. The first is by giving them a capital grant—that is, by subsidising the cost of building boats in American yards. The second is by subsidising their operating costs. We know that France also subsidises. My right hon. Friend neglected to mention Italy, which now pays a subsidy of 20 to 30 per cent. on the building cost and also pays a subsidy on the operating costs of her boats. Britain pays no subsidy on operating costs. It would be quite wrong for us to pay any subsidy on operating costs.
  However, we must consider our position very carefully. The choice facing the Government is whether we are to remain in the field and continue to sail ships flying the British flag, and built in British yards, on traditional routes of the world, where we have always sailed them, or whether we are to give in to foreign lines which are so heavily subsidised.
  This is the qualification and this is the necessity for the Bill. We cannot afford to ignore such unfair competition. The first and most important reason why we cannot afford to do so is because of our great position as a maritime nation. Secondly, from the point of view of our export industry, about which so much has been said in recent debates, to lose or weaken our shipbuilding industry would mean not only a loss of ships which we build for foreign countries—we have built many of them, including many at the yard of Harland and Wolff in my constituency—but we should also lose invisible earnings, which have been a very valuable contribution in the past to our balance of trade and balance of payments.
  The third reason, which hon. Members on both sides were correct in stressing, is the employment position in shipbuilding yards at the moment. In Belfast we are faced with very heavy redundancy. Unless the Government step in and help to fill the gap which is mentioned in the recently released Report of the Shipbuilding Advisory Committee on the prospects of the shipbuilding industry, we shall be left with no shipbuilding industry in this country at all, because of unfair competition abroad from yards not only in France,
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  Italy and America, but also in Sweden and Germany, which were so heavily subsidised and helped to rebuild after the war.
  I disagree in particular with the remarks of the right hon. Gentlemen the Members for Easington (Mr. Shinwell) and for Vauxhall (Mr. Strauss) and also my hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), who said that this subsidy can help only one yard. That is complete nonsense as, I think, they themselves later admitted. No matter who gets the contract—whether it be Harland and Wolff or John Brown, or whether it goes to the Tyne—the other yards will benefit because the successful yard cannot do all the work itself and there will be an overflow to the others. As the shipbuilding work will be more spread out, this subsidy will help all the yards. The subsidy is only £3½ million, although there is a loan of £18 million—
  Mr. Mellish: Is the hon. Gentleman saying that if a Belfast yard got the order it could do only its own particular job and that any other work would go to other yards?
  Mr. McMaster: I say that a contract like this would employ a very large number of men for three years. Even the shipbuilding manpower resources of Belfast are limited, so, as has happened in the years since the war, some work would have to be turned from Belfast and might very well go to John Brown or to Newcastle.
  I also disagree with the statement made by the right hon. Member for Vauxhall that the yard that won the contract would suffer in the long run because once the "Queen" was built there would be nothing more for the yard to do. If he has read the Report, he will see that shipbuilding is facing temporary trouble because of heavy building in the past, but it will not be very long before many cargo and passenger liners will need to be replaced. After the bleak period of the next two or three years referred to in the Report, there will be plenty of work for the yards.
  It is therefore essential that we should remain shipbuilders. We shall always want ships. As has been said often in this debate, passenger traffic across the Atlantic has increased very distinctly in the last ten years but, with growing prosperity and the expansion of world trade,

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  freight traffic must also increase. Only a very small part of that freight can be carried in aircraft. Britain has been the largest shipbuilder and, in terms of money, still is the largest shipbuilder in the world.
  I am surprised that nobody has yet touched on the strategic aspect. What would happen if the Government were not prepared to support British shipbuilding? What would happen in times of danger if all the cargo vessels and the liners were owned by expatriate Greek ship-owners, financed in the United States, sailing under flags of convenience but owing no true allegiance to any country? Are we to be placed at their mercy in times of crisis? Are we to depend on them to supply all the necessary shipping, and in that way lose our own shipping and our shipbuilding yards?
  It has also been stated, quite rightly, that many foreign tourists from across the Atlantic visit the United Kingdom. They do so because they come to Southampton in one of the "Queens". But if they travelled in American or French ships going straight to Le Havre, would those people come to this country and spend their dollars? Their dollars have been and are vital to us. It does not matter what the net profits are—and that question has been asked. If we can spend £s in this country to earn dollars, the gross is the net gain to this country.
  A ship like this is of enormous prestige value, though I put that last in this series of reasons for supporting the Bill. Such a ship is a shop window for Britain. It shows that we can still build the best ships in the world and sail them in competition. Furthermore, this subsidy is very much smaller than that given to our American, French and Italian competitors on the North Atlantic route.
  Suggestions have been made for helping our shipbuilding industry in general, and I want now to address myself to my right hon. and learned Friend the Chancellor of the Exchequer who is, I believe, to reply to this debate. Mention has been made of the guarantee that is incorporated in the Bill, and I want to draw attention to guarantees, not only to the Cunard Company but to other British companies. It seems that as a result of the recent extension of the Export Credit Guarantees Department's
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  cover for more than five years, foreign ship owners have an advantage over ours in the building of ships. I ask my right hon. Friend to look into this matter particularly to see if these credit guarantees can be extended to British ship-owners when they build their vessels in their own shipyards. In addition, I would ask him to consider the recommendation in the Shipbuilding Advisory Committee's Report on scrapping and building. There would seem to be a strong case for following such a policy.
  Many hon. Members on both sides of the House have missed this point. They have said, "Why support this Cunard Bill? This is not what British shipping really needs." I think I have said enough to show why we need a subsidy for the "Queen" and to indicate that we should not merely stop there. Let us consider other ways of meeting these subsidies which America, France and other countries pay, and scrapping and building might be a very good way of doing that.
  In the long term we must aim at persuading our competitors to abandon these protective practices—not only the payment of subsidies but practices such as flag discrimination. I noted with pleasure the efforts which were made to this end by the Prime Minister in his recent visit to America. I hope they will be followed up at the highest level and that the strongest representations and pressure will be brought to bear upon the United States, France and Italy and perhaps through G.A.T.T., to abandon these discriminatory practices which are so harmful to cheap shipping transport costs throughout the world which must be the aim of all sensible Governments.
  I congratulate my right hon. Friend on what he has managed to do in this Bill. He has managed to achieve the paramount purpose of the Government in shipping, namely, to keep our shipbuilding industry efficient and competitive. The way in which the loan has been granted to the Cunard Company, the Government providing the basic loan and the Cunard Company paying the rest, gives all the encouragement in the world to the yards which are tendering for this contract to put in competitive tenders. I believe there will be the keenest of competitive tendering for this contract.

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  Unlike the right hon. Member for Easington, I do not believe that British shipbuilding yards are unnecessarily expensive. He has said that the prices which we quote do not compare with prices quoted abroad. I would refer him—I am sorry that he is not in his place at the moment—to the Shipbuilding Advisory Committee's Report, and particularly to its remarks in paragraph 26. The British shipbuilding yards are as efficient as any in the world, and many a company which has ordered its ships abroad has been surprised at the final price when it has added all the extras, which are included in the usual British shipbuilding contract.
  I should like to make a particular plea to my right hon. and learned Friend the Chancellor of the Exchequer to augment the support which he has given and is giving to the shipbuilding industry through this Bill, by exempting the industry from the effects of the payroll tax which was announced in the Budget. I should like to quote from paragraph 26 of the Report of the Advisory Committee:
  "The latest evidence available suggests that at least some United Kingdom shipbuilders are now offering prices as low as their foreign competitors, though we are informed that this is sometimes achieved only by eliminating profits and cutting overhead charges even in those firms which are known to be leading in the industry in the introduction of cost-cutting techniques."
  If they are cutting profits and cutting themselves so fine, how can they possibly face an uncertain payroll tax which might interfere with the prices they have to quote in order to win contracts?
  Mr. Bence: I hope the hon. Gentleman will put an Amendment down in due course.
  Mr. McMaster: The time will come.
  Other help can be given to the shipbuilding industry, but I do not want to trespass on the time of the House now. The principal feature which strikes me is the cost of steel. I have referred to the effect of a payroll tax on the cost of labour. The other main constituent in the price of a vessel, a "Queen" or any other vessel, is the price of the steel which goes into it. The price of steel is very much determined by the price of coal. Unfortunately, in this country today we have to pay more for our coal
  1010
  than we should have to pay even for coal imported from the United States or from Europe. Therefore, I question seriously the Government's policy in closing opencast mines where cheap coal could be obtained.
  Mr. Deputy-Speaker: The hon. Member is straying too far.
  Mr. McMaster: I apologise, Mr. Deputy-Speaker. I related that matter to the subject of our debate because there have been constant references to the cost of the proposed vessel, and the price of steel is an element in the cost. However, I will leave that.
  I have avoided basing my speech on the affairs of my constituency tonight in the interests of the wider scope of the debate on the shipbuilding industry, but I will close by referring to both our problems and our successes there. Messrs. Harland and Wolff have a very great shipbuilding record. As we all know, it is one of the companies tendering for the contract. Two vessels built there, the "Oriana" and the "Canberra", have been spoken of with praise tonight. The "Canberra", launched last Saturday, is the largest vessel to be built in this country since the "Queens". I suggest, therefore, that we have a strong case in tendering for the "Queen" liner contract.
  I praise also the very conscientious attitude of the trade unions in Northern Ireland. In the Report of the Advisory Committee to which I have referred, there are references to trade disputes which often hinder the industry. In Northern Ireland, we have a fine record of good relations between management and men. A very realistic attitude has been apparent recently in the approach to demarcation problems. This attitude has been evident throughout the years since the war, and our record compares most favourably with that of any other yard in the country. I praise particularly the realistic attitude of management, trade unions and men.
  I agree with what has been said about the contract being placed fairly, but I ask my right hon. and learned Friend to consider for a moment what would happen if, all other things being equal, the tenders were equally balanced, taking into account delivery date, price, and all the rest. I suggest that in such a case

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  my right hon. and learned Friend should revert to an Answer given by my right hon. Friend the Minister of Transport when he said that social factors would be considered. There is to be committed here £18 million of taxpayers' money. The Government should insist, as they have the right to do, according to the White Paper, in consulting the Cunard Company about the placing of the contract, on considering unemployment factors. In Northern Ireland, we have over 8 per cent. unemployment, which is six times the national average. About 7,000 or 8,000 men are being laid off in Belfast since the completion of the "Canberra", and those men have very little opportunity of finding other work in Northern Ireland. In the unlikely event of equal tenders being submitted, regard should be had to these factors in the placing of the contract.
  8.44 p.m.
  Dr. J. Dickson Mabon: The hon. Member for Belfast, East (Mr. McMaster), in his speech, reminded me of a remark attributed to Jimmy Maxton at one of his election meetings. He was accused of trying to support two contradictory arguments at the same time. When taxed with this, he replied, quick as a flash, "If you can't ride two horses at one time, you ought not to be in the damned circus anyway". Perhaps that was the genius of the hon. Member's speech. I think that he did very well. He concluded by making an appeal to the Chancellor and referring to various things said in the Report of the Shipbuilding Advisory Committee. I congratulate him on the procedural agility by which he brought those matters and the price of coal into his speech, falling foul of the Chair only once. It was quite remarkable.
  In arguing for this, the hon. Member tended to try to meet the point raised, I think quite sensibly, by my right hon. Friend the Member for Easington (Mr. Shinwell) and my right hon. Friend the Member for Vauxhall (Mr. Strauss). There is a suggestion here that, somehow or other, this proposition of the Government is an exclusive alternative to any other means of helping the shipbuilding industry, and I should like the Chancellor, if he is replying to the debate, to tell us that that is not so, but
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  that, in fact, this is simply a contribution to the shipping world, to the nation as a whole, rather than any pretence of being a solution to our shipbuilding problems.
  I know that, in the words of my hon. Friend the Member for Widnes (Mr. MacColl) in another context, hon. Members have tonight paraded like oriental concubines before the Government, displaying the charms of their various shipbuilding firms in the hope that their own constituencies might be chosen for the contract. That temptation apart, I think the Chancellor would agree that we require a very extensive debate so that the Government might get the chance, through the new Joint Parliamentary Secretary—whom I congratulate on his appointment, and from whom we expect rollicking speeches from that Front Bench—to display their intentions towards shipbuilding.
  I do not represent a constituency which is in the position of being able to build the new Cunarder and, therefore, I am, in a sense, unbiassed, but I represent a constituency which is very much concerned with the welfare of shipbuilding. In that respect, it is worth while reminding the Chancellor that the point raised both by my right hon. Friend the Member for Easington and by the hon. Member for Belfast, East is very important, namely, the problem of subsidies. The hon. Member for Belfast, East talked about ending all international subsidies, but that is really crying for the moon. I do not see a situation arising anywhere in the near future, and certainly not in the next critical five years which he mentioned.
  After all, the Minister of Transport prides himself, a little unduly at times, on being extremely energetic and enthusiastic. He has been in Washington and has done all he can, he says, to make representations to the Americans about many of the objections raised by hon. Members tonight, and which have been put on the record, about shipping and shipbuilding, but the fact is that we are no nearer to having international agreements about flags of convenience, subsidies or anything else. It would be quite foolish for the Government to make their policy for the next five years on the supposition that we are to have some international agreement of some kind on this score. I think that the hon. Member

  1013
  for Belfast, East might put aside his prejudices in this matter, to which he is entitled, and realise that subsidies have come to be an instrument of Government assistance to the shipbuilding industry.
  Of course, with the subsidies there comes the unpleasant part, from the hon. Gentleman's point of view, in that there is the bargaining, because subsidies are money from the public purse and can only be given under public surveillance and with due regard to the public interest. Perhaps this is where those hon. Gentlemen opposite come in—those who are opposed to this openly, none of whom seems inclined to vote against the Bill tonight, and those who have made reservations in regard to their position on subsidies in general.
  When the hon. Gentleman talks about the "scrap and build" policy, this is one of the recommendations in the Advisory Committee's Report. It is an interesting Report, which makes nine recommendations, of which five have nothing to do with Parliament at all. They are entirely concerned with the industry internally. One other concerns a matter of amalgamation, to which an hon. Member opposite has said we were opposed. I do not know how he gets that impression, because I think that the smaller and medium-sized yards lend themselves readily to amalgamation.
  The other three points were concerned with the Chancellor, and I hope that tonight, at any rate, the Chancellor will tell us about them, and what thoughts he has on the policy of scrap and build. He might say that he wishes to reserve a view on that matter for a later date, but it is an important point. The hon. Gentleman for Belfast, East must realise that the policy of scrap and build is a policy of subsidisation. If the hon. Gentleman advocates it, it means that he is in favour of large subsidies over a wider field. This is the point of my intervention. I feel that a declaration must be made tonight that this is only a solution of part of the problem and that the Government intend to adopt the same vigorous attitude towards the shipbuilding industry as a whole as they have adopted towards this project to replace the "Queen Mary".
  I welcome the Bill. I think that it is a sensible Bill. All the Jeremiahs on the Government benches who have predicted
  1014
  how obsolescent this vessel will be, and who have wanted us to haul down the "Red Duster" over the Atlantic in favour of the larger vessels of other countries, are very wrong. It is right that the Government should take this step. I commend them wholeheartedly for taking it, but I want them to assure me that the real solution to the problems of the shipbuilding industry has yet to come, and that they will make an early announcement concerning their solution.
  8.51 p.m.
  Mr. John Howard: I agree with the remarks of the hon. Member for Greenock (Dr. Dickson Mabon). Undoubtedly, this subsidy is directed towards the passenger trade in the North Atlantic. The question before the House is: do we as a nation hold our position in the North Atlantic passenger trade? A great deal has been said about the advantages of the Bill to the shipbuilding industry. I acknowledge those advantages quite readily. My hon. Friend the Member for Belfast, East (Mr. McMaster) referred to them. The Opposition Front Bench gave the position of the shipbuilding industry as their reason for supporting the Bill. However, I consider the shipbuilding angle as incidental to the main theme of maintaining our position in the North Atlantic passenger trade.
  In common with many of my hon. Friends, I am opposed to indiscriminate subsidies. I wish that there were other ways of providing the funds needed for the replacement of the "Queen Mary". We are considering a loan of £18 million, of which £3¼ million is a subsidy, or, to put it another way, is the result of making available a loan at 4¼ per cent. interest instead of the higher rate of interest of 6¼ per cent. for loans from the Public Works Loan Board. On that basis, we might say that the Cunard Steam-ship Company Ltd. should have found the funds from its own resources for this vessel.
  Other things being equal, perhaps that would have been possible, but circumstances have changed enormously since the "Queen Mary" was built nearly thirty years ago. If building costs had remained stable instead of increasing between six and seven times and if taxation policy had enabled the Cunard Company

  1015
  to put away reserves to build a liner costing £30 million from the earnings of its predecessor, then I would join my hon. Friends in opposing a subsidy for the replacement of the liner.
  Three points have emerged from the debate, with which various hon. Members have endeavoured to deal. The first is whether it is desirable to compete in the North Atlantic trade. The second is whether we should operate with the fast luxury liners which have been the subject of this debate and which are capable of crossing the Atlantic in five days or whether we should use smaller vessels. The third is whether there is a good reason for Government finance being applied to this project.
  At this stage, I must disclose a constituency interest. I represent the Port of Southampton, which is the premier passenger port of this country. Over half the passengers coming into or leaving Great Britain for any destination enter or leave by Southampton. The "Queen Mary" and the "Queen Elizabeth" are essentially Southampton ships, and they are as much a feature of the port as the Bells of St. Mary's. I will not go on to extoll the virtues of the Port of Southampton other than to remark that we have a magnificent ocean terminal and dry dock, which are admirably fitted for the reception of these large passenger liners.
  It has been established that it is desirable to compete in the passenger trade in the North Atlantic. The problem has been considered by the Chandos Committee, which decided that if a replacement is to be provided it should be of roughly the same size as ore of the existing "Queens". Furthermore, it is clear that, as the "Queen Mary" ageing rapidly, not only must the replacement be planned, but construction must begin during the life of the present Parliament.
  The two "Queens" have not always operated in normal times and in their early years they had to carry the heat and burden of wartime troopships. I recall a trip which I made to the United States during the war, as a passenger in the "Queen Elizabeth", to collect a minesweeper. I read with pleasure the fact that I had been allocated a stateroom. On arriving aboard, I was surprised to find that 48 other people were
  1016
  occupying it. I was consoled, subsequently, by the fact that we carried only 5,000 passengers on the outward journey to New York, as compared with the 14,000 passengers who travelled in the troopship to Europe on the return journey.
  The House will be satisfied that it is still desirable for Britain to hold her proud position in the North Atlantic. I hope that enough has been said today to demonstrate that it is still a worthwhile proposition. The Chandos Committee was asked to consider
  "how the British passenger express service across the North Atlantic could best be maintained."
  The significance of those words is that they referred to a decision which the Government had already taken and which has been mentioned on many occasions during the debate in relation to our election manifesto. I was one of the many people who featured that item of Conservative policy in my election address and I have no doubt that many of my hon. Friends accepted this pledge by implication.
  The situation has not changed materially since October, 1959. It is still reasonable to say that there are merits in remaining in the North Atlantic passenger business. If we do not pass the Bill and offer the subsidy to the Cunard Company, which, after all, has been selected by the Chandos Committee as the company most capable of operating the new liner, the alternative is to leave the field to the other nations and to content ourselves with operating an Atlantic service through existing smaller ships and, therefore, virtually to abdicate from this important service in favour of the Americans, the French, the Dutch and the Germans.
  I mention the last two nations because they are operating with smaller ships. The reason why they can do so is that they have a much longer distance to travel and, therefore, they cannot enjoy the advantages of large liners capable of traversing the Atlantic in five days, thus having the weekend at sea which is an important consideration in passenger liners. They have to take more than the five days in any event, because their ports are much further east than Southampton or the port of Le Havre, in France.

  1017
  We also face hectic competition from the airline companies, about whom a great deal has been said this afternoon. The question is whether this competition will overwhelm the seaborne passenger traffic. Fifteen airlines from fourteen nations operate over the Atlantic. Below them, there are twenty-five passenger liners operated under fifteen different flags. This fierce struggle is nothing new. It has existed throughout the twentieth century and it has been a struggle for the trans-Atlantic trade.
  Reference has been made to the potential of the passenger traffic. I noticed that the European Travel Bureau forecasts that by 1965 about 1½ million people will make trips to Europe from America. I submit that there is no reason why the shipping industry should not secure a share of that traffic. After all, shipping has much to offer which air travel has not. If one travels by sea there is opportunity for relaxation. The figures show that there is a marked tendency for people to travel in one direction by sea.
  Now that the Cunard Company, as we are so well aware, has taken an interest in Eagle Airways perhaps it is not too much to hope that air tickets can be made available for both sea and air travel and that the present restrictions on the interchangeability of sea and air tickets can be overcome.
  We have heard about the declining trade in the Atlantic. Recent figures do not bear that out. We are running at about 169,000 passengers annually to and from the United States as against 163,000 in 1959, and of the 169,000 passengers 73,000, or 43 per cent., are carried in the "Queen" liners as against, say, five years ago when they carried a similar proportion, 42 per cent.
  To refer very briefly to the second question facing us, namely, whether luxury liners are the right liners for this traffic, certainly the Chandos Committee came to that conclusion, and I think it is fair to say, from the surveys which have been undertaken and from consultations with other ship-owners, that this is the right size of ship, that is, a ship nearly 1,000 ft. long and capable of about 30 knots.
  These, then, are some of the essentials of meeting foreign competition and air competition: fast service across the
  1018
  Atlantic, a weekly service by large ships which are limited chiefly to the port of Southampton and the French Atlantic ports. If we need a comparison we need only to look at the French building programme. Both the old "Normandie" and the new "France" are about 70,000 tons, and that, I think, supports the decision of the Government and the recommendations of the Chandos Committee. The "United States" is not quite so large, but there are special circumstances, including the need for her to go through the Panama Canal, as part of the terms of the United States Government's subsidy. Moreover, she is powered not by normal commercial engines operating under commercial conditions but by Wasp aircraft carrier engines operating at a very much greater pressure and able to develop rather higher speeds than commercially normal.
  Is there a reason for Government finance for this project, and, if so, are the arrangements satisfactory? That is, I think, the final question that the House must answer. The basic reason for the Government finance is clearly the fact that the liner will cost £30 million and that the Cunard Company can put only £12 million into the proposition. Therefore, either the Government or the City have to bridge the gap. In view of the very many uncertainties which are peculiar to the North Atlantic trade the Government have decided to come in and to provide a subsidy which makes the replacement of the liner possible. Uncertainties arise, first, because of the cutthroat competition on the Atlantic and because Cunard are competing with modern liners which are heavily subsidised.
  The new French liner's building costs, for example, are to be subsidised. Also, there is doubt about the extent to which foreign competition may receive even greater subsidies in the future. If we have any doubt about the latter point, we have only to refer to the "Stale of the Union" message delivered by President Kennedy to realise that Americans are still very determined to subsidise their shipping. There is, therefore, a great degree of commercial uncertainty about the future of this liner and of North Atlantic trade. This is good reason for Government intervention to secure our position in the North Atlantic and to recognise the special circumstances

  1019
  which obtain because of subsidies given to our competitors.
  American subsidies cover operating costs to bring them down to European level and they may run to as much as £1,700 to £3,000 a day whilst the liner is operating. The Americans also supply a loan for building, plus Government subsidy to bring the cost of building down to the price of the cheapest European yard. The building cost of the "United States" was £27 million, and £17 million was provided by the United States Government in subsidy.
  The same comment applies to the French liner where of the £32 million overall cost £7 million were provided by subsidy. The Dutch also provide loans at advantageous rates for shipbuilding. In the special circumstances, therefore, and in view of the approval which the General Council of British Shipping has given to this project the House can reasonably accept the Bill and look for-ward to the building of the "Q 3", the new Cunarder.
  We have already given some subsidies to the textile industry and if we now come forward with a subsidy in the peculiar circumstances of the North Atlantic trade, we shall at least underline the point which hon. Members have been making when they have complained about flag discrimination and other restrictive practices throughout the world which prevent British ships earning the full earnings which British "know-how" and ability entitle them to earn. By passing the Bill we shall demonstrate, in particular, to the Americans, who are the worst offenders in shipping discrimination and subsidies, that we do not intend to be run off the Atlantic route simply because they have waded in with subsidies for their vessels.
  9.8 p.m.
  Mr. R. J. Mellish: I would begin as so many other right hon. and hon. Members have begun by saying how happy we are at the appointment of the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) as Joint Parliamentary Secretary to the Ministry of Transport. I can say quite sincerely that in the last few years he and I have become very good friends. He has been
  1020
  a very painstaking back bencher and a hard worker and we are looking forward to his speeches on shipbuilding and ship repairing.
  The hon. and gallant Gentleman has a very wily Minister who will want to stoke and run the ship and direct everybody; and the hon. and gallant Gentleman will have to be an admiral, first-class, if he is to keep the ship on course. I give the hon. and gallant Gentleman and the Chancellor due notice that although we have debated many shipping problems today, we hope very shortly to have a debate on the present position of the industry. I am sure that the hon. and gallant Member will take a leading part in that debate.
  It is all that we have before us at the moment, but we cannot believe that this Bill represents the Government's only contribution to the shipping industry. Many of us today find ourselves in an embarrassing situation and I declare that at once. Quite frankly, if it were possible I should oppose the Bill, for many reasons which I hope to give in a moment. But for the reason which has been so admirably presented by every one of my hon. Friends representing Scottish constituencies—that this is the only Bill at the moment that will supply some sort of aid to some shipbuilding yard somewhere—we as a party cannot turn our back on the fact that it represents £18 million of Government aid. It could be misrepresented in the country if we were to oppose the Bill.
  Therefore, reluctantly, I must inform the House that we shall not oppose the Bill on Second Reading, although we hope to be given more assurances from the Chancellor of the Exchequer when he replies to the debate. What further assurances the Chancellor can give us, I do not know, but at least the right hon. and learned Gentleman can say what the Government proposes to do for the shipbuilding industry in the near future. For that reason, my hon. Friend the Member for Vauxhall (Mr. Strauss) said that although we had severe criticism of the Bill, we would not oppose its Second Reading.
  If we look back we find that this Bill originated at election time, when the Prime Minister gave a pledge. On that occasion, the Prime Minister was speaking in Scotland and the pledge having

  1021
  been made, was written into the Conservative Party's manifesto and, I suppose, it was meant for Scottish consumption. There was a great deal of unemployment in Scotland at that time, and the Prime Minister said—and it is in the manifesto for all to see—
  "we shall support the replacement of the Queen liners".
  It is arising out of that statement that I must ask the Chancellor of the Exchequer—since the Minister of Transport is so keen to assure us about the honesty of this Government in carrying out their pledges—to be completely candid with us and say whether the Government intend also to replace the "Queen Elizabeth" The Minister of Transport rather ducked answering that question when he made a play about how the Conservative Party intended to keep its election pledges. As far as I am concerned, the whole thing was very dishonest. The Prime Minister made the statement when he was trying to win seats in Scotland for the Conservatives. He did not have very much luck. As I say, there was unemployment in Scotland and it was election time; and the hon. Member for Newcastle-upon-Tyne. East (Mr. Montgomery) has admitted that he exploited that statement and interpreted it to apply to his own area, and the result was that the hon. Gentleman got in with a majority of 98 votes.
  Mr. Montgomery: I said that the statement appeared in the Conservative Party election manifesto. I was fighting an election in a big shipyard area and there was nothing wrong in my bringing forward a point which was mentioned in that manifesto. There was nothing wrong in that, and I won the seat.
  Mr. Mellish: I am making the simple point that the Prime Minister made that speech in Scotland and that the remarks contained in it were meant for Scottish consumption. The Prime Minister was alarmed about the unemployment position in Scotland and, obviously, he had to promise something.
  The statement was made "off the cuff", as it were, and it was followed by the establishment of that mysterious Committee under the chairmanship of Lord Chandos. That Committee appears to have followed typically on the line that is normally taken by the Minister
  1022
  of Transport, who never seems to do anything openly. I do not know why the Committee could not have reported all the information to the House. In any case, the Chandos Committee was inhibited, before it got started, by its terms of reference. Its job was to see how, in fact, it could implement the pledge given by the Prime Minister in that election manifesto, and it was within the narrow orbit of those terms of reference that the Committee reported, we gather, to the Minister of Transport.
  One question worrying hon. Members on this side of the House is: did the Committee consider whether the £18 million the Government intend to spend on this venture could have been spent in another way to help the British shipbuilding industry? I gather not, but surely we are entitled to know.
  Mr. Burden: The hon. Member is surely aware that a great deal of the investigation made by the Chandos Committee was of such a character that, if there had been a complete disclosure, a lot of valuable information would have gone to foreign countries.
  Mr. Mellish: Perhaps the hon. Member has some inside knowledge of Government activity. We are all aware that in his speech today he declared that he had a vested interest in this matter, that he is associated with the shipping line that has been awarded this subsidy, the Cunard Line.
  Mr. Burden: I did not.
  Mr. Mellish: The hon. Gentleman did. He tried hard in his speech today to defend why this particular firm, in which he has an interest, should receive an £18 million grant from the Government. That is very natural. If I were associated with a company and was to get all that amount of money, I should defend it all the time.
  The fact is that we have not seen the Chandos Committee's Report. It is a tragedy that it was not able to consider how best Government aid could be given to the shipping industry as a whole. The burden of our case is the way in which this was done on an election pledge given "off the cuff" for a certain reason in the North and exploited in other parts, and at the end of the day I believe it will not benefit the industry in the way it should.

  1023
  The hon. Member for Belfast, East (Mr. McMaster) made a rather extraordinary speech. He began by saying, if I understood him—if I can ever understand the Northern Ireland dialect—that it does not matter who gets the contract because all yards will benefit, and then he went on to say why he thought his own yard ought to get the contract. I could not quite follow that.
  My right hon. Friend the Member for Easington (Mr. Shinwell) made a first-class speech on the subject. He is qualified to do so, because he has spent many years in the industry. He said that he believed that Belfast should get the contract. I do not think that it will, and I will explain why. When the tenders are considered, much will depend on the date of delivery, above all else, and one of the problems here is that the contract will be given to a yard which is fully geared and can give the guarantees which the Government may well want.
  The Belfast position is a tragic one. We all appreciate that. I believe that even if Belfast were given the contract it certainly would not be, for Belfast, the sort of dawn that the hon. Member for Belfast, East would like us to believe. I warn him that we want a much longer-term policy for Belfast than this contract.
  The hon. Member paid tribute to the workers in Belfast, and I am glad that he did so. Most of those who work in the shipyards are members of the union of which I am proud to be a member. It is good to hear from a Conservative Member some nice things about the Transport and General Workers' Union.
  Mr. McMaster: I am astonished at what the hon. Member, as the spokesman on the Opposition Front Bench, has said in criticism of yards in Belfast, for they have built the largest passenger liners except the "Queens" and have delivered them in good time. Is he not aware that the Belfast yards are the biggest and best geared yards in the United Kingdom for building the projected liner?
  Mr. Mellish: I am not prepared to say that the Belfast people are more worthy of the contract than anybody else. In fact, this is the wicked part of the Bill. There is so much competition and so
  1024
  much anxiety about who is to get the contract at the end of the day. I wonder what my hon. Friends from Scotland, who are now so gleefully supporting the Bill, would say if they found that Belfast got it. Would they then be so keen about this? If they could turn the clock back, would they then vote against the Bill?
  One of the most important speeches made today was that by the hon. Member for Reigate (Sir J. Vaughan-Morgan). He asked questions which I want to take up and which, I hope, the Chancellor will answer. He said that of all the shipping companies in Britain the Cunard Line is the one which, over the last fifty-eight years, has had subsidies of one kind or another from the Government. He asked why it should be the Cunard Line only. Why is it that over fifty-eight years this company, above all others, has, somehow, had special preference? We are entitled to know. Why is it that the projected "Queen" has had to be built by the Cunard Line? Why were not other lines asked to compete for the contract?
  We have heard a wonderful story about the ships built in Belfast, and I quite agree with what was said. They were built not by the Cunard Line but by other firms. Why were these firms not asked to compete? There is an air of mystery about this, and it should be cleared up. I do not deny that the Cunard Company has done a first-class job in the past, but it strikes me as very odd that that one company out of the whole industry should get special preference. I ask the Chancellor of the Exchequer to let us know that.
  The Minister said, in effect, that it was right for a subsidy of this kind to be paid because foreign ships on the North Atlantic run are heavily subsidised by their Governments. I do not deny that, but it is not only on the North Atlantic route that foreign ships are subsidised. If it is his claim that the subsidy must be paid because foreign ships are subsidised on this route, then his new Joint Parliamentary Secretary will have to explain, in the debate on the shipping industry, why other British ships on other routes cannot be subsidised.
  The Labour Party is not opposed to subsidies for private industry. The agricultural industry receives millions of

  1025
  pounds from the Government, and we support the help that is given to it. But in the case of a subsidy of this kind I do not know why the Tory Party does not want more control by the Government. It is allowing £18 million of Government money to be spent, as a subsidy, without any control over it. Members opposite apparently do not want any profit from it. They seem to be ashamed of the word "profit". As my right hon. Friend the Member for Vauxhall suggested, it seems that, to Members opposite, it is almost immoral for the Government to make a profit.
  Yet I submit that had the new "Queen" been certain to make a profit, the Government would not have been asked for a subsidy. I do not believe that the Cunard Company would not, in those circumstances, have been able to raise the money from shipping circles. The hon. Member for Gillingham (Mr. Burden) told a wonderful story about the Cunard Company. According to him, it is, apparently, the greatest company that ever existed. He has a few shares in it, that is why. If that company could have shown the collateral, it would have been able to find the money itself. The nation will not make the profit that it should out of this transaction. Indeed, the Government intend to treat the Cunard Company better than they treat the local authorities, who are building houses for ordinary people.
  The Chancellor of the Exchequer must explain why the Report of the Chandos Committee was not allowed to be published, what he feels about the shipping industry generally, and whether the Bill is a pointer to subsidies being applied over a much larger area. If it is such a pointer, I shall not mind, provided that the Government take a measure of control over what is done with the nation's money, because it is right that they should do so.
  When the tender is finally decided, the emphasis must be put on the situation of various shipyards. I sincerely hold the view—and I hope that it will be accepted in the House as a whole—that Northern Ireland's position is very serious, because one of the problems of that part of the United Kingdom is that, if a shipyard worker is thrown out of work, he has no other job to go to, unless
  1026
  he emigrates to England. There is 8 per cent. unemployment in Northern Ireland.
  We on this side are just as concerned about Belfast as is the Conservative Party. I am rather tired of hearing Conservative Members talking about the Empire, and Northern Ireland being a part of it, while allowing the serious position in Belfast to worsen. That position should be given more attention than it is in this House. If Belfast does get the contract for this new liner, I shall not be unhappy and will recognise the reason for it.
  My right hon. Friend the Member for Easington referred to credit facilities given to foreign firms engaged in shipbuilding. Is it proposed, because of the plight of our own industry—which is acknowledged by the decision taken in the Bill—to give credit facilities to other British shipping firms? Has the Chancellor of the Exchequer any idea how best to help the industry? I believe that it needs special help. It is right to acknowledge that if we are to maintain our position in the world today shipping is one of our most important industries, so it is the job of the Government to help that industry when it is in trouble. I wish to know whether the right hon. and learned Gentleman will tell what facilities may be provided.
  The hon. Member for Sunderland, South (Mr. P. Williams) is one of the "rebels" of the Conservative Party and it is good to see him on his feet and attacking.
  Mr. P. Williams: I am sitting down.
  Mr. Mellish: He said—being a right-wing reactionary Tory, he would be expected to say it—that he is opposed to subsidies of any kind. I wish that the hon. Gentleman would say that in the agricultural areas, many of which are represented by Conservative Members of Parliament. He was really saying that he was opposed to this particular subsidy which, for some extraordinary reason, he finds obnoxious. I join with the hon. Member in saying that the lack of control in this respect is a reason for objecting to the subsidy. The hon. Gentleman also said that the British shipping industry is taxed more than any other industry in this country, and that, also, was a fair comment. We should ask the Chancellor of the Exchequer

  1027
  whether he can tell us how best he can extend relief to the industry.
  I believe that the Bill was drafted because of an election pledge given by the Prime Minister which he is now being compelled to redeem, much against the will of many hon. Members. We have seen what is, perhaps, a greater revolt among back bench Members opposite than has occurred before, and there are sound reasons why they should object to one firm being given special privileges. I object, also. I think that it smells. We have not seen the Committee's Report on which this Bill has been based and we have not been able to examine the facts. We are told that this company is to be given £18 million of public money and that it will be given preference, even over local authorities. If the interest rate goes above 4½ per cent. it will be given a grant. That means that this firm will be given money at one of the lowest rates of interest prevailing in the country and that that will be done by means of an Act of Parliament. Because hon. Members on this side of the House recognise that its provisions will afford some form of relief for the unemployment in the shipping industry, they are prepared to support the Bill.
  9.28 p.m.
  The Chancellor of the Exchequer (Mr. Selwyn Lloyd): This has been a remarkable debate. It has been much more agreeable than were some of our other debates. On the merits, I think hardly any hon. Member has completely agreed with any other hon. Member. It has also been an agreeable debate for the Government. On the whole, the House has agreed on two points. First, that no one would vote against the Government tonight, and, secondly, on the welcome given to my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) on his appointment as Joint Parliamentary Secretary to the Ministry of Transport.
  References have been made to the problems of the shipping and shipbuilding industries, and I accept the sincerity with which hon. Members have voiced their anxieties. I do not think this is the occasion for a full debate on that topic. I say to the hon. Member for Greenock (Dr. Dickson Mabon), for example, that there is certainly no suggestion
  1028
  on the part of the Government that this Bill is an answer to the problems of the shipping or the shipbuilding industry. May I say in parenthesis that I think not quite enough credit is given to the Government for the 40 per cent. investment allowance which is a very large contribution to the industry. I also hope very much that the recent proposals about credit terms for sales overseas will prove of great value to the exporters of ships.
  Mr. P. Williams: My right hon. and learned Friend has made an important point about the debate not going wider. Will he undertake to consult his right hon. Friend the Leader of the House about the possibility of having a wider debate on shipping and shipbuilding in due course?
  Mr. Lloyd: My hon. Friend knows well enough that that is not a matter for me, but I will convey to my right hon. Friend the point which my hon. Friend has made.
  Regarding this Bill, I think I must declare an interest. It is not a financial interest. I was born and bred on Merseyside, and it is quite true that for some time the larger Cunarders have sailed from Southampton—I am not quite sure why. But, nevertheless, Liverpool is the home of the Cunard Company, and when I was young great names like the "Mauretania", the "Aquitania" and the "Lusitania" were always in my ears. I shall not forget the personal sense of shock that I felt as a small boy when the "Lusitania" was sunk in the First World War. I confess a special sympathy for those who build and sail these ships. It may be very insular, sentimental and old-fashioned, and the rest of it and I can see that my financial head must rule my heart, but, nevertheless, I must confess to the House that I start with a prejudice in favour of the building of big ships.
  Mr. Shinwell: How many?
  Mr. Rankin: On the Clyde?
  Mr. Lloyd: Where they are built is another matter.
  Three fundamental questions have been raised in the debate. First, should the Government get themselves mixed up in the North Atlantic express passenger service by sea? Secondly, if so, is this

  1029
  the right sort of ship for them to have? And thirdly, are the financial terms tolerable? I shall not deal with the question of tenders and details with regard to them. That is more a matter for my right hon. Friend.
  On the first question of whether the Government should get themselves mixed up in the North Atlantic traffic, I apologise for repetition, but I think it is important that we should state again the facts of this situation. This route is the most highly subsidised route in the world. Other countries subsidise it much more than we have done. The present proposal involves a subsidy of about 11 per cent. even supposing the full grant of £3¼ million is paid. The French are contributing 20 per cent. of the cost of the "France" and making up any current losses of the company running the vessel.
  The United States Government paid over 58 per cent. of the cost of the "United States", 45 million dollars out of 78 million dollars, and they contribute now 28 per cent. or the running cost. The Dutch, who have not been referred to much in this debate, advanced 50 per cent. of the cost of the "Rotterdam", at 4½ per cent., with the proviso that no interest was to be paid if the owning company operated at a loss. Therefore, I maintain that if we are to remain in this passenger ship route we have to accept the fact that it is a subsidised route.
  There is a long tradition of financial help for this route. This Bill is not a new departure. I have read debates in 1903 about the Bill put forward then and in 1934 the proposals dealing with the "Queen Mary" and the "Queen Elizabeth". I think that it may not be uninteresting to the House if I said a word or two about those transactions.
  In 1903 the agreement with Cunard was that £2·6 million was advanced at 2¾ per cent. for building the "Lusitania" and the "Mauretania". The object was to build ships capable of a speed of 23½ knots and more. There was a current subsidy to Cunard of £150,000 a year for operating high speed vessels. The ships came into service in 1907 and the agreement was for 20 years from that date. The "Lusitania" was sunk, alas, in 1915, but the
  1030
  "Mauretania" continued in service until 1927.
  As to the "Queen Mary" and the "Queen Elizabeth", in 1934, the Government advanced nearly £4 million to the Cunard on very favourable terms, the first £2¾ million at ½ per cent. below the Bank Rate until 1st January, 1940, and the remainder under arrangements which made possible abatement or waiver of interest. This was followed by a loan of £5 million in 1937 for building the "Queen Elizabeth" on similarly favourable terms, £2½ million at ½ per cent. below Bank Rate until 1943 and interest waiver arrangements on the remaining £2½ million. One of the interesting facts about that transaction is that the overall interest on the Government loans, all of which were repaid, was about 1⅓ per cent.
  My hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) talked about the Cunard Company being the scarlet woman of the shipping industry and about the wages of sin. I do not admit that the previous transactions were either immoral or dishonourable. On the whole, the transactions of which I have spoken were useful to the nation. My hon. Friend takes too puritanical a view of financial support.
  I am certain that the very clear consequence of no help from the Government in these circumstances would be the gradual withdrawal from the express weekly route across the Atlantic. It would not be total withdrawal from the North Atlantic services, because the slower ships would survive and continue, but, with the increased costs of running the "Queen Mary", there is no doubt about the future. It is that it would be the gradual withdrawal from the express services.
  This is an issue which each one of us in the House must face. I am absolutely satisfied that without this action, which the Government have put forward for the approval of the House, this ship would not be built—unless the Government did it themselves. Right hon. and hon. Gentlemen who are critical of this proposal must accept that either the ship would not be built or the Government would have to build it themselves. I am unable to accept the proposition that the Government should accept the whole of the risk of building this ship.

  1031
  An argument based on what the Cunard Company does with the rest of its assets is unsound. That is not the point. The point is whether this ship would be built. That is what we have to face. Some of my right hon. and hon. Friends will ask, as perhaps the right hon. Member for Easington (Mr. Shinwell) will ask, "What would it matter if the ship was not built?" This is also something which we must face. The right hon. Member for Vauxhall (Mr. Strauss) spoke of the deteriorating passenger figures and seemed to take a very melancholy view of passenger prospects. That is a possible view to hold, but I do not hold it. I think that a residuum of people will continue to want to cross the Atlantic by ship. They will be very much attracted to a new ship. A new ship will have a very considerable selling point of its own for this service. I do not accept that we shall reach the position, certainly within the next fifteen years, when we should be so despairing of the prospects as to say this is not an economic proposition to begin with.
  There is another point which I do not think has been much emphasised in the House today but which is very much in my mind. That is the foreign currency earnings of this ship. I am advised that in each of the years 1958 and 1959 the dollar earnings from the two "Queens" amounted to about 25 million dollars gross and about 20 million dollars net. The advice we have is that the new ship is estimated to earn about 15 million dollars gross and 13 million dollars net annually. That is a very substantial contribution to the balance of payments.
  It does not end there. If no British citizen can travel across the Atlantic in a British ship, be may be inclined to go in a ship of another country. He will travel, as one of my hon. Friends admitted that he would travel, in the "United States", or whatever ship it may be, and there will be a loss of foreign currency in that way.
  I also feel that if we do gradually withdraw from this express service there will be a tendency to by-pass Britain in more ways than one. I know that these other lines still call here, but I feel, as I say, that this would give substance to the idea of a direct route from North America to Continental Europe, and that we would be pushed out and by-passed.
  1032
  I hope my hon. Friends will not think that this is an insubstantial argument. There are substantial reasons, on foreign currency grounds and on the general position of keeping us in this picture, for supporting the kind of proposition we advance.
  A good deal of reference has been made to the prestige element, and on that I have only this to say. If we decided to withdraw from this route I am sure that there would be an awful hullabaloo on prestige grounds. Of course, it might be said that this was an outmoded status symbol, but I think that if the idea got about that we were withdrawing from the route many people would ask, "Is not this a tremendous betrayal of British prestige and interest?" I say, quite frankly, that to build what I believe will be the finest ship afloat is not bad business for us on prestige grounds.
  I have dealt with the point as to whether Her Majesty's Government should concern themselves with this route. The second point, which, I agree, is a very practical one, is whether, if we are to do this, this is the right sort of ship. It has been suggested that to have more rather smaller ships would be a better use of public money, and, indeed, of the money of the Cunard Company. All I can say about that is that Lord Chandos's Committee was set up to examine that very point. Lord Chandos is known to hon. Members.
  Another member of that Committee was Sir John Hobhouse, of the Blue Funnel Line. Sir John has been known to me for many years. He is a political opponent, but has immense knowledge of shipping, and most of us who have some knowledge of Merseyside would not think that the judgment of the Blue Funnel Line is at fault about much that has to do with shipping. Sir John Hobhouse has retired from the Chairmanship of the Blue Funnel Line. I make it absolutely clear that I do not call him in as a witness in support of the proposition that we should do this, but simply as to whether or not, if we do this, this is the right sort of ship. We have the evidence of Lord Chandos, of Sir John Hobhouse and of one of the most expert accountants in the country—
  Mr. Shinwell: Will the Chancellor tell me where the evidence is? He and his

  1033
  right hon. Friend the Minister of Transport have spoken of it, but where is the recorded evidence that demonstrates that the Committee said that this is the type of ship to build in preference to building smaller ships of considerable speed?
  Mr. Lloyd: I do not know what the evidence is. I doubt whether I should understand it if I did know it, but I do know that these people of experience, having considered the evidence, came to this conclusion. And that is what I think is important. What is the point of setting up a special committee if one then has to go into all the evidence oneself and come to a conclusion oneself? The plain fact of the matter is that, as I understand it, on this point the Chandos Committee was absolutely specific. It said that if this thing is to be done that is the right way to do it.
  Nor does it rest only with the conclusions of the Chandos Committee. The Yarrow Admiralty Research Department came to exactly the same conclusion—
  Mr. Shinwell: The right hon. and learned Gentleman's language is within my memory. He said that some hon. Members have suggested that instead of building this ship, of great size, of 29½ knots, and at great expense, we should build four ships or a number of smaller ships for the Atlantic trade, and he said that this is precisely the point with which the Committee dealt. Where is the evidence? Where is the evidence that the Committee dealt with this point? Was the issue before the Committee: "Shall we build one ship which the Government will partly subsidise, or shall we subsidise the building of several ships?"
  Mr. Lloyd: The point was that the Committee recommended that the only way to stay in this business was to build a ship of this size. There was an original idea of a ship of 85,000 tons, but the Chandos Committee came to the conclusion that it should be 75,000 tons. The Committee went into this matter in very great detail and made a most meticulous examination of the alternatives. As I say, in a matter of this sort one is very much affected by the judgment of someone whom one knows to have tremendous experience in these matters.
  Mr. Bence: Was it not a fact that the Yarrow Admiralty Committee and other authorities determined, in tanks in which
  1034
  winter conditions were created similar to those in the North Atlantic, that a vessel between 900 ft. and 1,000 ft. was the range of size within which the maximum speed could be given over the North Atlantic route?
  Mr. Lloyd: I believe that the preponderance of effective advice has been that if we are to do this thing—I am not attempting to judge whether we do it or not—this is the right way to do it. That is the second point.
  Mr. Mellish: Is not the whole truth that the terms of reference which the Chandos Committee was given were so narrow because they were allied with the statement that was made in the election manifesto of the party opposite? This is what we are complaining about. The Chandos Committee was not given the right terms of reference.
  Mr. Lloyd: I do not think the hon. Member is making a fair point. The Chandos Committee advised that if we were to attempt to stay in the North Atlantic express passenger service with some ship supported by Government funds, the way to do it was with a ship of 75,000 tons. That was the Committee's view, and I think that was the view which was supported by the Yarrow Admiralty Research Department.
  The third point to which a great deal of attention has been paid today is: are the financial terms tolerable? Is this the right sort of ship to back? Is it right to give to the Cunard Company a grant of £3¼ million and a loan of £14¾ million? Reference has been made—and I do not apologise for repeating it—to the respects in which the present bargain is more favourable than the original Chandos proposals. Full interest of 6¼ per cent., or whatever is the rate appropriate at the time, is going to be paid during the construction of the vessel. There is going to be no abatement of interest on the Government loan if the Cunard Company's equity earnings on the new ship are low, and there is to be a sharing of any saving of costs. Those are three important respects in which the final proposals are an improvement, from the Government's point of view, on the Chandos proposals.
  The second matter on which I should have thought the House would agree is that this is going to be an open subsidy.

  1035
  On the whole, it is better to have an open cash grant instead of a concealed subsidy at an artificially low rate of interest, and I think that in this respect the current proposals differ from those made in earlier years and, on the whole, are an improvement on the earlier proposals.
  The third aspect of this matter is the question of the Cunard interest. I was asked, "Why only the Cunard Company?" I would remind the House that when the 1934 bargain was being made it was one of the conditions of the bargain that the White Star and Cunard should amalgamate. It is not just a question of selecting one company on the North Atlantic route to which to give a special benefit, but we insisted in those days that the two companies should get together. I should have thought, in view of the extent of international competition, that that was not an unreasonable proposition.
  It is said also that the Government should have asked the Cunard Company to pledge all its assets against the ship. The fact of the matter is that the Cunard Company is putting in £12 million of its own money, its shareholders' money. I do not think it would have been reasonable to ask it to underwrite the Government's loan in full. The right hon. Member for Easington said something about the Cunard Company's resources, and he gave some figures. I think he said it had £15 million investments and £6 million in cash. But, of course, £12 million of that is earmarked for this purpose, and, again, the company has its own replacement problems, quite apart from this ship. People may talk about the "scarlet woman" of the Atlantic but it should not be forgotten that, since the war, the Cunard Company has spent £30 million of its money building 200,000 tons of shipping for this purpose. Obviously, it has a considerable replacement programme of its own for which it has earmarked certain funds. I suggest that it is a very remarkable indication of its confidence in the future of this project that it is prepared to back it with £12 million of its own money.
  As has been said, the Government will have a lien over all depreciation moneys. In addition, any excess of equity earnings over 7½ per cent. is to go towards accelerated redemption of the loan. This
  1036
  is a very considerable degree of security for the Government.
  I agree with hon. Members opposite in the view which I, as Chancellor of the Exchequer, have to take. I am very much concerned with the prospects of being repaid. I want to deal for a moment or two with those prospects. The Government have a first charge on the ship; they can take it over if there is any default. Apart from that, they will receive annuities calculated to pay off the loan with interest in twenty-five years. Finally, they have a charge over accumulated depreciation moneys which will be set aside at the rate of 4 per cent. per annum on the cost of the ship. This means that, within thirteen years, or about half-way through the life of the ship, unless the financial results are very much worse than, I think, anyone has reason to expect, the Government will have received back, or will have a claim on sums amounting to, £14¾ million, or virtually the whole loan. That takes us, in effect, over the first half of the life of the ship. (After ten years, the corresponding figure is over £11¼ million.) I say, therefore, that whatever may be the uncertainties about the latter part of the life of the ship, the Government have an assurance that by far the greater part of the advance will be covered well before the ship is halfway through its career, and fully covered thereafter. If the ship does well and the funds are available, there are provisions for accelerated redemption.
  The right hon. Member for Vauxhall concluded his remarks about the financial aspects of the proposition with what I thought was a remarkable contradiction. First, he said that this would be a completely unrewarding proposition because the traffic figure would not justify the risks taken. Next, he stressed how monstrous it was that the Government were not insisting in taking part in the equity.
  Mr. Strauss: I said that it seemed on the figures which we knew that the prospects for commercial success in this trade were poor, but, on the other hand, the Cunard Company were optimistic. There is no reason why, if the Cunard Company's estimates should turn out to be right, the Government should deny themselves some share in the profit which is to be made by the transaction.
  Mr. Lloyd: The answer is that we have driven what we think is a fairly hard but fairly reasonable bargain. We have what we regard as security for our loan. Even now, I cannot understand why, if one takes a pessimistic view of the prospects, that should be a ground for great condemnation of the Government because we have not insisted upon an equity interest. Of course, the right hon. Gentleman will know that, if we had insisted on an equity interest, that might have carried with it further responsibilities.
  To sum up, I would say, as Chancellor of the Exchequer, that I do not welcome proposals for subsidy in the public sector or the private sector of industry. I would much rather see both sectors of industry in this country able to stand on their own feet, and I assure the right hon. Member for Easington that I am not doctrinaire in this matter any more than he is. I should like to see both sectors standing on their own feet. Nevertheless, I agree with the hon. Member for Greenock that each proposition has to be examined upon its merits, and we are putting forward this proposition as an individual proposition and not as an attempted solution to all the problems of shipping or the shipbuilding industry.
  I think that there are three arguments why the House should give a Second Reading to this Bill. First, this is a highly subsidised route, and without a subsidy this ship would not be built, and Cunard would gradually withdraw from the express passenger service on the North Atlantic. Secondly, the expert advice given to the Government is that this is the right sort of ship to build for this purpose. Thirdly, in all the circumstances, the bargain struck with Cunard is not unfair to the taxpayer. I would say that it compares favourably with some of the other bargains which I have to strike, on behalf of the taxpayers, with certain other interests and industries. I therefore ask the House to give the Bill a Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a committed of the whole House.—[Mr. Hughes-Young.]
  Committee Tomorrow.

  NORTH ATLANTIC SHIPPING [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 purpose of any Act of the present Session to enable the Minister of Transport to make advances to Cunard White Star Limited in connection with the construction of a large vessel for the North Atlantic shipping trade, it is expedient to authorise—

  (a) the provisions, either wholly out of the Consolidated Fund or in part out of the Consolidated Fund and in part out of money provided by Parliament, of sums not exceeding eighteen million pounds to be advanced to the said company either wholly as loans, or partly as loans and partly as grants;

  (b) the issue out of the Consolidated Fund of sums payable under any provision of the said Act authorising the Minister of Transport to enter into any agreement with the said company concerning the insurance of any risks;

  (c) the borrowing of money for the purposes of the said Act in any manner authorised under the National Loans Act, 1939;

  (d) the payment into the Exchequer of any sums falling to be so paid by virtue of the said Act of the present Session and their re-issue out of the Consolidated Fund.—[Mr. Marples.]

  Resolution to be reported.
  Report to be received Tomorrow.

  REPUBLIC OF SOUTH AFRICA (TEMPORARY PROVISIONS) BILL
  Considered in Committee.
  [Sir GORDON TOUCHE in the Chair]

  REPUBLIC OF SOUTH AFRICA (TEMPORARY PROVISIONS) BILL

    Clause 1.—(OPERATION OF EXISTING LAW IN RELATION TO SOUTH AFRICA.)
    9.55 p.m.
    Mr. H. A. Marquand: I beg to move,
    That the Chairman do report Progress and ask leave to sit again.
    I move this Motion because it is now suggested that we should embark at this late hour on the discussion of the Committee stage of a highly important constitutional Measure. The fact that it is highly important and constitutional is witnessed by the fact that we are in Committee of the whole House for this

    1039
    purpose. On this Bill, which has such far-reaching effects, we have hitherto had only three hours of debate on Second Reading. The Government must surely feel that, having given us only that three hours, against which we raised no complaint, now to suggest that the Committee should start, at Ten o'clock, to proceed with the detailed examination of the Bill, Clause by Clause and Amendment by Amendment, at such a late hour, would be an abuse of the procedure of the House.
    During the course of that extremely brief debate on Second Reading, we got a very laconic and brief explanation of the purposes of the Bill from the Secretary of State himself. We had just begun to explore the full meaning of the various Clauses of the Bill when we had to finish the debate after only three hours of opportunity to discuss it. This Bill affects the relationship of South Africa with the United Kingdom, and
    its repercussions will be felt far beyond the United Kingdom, over the whole of the Commonwealth.
    The eyes of the Commonwealth are on us at this time, and to enter upon this discussion tonight, when the opportunities of what we have to say being reported in the Press and being carried round the Commonwealth—[HON. MEMBERS: "Oh."] This is quite serious.
    It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
    Committee report Progress.

  BUSINESS OF THE HOUSE
  Motion made, and Question put,
  That the Proceedings on the Republic of South Africa (Temporary Provisions) Bill be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Selwyn Lloyd.]
  The House divided: Ayes 173, Noes 98.

  Division No. 151.]

  AYES

  [10.0 p.m

  Agnew, Sir Peter

  Elliott, R. W. (Nwcstle-upon-Tyne, N.)

  McLaren, Martin

  Aitken, W. T.

  Farr, John

  McLaughlin, Mrs. Patricia

  Allason, James

  Fell, Anthony

  McMaster, Stanley R.

  Arbuthnot, John

  Finlay, Graeme

  Macpherson, Niall (Dumfries)

  Atkins, Humphrey

  Fisher, Nigel

  Maddan, Martin

  Balniel, Lord

  Forrest, George

  Maitland, Sir John

  Barlow, Sir John

  Fraser, Ian (Plymouth, Sutton)

  Manningham-Buller, Rt. Hn. Sir R.

  Barter, John

  Gammans, Lady

  Matthews, Gordon (Meriden)

  Batsford, Brian

  Godber, J. B.

  Mawby, Ray

  Baxter, Sir Beverley (Southgate)

  Goodhart, Philip

  Maxwell-Hyslop, R. J.

  Beamish, Col. Sir Tufton

  Goodhew, Victor

  Maydon, Lt.-Cmdr. S. L. C.

  Bell, Ronald

  Gower, Raymond

  Mills, Stratton

  Berkeley, Humphry

  Grant-Ferris, Wg. Cdr. R.

  Montgomery, Fergus

  Birch, Rt. Hon. Nigel

  Green, Alan

  Nabarro, Gerald

  Bishop, F.P.

  Grimston, Sir Robert

  Noble, Michael

  Black, Sir Cyril

  Grosvenor, Lt.-Col. R. G.

  Osborn, John (Hallam)

  Bourne-Arton, A.

  Gurden, Harold

  Osborne, Cyril (Louth)

  Box, Donald

  Hamilton, Michael (Wellingborough)

  Page, John (Harrow, West)

  Boyd-Carpenter, Rt. Hon. John

  Harrison, Brian (Maldon)

  Page, Graham (Crosby)

  Braine, Bernard

  Harvey, John (Walthamstow, E.)

  Pannell, Norman (Kirkdale)

  Bromley-Davenport, Lt.-Col. Sir walter

  Heald, Rt. Hon. Sir Lionel

  Partridge, E.

  Browne, Percy (Torrington)

  Hendry, Forbes

  Pearson, Frank (Clitheroe)

  Bryan, Paul

  Hiley, Joseph

  Peel, John

  Buck, Anthony

  Hill, Mrs. Eveline (Wythenshawe)

  Percival, Ian

  Bullard, Denys

  Hill, J. E. B. (S. Norfolk)

  Pickthorn, Sir Kenneth

  Campbell, Gordon (Moray & Nairn)

  Hirst, Geoffrey

  Pitt, Miss Edith

  Carr, Compton (Barons Court)

  Holland, Philip

  Pott, Percivall

  Chataway, Christopher

  Hollingworth, John

  Powell, Rt. Hon. J. Enoch

  Cleaver, Leonard

  Howard, John (Southampton, Test)

  Prior, J. M. L.

  Cooke, Robert

  Hughes Hallett, Vice-Admiral John

  Prior-Palmer, Brig, Sir Otho

  Cooper, A. E.

  Hughes-Young, Michael

  Proudfoot, Wilfred

  Cordle, John

  Jackson, John

  Pym, Francis

  Corfield, F. V.

  James, David

  Quennell, Miss J. M.

  Costain, A. P.

  Johnson, Dr. Donald (Carlisle)

  Rawlinson, Peter

  Coulson, J. M.

  Johnson, Eric (Blackley)

  Redmayne, Rt. Hon. Martin

  Courtney, Cdr. Anthony

  Johnson Smith, Geoffrey

  Rees-Davies, W. R.

  Crosthwaite-Eyre, Col. O. E.

  Kerr, Sir Hamilton

  Ridley, Hon. Nicholas

  Curran, Charles

  Kershaw, Anthony

  Ridsdale, Julian

  Dalkeith, Earl of

  Kirk, Peter

  Roberts, Sir Peter (Heeley)

  Deedes, W. F.

  Lewis, Kenneth (Rutland)

  Roots, William

  Digby, Simon Wingfield

  Linstead, Sir Hugh

  Ropner, Col. Sir Leonard

  Doughty, Charles

  Litchfield, Capt. John

  Royle, Anthony (Richmond, Surrey)

  du Cann, Edward

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Russell, Ronald

  Duncan, Sir James

  Loveys, Walter H.

  Scott-Hopkins, James

  Eden, John

  Lucas-Tooth, Sir Hugh

  Seymour, Leslie

  Elliot, Capt. Walter (Carshalton)

  MacArthur, Ian

  Sharples, Richard

  Shaw, M.

  Thatcher, Mrs. Margaret

  Ward, Dame Irene

  Shepherd, William

  Thomas, Peter (Conway)

  Watts, James

  Simon, Rt. Hon. Sir Jocelyn

  Thornton-Kemsley, Sir Colin

  Wells, John (Maidstone)

  Skeet, T. H. H.

  Tilney, John (Wavertree)

  Whitelaw, William

  Smith, Dudley (Br'ntf'rd & Chiswick)

  Turner, Colin

  Wolrige-Gordon, Patrick

  Smithers, Peter

  Turton, Rt. Hon. R. H.

  Woodhouse, C. M.

  Smyth, Brig. Sir John (Norwood)

  van Straubenzee, W. R.

  Woodnutt, Mark

  Spearman, Sir Alexander

  Vane, W. M. F.

  Woollam, John

  Speir, Rupert

  Vaughan-Morgan, Sir John

  Worsley, Marcus

  Storey, Sir Samuel

  Vosper, Rt. Hon. Dennis

  Studholme, Sir Henry

  Wakefield, Edward (Derbyshire, W.)

  TELLERS FOR THE AYES

  Summers, Sir Spencer (Aylesbury)

  Walder, David

  Mr. Gibson-Watt and

  Tapsell, Peter

  Walker, Peter

  Mr. Chichester-Clark.

  NOES

  Ainsley, William

  Jay, Rt. Hon. Douglas

  Roberts, Albert (Normanton)

  Allen, Scholefield (Crewe)

  Jones, Rt. Hn. A. Creech(Wakefield)

  Robertson, J. (Paisley)

  Bacon, Miss Alice

  Jones, Dan (Burnley)

  Rogers, G. H. R. (Kensington, N.)

  Blackburn, F.

  Jones, Elwyn (West Ham, S.)

  Ross, William

  Bowden, Herbert W. (Leics, S. W.)

  Key, Rt. Hon. C. W.

  Short, Edward

  Bowles, Frank

  Lever, Harold (Cheetham)

  Skeffington, Arthur

  Boyden, James

  Mabon, Dr. J. Dickson

  Slater, Mrs. Harriet, (Stoke, N.)

  Brockway, A. Fenner

  MacColl, James

  Slater, Joseph (Sedgefield)

  Butler, Herbert (Hackney, C.)

  McKay, John (Wallsend)

  Small, William

  Callaghan, James

  MacMillan, Malcolm (Western Isles)

  Snow, Julian

  Castle, Mrs. Barbara

  Mallalieu, E. L. (Brigg)

  Sorensen, R. W.

  Cliffe, Norman

  Manuel, A. C.

  Soskice, Rt. Hon. Sir Frank

  Collick, Percy

  Mapp, Charles

  Spriggs, Leslie

  Cronin, John

  Marquand, Rt. Hon. H. A.

  Stewart, Michael (Fuiham)

  Deer, George

  Marsh, Richard

  Stones, William

  Delargy, Hugh

  Mellish, R. J.

  Swain, Thomas

  Diamond, John

  Mendelson, J. J.

  Sylvester, George

  Dugdale, Rt. Hon. John

  Millan, Bruce

  Symonds, J. B.

  Ede, Rt. Hon. C.

  Mitchison, G. R.

  Taylor, John (West Lothian)

  Edwards, Waiter (Stepney)

  Morris, John

  Thomas, George (Cardiff, W.)

  Evans, Albert

  Moyle, Arthur

  Thomson, G. M. (Dundee, E.)

  Fletcher, Eric

  Noel-Baker, Rt. Hn. Philip(Derby. S.)

  Thornton, Ernest

  Greenwood, Anthony

  Oliver, G. H.

  Wade, Donald

  Grey, Charles

  Oram, A. E.

  Wainwright, Edwin

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Owen, Will

  Watkins, Tudor

  Hamilton, William (West Fife)

  Pannell, Charles (Leeds, W.)

  Weitzman, David

  Hayman, F. H.

  Parker, John

  Whitlock, William

  Henderson, Rt. Hn. Arthur(RwlyRegis)

  Pentland, Norman

  Wilkins, W. A.

  Hilton, A. V.

  Popplewell, Ernest

  Williams, W. T. (Warrington)

  Holt, Arthur

  Probert, Arthur

  Willis, E. G. (Edinburgh, E.)

  Houghton, Douglas

  Pursey, Cmdr. Harry

  Wilson, Rt. Hon. Harold (Huyton)

  Hughes, Hector (Aberdeen, N.)

  Randall, Harry

  Irving, Sydney (Dartford)

  Rankin, John

  TELLERS FOR THE NOES:

  Redhead, E. C.

  Mr. Charles A. Howell and

  Mr. Lawson.

  REPUBLIC OF SOUTH AFRICA (TEMPORARY PROVISIONS) BILL
  Again considered in Committee.
  Mr. Marquand: It would be very unfortunate if so important a Measure as this, which might, for all we know, arouse great interest in many other Commonwealth countries, were taken at so late an hour so that those Commonwealth countries which are greatly interested would have little or no opportunity of knowing what was being said in the Committee about so important a matter.
  I rose to move the Motion to give the Government an opportunity of considering whether it really was fair to ask the Committee now to embark upon what must inevitably be a fairly prolonged sitting if we are to do our duty and carefully to consider the Bill with the help of the various Amendments we have put
  1042
  down. It would be wrong, in our opinion, to embark upon this stage now. That is why we voted just now against the Motion to suspend the Standing Order. If it had been a reasonable thing to embark upon the Bill at this hour we would not have opposed that Motion.
  We have given the Government an opportunity to consider whether they can make any accommodation with the Committee on this matter. I trust that the Government will tell us either that they intend to abandon the proceedings altogether, or that they do not intend to keep the Committee very long this night, but will give us an opportunity on some other occasion when we can debate the Bill in reasonable circumstances and when we can have a good attendance of Members, and, as I say, give an opportunity to other members of the Commonwealth to know what we are talking about.
  The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I think that the Committee will agree that this is an important Bill. The fact is known that on 31st May South Africa becomes a Republic. I think that this Bill is, in principle, desired by both sides of the Committee. It was announced as business for today, without objection being taken, and I would hope that the Committee would agree to see whether we can make reasonable progress tonight and see how we get on.
  Mr. Marquand: The right hon. and learned Gentleman has said it was announced as business for today without any question being raised at that time, but I and those of us who are more especially interested in this Bill naturally assumed, from the way the announcement was made by the Leader of the House, that the North Atlantic Shipping Bill would not occupy the whole of the day. There was no
  1044
  suggestion at that time that the Standing Order would be suspended and that we might go on with this Bill late at night.
  I trust that I have here the reputation of being a reasonable man. I would be willing to meet the Chancellor of the Exchequer and the Joint Under-Secretary of State for Commonwealth Relations if we had some idea of what they mean by "reasonable". If, then, we proceed in a reasonable manner upon the first Amendment, and if we have a satisfactory debate, will the right hon. and learned Gentleman then think that we have made reasonable progress?
  Mr. Lloyd: I would say, let us see how we get on. I do not think that we shall be unreasonable, any more than the right hon. Gentleman.
  Question put and negatived.
  10.15 p.m.
  Mr. Marquand: I beg to move, in page 1, line 9, to leave out "one year" and to insert "six months".
  This Amendment is one of great importance affecting what is in a way the major proposal of the Bill, namely, that there should be a standstill in our relations, particularly in respect of various laws, with South Africa for one year. South Africa is going to leave the Commonwealth without question on 31st May. If we are to follow what is suggested in the Clause we shall continue for a whole 12 months to act as though it had not left the Commonwealth.
  When we debated this matter on Second Reading the Secretary of State for Commonwealth Relations advanced two main reasons for his proposal that the duration of the standstill should be as long as 12 months. The first reason that the right hon. Gentleman advanced was that it would be necessary before introducing the final legislation to review a considerable number of laws which otherwise would cease automatically to have effect on 31st May. The right hon. Gentleman mentioned no fewer than eleven statutes and said that they were only examples, indicating thereby, although he did not tell us what they were, that there were probably many other statutes which would have to be reviewed and on which the Government would have to make up their minds what alterations in the application of those statutes to South Africa they would wish to include in a final Bill.
  The second argument that the right hon. Gentleman advanced was that besides looking at individual laws and seeing whether and how they needed modification in the new circumstances of South Africa being no longer a member of the Commonwealth, it was also necessary to review some of the more important aspects of the relationships of this country with the Union of South Africa. These are the general relationships in respect of matters for which no legislation is needed in the new circumstances. The right hon. Gentleman mentioned bilateral agreements between us, as, for example, our agreements on trade and defence. Unfortunately, the rules of order considerably curtailed our discussion of these general relations and I suppose that if they curtailed it then they will curtail it
  1046
  even more severely now. This is one of the reasons why we have not been able to examine the new situation as thoroughly as was necessary.
  The Under-Secretary of State for Commonwealth Relations in winding up the debate went through all the major matters of relationships efficiently and courteously. I freely admit that the hon. Gentleman dealt with all the points of any importance raised in the debate. We make no complaint of the way in which he dealt with them, but when the hon. Gentleman finished he still left us unconvinced, despite the skill of his exposition, of the need for a twelve months' duration of this standstill. Even though the hon. Gentleman and his right hon. Friend pointed out more than once that it was the outside limit and that they hoped to complete the process within twelve months, we still felt dissatisfied with the Government's attitude towards this general proposition of a twelve months' standstill.
  When the Under-Secretary was explaining why he thought that twelve months were still necessary, he said:
  "…we need time in which to work out the future pattern of our relationships with South Africa, to hold discussions on many complex subjects with the Union Government and to take the necesary legislative or other action."
  On that general question of relationships, the hon. Gentleman said that we needed time—without specifying why it should take so long to work out the future pattern.
  On the question of trade with the Union of South Africa, the hon. Gentleman said:
  "All I am saying is that we have carefully to consider the balance of advantage and disadvantage; we have to consider carefully the position we want in the future."
  In regard to the Sugar Agreement, he said:
  "We are considering, therefore, what effect the departure from the Commonwealth of South Africa has upon her membership of the Agreement."
  Regarding the training of South African troops in this country, the hon. Gentleman said:
  "If request for facilities of this kind are received in future from South Africa, they will have to be considered very carefully…"
  On the question of nationality, he said:
  "Clearly, the matter cannot be left there,"—

  1047
  the hon. Gentleman was referring to the existing law—
  "but how we dealt with it obviously requires our most careful thought."—[OFFICIAL REPORT, 24th April, 1961; Vol. 638, c.171–8.]
  So at every important point we were told by the Government, in a courteous speech, that they did not have the faintest idea of what they were doing. I have reached the conclusion that they did not give any thought whatever to this subject.
  It grieves hon. Members to feel that there has been on the part of the Government no thought devoted to the consideration of this Measure and that they were taken utterly unawares. Did not the Government remember what happened at the Prime Minister's Conference in May, 1960? It was common knowledge, widely reported in the world's newspapers, that there had been heated discussions about South Africa's racial policies, and that some had taken the view that membership of the Commonwealth was not compatible with those policies.
  When the Prime Ministers summed up the conclusion of the 1960 Conference, they deliberately declared that the Commonwealth was a "multi-racial association". That statement was a clear indication that the majority at the Prime Ministers' Conference thought that the nature and character of the Commonwealth was such that it could hardly be acceptable to a Government which took exactly the opposite point of view, and which did not want to create a multi-racial association. They went on to say that, in 1961, if South Africa became a Republic in the meantime, she would have to come back to the Commonwealth Prime Minister's Conference and ask for approval.
  No one reading that statement of the Conference and having followed the events of the Conference—and the Government had better opportunities for doing that than anyone else—could doubt that South Africa's membership of the Commonwealth would be in question. No one who knew the depth of feeling among African and Asian members of the Commonwealth towards racial segregation, and the practice and doctrine of apartheid, could have doubted that this would be a great issue. No
  1048
  one could suppose that they would ask South Africa to come back, if she wanted to be in the Commonwealth, without realising that the question of her continued membership would come up. Yet, in all this intervening period of ten or 11 months, judging by what we have been told during the Second Reading, the Government have done no homework on this subject. They have not considered these matters and are not ready to say what they think ought to be done on any one of a series of very important questions. We were left by the Secretary of State for Commonwealth Relations with a laconic speech which lasted only a quarter of an hour and told us scarcely anything. The Joint Under-Secretary was left to wind up the debate in no better position. It could hardly have been otherwise. If the Secretary of State was unwilling or unable to tell what the Government's policies were, the hon. Gentleman could not do so either.
  So we say that we have reached a situation in which evidently the Government have procrastinated; but this is no excuse for procrastinating still further. Although the Government would not tell us anything about it, we must all have a pretty shrewd idea what the issues are, and everyone must have formed his own opinion on what ought to be done on each of these items. Surely it cannot be true that the Government have refused to consider these matters at all. Surely they must have a very good idea about what they intend to do. The legal arrangements and the necessary amendments which may need to be made in individual Statutes about nationality and many other issues must surely be comparatively simple because there are many precedents for them, for this is not the first time that a country has left the Commonwealth. These matters cannot really be as difficult as all that.
  I cannot believe that Her Majesty's Government really did not consider all these things. If they are going to oppose my Amendment, they must say "No, it is perfectly true; we have given no consideration to these matters. We have no idea at all what ought to be done either about general relationships or about legislation to bring certain Statutes into conformity with the new set of circumstances." The Government have one or other of these alternatives to choose. I cannot believe that they have

  1049
  paid no attention whatever to the matter. I am sure that a great deal of thought must have been given to it in the intervening months, that work must have been going on inside the Department and that there are men there ready now to say exactly what is necessary about a whole wide range of these things.
  Continued procrastination in the interval would be no excuse for further procrastination now, and we see no reason why this matter cannot be dealt with within six months. Indeed, we see good reason why we should not allow the period to be too long—because of the effect upon the outside world. If we take an unnecessarily long time over what, whether hon. Members like it or not, has now got to be done, it will be giving a wrong impression of the new situation. We shall be leading African opinion and, in particular, Asian opinion to believe that we really want no change at all or that there is to be no change. The value of the words of the Secretary of State to the effect that it must not be left to be supposed that to leave the Commonwealth makes no difference, will be washed away if we take 12 months. We hope that the Government will now say that they can do it in less time and so accept the suggestion which I have made.
  Viscount Hinchingbrooke: I can quite see the point of view of the right hon. Member for Middlesbrough, East (Mr. Marquand). If one is a Socialist and has been proceeding for a number of years on the supposition that a great country like South Africa ought to be turned out of the Commonwealth in double quick time because of the iniquities of her offences, one makes every preparation in one's mind for the fact that the Government have scheduled out the whole thing and have prepared, Department by Department and sub-department by sub-department, for the inevitable event.
  10.30 p.m.
  The right hon. Gentleman is quite right, from his point of view, to charge the Government with lack of foresight and lack of preparation, but on this side of the Committee we see the thing differently. It is true that there was a certain amount of row behind the scenes, so we are told, at the 1960 Prime Ministers' Conference, but that row did
  1050
  not come out very much in the open. Public opinion was not prepared for the calamitous event that was to fall within twelve months. Mr. Menzies was not making the sort of speeches he is now compelled to make through the turgid turn of events. Nor was Mr. Diefenbaker saying the same sort of things as he is now. They were not marching to the promised day when South Africa would leave the Commonwealth. They were hushing up, as fast and as long as they possibly could, all that happened at the 1960 Conference.
  It was not very long ago—perhaps only a month or two before the last Conference—that my right hon. Friend the Secretary of State for Commonwealth Relations was sent round the world on an inquiry. We all understood—and, no doubt, civil servants, public opinion and the newspapers understood—that he was doing his best to pacify some of these censorious Prime Ministers from the black Commonwealth who were supposed to be up in arms about the position of South Africa. The whole British community understood that this was what was happening.
  Of course, no preparations were made by the Commonwealth Relations Department to plan for the event of South Africa leaving the Commonwealth. I can well understand the Government saying that they are unprepared and want a year in which to prepare. There is a completely different attitude as between the two sides of the Committee on this subject. I can well understand Members opposite. They are only too delighted about what has happened. I know that the hon. Lady the Member for Blackburn (Mrs. Castle) is only too delighted to castigate the Government for not having every little detail prepared for the consequential retribution to be applied to South Africa for what she is supposed to have done. So is the hon. Member for Eton and Slough (Mr. Brockway).
  The country at large, however, is not prepared. I hope that the Tory Government and the Tory Party are not prepared. Certainly, Tory opinion in the country is so shocked and horrified at what has happened that it is willing to give the Government not only a year but two years, three years, five years in which to work out the details. We would be

  1051
  prepared to see no change or action taken which would be inimical to the interests of South Africa, looking forward to that happy day when the British world comes to its senses and when South Africa will have made such changes as will enable us to welcome her back to the Commonwealth with open arms. Let sleeping dogs lie. Do not let us be driven by the ideological designs of Members opposite into a totally false situation.
  Mr. Glenvil Hall: I am sorry that the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) made the speech to which we have just listened. It makes it very difficult for some of us to say what we would wish to say. It seems to me that we have to look at this in a commonsense way. Much to the regret of all hon. Members, South Africa has had to leave the Commonwealth because of her attitude to the black populations within her borders. That is a fact which we have to accept. The question arises, what are we to do in these circumstances?
  We have had many years of close association with South Africa. There are hundreds of thousands of people of British birth living there who still look to this country as their home. To them it is very sad that all this has happened, and they look forward to South Africa coming back into the Commonwealth. As I indicated during the Second Reading debate, I, for one, do not want to say or to do anything to postpone the day when South Africa changes her present policy and is able to return. We have all sorts of ties with South Africa, through Acts of Parliament and in other directions, which have been built up over the years and now have to be severed or altered, and we have to consider what is the best method to deal with them.
  The only question which arises on this Amendment is whether the period put into the Bill by the Government is reasonable. Ought it to be six months or the year which the Government are putting into the Bill, or ought it to be five years, as was said by the noble Lord the Member for Dorset, South? On Second Reading the Minister—unfortunately he is unable to be with us tonight—indicated that he thought a year was
  1052
  reasonable and that if the Government could carry through the negotiations before then the House of Commons could rely on it to do so.
  I am willing to accept the word of the right hon. Gentleman, for I know that there are all sorts of complicated matters to be considered and sorted out. If we want to make a gesture to those there who are still with us in spirit and want somehow to stay with us in the Commonwealth, we ought not to hurry too much to clear them out. What was the reason given on Second Reading by my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) and by other hon. Members on this side of the Committee and by one hon. Member opposite for thinking a year too long? It was that world opinion would be outraged if we make the period a year; that, in particular, the African and Asian populations in other parts of Africa would not understand. I think we under-rate their intelligence. The Ghananians, for example, and others will readily understand why a year is reasonable in the circumstances. If they do not understand, it is just too bad. We cannot always run our lives and carry out policies with one eye on the black populations in other parts of Africa.
  It seems to me, however, that we underrate their intelligence. They will realise as well as anyone that this kind of thing takes time. They know what our policy is; that we are with them in their hatred of apartheid and this Government and this country will do their best to stand by the rest of Africa against the present policy of the South Africa Government. I hope, therefore, that my right hon. Friend and my hon. Friends will not press this Amendment to a Division.
  With the long Summer Recess ahead, the distance away of South Africa and the negotiations to be carried through, a year is not too long. We want to make a gesture to our friends in South Africa who are still with us heart and soul and are heart-sick that this has fallen on their country. Therefore, I hope that my right hon. Friend will withdraw this Amendment and allow us to get on with the rest of the Bill without further delay.
  Mr. Humphry Berkeley: I warmly endorse the plea made to his own Front Bench by the right hon.

  1053
  Member for the Colne Valley (Mr. Glenvil Hall). I did not agree with all the sentiments expressed by my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke), but I sense that there is a general feeling on both sides of the Committee that more time should be allowed for the unravelling of the many complications surrounding the departure of a country from the Commonwealth.
  I am firmly of the opinion that it would be a great mistake if the prized membership of the Commonwealth could be lightly set aside. I adhere firmly to the principle of a country being either in the Commonwealth or outside it. I do not believe that it would be acceptable to the majority of people in this country that over a sustained period the Republic of South Africa could maintain the same relationship with the United Kingdom as she has done in the past.
  I strongly press the spokesman on the Opposition Front Bench to realise that there are those on this side of the Committee who feel as great a sense of re-pugnance at the policy of apartheid as he does. Some of us feel, however, that the attitude of the Opposition, if they press the Amendment, may appear to be undignified and niggling.
  I am not ashamed that the Government did not produce a carefully prepared plan to enable the departure of South Africa from the Commonwealth to be smoothly taken through all its stages in a few months. There were excellent reasons why the Government should not do this. The right hon. Member for Middlesbrough, East (Mr. Marquand) referred to the 1960 Commonwealth Prime Ministers' Conference. I ask him to remember that, when the future constitutional relationship of South Africa to the Crown was discussed, it was brought up in a quite different sense from that in which any discussion had been held in the past. When the question of India remaining in the Commonwealth after becoming a republic was discussed, the necessary constitutional formalities had already taken place. The same is true of Pakistan.
  When in 1960 the Commonwealth Prime Ministers were asked to approve the admission of Ghana to the Commonwealth
  1054
  after she became a republic, a plebiscite had taken place and President Nkrumah's candidature had been popularly endorsed. However, when the South African application was first mentioned at the Commonwealth Prime Ministers' Conference in 1960, the plebiscite had not taken place. Indeed, it was far from certain at that time whether the plebiscite would go with the Government or against them. When the plebiscite eventually took place, a very narrow margin of those who were entitled to vote voted in favour of a republic.
  My second point is that, as the question of South Africa's future had not already been settled in advance by the population of South Africa, or by those in South Africa entitled under the Constitution to vote, it was plainly premature for the Commonwealth Prime Ministers to pass judgment on the future constitutional relationship between South Africa and the remainder of the Commonwealth.
  Therefore, for the most natural and obvious reasons, which did not apply in the case of India, Pakistan or Ghana, the Commonwealth Prime Ministers decided that the application could be considered only after the necessary constitutional formalities had taken place—that is to say, after the electorate had pronounced by plebiscite.
  10.45 p.m.
  This being so, the British Government were quite right to take no steps whatever in advance to prejudge the issue and to take no steps whatever to prepare legislation which could be pushed through in a hurry. If it is the issue of apartheid that we are judging tonight, I would say two further things. I do not think any hon. Members has ever expressed in public support for apartheid, and most of us, I think, have expressed the strongest disapproval of it. I would also refer the right hon. Gentleman to the observations which were made at London Airport by President Nkrumah of Ghana on his departure from this country after the Commonwealth Prime Ministers' Conference of 1961, when he said in strikingly moderate terms that he very much regretted the fact that South Africa had left the Commonwealth, and he went on to say that if the South African Government had made the smallest gesture—I emphasise those

  1055
  words—he and his other Commonwealth colleagues, from the coloured Commonwealth primarily, would have been in favour of South Africa remaining inside the Commonwealth.
  If one has that sort of moderate expression from a Commonwealth Prime Minister who is generally thought to be somewhat extreme, I think it only right and proper that our own Government should have taken what was in my view quite a constitutionally correct point of view. They should not have prejudged the issue, but when in the end the regrettable but, in my view, inevitable step was taken, that step should have been accepted.
  I believe our Government are absolutely correct now in asking for a reasonable period of time, and a year cannot be called excessive in which to sort out these constitutional relationships. Nobody has pretended that things can go on as they were, but I would appeal to the right hon. Member for Middlesbrough, East to realise that though most of us regard the withdrawal of South Africa as being inevitable, we should try to make it a dignified procedure. Do not let us try at this stage to niggle over six months, nine months or a year. Let us recognise this as being a very serious and regrettable necessity, and try to see that the break, when it does come, is a dignified break, and let us do it in a way which none of us would afterwards regret.
  Mr. A. Fenner Brockway: As I have listened to the speeches tonight my mind has gone back to the statement by the Secretary of State for Commonwealth Relations at the conclusion of the debate when the Union of South Africa withdrew from the Commonwealth. The Secretary of State then said that it must be made very clear that there is a distinction between States which are within and those which are outside the Commonwealth. He insisted in that speech that the Union of South Africa, having withdrawn from the Commonwealth, must be treated in a different way and that treaties and agreements between this Government and the Union of South Africa which depended upon her membership of the Commonwealth should cease. The Secretary of State for Commonwealth Relations made
  1056
  that quite clear also in the very brief speech with which he moved the Second Reading of this Bill.
  I wish to support this Amendment on the ground of the contents of the speech of the Secretary of State when he moved the Second Reading of this Measure. The speech lasted only about a quarter of an hour and, in the course of it, he treated the whole subject as though it was nothing of great importance. He gave the impression that this was a quite incidental measure, dealing only with some small matters. He listed to the House the kind of treaties with the Union of South Africa which we must negotiate before the solution of this problem of our relationship can be settled. Indeed, they were a list of quite insignificant matters; a Merchant Shipping Act, the Colonial Probates Act, a Maintenance Orders Act, the Medical, Dentists, and Solicitors Acts, the Colonial Marriages Act, the Naval Prize (Procedure) Act, and the Evidence by Commission Act.
  There were two more to which I shall refer in a moment, but I put it to the Committee tonight that measures of that kind, with a Commonwealth Relations Office and a responsive Government in the Union of South Africa which sought to clear up this situation—this unusual and unsatisfactory situation where the Union, having withdrawn from the Commonwealth and there being treaties between us—could be settled within six months. Any competent Commonwealth Relations Office, with a competent Minister, could settle the small matter of these Acts within the time we specify from our Front Bench tonight.
  I should like now to refer to the two other measures of which the Secretary of State made mention in his short speech. The first was the Companies Act, 1948, and the second, in the rather curious phrase of the right hon. Gentleman, "even the Finance Act of last year". I emphasise that phrase, and I want to ask the Under-Secretary—because I want the facts on this matter—whether the Companies Act, 1948. does refer to matters such as trusteeship securities in the Union of South Africa. I particularly want to ask—and if it is possible I should be grateful for an answer immediately, although, of course, I shall understand if that is not possible

  1057
  —what it is in the Finance Act of last year which makes that Act appropriate and relevant to this Bill now before the House. If the Under-Secretary is able to answer immediately I shall give way now.
  The Joint Under-Secretary of State for Commonwealth Relations (Mr. Bernard Braine): I will endeavour to cover that point when I come to address the Committee. It would be preferable if I left individual points of that nature to my speech.
  Mr. Brockway: Of course, I will accept that, but I think the hon. Gentleman will see why I have drawn attention to the point. In his own speech, when he was answering questions put from this side regarding our links with South Africa by trade—to use his own words—
  "We share preferential advantages."
  he added,
  "'None of these arrangements are affected by the Bill."—[OFFICIAL REPORT. Vol. 639, cols. 174–5, 24th April, 1961.]
  Imperial Preference is not affected, and I should like to know why the Finance Act of last year is affected by this Bill, and the Finance Act, 1919, which legalised Imperial Preference with South Africa, is unimpaired. If this year's Finance Act is relevant to the Bill, why is the Finance Act, 1919, which introduced Imperial Preferences, not affected by the Bill, and why does the question of Imperial Preference not arise? If Imperial Preference is to continue for one year, the Union of South Africa will for that period possess the advantages of membership of the Commonwealth which the Secretary of State himself has emphasised in two speeches must be ended when the Union moves out of the Commonwealth.
  In order to be quite clear on the point, I will read the relevant provisions of the 1919 Finance Act. They are to be found in Section 8:
  "With a view to conferring a preference in the case of Empire products, the duties of customs on the goods specified in the Second Schedule to this Act shall, on and after the dates provided for in that schedule, be charged at the reduced rates (hereinafter referred to as 'preferential rates') shown in the second column of that Schedule, where the goods are shown to the satisfaction of the Commissioners of Customs and Excise to have been consigned from and grown, produced or manufactured in the British Empire.
  1058
  For the purposes of this section—
  'The British Empire' means any of His Majesty's dominions outside Great Britain and Ireland and any territories under His Majesty's protection, and includes India".
  The point I make is that, if the Finance Act of this year in provisions referring to South Africa comes under this Bill, similarly the Finance Act, 1919, comes within it. If it does come within the Bill, then the speech of the Secretary of State for Commonwealth Relations in moving the Second Reading ought to have been much more comprehensive and adequate in dealing with matters of that kind.
  There are other important Measures which, it seems to me, undoubtedly come under the Bill but to which the Secretary of State did not refer in his speech. We have an Amendment down which relates to the two Visiting Forces Acts, so I shall say no more about that now. The next are the Fugitive Offenders Acts, which are of tremendous importance at this time. When he re plies to the debate on whether the interim should be six or twelve months, will the Joint Under-Secretary of State give us a definite assurance about political refugees from the Union of South Africa who go to the Protectorates and other British territories? Will he give us an assurance that no political refugee will be turned back to the Union? Will he assure us that, unless an offence committed in the Union is an offence if committed in a Protectorate or a British territory, a man will not be turned back? Will he assure us that no one who is not guilty of an extraditable offence—
  Sir Robert Grimston: On a point of order, Mr. Williams. Will my hon. Friend the Joint Under-Secretary of State be in order in replying to all these questions on the Amendment now before the Committee?
  11.0 p.m.
  The Temporary Chairman (Mr. W. R. Williams): I have been listening carefully. I thought that what the hon. Member for Eton and Slough (Mr. Brockway) wanted to find out was whether it was possible for some of these things to be done within a certain period, to enable him, I take it, to decide whether to vote for or against the

  1059
  Amendment. If that is his purpose, it is in order and the Under-Secretary will be able to reply to the point.
  Mr. Brockway: Thank you, Mr. Williams. You have gathered the question that I was putting. On this important matter of the Fugitive Offenders Act, which comes under this Measure, I want to ask the Under-Secretary of State whether it might not be preferable, even from the drafting aspect, before the Bill comes into operation to amend the Order in Council which governs this problem and whether, even if the hon. Gentleman gives an undertaking in the House of Commons, there might be a magistrate's decision which is not in accordance with that undertaking.
  I acknowledge at once that if all the matters to which I have referred come within the scope of this Measure, one could view with sympathy the Government's demand that they should have twelve months for settlement. Our difficulty is that when the Secretary of State introduced the Bill he made no mention of these larger issues. If the Bill is restricted to the quite minor issues that were mentioned by the Undersecretary, in our view there is no justification for the twelve months' period.
  When the Minister said to us at the end of the debate on the withdrawal of South Africa from the Commonwealth that we must have a period to settle these matters, we agreed. If, however, he had said that it must be a period of twelve months, I think that all of us on this side, and some hon. Members opposite, would have been surprised and shocked by that length of time.
  We have to face the fact that the Union of South Africa has withdrawn from the Commonwealth on an issue of deep principle which is felt acutely by the Asian and African members of the Commonwealth, by Canada and, despite what has been said otherwise, by the majority of people in this country, who view the system of apartheid with horror. We do not want a decision to be reached tonight which would seem to postpone the break beyond a reasonable period. It is for that reason that we have put forward the Amendment for six months.
  Mr. Paul Williams: For 300 years there has been a bond of emotion, of friendship, of compassion
  1060
  and of understanding between Europe, on the one side, and European opinion in South Africa, on the other side. As a result of the decision of the South African Government at the recent Prime Ministers' Conference, South Africa is to withdraw from membership of the Commonwealth. This can be nothing but a mammoth tragedy for the Commonwealth, for South Africa and for Britain, too.
  As my hon. Friend the Member for Lancaster (Mr. Berkeley) has said, this is a time for taking a dignified stand on these matters. I would wish that Her Majesty's Ministers had behaved in as dignified a way as the right hon. Member for Colne Valley (Mr. Glenvil Hall) did a few moments ago, but to have spoken, as some Ministers have done after South Africa's decision to depart from the Commonwealth, in a sneering, out-of-the-corner-of-the-mouth way of criticism after the event, is something which can do nothing but nauseate general public opinion. That Ministers have taken it upon themselves to criticise in a rather holier than thou attitude is something which repels most Conservatives and, I hope, though one cannot tell, the majority of the country.
  I agree with my hon. Friend and my noble Friend on this matter, that to talk of a year is perhaps too short a time. When one looks back on the trading communications and defence systems which link this country with South Africa, it can be nothing but a tragedy that these events have taken place, and it makes them no less a tragedy to turn on our past friends, our past allies, our past comrades and criticise them for their internal domestic policies. For that is what we in this Committee and the House have been doing, and our delegates to the United Nations as well. I would have hoped that, at a moment like this, instead of talking of six months or 12 months we would perhaps have been talking of two or three years. To cut these bonds between ourselves and South Africa in all too short a time makes it well nigh impossible for South Africa to return to the Commonwealth at any stage should she ever wish to return, and I would have thought—
  The Temporary Chairman: Order. What we are discussing is whether the time should be 12 months or six months,

  1061
  not more than 12 months. I hope the hon. Member will address himself to the Amendment.
  Mr. Williams: That is exactly why I referred to the alternatives of six or 12 months, and in passing, as a number of other speakers have done, I also referred to the possibility of a longer period. As it is impossible in my particular case, apparently, to refer to anything longer than 12 months, I shall devote my few remaining remarks to the question of the six or 12 months.
  I hope that the Government will take the maximum time, to get away from the sharpnesses and the bitternesses which arose during and out of the Prime Ministers' Conference, in the hope that as a result of allowing temperatures to come down and passions to subside a more balanced view may be taken of South Africa's rôle in the world and her rôle in relation to Britain's defence and our trading interests as well. I hope the Government will not be chivvied off this point, but will stand on the 12 months, so that we may proceed to have a new type of friendship and a new type of alliance and a new type of association with the Union of South Africa.
  Mr. John Dugdale: I want to be brief, so I shall not spend much time in defending the Government which the hon. Member for Sunderland, South (Mr. P. Williams) has been attacking. Their action is preferable to the action which he wants. Nor do I intend to get out of order by referring to a longer period, but I want to know whether it is because the Government want to keep up relations with South Africa as they were before for as long a period as possible, or whether it is due to sheer incompetence, because it must be one or the other. I just do not know which it is.
  I have been looking up one or two precedents, as other hon. Members have, and I find that, for instance, the treaty under which Burma left the Commonwealth was signed on 17th October, 1947, and that the Act effecting independence came in January, 1948, not a very long time afterwards. Ireland left on 18th April, 1949; the subsequent Act was in June, 1949. In neither instance was a long interval necessary. I know that that happened under a Labour Government
  1062
  here, and, naturally, I know the great proficiency of a Labour Government, and I presume that the Conservative Government are not as proficient, but it does seem strange that it should take such a very long time under a Conservative Government for these arrangements to be made.
  The only reason I can suggest for it is that the Commonwealth Relations Office has, if I may so put it, been caught with its nether garments down and simply does not know what to do. I believe that that may well be the case. It simply does not understand the position at all. I should have thought that the possibilities of these eventualities occurring might have been foreseen and that preparations might have been made for them, but apparently nothing of the kind was done.
  Take, for example, the question of citizenship. What happened in Ireland? So far as I understand it, people domiciled in Eire ceased to be British subjects.
  Mr. P. Williams: No.
  Mr. Dugdale: The great majority of them did. The Burmese, too, except those normally resident in British territories, ceased to be British subjects. That decision was made not in a year but in a very short period. I should have thought that similar decisions could have been made this time. Many of the points dealt with by the Secretary of State in his speech were comparatively small and could have been dealt with fairly easily.
  Some of the biggest questions are outside the scope of the Bill altogether, as the Secretary of State informed us, including the High Commission Territories and, it might well be, Imperial Preference, too. We have to do a relatively small number of things compared with the number of administrative decisions that are to be made. We want to make it as plain as possible that South Africa has left the Commonwealth and is no longer a member of it.
  I said that the terms of the Bill may be due to the sheer incompetence of the Commonwealth Relations Office, but many of us fear that they may be due to a desire on the lines of that of Dr. Verwoerd who said at a dinner on 17th March:
  "For South Africa and the United Kingdom and the other old friends this means new opportunity. They must seek to develop in

  1063
  other ways, untrammelled by the former problems, great bonds of friendship and cooperation to their mutual advantage. We are already working on these lines. Perhaps it is better this way, since sources of possible clash in most difficult situations fall away. Our trade and bilateral agreements, including the maintenance of the preferential trading arrangements. South Africa's membership of the Sterling area, and the value of our gold production, defence agreements with regard to a common enemy, etc., etc., need undergo no change. They can be re-endorsed in what our experts find to be the correct manner."
  Viscount Hinchingbrooke: Good idea.
  Mr. Dugdale: I disagree profoundly with the noble Lord, who thought we were wrong on the South African issue, but that it followed naturally from our policy. Having had this break with South Africa on South Africa's own choice on fundamental points, it would be wrong to prolong her remaining in, the Commonwealth for a day more than necessary, and we think that six months are quite long enough. We do not want a nice, coy arrangement which will allow people to forget Sharpeville and Langa and other atrocities in South Africa. We want to recognse that South Africa has left the Commonwealth. We want to make a clean break and to make it in six months.
  Mr. Raymond Gower: The right hon. Member for West Bromwich (Mr. Dugdale) made an interesting comparison between Burma and South Africa and between Eire and South Africa, but I think that it would be possible to distinguish the Acts dealing with those countries and the present Bill. His comparison of Burma with South Africa was cold-blooded. The relationship which we have enjoyed for over 120 years with South Africa is much more involved and complex. Relations of people in this country have settled in South Africa. The majority of people in Burma were Burmese and the break with Burma was absolute and clean-cut. Presumably at the desire of the Burmese, it was to be permanent and there was no question of staying in the Commonwealth.
  On the other hand the break with Eire was perhaps a break only in name, because a special relationship was recognised in her case. As the right hon. Gentleman will probably admit, even today citizens of Eire who come to this country are entitled to all the privileges
  1064
  of British citizenship after a comparatively brief residence. It is therefore possible to distinguish fairly between those Acts and this Bill.
  I warmly support the whole tenor of the speech of the right hon. Member for Colne Valley (Mr. Glenvil Hall). That is the mood in which we should approach this question without for a moment agreeing or approving of the idea of apartheid, with which we nearly all disagree.
  11.15 p.m.
  There is a different sort of relationship between Britain and South Africa than between this country and the countries of the "newer" Commonwealth, if I may use that word. There is a kind of blood relationship. Though the withdrawal of South Africa from the Commonwealth will and must mean a new sort of relationship with that country, surely we can never feel towards South Africa as we do towards a foreign country. Therefore we need a considerable period in which to work out our difficulties. We need time to ponder on this relationship. After all, we are discussing a country to which many of our people have come and gone for generations past. Let us also remember that, from their point of view, many South Africans look upon London and Britain as their homeland. We cannot consider this matter in a cold-blooded way. To do that would be unworthy on the part of those who call themselves British.
  I hope that, although we deeply regret what has happened, and while we in no way condone the causes which have led to this state of affairs, the mood expressed in the admirable speech of the right hon. Member for Colne Valley will prevail on both sides of the Committee.
  Mr. Donald Wade: I am not so much concerned with the difference between six months and 12 months as I am with the use that is made of this standstill period. That is the important matter. If during this period certain Statutes are considered and some of the complicated legal points are looked into—but otherwise no changes are made—at the end of the standstill period Dr. Verwoerd and his friends will say that leaving the Commonwealth is of no great significance. That is the danger which I foresee.

  1065
  In the debate on 22nd March, the Secretary of State for Commonwealth Relations used a paragraph in his winding-up speech which has not yet been quoted in our debate tonight, but which, I thought, was of great importance. He said:
  "Yet, while applying for continued membership, the South African Government—and this is something which bit very deep into all other members—still firmly refuses to receive diplomatic representatives from any non-European members of the Commonwealth. This makes a mockery of consultation;…"—[OFFICIAL REPORT, 22nd March, 1961; Vol. 637, c.529.]
  How can one carry on a Commonwealth under those circumstances?
  Another quotation which has been referred to several times is the sentence which points out that we must be careful not to destroy the value of Commonwealth membership by giving to those who are not members all the privileges that are given to those who are. It is during this period of 12 months that we have to work out the true implications of that sentence.
  Reference has been made to trade and tariffs. I do not believe that the Commonwealth can be held together by economic ties alone, but as long as Imperial Preference continues those preferences should be for those who are members of the Commonwealth, and I do not see how South Africa can expect to benefit from them.
  It would confuse the issue to attempt to make too close comparisons between South Africa and Burma, or South Africa and Eire, without also looking into the economic consequences of leaving the Commonwealth.
  I realise that we must consider the question of citizenship and status and, on the subject of political refugees, I was pleased to hear the views of the hon. Member for Eton and Slough (Mr. Brockway). I hope that the Joint Undersecretary will reply to that.
  I should like to make a brief comment on the subject of citizenship, which must be decided within the period that we are debating—
  Mr. R. H. Turton: On a point of order, Mr. Williams. Is it in order to discuss citizenship when we have been told that it is outside the scope of the Bill?
  The Temporary Chairman: I was just wondering where the hon. Member was getting to. Perhaps I ought to remind the Committee that what we are discussing now are the relative merits of 12 months and six months, and it would be just as well if hon. Members confined themselves to that.
  Mr. Wade: Thank you, Mr. Williams. I appreciate that. The point that I wish to put to the Committee is that within this period certain very important decisions have to be made, particularly as regards citizenship. I should have thought that most of these decisions could have been made within a period of six months.
  I cannot foresee the possibility of any permanent dual citizenship for inhabitants of the Union of South Africa, and I think a decision has to be made on that. Also, I do not think that legally the inhabitants of South-West Africa can be regarded as under British protection, and the only solution for any who leave South- West Africa is to grant something in the nature of a Nansen passport—
  The Temporary Chairman: I am afraid that the hon. Gentleman is straying much too far for my liking, and if he cannot come back to the Amendment, I am afraid that he will have to resume his seat.
  Mr. Wade: I must bring my remarks to a close, Mr. Williams, but I hope that the Joint Under-Secretary will make some reference to the High Commission Territories which, obviously, are vitally affected by the departure of South Africa from the Commonwealth.
  It is essential that it should be demonstrable to those outside the Commonwealth and to those within it that leaving the Commonwealth is a step of very serious importance and not one of little effect. Also, I hope that the Government will show their determination to protect those whom Britain is still legally empowered to protect, and, in particular, those who for one reason or another, mainly political, leave the Union of South Africa and ask for our protection.
  Mrs. Barbara Castle: Once again we have cause to complain of the off-hand way in which the Government are treating the Bill. It is

  1067
  clear from the debate which has taken place that this is a very important Measure which raises points of substance and arouses deep feelings on both sides of the Committee. It is intolerable that we should have been expected to start the Committee stage of this Measure at such a late hour after an exhaustive debate on another major topic and at a time when the Minister responsible for the Bill is not able to be present and, therefore, is not able to answer the points of substance which we make.
  I am very sorry that my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) made the speech he did.
  The Temporary Chairman: Order. That point has already been resolved. I should like the hon. Lady to come to the Amendment now.
  Mrs. Castle: I am on the Amendment, Mr. Williams. I was just about to refer to the speech made by my right hon. Friend, which was on the Amendment, who was certainly not called to order by you in the course of his speech.
  Hon. Members: Order.
  The Temporary Chairman: I was not in the Chair when the right hon. Member for Colne Valley spoke. I am concerned only with whether hon. Members are in order on the Amendment when I am in the Chair.
  Mrs. Castle: If you will allow me to complete my sentence, Mr. Williams, you will find that I am in order. I was going to say that I was sorry that my right hon. Friend the Member for Colne Valley made his speech opposing the Amendment. It is not that I question the right of any right hon. or hon. Member to disagree with his own Front Bench, but I do question the wisdom of any right hon. or hon. Member on this side of the Committee agreeing on any colonial issue with the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), although—
  Mr. Glenvil Hall: If my hon. Friend thinks that I agreed with the noble Lord, she must have been asleep.
  Mrs. Castle: Once again I have been interrupted before I could finish my
  1068
  sentence. I was going to say that I know perfectly well that my right hon. Friend does not share the same approach to the problem of South Africa as the noble Lord, but the danger—which is rapidly becoming apparent—of his speech is that it has been called in aid to support quite different purposes from those he had in mind and to lend support to a quite different approach to the question of how we are to deal with South Africa.
  It has become quite clear in the course of the debate how wise we on this side of the Committee were to put down this Amendment, because those Members opposite who have opposed it so vigorously have shown that their reasons for doing so is that they object to South Africa's leaving the Commonwealth.
  Mr. Berkeley rose—
  Mrs. Castle: I hope that the hon. Member for Lancaster (Mr. Berkeley) will not interrupt me, because I am just about to make an exception in his case. All Members opposite who have taken part in the debate, with his exception, would have been perfectly happy to see South Africa remain unconditionally within the Commonwealth. They believe that toleration of the apartheid policy of the South African Government is perfectly compatible with the continuation and the future health of the Commonwealth. We on this side violently disagree with that point of view, and that is why we are moving the Amendment.
  I except from those remarks the speech made by the hon. Member for Lancaster, who made it clear that his reasons were very different, but I suggest to him that he has totally failed to appreciate a very important fact—that the argument for this Amendment has been made by the Government Front Bench. It was made during the Second Reading debate, in which we had a very remarkable distinction between the speeches of the Secretary of State at the beginning of the debate and the Under-Secretary of State at the end.
  The Secretary of State told us of the matters covered by the Bill, and, as my hon. Friend the Member for Eton and Slough (Mr. Brockway) has pointed out, they made a very unimportant list indeed. They covered such things as the Merchant Shipping Act, 1894, the Colonial Probate Act, 1892, maintenance

  1069
  orders, and the Dentists Act, 1957. Having read out this list, the Secretary of State went on:
  "Some of the issues of policy involved are reasonably straightforward; others are purely legal and should not be too difficult to resolve. But there are yet others which present quite difficult human and political problems which will, I think, require a good deal of careful thought."—[OFFICIAL REPORT, 24th April, 1961: Vol. 639. c.103.]
  In that remark he was not referring to this list at all. I am sure that none of the Measures to which he referred will raise any deep human and political problems. The issues which do raise deep humane and political problems were dealt with by the Joint Under-Secretary of State. His speech was not about what was in the Bill but about what was not covered by the Bill.
  11.30 p.m.
  If any hon. Member reads carefully the speech of the Joint Under-Secretary, he will be struck by the significant fact that all the issues to which we have referred to tonight are excluded from the scope of this Measure. The Simons-town Agreement of 1955 is not affected by the Bill. The customs agreement between the High Commission Territories and the Union of South Africa is not affected by the Bill. My hon. Friend the Member for Eton and Slough quoted the Joint Under-Secretary as saying that the preference arrangements are not affected by the Bill. Nor are the citizenship questions. The Joint Under-Secretary went out of his way to explain to me very laboriously, spelling it out in words of one syllable, that the British Nationality Acts of 1948 and 1958 did not make any reference to Dominion status or to Commonwealth relationships and, therefore, did not come within the scope of the Bill.
  My answer is, why do we need 12 months to deal with those human and political issues which are not affected by the Bill? In justification for this period of time, the Joint Under-Secretary has argued that we must have 12 months to look at the whole complex pattern of our relations with the people of South Africa before we reach final decisions. We may need time for that, but we do not need a standstill arrangement on legislation as provided for in this Bill. The Bill is totally irrelevant to the complex problems for which the hon.
  1070
  Gentleman said that we need so much time.
  This fact deepens a suspicion which I already held, that this Bill is not legislative important at all but merely psychologically. It is not a request by the Government to give the time that they must have before cataclysmic changes take place in Africa to study citizenship relations, customs relations and all the rest of it. It is a straight political move, an attempt to do what the noble Lady the Member for Dorset, South and other hon. Members opposite have been asking for tonight. It is an attempt to minimise the impact, the psychological and political impact, in South Africa of their severance from the Commonwealth.
  We on this side of the Committee will not be a party to any such political move. I am convinced that the Government are attempting—and this Bill is part of the attempt—to produce, not a clean cut between Commonwealth membership and non-Commonwealth membership in the case of South Africa, but are preparing the way for the development of a new kind of special association between South Africa and the Commonwealth which will mitigate the shock to the South African people of the breaking of the Commonwealth tie.
  We have already had a number of significant signs of the Government's intentions in this respect in the course of earlier debates. For instance, when the Secretary of State was challenged on the citizenship point by the Opposition Front Bench, he told us that we must not assume that South Africans will become aliens as a result of the breaking of the Commonwealth tie. We were also told that we must not assume that the turning of the High Commissioner into an Ambassador means that he will become responsible to the Foreign Office, as anyone who believed that the Commonwealth tie had been broken would assume.
  The Under-Secretary went further. He said in answer to a question that he thought it was natural that the Ambassador should be responsible to the Commonwealth Relations Office. This is a new and very significant constitutional development. In answering questions about whether the Commonwealth preferences were to be continued in South Africa's case, the Under-Secretary

  1071
  said that in his view we should not lightly cast aside advantages of this kind.
  Therefore, on the citizenship question, on the High Commissioner question, and on the Commonwealth Preference question, we have sinister signs that a new type of constitutional relationship is being prepared by the Government. Tonight we are being asked to pass this Clause giving the Government 12 months breathing space, not to deal with the legislative consequences involved in the Bill, but to prepare a new political move. If some such new association were to be evolved, it would clearly require the approval of the other Commonwealth Prime Ministers, who have collectively stated their attitude towards South Africa's membership of the Commonwealth.
  Is the purpose of the 12-month period to bring us to the time of another Commonwealth Prime Ministers' Conference at which the Government will submit an entirely new suggestion in an attempt to salvage some of the wreckage of the last Conference? We on this side fear that the purpose of the Measure is not, as has been assumed by everybody, to give us time to deal with complicated questions, but rather that it is a psychological move designed to send this message to the people of South Africa, "Do not worry. You are not really outside the Commonwealth". That is why we move the Amendment. We on this side believe unalterably that there is no room in the Commonwealth, nor within a special association with the Commonwealth, for any people, whether they be of English blood or not, who condone and tolerate the policies of apartheid. I hope that my right hon. and hon. Friends will stand firm by the Amendment, particularly in view of the attitude of mind revealed by so many hon. Members opposite tonight.
  Mr. John Biggs-Davison: The hon. Lady the Member for Blackburn (Mrs. Castle) having spoken as she has, I should like to appeal to the right hon. Member for Middlesbrough, East (Mr. Marquand) to respond to the appeal of his right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall), who tonight, as on Second Reading, made a most remarkable and helpful contribution
  1072
  to our debate, and not to press this Amendment.
  The hon. Member for Blackburn said that the Amendment was psychologically important. I agree. This Bill has now been printed for more than a month. It has been read and studied by the Government and people of South Africa, and if this House of Commons is going to alter the standstill period from one year to six months, I suggest that the effect on the South African people and indeed on wider opinion outside will be deplorable and that this House would stand condemned as having committed a vindictive, mean and contemptible act.
  I know that a number of hon. Members opposite who specialise in human brotherhood want to pursue their vulgar vendetta against South Africa. We have had also the spectre of Campbell-Bannerman coming down from Huddersfield to attack South Africa, although it is to his party that we largely owe the deplorable state of affairs which we have now reached.
  Mr. Wade: I was not attacking South Africa. I was trying to be realistic about the situation in South Africa at the present time which we all, I hope, regret.
  Mr. Biggs-Davison: I will not go back to the record of the Liberal Party in relation to South Africa since the beginning of the century, but merely say that there are some hon. Members who have a vendetta against South Africa. I take the other view. I take the view that we need an association and an alliance with South Africa. We can dislike South Africa. We can attack her policy. I myself have criticised the policy of the present South African Government. We can be patronising about South Africans. But the fact is that we British in this dangerous world need a close association with South Africa for trade purposes, for purposes of the sterling area and for defence.
  We should betray the interests of our constituents if we were to treat these matters lightly and if we were to do anything in this Committee which would make it more difficult for Her Majesty's Government to make new and satisfactory arrangements with the Union of South Africa which, in my opinion—others may differ from me—should be no less close than those that we have with the Republic of Ireland.

  1073
  This Amendment would only have the effect of poisoning our relations with the Union of South Africa, and I hope it will not be passed.
  Mr. Braine: I fully understand the reason why the right hon. Member for Middlesbrough, East (Mr. Marquand) moved this Amendment, and I appreciate, as I think the whole Committee does, the clear and reasoned arguments that he advanced in its support. But, frankly, the speeches of the right hon. Member for Colne Valley (Mr. Glenvil Hall) and of my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) summed up the whole matter.
  The right hon. Gentleman said that we should look at this matter in a common sense way. I agree. In our debate on the Second Reading, my right hon. Friend the Secretary of State for Commonwealth Relations and I indicated why we thought that it was reasonable that the Bill should provide for a maximum period of 12 months. If we had thought that six months would be adequate, we would not have hesitated to make the necessary provision. The answer to the right hon. Gentleman the Member for West Bromwich (Mr. Dugdale) is that there has been, and there will be, no procrastination. We are just as anxious as anybody in the Committee to secure as quickly as possible a reasonable, fair, and just settlement of all the issues involved. Uncertainty about the future profits nobody here or in South Africa.
  11.45 p.m.
  This matter of timing has been given the most careful thought. While some of the matters we have to deal with are straightforward and not too difficult to resolve, others are technical and complex and, with the best will in the world and all the blandishments of the hon. Lady the Member for Blackburn, unforeseen difficulties may arise in connection with them.
  Mr. E. L. Mallalieu: Would the Under-Secretary tell us what these complicated measures are?
  Mr. Braine: I am endeavouring to answer the points which have been already raised by hon. Members on both sides of the Committee. If the hon. and learned Member will permit me, I want to answer them as fully as I can. Clearly,
  1074
  we do not want to find ourselves at the end of a standstill period in a situation where we have to propose a further standstill because we allowed ourselves too little time in the first place. Parliament would not look upon us too kindly if we showed such lack of foresight. We must allow an adequate period, and the Government believes it to be 12 months. The right hon. Gentleman the Member for West Bromwich, in support of an argument that we should rush forward with all speed, quoted to us the precedent of Burma. He said that that had taken nothing like 12 months. With respect, his memory is at fault, since no real parallel exists here. The only questions with Burma were preference and citizenship. My hon. Friend the Member for Barry (Mr. Gower), in his eloquent speech, and my hon. Friend the Member for Sunderland, South (Mr. P. Williams) both pointed out that the whole pattern of our relationship with South Africa is far more complex. So far as the Irish Republic is concerned, I am advised that it took a full year to work out the relationship in detailed discussion with other Commonwealth countries.
  The right hon. Gentleman the Member for Middlesbrough East asked me why we needed so long a period. We should not forget that there are human considerations involved which, in our anxiety to get this matter settled as speedily as possible, the Committee should not overlook. I will tell the Committee what I have in mind. Even within the narrow scope of this Bill, there are statutes which have consequences that are important and personal for individual citizens.
  There is, for example, one such provision which the hon. Gentleman the Member for Eton and Slough (Mr. Brockway) thought quite insignificant. I refer to the Colonial Probates Act. 1892, which enables the legal representatives of a person dying in South Africa with property in England to register for probate here and to obtain administration of the estate in this country. There is also the Maintenance Orders (Facilities for Enforcement) Act, 1920, under which a woman living in this country with a husband in South Africa may obtain here a provisional order for her maintenance which is then sent to South

  1075
  Africa for confirmation and enforcement. If there were no standstill period, that woman's redress would be lost on 31st May.
  Mr. Brockway: Is the hon. Gentleman suggesting that it takes a whole year to negotiate matters like that?
  Mr. Braine: No. Neither my right hon. Friend the Secretary of State nor I have ever contended that. What we have said is that 12 months represent the maximum period and that in many cases we hope to have these matters resolved before then. I will take the opportunity of saying now what I should have said later. We want the 12 months not merely to review Statutes of that kind, we need the 12 months to review not only these Statutes but the whole scope of our relations, whether or not they are affected by the Bill. We do not want to tackle the Statutes piecemeal without having completed our examination over the whole field. However, I do not want to be driven off my point about matters of personal and human concern because, although it does not seem to have entered the mind of the right hon. Member for West Bromwich, it is very much in the mind of the Government. I am sure that it is also in the minds of the right hon. Member for Colne Valley and the right hon. Member for Middlesbrough, East, who moved the Amendment.
  Going back to the two Statutes I mentioned, the Committee will understand that the processes involved in such cases for individuals and their advisers would normally take some months. Another illustration, which, of course, is likely to affect very many people, is citizenship. We ought to allow, for instance, a South African citizen who wished to consider returning to this country and acquiring citizenship here a reasonable time in which to consider the position and make his arrangements. The hon. Lady the Member for Blackburn (Mrs. Castle) suggests that these things can be done at a single stroke. But we have here matters which affect family and business relationships, and we must allow reasonable time.
  In short, we ask for a year not merely to give elbow room to the two Governments to make their arrangements, but to give an opportunity to any private
  1076
  persons concerned to make their own arrangements and consider the future.
  Mrs. Castle: The hon. Gentleman went to a great deal of trouble on Second Reading to tell me that the British Nationality Acts were not affected.
  Mr. Braine: The hon. Lady chided me on Second Reading, when I wound up, for having referred to many matters which I said were outside the scope of the Bill. The reason should be manifest to her. Most of the points raised in the debate were outside the scope of the Bill, but, although I went very near to transgressing the bounds of order, I should, I think, have been guilty of some discourtesy to the House if I had not attempted to answer them.
  Mrs. Castle: Will the hon. Gentleman please refer to what he said, as reported in HANSARD, 24th April, 1961, column 178? He made a categorical statement there that the British Nationality Acts of 1948 and 1958 were not covered by or affected by the Bill. Was he right then or not?
  Mr. Braine: The hon. Lady presses that point and I will answer when I find the reference in HANSARD. Of course, the Bill arises because certain British Statutes would no longer have application after 3lst May, 1961, since South Africa would no longer be in the Commonwealth and they would lapse. The Bill has the effect of giving us a twelve months standstill period in order that we may settle, during that period, the arrangement which will obtain afterwards. The hon. Lady chided me for saying that the Bill did not affect the wider aspects of our relations such as nationality.
  Mrs. Castle: I am much obliged to the hon. Gentleman for giving way again. Will he refer to what he then said:
  "The hon. Lady the Member for Blackburn thought that the Bill itself was concerned with the issue of citizenship and nationality. I must make it absolutely plain that this issue is not affected by the Bill".—[OFFICIAL REPORT, 24th April, 1961; Vol. 639, c.178.]
  Mr. Braine: That is so. The hon. Lady should have read on:
  "All that the Bill does is to preserve the position for twelve months under Acts of the United Kingdom Parliament which make provision in relation to Her Majesty's Dominions,

  1077
  or describe South Africa by reference to membership of the Commonwealth and which, but for the Bill, would cease to have any application to South Africa after 31st May next.
  The relevant United Kingdom statutes governing the question of nationality are the British Nationality Acts of 1948 and 1958…. Section 1 (1) of the 1948 Act states that every person who is a citizen of a country named in the following subsection is a British subject. This subsection simply contains a list of the countries in question, including South Africa, without, however, any reference to membership of the Commonwealth. This will remain the position, even though South Africa leaves the Commonwealth on 31st May, unless and until the Nationality Acts are amended."—[OFFICIAL REPORT, 24th April, 1961; Vol. 639, c.178–9.]
  I have said this over and over again. [Interruption.] The hon. Lady was not following me in the first place. [HON. MEMBERS: "Oh."] All I am saying is that this is another reason why we shall need a 12-month period to get this difficult and complex question of nationality and citizenship resolved by May, 1962, by which time the Bill will have ceased to have effect.
  The hon. Member for Eton and Slough asked about the position concerning certain other statutes and mentioned the Finance Acts, 1960 and 1919. Both of these come within the scope of the Bill and their provisions would lapse on 31st May but for the Bill. Section 38 of the Finance Act, 1960, provides for relief from Income Tax on retirement pensions paid under the superannuation scheme of a territory within the Commonwealth. It does not refer to the matter that the hon. Gentleman had in mind.
  He then quoted from the Finance Act, 1919, on the subject of preference. It was a good point. The present provisions as to Commonwealth Preference, however, are contained in the Import Duties Act, 1958, which refers to Commonwealth countries, including South Africa. This, too, falls within the ambit of the Bill. The important point is that my right hon. Friend the Commonwealth Secretry was talking about the trade agreement during the Second Reading. Although these are the Acts which facilitate our trading arrangements and give the bite to the trade agreement, to which my right hon. Friend the Secretary of State referred, that agreement will continue after 31st May and will be the subject of negotiation during the standstill period.
  Mr. Brockway: I was referring to the hon. Gentleman's own speech. I ask him to look at the foot of column 174 and the top of column 175 for 24th April. He used these words:
  "I should like to turn now to the question of economic links now and in the future. A number of hon. Members referred to this. We are closely linked to South Africa by trade. We share preferential advantages. We are both members of the same currency area. None of these arrangements are affected by the Bill."—[OFFICIAL REPORT, 24th April, 1961; Vol. 639. c.174–5.]
  That includes preferential advantages. Now the hon. Gentleman is saying that that does not come within the terms of the Bill.
  Mr. Braine: No. What I said was that the statutes do have effect and come within the scope of the Bill. But our trading arrangements with South Africa are governed by a bilateral trading agreement. We have to see what form our future trading relations with South Africa are to take. I am not prepared at this moment to say what form they shall take. Obviously, we must consult our own British interests in the matter. I would have thought that it should be our object, as far as possible, to safeguard existing agreements and the trade between countries rather than to diminish it.
  I do not subscribe to the view of the hon. Lady the Member for Blackburn, who implied on Second Reading that she wanted to punish South Africa and that she would not be at all unhappy to see trade between our two countries falling off. I do not think that that is the view of the Committee as a whole or of the country. It is not a view that will commend itself to sensible people anywhere, although I understand why the hon. Lady holds it.
  12 m.
  I want to emphasise, therefore, that the two Acts to which the hon. Gentleman referred are the Acts which give bite to the agreements, but it is about the agreement we shall have to negotiate in the next 12 months. He referred also to the Companies Act, 1948. This does not concern trustee securities as he thought. But it provides for United Kingdom companies carrying on business in any of Her Majesty's Dominions who keep a branch register there. We want to continue this for a year, and this Bill does that.

  1079
  The hon. Gentleman then turned to a far more important matter and one which, I think, must have been in the minds of many hon. Members. He turned to the question of the Fugitive Offenders Act, 1881, and asked about political refugees. This Act would lapse but for this Bill, and obviously before the end of the 12 months some new arrangement will have to be made; but for the moment there is no need for any anxiety on the score mentioned by the hon. Gentleman.
  It is a matter for the courts of the High Commission Territories to order or to refuse to order the return of a person who is charged in South Africa with an offence against South African law who has been found in one of the territories and whose return is asked for under the Fugitive Offenders Act by the South African authorities. Let me give some support for what I am saying.
  There is on record the case of Mubarak Ali Ahmed heard in 1952 before the then Lord Chief Justice and the present Lord Chief Justice. The court stated that in a proper case a court—for instance, one in the High Commission Territories—would apply the same rules with regard to an application under the Fugitive Offenders Act, as it does under the Extradition Act, 1870, and that if it appeared that the offence charged was in fact a political one, would refuse to return him. Hon. Members may recall a case heard in Basutoland as recently as January of this year, when a magistrate discharged four persons whose return to South Africa had been requested, having taken the view that the offence with which they were charged was of a political character. In any event, an order by a magistrate for the return of a prisoner under the Act is subject to appeal to the higher courts. I am sure the Committee will agree that what has already been ruled on the matter shows quite clearly that the position may be safely left as it is until legislation is passed to replace the present arrangements.
  I repeat, therefore, that the Bill does not in itself cover some of the wider aspects of our relations with South Africa. Its only effect is to continue in force—this is the point which the hon. Lady the Member for Blackburn does not seem able to grasp—for a fixed and limited period those Statutes of the
  1080
  United Kingdom and Colonial Territories which otherwise would cease to have effect in relation to South Africa after 31st May. My right hon. Friend gave some examples on Second Reading, and I do not think, apart from those I have already given, I need add any more.
  I understood from the right hon. Gentleman that he really was anxious to find out why we needed this period of 12 months instead of a short period such as he has suggested.
  Mr. Elwyn Jones: In view of the confusion which exists, will 12 months really be enough?
  Mr. Braine: My right hon. Friend, when moving the Second Reading, thought that it would be ample and he said—I do not quote his exact words—he would be very surprised if we were not able to conclude matters before then. I hope that relieves the hon. and learned Member's anxiety on that point.
  I can give the Committee an assurance that we intend to move in these complex matters as fast as we can. Shortening the statutory period within which we could act would not enable us to move any faster. On the contrary, it might cause the Government, Parliament, and perhaps individual citizens whose interests might be adversely affected, some considerable inconvenience, if, as I say, we ran into unforeseen difficulties which could not be resolved within the shorter period. For these reasons I hope the right hon. Gentleman will feel that he can withdraw his Amendment.
  Mr. Marquand: I was glad to hear what the Under-Secretary said about the Fugitive Offenders Act, but I should like to have a little time to read it and consider whether more ought to be said about that important subject. I am sure that it will be in order when we reach the Motion, That the Clause stand part of the Bill, to raise the matter again after we have had a little time to study what the hon. Gentleman said.
  On the question whether the period of standstill in South Africa's relationship with this country should be six months or 12 months, as I have said and as has been made abundantly clear in the debate, there are two main fields of activity. One is that of negotiation about our general relationship with South

  1081
  Africa on which we have heard again tonight there is a great deal to be done. The other is the field of study of how to apply to the changed circumstances particular laws the application of which might come to an end in this respect on 31st May.
  I have heard nothing from the Undersecretary which makes me feel any more than I felt at the beginning that there is any reason why that second field of inquiry should not have been completed by now. It could have been and should have been completed. There was plenty of time and plenty of warning to get on with it. If that had been done, we should require only a period of negotiation in the other field, and we want negotiation. We can think of all kinds of matters that would need to be raised during that period.
  The main issue whether we should have a six months' or a 12 months' period of standstill has evidently turned on the effect that our choice would have on opinion outside. Naturally, I was very interested in and paid close attention to what my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) said. He speaks with authority and in an attractive and persuasive manner. He asked whether in considering this matter we would not make a gesture to our friends in South Africa by withdrawing the Amendment and accepting a period of 12 months for negotiation. But we have made this gesture to our friends in South Africa many times.
  At this late hour I should not like to attempt to traverse all that I said in the debate last April on the general policy of apartheid, when the House passed without a dissentient voice a condemnation of the practices and principles of apartheid. I said then how I knew South Africa, how I knew many people there, how I had visited the country twice and how I had appreciation and understanding of the attitude and feelings of many people there, not only of those of British descent but of many of my friends of Afrikaaner descent. We, of course, understand their difficulties and we recognise that they have a more difficult struggle against apartheid when they are surrounded by the troops of the Nationalist Government than we can have in just making speeches in the House of Commons.
  We have made that gesture time and again from our Front Bench and from
  1082
  the Labour Party by telling our sup porters that we would be against the expulsion of South Africa from the Commonwealth. We said that on the eve of the last Commonwealth Prime Ministers' Conference, because we felt that we did not wish to leave out the 10 million citizens of South Africa who are Africans in the sense that the word is used today or the 500,000 Asians or the 1½ million of mixed descent. We wanted to keep South Africa in the Commonwealth for the good of those people. Our sympathies are with them, and we understand and appreciate the circumstances in which they live—not the people of the white race, but suppressed people of the other races who have committed no crime except to have a different coloured skin from those who dominate their country.
  The time has come when the whole situation has radically changed, not by the expulsion of South Africa, but by the withdrawal of that country—
  The Chairman: I hope the right hon. Gentleman will come to his argument on whether the period should be six months or twelve months.
  Mr. Marquand: I am relating my argument to what has already been said by the right hon. Member for Colne Valley and other hon. Gentlemen opposite who have implored us tonight to reconsider the effects of a gesture on the people in South Africa. One might have had more sympathy with those appeals to reconsider the need for a gesture, and perhaps to concede some alteration, if we had not heard the speech of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) and the comments of the hon. Member for Sunderland, South (Mr. P. Williams). Those hon. Members gave their case away. They proved that the longer we granted for the necessary negotiations and alterations in the law, the more it would be held to mean approval of the doctrines and principles of apartheid. Those hon. Members even went so far as to say that the period should be longer, and their remarks showed up the deep gulf that exists between us on this matter.
  The remarks of those hon. Members attacked the Government's belief that the Commonwealth is strengthened by what has happened. That is the belief, which we share, that, regrettable as

  1083
  it is in some respects, the withdrawal of South Africa has strengthened the Commonwealth by giving it a new principle and a new standing in the world—a standing for the principle of abandonment of all forms of apartheid and racial discrimination. It is a belief in helping the various races that form the Common wealth to live together; to work for the great ideals of disarmament and world government, and so on. Admiration such as that expressed by the hon. Member for Chigwell (Mr. Biggs-Davison) for brave men in South Africa—
  The Chairman: Order. The hon. Member has strayed far from the point.
  Mr. Marquand: Only because I am tempted to refer to the speeches made by—
  The Chairman: The hon. Member must resist that temptation.
  Mr. Marquand: I merely wish to make a rebuttal of the suggestion that withdrawal of this Amendment would be a gesture of encouragement to the people of South Africa. We all want to encourage them and while their Government is making what The Times called a "Gadarine trek", I regard it as a great mistake to withdraw the Amendment. It would sound as if we had been converted by the arguments from the other side, to which apparently I am no longer entitled to refer. It would be gravely misunderstood not
  only by African opinion, to which the noble Lord referred with some scorn. It would be misunderstood by the very people inside South Africa to whom hon. Gentlemen opposite say they want to appeal.
  12.15 a.m.
  Those people would say that we had given in, that we were complacent, that by accepting the period laid down by the Government in this Measure for the necessary negotiations we were going to recognise the attitude which tries all the time, as my hon. Friend the Member for Blackburn (Mrs. Castle) has said, to pretend that no change has taken place, that everything in the garden is lovely and that one day when someone makes a gesture or a speech which does not state the full policy of apartheid in all its horror South Africa will be allowed back into the Commonwealth. We are in favour of South Africa coming back into the Commonwealth when her racial policies had radically changed. Meanwhile, a period of negotiation is certainly necessary, but to prolong that period of negotiation would be to make our position entirely misunderstood, and so we will not withdraw our Amendment.
  Question put, That "one year" stand part of the Clause:—
  The Committee divided: Ayes 155, Noes 61.

  Division No. 152.]

  AYES

  [12.16 a.m.

  Agnew, Sir Peter

  Clark, Henry (Antrim, N.)

  Grosvenor, Lt.-Col. R. G.

  Aitken, W. T.

  Cleaver, Leonard

  Hamilton, Michael (Wellingborough)

  Allason, James

  Cooke, Robert

  Harris, Reader (Heston)

  Arbuthnot, John

  Cooper, A. E.

  Harrison, Brian (Maldon)

  Atkins, Humphrey

  Cordle, John

  Harrison, Col. J. H. (Eye)

  Balniel, Lord

  Corfield, F. V.

  Harvey, John (Walthamstow, E.)

  Barlow, Sir John

  Courtney, Cdr. Anthony

  Hendry, Forbes

  Barter, John

  Crosthwaite-Eyre, Col. O. E.

  Hiley, Joseph

  Batsford, Brian

  Curran, Charles

  Hill, Mrs. Eveline (Wythenshawe)

  Beamish, Col. Sir Tufton

  Currie, G. B. H.

  Hill, J. E. B. (S. Norfolk)

  Bennett, F. M. (Torquay)

  Dalkeith, Earl of

  Hinchingbrooke, Viscount

  Berkeley, Humphry

  d'Avigdor-Goldsmid, Sir Henry

  Hirst, Geoffrey

  Biggs-Davison, John

  Doughty, Charles

  Holland, Philip

  Birch, Rt. Hon. Nigel

  du Cann, Edward

  Hollingworth, John

  Bishop, F. P.

  Eden, John

  Hopkins, Alan

  Black, Sir Cyril

  Elliot, Capt. Walter (Carshalton)

  Hughes-Young, Michael

  Bourne-Arton, A.

  Elliott, R. W. (Nwcstle-upon-Tyne, N.)

  Iremonger, T. L.

  Box, Donald

  Emery, Peter

  Jackson, John

  Boyd-Carpenter, Rt. Hon. John

  Farr, John

  Johnson, Dr. Donald (Carlisle)

  Boyle, Sir Edward

  Fell, Anthony

  Johnson, Eric (Blackley)

  Braine, Bernard

  Finlay, Graeme

  Johnson Smith, Geoffrey

  Bromley-Davenport, Lt.-Col. Sir Walter

  Fisher, Nigel

  Kerr, Sir Hamilton

  Browne, Percy (Torrington)

  Fraser, Ian (Plymouth, Sutton)

  Kirk, Peter

  Bryan, Paul

  Gammans, Lady

  Langford-Holt, J.

  Buck, Antony

  Gibson-Watt, David

  Linstead, Sir Hugh

  Bullard, Denys

  Goodhart, Philip

  Litchfield, Capt. John

  Campbell, Gordon (Moray & Nairn)

  Goodhew, Victor

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Carr, Compton (Barons Court)

  Gower, Raymond

  Loveys, Walter H.

  Chataway, Christopher

  Green, Alan

  Lucas-Tooth, Sir Hugh

  Chichester-Clark, R.

  Grimston, Sir Robert

  MacArthur, Ian

  McLaughlin, Mrs. Patricia

  Pitt, Miss Edith

  Tilney, John (Wavertree)

  McLean, Neil (Inverness)

  Pott, Percivall

  Turner, Colin

  McMaster, Stanley R.

  Powell, Rt. Hon. J. Enoch

  Turton, Rt. Hon. R. H.

  Macpherson, Niall (Dumfries)

  Prior, J. M. L.

  van Straubenzee, W. R.

  Maddan, Martin

  Proudfoot, Wilfred

  Vane, W. M. F.

  Manningham-Buller, Rt. Hn. Sir R.

  Pym, Francis

  Vosper, Rt. Hon. Dennis

  Matthews., Gordon (Meriden)

  Quennell, Miss J. M.

  Wakefield, Edward (Derbyshire, W.)

  Mawby, Ray

  Redmayne, Rt. Hon. Martin

  Walder, David

  Maxwell-Hyslop, R. J.

  Ridley, Hon. Nicholas

  Walker, Peter

  Maydon, Lt.-Cmdr. S. L. C.

  Ridsdale, Julian

  Ward, Dame Irene

  Mills, Stratton

  Roberts, Sir Peter (Heeley)

  Watts, James

  Montgomery, Fergus

  Roots, William

  Wells, John (Maidstone)

  Nabarro, Gerald

  Russell, Ronald

  Williams, Paul (Sunderland, S.)

  Osborn, John (Hallam)

  Scott-Hopkins, James

  Wilson, Geoffrey (Truro)

  Page, John (Harrow, West)

  Seymour, Leslie

  Wolrige-Gordon, Patrick

  Page, Graham (Crosby)

  Sharples, Richard

  Woodhouse, C. M.

  Pannell, Norman (Kirkdale)

  Shaw, M.

  Woodnutt, Mark

  Partridge, E.

  Skeet, T. H. H.

  Woollam, John

  Pearson, Frank (Clitheroe)

  Smith, Dudley(Br'ntf'rd & Chiswick)

  Worsley, Marcus

  Peel, John

  Smithers, Peter

  Percival, Ian

  Storey, Sir Samuel

  TELLERS FOR THE AYES:

  Pickthorn, Sir Kenneth

  Studholme, Sir Henry

  Mr. William Whitelaw and

  Pilkington, Sir Richard

  Summers, Sir Spencer (Aylesbury)

  Mr. Michael Noble.

  NOES

  Ainsley, William

  Lee, Miss Jennie (Cannock)

  Ross, William

  Allen, Scholefield (Crewe)

  Lever, Harold (Cheetham)

  Skeffington, Arthur

  Blackburn, F.

  Mabon, Dr. J. Dickson

  Slater, Mrs. Harriet (Stoke, N.)

  Bowden, Herbert W. (Leics, S. W.)

  McInnes, James

  Slater, Joseph (Sedgefield)

  Brockway, A. Fenner

  MacMillan, Malcolm (Western Isles)

  Small, William

  Castle, Mrs. Barbara

  MacPherson, Malcolm (Stirling)

  Snow, Julian

  Cliffe, Michael

  Mallalieu, E. L. (Brigg)

  Sorensen, R. W.

  Cronin, John

  Manuel, A. C.

  Soskice, Rt. Hon. Sir Frank

  Delargy, Hugh

  Mapp, Charles

  Spriggs, Leslie

  Diamond, John

  Marquand, Rt. Hon. H. A.

  Stewart, Michael (Fulham)

  Dugdale, Rt. Hon. John

  Mellish, R. J.

  Thomas, George (Cardiff, W.)

  Greenwood, Anthony

  Mendelson, J. J.

  Thomson, G. M. (Dundee, E.)

  Grey, Charles

  Millan, Bruce

  Wainwright, Edwin

  Hayman, F. H.

  Noel-Baker, Rt. Hn. Philip(Derby, S.)

  Whitlock, William

  Hilton, A. V.

  Oram, A. E.

  Wilkins, W. A.

  Houghton, Douglas

  Pannell, Charles (Leeds, W.)

  Willis, E. G. (Edinburgh, E.)

  Hughes, Hector (Aberdeen, N.)

  Parker, John

  Wilson, Rt. Hon. Harold (Huyton)

  Irving, Sydney (Dartford)

  Pentland, Norman

  Jay, Rt. Hon. Douglas

  Probert, Arthur

  TELLERS FOR THE NOES:

  Jones, Dan (Burnley)

  Pursey, Cmdr. Harry

  Mr. Edward Short and

  Jones, Elwyn (West Ham, S.)

  Redhead, E. C.

  Mr. Charles A. Howell.

  Lawson, George

  Roberts, Albert (Normanton)

  Mr. Selwyn Lloyd: I beg to move,
  That the Chairman do report Progress and ask leave to sit again.
  I do not believe it was unreasonable that we should try to make progress with this Bill tonight. It was announced as part of the business for today not only last Thursday but the Thursday before. The Bill is urgent, the 31st May is the operative date for South Africa becoming a republic, and another place must deal with it as well as this Committee. I think hon. Members realise the need for this Bill, but we on the Government side want to make progress with it with good will. I think it is a House of Commons situation and, therefore, I am moving this Motion. The Bill must be put down for tomorrow's business, when we shall see how we get on with it.
  Mr. Marquand: We recognise that this Bill must be passed; we have done so throughout. Our objection, and the reason why I moved the same Motion
  1086
  earlier, was because we thought a Measure of high constitutional importance should be taken at a reasonable hour. We have no objection to it being taken tomorrow, but I hope it does not mean that we shall embark on this business at ten o'clock at night.
  Question put and agreed to.
  Committee report Progress; to sit again this day.

  RURAL WATER SUPPLIES AND SEWERAGE [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to amend section two of the Rural Water Supplies and Sewerage Act, 1944, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act of the present Session in the sums payable out of moneys so provided by way of rate-deficiency grant or Exchequer equalisation grant under the enactments relating to local government in England and Wales or in Scotland.
  Resolution agreed to.

  FLOODING, HULL
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gibson-Watt.]
  12.28 a.m.
  Commander Harry Pursey: The subject which I raise is the serious flooding in Hull during the recent spring equinoctial high tide, on the night of 20th March, when the River Hull reached the corporation's datum limit and a serious disaster was averted only by the smallest margin. The major problem in Hull regarding flooding is that large areas are several feet below high water spring tides and, consequently, at every high tide these areas are wholly dependent for immunity on the banks and wharves being properly maintained at the necessary height and impervious to all over-topping seepage or any other flooding effect.
  Four parties are concerned, the Ministry of Agriculture, the Hull and East Yorkshire River Board, the Hull Corporation, and the Riperian owners. The owners are entirely responsible, financially and morally, that their banks and wharves do not permit flooding and the board and corporation have powers to ensure that that is the position. Nevertheless, on 20th March, in the darkness and coldness of eight o'clock at night, the river overtopped long lengths of wharves, seeped through several defective ones and seriously flooded many areas. Four wards out of eight in my constituency were affected and dozens of streets and hundreds of houses were flooded. Water rose to four feet in factories and to three feet in homes. Reports appeared in the local papers with pictures of unfortunate householders "mopping up", but what should have been published was photographs of the defective wharves which caused the flooding.
  The Parliamentary Secretary in answer to a Question of mine on 17th April stated the official attitude, namely:
  "This flooding was the result of exceptional circumstances."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, c.787.]
  With my thirty years' naval experience of tides, I maintain that the only exceptional circumstance was that this tide was only three-eighths of an inch above the 1921 tide and so wharf owners have
  1088
  had forty years in which to make good the deficiencies then exposed. Consequently, there should have been no serious flooding six weeks ago tonight. Moreover, in dealing with freeboard on wharves, one should deal in inches, if not feet, but not eighths of an inch.
  Because of the 1921 extensive flooding, in 1925 the corporation, by Act of Parliament, obtained powers to require any riparian owner to execute such works or repairs to prevent the overflow of the River Hull, by raising and maintaining their banks and wharves to the height of 16·5 feet Ordnance Datum at the mouth to 15 feet at the city boundary. I am not going to get bogged down tonight with Ordnance Datum, Newlyn Datum, Town Datum, or any other datum, because three are used in Hull.
  The 64,000 dollar mistake for the ensuing thirty-five years is that the 1925 Conservative corporation took powers to raise the level of the wharves only to the 1921 high tide level. It is quite incredible that they obtained no freeboard whatever. Had they done so, this heartrending problem of house flooding would have been solved for all time and there should have been no serious flooding during the last thirty-five years.
  Instead, there have been three very serious, but nevertheless unnecessary, floodings in 1953, 1954 and this March, as well as numerous not so serious floodings. Admittedly, since 1953, the River Board has raised and strengthend the earth banks from Wawne to Stonferry, and during the recent high tide there was no threat of overtopping along these banks. The question which arises is why the same continuous freeboard, above the March tide level, has not been obtained throughout the whole length of the River Hull.
  In 1954 the board also sponsored a scheme, supported by the corporation, whereby 31 sites, 17 privately owned and 14 owned by the corporation were improved. The question which arises here is: if 31, why not the whole lot of the defective wharves? Furthermore, early last year the board raised the banks north of Hull at a cost of over £100,000, to save North Hull from flooding. The question which arises here is: why has not similar action, at similar expense, been taken in the centre of the city to save Central and East Hull

  1089
  from flooding, once and for all time? The board's policy appears to be one of protecting unoccupied land, at the expense of the most densely populated areas in the heart of the city.
  In the winter of 1959–60 serious flooding took place. Certain firms wrote and complained to the Town Clerk and asked for preventative action to be taken. The Town Clerk replied in February last year. I have a copy of the letter, which is headed, "River Hull—Flooding". I quote:
  "Further to my letter of the 2nd February. With regard to your suggestion that steps should be taken to raise the river bank in an effort to prevent a recurrence of the flooding, I have taken this point up with the City Engineer who informs me that following the severe flooding which occurred in 1953 and 1954 many of the lowest quays, wharves and frontages to the River Hull were raised and very much more serious flooding has been prevented thereby.
  "It is proposed to carry out a survey of the whole of the length of the river banks within the City in order to ascertain such other low frontages which it might be necessary to raise with a view to the prevention of further flooding for the future."
  We now see two main reasons for the continued serious but totally unnecessary flooding in the centre of the city: first, the 1925 Act does not give the corporation sufficient powers compulsorily to obtain the necessary freeboard above flood level for the River Hull, as has the River Humber. Second, numerous negligent riparian owners have failed in their legal obligations to maintain their wharves at the proper height and impervious to seepage and other flooding, and in their moral obligations to raise their wharves when adjoining wharves have been raised to ensure the necessary freeboard.
  The responsible corporation official, of course, is the City Engineer, Mr. Morris. He has served the corporation for some thirty years; there are some important landmarks in the city to his credit, and, as he is about to retire, it would be uncharitable for me to say more than that he has not been river-minded. It is to be hoped that the new City Engineer will be river-minded and that in a short time we shall see flooding in Hull stopped for ever more.
  I have had four days' investigation, by personal observations and interviews on the spot, into the derelict and deficient wharves which caused the recent
  1090
  unnecessary flooding, and into the individual wharf-owners who, by their culpable neglect, inflicted the untold misery and suffering on hundreds of my poor constituents. The derelict wharves include Eagle Oil Mill site, another opposite Air Street, part of the Danish Bacon factory wharf and Cook's wharf, previously owned by William Gillyot. His factory collapsed many years ago and the wharf has since crumbled away.
  The deficient wharves on the east bank, working down river, include Hanger's Paints, Good Havercrofts, with two gaps and defective dam boards, probably not put in, Benninga's Mill wharf 9 inches lower than the previous one, British Oil & Cake Mills good wharf overtopped and the wharf next door overtopped.
  Earle's Cement is one of the worst wharves on the river. This wealthy firm is making vast profits at the expense of a seriously deficient wharf and the services of the fire brigade to pump them out. Defects include wall breaches filled with cement bags. The height is insufficient and the owners know the wharf will be flooded and have built a dam round their coal to prevent it from being washed away instead of raising the height of the wall.
  Slingsby's wharf is one foot below adjoining wharves. Sculcoates Bridge, closed for 1½ hours because of the flooding, has three corner sites, and Scott Street Bridge one, owned by the corporation, which required investigation. There are nine private wharves between this latter site and North Bridge, and this was a seriously flooded area. I wrote to the owners and five replied. Their information largely fortified information received from elsewhere.
  Chamber and Fargus over the years have raised their wharf, at this and other sites, to cope with the rising tides, but are flooded from other wharves. International Bulk Liquids wharf is supposed to be up to Corporation requirements but was overtopped. Yorkshire Dry Dock was reported to me, from elsewhere, to have a low frontage and to have been flooded. Yorkshire Hennebique acquired Houltons' wharf last autumn. It was overtopped and is to be raised by 2 ft. plus. This firm is a contractor for wharves. Henry Mead & Co. had raised their wharf by 16 ins.,

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  except for 6 ft. only 7 ins., and this length was overtopped.
  Four owners did not reply to my inquiries, so presumably they have deficient wharves which flooded—question mark! These are Ellerman Wilson Line, A. E. Woodward, Ready to Lay Concrete, Lincoln and Hull's, and they are all reported to have been overtopped. It is generally understood that the fourth of these four wharves caused the worst flooding in the Lime Street area.
  On the west side of the river, Sisson's Paints were flooded, and at Bankside water entered T. Holmes and Sons premises and the Gas Board garages. There is a long run of completely built-up, good wharves hereabouts, but the question is whether it is high enough to stop flooding; or did the river overtop?
  Wincolmlee is a serious flood area. Between the railway bridge and Sculcoates bridge, there are some fifteen wharves which I have reported to the Minister for investigation; and among the worst, Major's wharf is reported to have been overtopped by 2 ft. and to have flooded several streets. Johnson Brothers wharf appears to be 15 inches, or more, lower than the next one, Hennebique Ready Mixed Concrete, which is a good wharf; but Rank's wharf also appears to be 15 inches, or more lower than the previous one.
  A bad overflow is reported among the five wharves below Sculcoates bridge. The next one, Huetson's, is a bad wharf and a persistent flooding nuisance over the years, with coal dust, sand, and gravel washed into houses. Below Scott Street bridge, Barraclough's is reported as a bad wharf, and Barker's requires investigation. There is also a set of steps here with a serious overflow, eight feet wide, into the street; and a doubt as to ownership and responsibility for prevention of flooding. Yorkshire Hennebique Contracting Company has a good wharf which has been raised above corporation requirements, and which is claimed not to be overtopped by the highest tide and to be impervious to seepage. All wharves should be in this condition.
  Furley's wharf has recently been repaired and raised to corporation requirements, but this is 18 inches below the previous wharf and had little, or no,
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  freeboard in the recent high tide. The result of this investigation shows that some of these Hull wharves are among the worst in the country and that parts of the river are a disgrace to the city.
  My main question, therefore, is what immediate action the Minister of Agriculture will take forthwith to bring all the wharves on the River Hull up above the recent high tide level, with complete permanent construction, and so prevent further unnecessary flooding. Seven years have elapsed since the 31 sites were brought up to corporation height and, in the light of the serious March flooding, it is high time for a completely new reappraisal of the whole length of the River Hull by everyone responsible; that is, the Minister, the river board, the corporation, and the owners. There may now be fifty, or even a hundred or more, major defects on the wharves causing overtopping, seepage, and other flooding. I can provide a detailed list of some fifty, or more, deficiencies and defects.
  In 1954, the then Minister of Housing and Local Government, the right hon. Member for Streatham (Mr. Duncan Sandys), visited Hull to examine the bad housing conditions resulting from the flooding, and he stated that he would take immediate action. The first requirement now is for the Minister of Agriculture himself to visit Hull and examine the river banks or to be personally aware of what is required in order to bring all wharves up to a sufficient and continuous height. The problem is a wharf one, and not a housing one; because, with no flooding, there will be no flooded houses.
  What is required is that the Minister should, in the near future, cruise up and down the river at a daylight spring tide, with his experts, who could point out the obvious defects. I am prepared to accompany him and give the advantage of my investigations, which will disclose more than I have time to disclose now. In fact, I could write a book about defective Hull wharves and provide numerous photographs of those wharves which caused the floods.
  The second requirement is to prepare a full list of flooded banks and wharves. I suggest a circular to all riparian owners, with three simple questions: "(1) What is the height of your wharf

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  above datum, and did it completely resist flooding on 20th March by overtopping, seepage or other means? (2) If not, what was the cause, or causes, of flooding? (3) What steps do you propose to take to prevent flooding?".
  No help can be expected from the Chamber of Commerce. I wrote to it, but those concerned refused to meet me. I understand that about 50 per cent. of its wharf-owner members have deficient wharves, so it is protecting guilty men.
  The problem is how to get the River Hull wharves raised to the height of the River Humber banks at the mouth and the river board's height at Stoneferry. It is quite crazy that there should be three levels in Hull—the River Humber banks, the river board's level, and the corporation level, the corporation level being the lowest one of all three. Nevertheless, as a first step, the corporation should issue compulsory notices to all low wharf owners to bring their wharves up to corporation level. Presumably, the river board also can take action for all wharves to be brought up to its level. Otherwise, we shall have the crazy position of a river board virgin site at one height next door to a corporation site at a lower height and being flooded.
  In 1954, certain financial grants were made and it may well be that certain work will now be eligible for grant. But there should be no public money for negligent owners who should have brought their wharves up to corporation requirements during the last thirty-five years, particularly when no public money is available for the flood victims of their neglect.
  Time is of the essence of the problem to prevent further flooding. The obviously defective wharves can be dealt with forthwith, even if a second list has to follow. Both banks of the river should be wholly completed by the autumn equinoctial high tide on 23rd September, when the Minister should be able to unveil a plaque in a prominent place in Hull recording that all the banks have been completed in the summer of 1961. We shall then have no more nonsense about "the river overflowed the wharf" when, in fact, the wharf failed to keep the river out.
  I shall continue my crusade by questions, Press statements, public meetings, and every means open to me until the
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  guilty men who own the deficient wharves have made good their deficiencies, and my poor constituents, in humble homes, no longer have to contend throughout a dark, cold, winter's night with a river flood which is a major disaster for every house flooded out.
  12.49 a.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. W. M. F. Vane): The hon. and gallant Member for Kingston upon Hull, East (Commander Pursey) was very courteous and he gave me notice of some of the points he intended to raise this evening. I shall gladly try to give him as much information as I can. I acknowledge at the outset his great experience of these matters. I make no pretence to expert knowledge of tides, but I have seen floods in a town in my constituency and I realise the misery as well as the damage which can result.
  Let me say at the outset that my Department stands ready to give any help in its power to the local bodies who are charged with the responsibility of dealing with this problem, namely, the Hull and East Yorkshire River Board and the Hull City Corporation. There is, of course, an overlap in membership between these two authorities, and so liaison ought not to be difficult. The river board has full powers under the Land Drainage Act, 1930, to undertake land drainage work, including works of protection against flooding, whether from inland water or from the tide, in connection with its designated main rivers, the chief of which is the River Hull.
  River boards' schemes on their main rivers are financed by levying a precept on county councils and county borough councils within the river boards' areas, the cost being divided in proportion to the rateable values of properties within the councils' areas. The Hull Corporation provides roughly two-thirds of the Hull and East Yorkshire River Board's precept revenue. My Ministry pays grants to river boards in aid of works of improvement and new works, the rates of grant varying according to the financial position of each board. That is the test. We cannot apply the test suggested by the hon. and gallant Member. In the case of the Hull and East Yorkshire River Board, the rate is 55 per cent. for

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  tidal defence works. That is a not inconsiderable proportion.
  The Hull Corporation also has power, under its 1925 Act, to which the hon. and gallant Member referred, to require riparian owners to raise their banks to the maximum level prescribed by the Act—the hon. and gallant Member said that the level was not high enough—and in default to execute the work themselves and recover the cost. There is no provision enabling Government grant to be given for work done under the powers of the 1925 Act.
  It can be seen, therefore, that there are two lines of defence in Hull, one of which is the city corporation, which was far-sighted when it took these powers before the Land Drainage Act, 1930. With the two lines of defence, it should be possible to make doubly sure that the work is done. The fact that there is divided responsibility should not be an obstacle in view of the fact that there is the overlap of members on the two authorities.
  Coastal flooding is caused by a combination of adverse conditions of tide and wind and fresh-water flow which produce abnormally high water levels. That is what happened in the Thames, when there was a flood warning in the City of Westminster not so long ago. Seepage may also have played a part, because, as the hon. and gallant Member said, a number of the wharves are probably not in the condition which they should be. Such combinations may occur two or three times in quick succession or may not occur for a long time, but flooding in this part of Hull has occurred periodically for a long time.
  Before last month's flooding, there was serious flooding towards the end of 1954. My Ministry then discussed with the river board and the Hull Corporation the question of how these two bodies might best use the powers available to them to ensure that the flood alleviation works were undertaken—in other words, what we are considering again today. I understand that the basis on which the matter was then discussed was that the river board would consider promoting a comprehensive scheme while the corporation would co-operate to secure the agreement of the riparian owners either to raise their frontages to conform with the
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  board's scheme or to allow the board to do the work, the owners contributing to the cost. The owners were to be required to forgo any claim for compensation and to agree to maintain the works under the board's supervision. So far so good, but only some £5,000 worth of emergency work was done. This certainly improved the position, but the major proposals have not been undertaken.
  A comprehensive survey of the banks of the River Hull was begun by the corporation in 1959, a survey such as the hon. and gallant Member has mentioned, but I am informed that this was suspended because of other urgent work. Thus, no up-to-date estimate of the likely cost can be prepared until this survey has been completed. I am, however, advised that it should not take very long. Although it is not an easy operation to conduct, it does not present insuperable difficulties to competent technical men.
  I cannot speak for the river board or for the corporation, both of which have extensive powers. It may be—I do not know—that the board has in mind the possibility that action by it in connection with wharves might result in compensation claims. The board may also have in mind the possibility that the levels prescribed in the Corporation's 1925 Act might now prove inadequate for exceptional floods. As the hon. Member has said, it is a matter of inches. Although the whole of the works are a substantial undertaking the levels we are considering are not in feet but inches, but, none the less, vital inches. Whatever arrangements the board and the corporation may wish to come to between themselves, what I wish to emphasise is that the powers are there under the Land Drainage Act, 1930, for whatever work is necessary to deal with the flooding, and the financial resources are there under that Act to enable the work to be done, and it is for the responsible local authorities to decide whether and how they will use those powers and resources.
  I do not propose to follow the hon. Member into all the details he has given me about recent floods. I do not think he would expect me to refer to all those individual properties. Nor would I want to lay charges against any firm or against any individual. I am quite prepared to accept his general account, however, though again these are questions for the responsible authorities to consider locally.

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  I am sure that they will take note of what has been said here tonight. The particulars supplied by the hon. Member will certainly assist us in our consideration of any proposals which may be submitted by the river board for our approvel, and, of course, grant.
  My right hon. Friend wishes me to say he is ready to support the hon. Member's endeavours to get something done speedily to alleviate recurrent flooding in Hull and that his officers are at the disposal of the responsible bodies for any help or advice they may need. The
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  river board and the city corporation are aware of my Department's readiness to advise, and they are aware that the Ministry is prepared to consider comprehensive proposals submitted to it for grant aid at the level warranted by the financial circumstances of the board. I sincerely hope we may soon see some progress in this direction.
  Commander Pursey: Thank you.
  Question put and agreed to.
  Adjourned accordingly at four minutes to One o'clock.