Commons Sitting of 21 November 1961

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Shipping and Fishing Industries, Scotland
    Mr. Hector Hughesasked the Chancellor of Exchequer if he will make a statement regarding the effect of the pay pause on the shipping, shipbuilding, and fishing industries in Scotland, in view of the unemployment caused in these industries; and what steps he proposes to take to restore their prosperity.
    The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I do not accept the suggestion that the pause in increases of personal incomes has caused unemployment in the industries referred to. The primary purpose of the pause is to prevent increases in costs. That is vital for the future of these industries.
    Mr. Hughes: Is the right hon. and learned Gentleman aware that his policy has reduced Scotland's coastal shipping from 1,000 ships to 600, that the pay pause has accentuated this, that the high Bank Rate has made it worse, and that both have increased unemployment there? Can the right hon. and learned Gentleman devise some means of rectifying the situation and restoring these industries to the prosperity which they enjoyed before his appointment as Chancellor of the Exchequer?
    Mr. Lloyd: The hon. and learned Gentleman will not, of course, expect me to agree with the preliminary part of his supplementary question. As far as the second part is concerned, I think it important that the pay pause policy should be successful in the interests of those industries.
    Mr. Gresham Cooke: Would it not be disastrous to give up the pay pause at the present time just when the country is getting a grip on its exports? If costs can be kept down in shipbuilding in Scotland it is the surest way to help exports.
    Mr. Lloyd: I entirely agree with my hon. Friend.

    Decimal Coinage
    Mr. Gresham Cookeasked the Chancellor of the Exchequer, in view of the possibility of the United Kingdom entering the Common Market, what is now the policy of Her Majesty's Government towards decimal coinage.
    Mr. Selwyn Lloyd: I would refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Taunton (Mr. du Cann) on 14th November.
    Mr. Gresham Cooke: If my right hon. and learned Friend is going to make a statement in the future, may I suggest to him that he might be encouraged by the fact that the business community now seems to be coming round in favour of decimal coinage. The expenditure on new instruments, adding machines and computers would appear to be justified by the savings that would accrue to industry. Therefore, if we are going into the Common Market it would be a step which industry generally would welcome.
    Mr. Lloyd: I am certainly considering the point which my hon. Friend has made.

    Dividends
    Mr. Leatherasked the Chancellor of the Exchequer by what percentage dividends declared in the first half of 1961 differed from the first half of 1960, after making due adjustment for increased capital employed.
    Mr. Selwyn Lloyd: Gross ordinary dividends declared in the first half of 1961 were about 15 per cent. higher than in the first half of 1960. The best estimate that I can make in answer to the second pant of my hon. Friend's Question is that there was on increase in the capital employed of roughly 2 per cent. by new issues of capital, and of roughly 5 or 6 per cent. by ploughing back of profits. It, therefore, seems likely that about half the increase in dividends can

    1113
    be attributed to an increase in the capital employed.
    Mr. Leather: While thanking my right hon. and learned Friend for that Answer, may I ask him whether this does not, in fact, show that the true increase in dividends on the capital employed is, first of all, a great deal less than people had at one time been led to believe, and, secondly, is, in fact, very similar to the true increase in wages during the same period?
    Mr. Lloyd: I think that my hon. Friend is right on both those points. Of course, these figures refer to the first half of 1961.
    Mr. H. Hynd: On the contrary, does not this show the complete unfairness of having a wage pause without a dividend pause?
    Mr. Lloyd: The hon. Gentleman will know that there was no wage pause in the first six months to which I am referring. In fact, during the second quarter of this period wages and salaries went up by nearly 10 per cent.?
    Mr. Lee: Will the right hon. and learned Gentleman tell us how he describes members of his own party who agree to a dividend increase and then vote in favour of a wage pause?
    Mr. Lloyd: That does not arise out of the Question.
    Mr. Jay: Is it not rather misleading to include profits ploughed back, since the shareholders were not asked to put up money in that sense at all?
    Mr. Lloyd: I do not agree.

    Federation of British Industries and Trades Union Congress (Discussions)
    Mr. W. Yatesasked the Chancellor of the Exchequer (1) how many times during this year he has met representatives of the Federation of British Industries to discuss export incentive schemes; and what were the results of these meetings;
    (2) on what date he met the Trades Union Congress this year to discuss incentive schemes for exports to the Continent; and what was the result of the meeting.
    Mr. Selwyn Lloyd: My right hon. Friend the President of the Board of Trade and I are in frequent touch with the Federation of British Industries, the Trades Union Congress and other interested bodies on the means of promoting exports. For example, the National Production Advisory Council on Industry, on which both these bodies are represented, has had several discussions on this subject this year. On export incentives, I would refer my hon. Friend to my speech in the House of 7th November.
    Mr. Yates: I thank my right hon. and learned Friend for that reply. Will he bear in mind that the F.B.I. told me this morning that there have been no official negotiations on this matter since 1955? Will he also bear in mind the letter from the Trades Union Council saying that the General Council has not met the Chancellor specifically for this purpose? I suggest that the Chancellor should be looking at this right away.
    Mr. Lloyd: We have quarterly meetings of the N.P.A.C.I. That is the body on which both these bodies are represented, and this year we have discussed the matter on several occasions.
    Mr. H. Wilson: While the right hon. and learned Gentleman is pursuing his elephantine methods of thought on this question, will he—
    Mr. Yates: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise this matter at the earliest opportunity.
    Mr. Speaker: In these circumstances I cannot accept the notice
    Mr. Wilson: Will the Chancellor give particular consideration to two proposals, first, for a differential investment allowance which we on this side of the House voted for in Finance Bill after Finance Bill for many years, and, secondly, the question of the turnover tax which we suggested to him last July?
    Mr. Lloyd: I tried to deal with these matters in the debate to which I referred.

    Government Employees (Wages)
    Mr. Darlingasked the Chancellor of the Exchequer if he will take steps to raise the average wage rates and earnings of employees in Government establishments by 6 per cent. annually for the next 10 years so that they will be earning £1,000 a year in 1971.
    The Financial Secretary to the Treasury (Sir Edward Boyle): The possibility of increasing average real weekly earnings of employees in Government service will depend upon preventing inflation, keeping our costs competitive and devoting adequate resources to exports. But it would be quite wrong to forecast a separate figure for the annual increase of one particular section of the community.
    Mr. Darling: We have heard those views before. Will the hon. Gentleman deny or confirm the rumour going round that his right hon. and learned Friend is thinking in terms of trying to work the economy in such a way that we get a 2 per cent. or 2½ per cent.—
    Mr. Speaker: Order. It depends on the source of the rumour whether the question is in order not not, but the Minister cannot be asked to confirm or deny a rumour for which he is not responsible.
    Mr. Darling: Is it not a fact that the Government are thinking in terms of getting the economy to work in such a way that there is a 2 per cent. or 2½ per cent. increase in incomes each year? If that is so, how are the workers in industrial establishments under the control of the Government going to have the promise made to them by the Prime Minister fulfilled?
    Sir E. Boyle: What is true is that if we want to achieve a good rate of growth for industry we must keep the rise in personal incomes in line with rises in the national income.

    O.E.C.D. Countries (Productivity)
    Mr. H. Wilsonasked the Chancellor of the Exchequer what proposals have been put before the Organisation for European Co-operation and Development for a plan for industrial expansion involving a growth of 50 per cent. in industrial output by 1970; and whether
    1116
    Her Majesty's Government have informed the Organisation of their support for this plan.
    Mr. Jayasked the Chancellor of the Exchequer whether Her Majesty's Government will support the proposals for a planned 50 per cent. economic growth in the Atlantic community by 1970, made by the United States Government to the Organisation for Economic Co-operation and Development.
    Mr. Selwyn Lloyd: With permission, I will circulate, in the OFFICIAL REPORT the full text of the communiqué issued after the first Ministerial meeting of O.E.C.D., which took place in Paris on 17th and 18th November. The meeting set as a collective target for the Organisation the attainment during the decade from 1960 to 1970 of a growth in real gross national product of 50 per cent. for the twenty Member Countries taken together. This initiative has the full support of H.M. Government.
    Mr. Wilson: Is the right hon. and learned Gentleman aware that Treasury sources were briefing the Press before last Thursday's meeting to the effect that the original American plan was too much for this country and that the Chancellor would argue for it to be cut down? Is it not time that the Government introduced an economic policy which will stop this country being a drag on our allies?
    Mr. Lloyd: I do not accept that for a moment. As regards this target, I believe that it certainly is within the collective possibilities of the alliance. With regard to the briefing beforehand, I should like to make it quite clear that I had some doubts about the wisdom of bringing this forward at this meeting. I thought that further time was required to consider its presentation, in particular so that it would not appear to be a rich man's club meeting together to decide how to increase its own productivity without regard to the poorer countries of the world.
    Mr. Jay: As the Chancellor says that the aim has the support of the Government, will his policies be designed to carry it out?
    Mr. Lloyd: My policies are designed to carry out growth on a sound basis.
    The following is the communiqué:

  PRESS COMMUNIQUÉ APPROVED BY THE O.E.C.D. COUNCIL, NOVEMBER 17, 1961
  1. The first Ministerial Council of the O.E.C.D. meeting in Paris 16th and 17th November under the Chairmanship of the Canadian Minister of Finance, the Honourable Donald M. Fleming, surveyed economic prospects of the vast community of member nations comprising more than five hundred million people in Europe and North America and examined its world responsibilities.
  2. The Ministers noted the substantial economic growth that had taken place in most member countries during the past decade. They agreed on the desirability of establishing a target for further growth. Under conditions of price stability and the necessary provision for investment, rapid growth facilitates the harmonious development of world economy, helps to promote a liberal world trading system, provides a necessary foundation for rising living standards and ensures a high level of employment. It will enable industrialised member countries to contribute more effectively to the development of less advanced countries both through the provision of financial and technical assistance and through a widening of their export markets and the increase of their export revenues.
  3. Accordingly the Ministers set as a collective target the attainment during the decade from 1960 to 1970 of a growth in real gross national product of 50 per cent. for the twenty member countries taken together. The rate of growth may vary from year to year and from country to country, moreover, being a collective target, individual countries may fall short of or exceed it in varying degrees.
  4. Each country will have to make its contribution to collective growth in accordance with its own special circumstances. This contribution will be supported and made more effective by simultaneous expansion in other countries. The setting of a joint target for economic growth is itself recognition of the increasing inter-dependence of the separate economies of the twenty member countries. Given their needs, it is desirable that member countries in the process of development should have a relatively higher rate of growth. A 50 per cent. increase in output during the decade will call for deliberate national economic policies and their co-ordination through the organization's procedures of consultations and co-operation.
  5. In this respect the Ministers put particular emphasis on the necessity of a proper equilibrium in the external payments of member countries as a condition for the fulfilment of the growth target mentioned above. It was, therefore, necessary to develop still further the close co-ordination of financial and economic policies and the mutual sense of responsibility between deficit and surplus countries in order to attain the common objective of accelerated economic growth while further improving the international payments mechanism. The various means already available to relieve temporary pressures on particular currencies were of great value, but they should be further developed.
  6. Price stability is of the highest importance in order to assure to the population the full benefit of economic growth and to maintain equilibrium in international payments. Excess demand should, therefore, be prevented and efforts made to improve productivity and labour mobility. The gains through higher productivity should be fairly distributed, and increases in the level of money incomes should be kept generally in line with increases in productivity, which alone provide the means to a durable increase in the standard of living. In countries with payments deficits it is particularly important that the competitive position is not undermined through cost increases. Liberal import policies are another means of assuring price stability. The surplus countries have a special responsibility to use this and other means available to them which contribute to both external and internal equilibrium.
  7. The Ministers emphasised that a special effort must be made to promote growth in less-developed member countries and thus endeavour to reduce the very great disparities in incomes per head. In these countries there are great possibilities for achieving a higher standard of living through more intensive use of natural and human resources. They stressed their conviction that more investment and more training are necessary conditions for such a development. To induce a real increase in the inadequate growth rates of such member countries the Ministers instructed the organisation to encourage and assist such countries in their efforts including the preparation and achievement of sound development plans.
  8. In order to achieve the growth target, increasing use of scientific training and research is needed. Their utilisation in agriculture and industry should be closely studied. The organisation should further develop its work in these fields.
  9. The Ministers noted that, thanks to increased productivity and mechanisation, agricultural production had risen considerably in the O.E.C.D. countries and they recognised that agriculture would also play an important rule in attaining the collective growth target. The Ministers agreed that necessary adjustments within agriculture should be carefully studied. They thought that increased productivity within agriculture should contribute to general price stability. In addition agriculture could, in many countries, make manpower available for the expansion of industry. In this connection the importance was recognised of ensuring that the agricultural population should share in the rising standard of living resulting from economic growth. The Ministers agreed with the O.E.C.D. Ministers of Agriculture meeting of October, 1961, that agricultural policies should be the subject of continuous consultation and confrontation within the organisation in order to secure that industrial and agricultural production developed harmoniously.
  10. The Ministers were determined that increased production should lead to a significant increase in the aid to the less-developed countries. In 1960, the aggregate flow of resources, both public and private, from

  1119
  member countries and Japan, a member of the organisation's Development Assistance Committee, amounted to about Dollars 7·5 billion. The Ministers agreed that a further increase of development assistance was needed and they welcomed the intention of the Development Assistance Committee to institute, beginning in 1962, an annual review of aid efforts and policies of its member countries. The main purpose should be to increase the efforts and to adapt them better to the needs and circumstances of the recipient countries through exchange of experience regarding bilateral aid. The Ministers expressed the desire that the Development Assistance Committee should encourage greater co-operation among donor countries in their bilateral aid efforts and that a common approach should be applied increasingly to specific problems of economic development assistance. They also recognised the need for full co-operation with and support of multilateral institutions providing development aid, and they welcomed the work going on to define measures to encourage private capital exports to less-developed countries.
  11. The Ministers recognised that successful economic expansion in less-developed countries can best be achieved through carefully prepared programmes based on an assessment of needs and resources. They, therefore, welcome individual and regional efforts by less-developed countries in drawing up such programmes. The Ministers instructed the organisation to study the functions and structure of the contemplated O.E.C.D. development centre which could help, in co-ordination with existing institutions, to meet the urgent need for more knowledge and for qualified persons to assist in the development efforts.
  12. The Ministers stressed the importance of reducing barriers to the exchange of goods and services, in particular on the part of the more industrialised countries, as a means of promoting economic growth and of providing expanding markets. They emphasised the need to seek ways and means, both in the O.E.C.D. and in other international forums, to reduce barriers to trade among O.E.C.D. countries and between O.E.C.D. countries and the rest of the world. The main instrument of the organisation in achieving this aim should be periodic confrontations of trade policies. The Ministers underlined the significance of the negotiations between the European Economic Community and other European countries—the arrangements adopted should safeguard the legitimate interests of other countries. They expressed their satisfaction that the countries engaged in negotiations were willing to keep the O.E.C.D. informed of the progress of the negotiations. The aim of the organisation should be to contribute to the maximum freedom of trade and to enable the less-developed countries to obtain increasing export revenues.
  13. In conclusion, the Ministers noted that these measures were but first steps in a collective effort that must extend increasingly beyond the relationships among their own countries and the material well-being of their citizens. Member countries will pursue together the three objectives of the O.E.C.D.
  1120
  convention pertaining to economic growth, aid and trade in order to ensure a sound expanding free world economy.

  National Theatre
  Mr. Straussasked the Chancellor of the Exchequer what progress has been made in formulating a national theatre scheme in response to his offer of 12th July this year.
  Mr. Selwyn Lloyd: I am awaiting the submission of a scheme by the Joint Council of the National Theatre.
  Mr. Strauss: Is the Chancellor aware of the strong opposition expressed in many quarters, particularly by the Actors' Equity Association, against this proposal that a national theatre company should formed by a combination of the Stratford Company and the Old Vic Company? Is he further aware of the concern held by all those who have supported the national theatre idea that his proposal will mean that there will be only one drama theatre, only one drama auditorium? Will he consider all these matters and discuss them with all the interests concerned?
  Mr. Lloyd: The position now is for the Joint Committee of the National Theatre to put forward its proposals to me.

  Capital Gains Tax
  Mr. H. Wilsonasked the Chancellor of the Exchequer if, in his forthcoming legislation regarding a tax on short-term speculative gains on property and share deals, he will include provisions making such a tax retrospective to the date of his original announcement.
  Mr. Selwyn Lloyd: I have nothing to add to what I said in the House on 7th November on this point.
  Mr. Wilson: But, quite seriously, in view of the precedents, some of them highly respectable, including the Prime Minister's retrospective activity in connection with the suspension of investment allowances back to the date of the announcement, will the Chancellor be wise and safeguard himself at this point, at any rate, by making it plain that when he introduces it he will make it retrospective to this date? Is he

  1121
  aware that when he does introduce this tax, which he is obviously taking a long time to work out, it will be much more difficult then to announce that it will be retrospective to the date of his original announcement?
  Mr. Lloyd: Quite seriously, I think it is better not to anticipate what the provisions will be.
  Mr. Nabarro: If there were any element of retrospection, would it not be just and in accord with our fiscal statutes that losses should be taken into account retrospectively as well, especially in view of the sliding downwards of the equity market on the Stock Exchange at the present time?
  Mr. Lloyd: I will certainly note my hon. Friend's point.
  Mr. Wade: Can the Chancellor say when this legislation will be introduced?
  Mr. Lloyd: No, Sir. I would add to that that it will be produced in the next Budget, if not before.
  Mr. J. T. Price: When the Chancellor is giving further consideration to this matter, will he also take into account the enormous amount of social damage which is being done by holding on to large blocks of land for speculative purposes round every large city? Will he try to make some assessment of the amount of land being held in anticipation of speculative gains and bring this within the terms of his fiscal remedy?
  Mr. Lloyd: I assure the hon. Gentleman that all relevant matters are being considered.

  Stock Exchange Transactions (Stamp Duty)
  Mr. F. M. Bennettasked the Chancellor of the Exchequer whether he will consider legislation abolishing the 2 per cent. Stamp Duty on Stock Exchange transactions.
  Sir E. Boyle: I have noted my hon. Friend's suggestion.
  Mr. Bennett: Will the Chancellor please re-examine this matter in the context of his forthcoming speculative gains tax? Does he know that foreign investors, who are traditional users of the London Stock Exchange and other
  1122
  facilities, are increasingly carrying out their transactions in overseas centres, where there is no such duty, to the exclusion of this country? Is it not a pity to keep on making sad noises about the country's loss of invisible exports while keeping in being discriminatory obstacles against the services we can offer?
  Sir E. Boyle: I think that my hon. Friend would be wise not to expect a further reply. I have no doubt that my right hon. and learned Friend has listened to, and will take note of, the point made by my hon. Friend.
  Mr. H. Wilson: While no more optimistic of a reply from the hon. Gentleman, but noting that the Chancellor is listening to ideas, as we are told that he is anxious to tax short-term speculations, will he consider applying the Stamp Duty to transactions that take place during the period of the Stock Exchange account?
  Sir E. Boyle: That raises rather wider issues than the Question on the Order Paper.
  Mr. John Hall: Will my hon. Friend bear in mind that when introducing measures to penalise investors it would be fair and reasonable to give some encouragement to the genuine investor by removing this tax?

  Cambridge University (Applied Economics)
  Sir L. Plummerasked the Chancellor of the Exchequer what additional grant will be made by the University Grants Committee to Cambridge University to help finance the new work being undertaken by the Department of Applied Economics in the study of economic planning.
  Sir E. Boyle: The proposals submitted by Cambridge University will be taken into account by the University Grants Committee, which is at present considering what recommendations to make on the general level of recurrent grant to the universities for the next quinquennium 1962–67.
  Sir L. Plummer: Is not this a question of too little too late? Is he aware that the university has applied for and received a three-year grant from the

  1123
  American foundation to investigate planning in this country which is now one of the pet babies of his right hon. and learned Friend?
  Sir E. Boyle: I am glad that universities are taking an interest in planning, and doubtless they will note past successes and also past failures in the public sector of our economy. I think that I have given a fair answer to the Question put down by the hon. Gentleman.

  Income Tax Assessments
  Mr. Haleasked the Chancellor of the Exchequer whether he will introduce legislation to mitigate the hardship to persons of widely fluctuating incomes due to their liability to pay large taxation on a notional previous year's assessment which may be in excess of the income being currently received.
  Sir E. Boyle: I have noted the hon. Member's suggestion.
  Mr. Hale: Is noting it quite enough, in view of the fact that we did have a three-year average which was abolished by the Tories during one of their tax reduction pauses? Is not it a fact that many people who find their income fluctuating by drops of 50 per cent., 60 per cent. or 70 per cent. in any year face real hardship, and will the Minister do more than note it?
  Sir E. Boyle: I think there are real difficulties about a general system of averaging, and also, I suggest, to allow averaging only where income has fallen by a specific amount. I agree with the hon. Gentleman about the importance of justice being seen to be done. Perhaps he would care to pursue the matter by correspondence or talk to me about it.

  Tax Liability (Non-residence)
  Mr. Haleasked the Chancellor of the Exchequer how many British subjects during the last 20 years who were paying British Income Tax ceased to do so because they changed their country of domicile.
  Sir E. Boyle: I assume that the hon. Member's Question relates to individuals who have ceased to be resident in the United Kingdom for tax purposes. No information is available as to their numbers. They would, of course, in general
  1124
  remain liable to British Income Tax on income arising in this country.
  Mr. Hale: This is very good news indeed. Does it mean that if I stop filling in my tax assessment form no one will make a note of it on a piece of paper and there will be no record?
  Sir G. Nicholson: And no memorial service.
  Sir E. Boyle: I hope that it will be long before the sad eventuality mentioned by my hon. Friend arises. The answer to the hon. Gentleman is, "No". If people have not filled in a tax form for a long time, sooner or later routine checks are made. In his Question, the hon. Member, who seldom makes an error, has referred to "domicile" when he really means "residence".

  Development Assistance Group
  Mr. Boydenasked the Chancellor of the Exchequer what steps have been taken by the Development Assistance Group towards extending the investment of capital in under-developed countries; and what contribution Her Majesty's Government are planning to make in 1962.
  Mr. Selwyn Lloyd: The Development Assistance Group has now become the Development Assistance Committee of the O.E.C.D. The rôle of the new Organisation in encouraging the provision of capital to under-developed countries is described in the communiqué issued on 17th November, which I have said is being circulated in the OFFICIAL REPORT. Our own governmental aid expenditure is running at about £180 million this year, as compared with £150 million last year.
  Mr. Boyden: Will the right hon. and learned Gentleman say what percentage of the gross national product is represented and whether he thinks it is enough?
  Mr. Lloyd: If the hon. Gentleman will put down a Question I will try to answer it.

  National Economic Development Council
  Mr. Oramasked the Chancellor of the Exchequer what conclusions he has now reached about the representation of consumers on the proposed

  1125
  National Economic Development Council.
  Mr. Selwyn Lloyd: I have nothing to add at present to the reply I gave to the hon. Member's supplementary question on 14th November.
  Mr. Oram: Is not consumer satisfaction the final test of sound economic planning, and ought not organisations of consumers to be represented equally with organisations of producers? Will the right hon. and learned Gentleman consider the possibility of extending the number of proposed independent members and include among them someone conversant with consumer interests?
  Mr. Lloyd: I have heard with interest what the hon. Gentleman has said, and I will certainly bear it in mind.
  Sir Richard Pilkington: Has my right hon. and learned Friend noted that at least one hon. Lady opposite who is in the Chamber hopes that absolute chaos will be produced in the planning council by the presence there of the Trades Union Congress?
  Mr. Stonehouse: Will the Chancellor consider allowing representation to the Co-operative Movement, which represents 12 million consumers?
  Mr. Lloyd: I said I was considering that matter.

  Personal Incomes, Scotland
  Mr. Gourlayasked the Chancellor of the Exchequer what number of incomes before tax, for the latest convenient 12-month period in Scotland, totalled under £400 per annum, and under £600 per annum, respectively; and if he will state the comparable figures in respect of England and Wales together.
  Sir E. Boyle: The latest year for which estimates have been made is 1954–55 and they relate only to incomes within the purview of the Inland Revenue Department, so that they exclude most incomes below the effective exemption limit (then £155 a year). The figures for Scotland are 1 million and 1·6 million, respectively, and for England and Wales 8·5 million and 14·3 million. The combined incomes of a married couple are counted as one unit.
  Mr. Gourlay: No wonder the Prime Minister apologised at the Guildhall the other week for his speech some years ago about never having had it so good. Is the hon. Gentleman aware that the figures he has quoted represent the actual position in Scotland, not only then but at present, much more accurately than the reference to the misleading average of £15 per week so often quoted by his right hon. Friends? Will the Minister give us some indication of how he intends to ensure that those earning less than £7 14s. a week at present will be raised to the £20 a week level promised at Brighton by the Prime Minister?
  Sir E. Boyle: If the hon. Gentleman would care to debate the issue of the widely diffused increase living standards of the 1950s I should be pleased to do so at any appropriate time either in this Chamber or outside. I should like to remind him of the simple Fabian calculation that over the country as a whole there was a 20 per cent. rise in living standards in the 1950s, and I hope that the hon. Gentleman will not forget the large improvement in the position from matters not directly related to personal income, like, for example, the improvement in the education service.

  Property Companies (U.S.A. Office Building)
  Mr. Millanasked the Chancellor of the Exchequer what applications he has received from two British property companies for capital exports sanction to enable them to build a 20 million dollar office building in Boston, Massachusetts; and what action he is taking to protect the United Kingdom balance of payments position in this and similar transactions.
  Mr. Selwyn Lloyd: The transfer of a small proportion of this sum was authorised in April and May last. The bulk of the money was to be raised abroad. As to the general question, I am carrying out the policy which I stated to the House on 25th July.
  Mr. Millan: Will not the Chancellor be a little more forthcoming than that? Is he aware that the chairman of one of the property companies concerned has said that if it is not possible to raise

  1127
  money in the United States it will be raised here? Cannot the Chancellor give a categoric assurance that this sort of speculative transaction will not be allowed if it involves a drain on our balance of payments? What is the good of appealing to our exporters to increase their efforts if this sort of thing is allowed to continue?
  Mr. Lloyd: Within the limits of the general policy I laid down, each case is looked at on its merits from the point of view of what advantage it has for this country's balance of payments and visible or invisible earnings. I have nothing to add to my original answer.
  Mr. H. Wilson: Has the Chancellor seen figures published recently by the United States Department of Commerce showing that the return, in terms of current earnings, on capital invested by this country in America is far less than the return on American capital invested in this country up to a comparable amount? In view of this and the clear detriment to our current capital balance of payments, will the Chancellor look at these cases very carefully indeed?
  Mr. Lloyd: Certainly I will. But I do not think it would be wise to exclude us from what might be very profitable undertakings.
  Mr. J. T. Price: Can the Chancellor say whether the overseas trading corporation legislation will apply to transactions of this kind? May I remind him that that legislation, which was enacted by his House some years ago, did not require the revenue from investments not registered in London to be returned to this country. If, in fact, profits made by this kind of investment are not returnable to this country, what contribution is this kind of transaction making to the economy of Great Britain?
  Mr. Lloyd: That is a rather different issue. If the hon. Gentleman wishes to put down a Question, I will try to answer it. Regarding approval of individual cases, what the hon. Gentleman said in the latter part of his supplementary question is relevant.
  Sir C. Osborne: Is my right hon. and learned Friend satisfied that sufficient income is brought back to this country from capital invested abroad? Is he
  1128
  satisfied that the recent steps he has taken are proving satisfactory?
  Mr. Lloyd: Regarding the first part of my hon. Friend's supplementary question, I am not satisfied. Regarding the second part, I am doing what I can to see that the position is improved.

  Shipbuilding (Credit Facilities)
  Mr. Millanasked the Chancellor of the Exchequer what proposals he now has for improving the facilities available for credit financing for British exporters, particularly those engaged in heavy industry such as shipbuilding.
  Mr. Selwyn Lloyd: I have nothing yet to add to what I said on the 7th November.
  Mr. Millan: Will the Chancellor say whether we may expect some definite statement from him? Is he aware that there is increasing concern among exporters and particularly in the shipbuilding industry over this matter, and quite definite charges have been made that British shipbuilders are very much worse off than many of their competitors abroad, despite the Peat, Marwick, and Mitchell report? May we have something definite soon; if not a definite Government proposal, at least some fuller statement of the facts?
  Mr. Lloyd: I think that the hon Gentleman, with his experience of this matter, knows how extremely complicated it is. I will certainly make a statement as soon as possible.

  Scotland
  Mr. W. Hamiltonasked the Chancellor of the Exchequer whether, in view of the special difficulties through which the Scottish economy is now going, he will take steps to ease his credit policy in such a way as to take account of those specific difficulties.
  Sir E. Boyle: In all our economic arrangements we take full account of the special problems of Scotland, and will continue to do so.
  Mr. Hamilton: The Question was put down precisely because the Government do not do that. Does the hon. Gentleman recollect that in the discussions on the Local Employment Act the point was made by hon. Members on this side of

  1129
  the House that special measures ought to be taken to deal with the particular problems in Scotland and that the Scottish economy was suffering unduly harshly from the present restrictions imposed by the Government? Would not he consider being more discriminatory in the application of this policy?
  Sir E. Boyle: I understand the point which the hon. Member puts, but my answer is that I do not agree with him. At the present time there are 28,000 new jobs in prospect in Scotland, and of those 24,000 are in the Development Districts. I certainly would not agree with the hon. Gentleman that the Local Employment Act has failed in Scotland.
  Mr. Willis: Is the hon. Gentleman aware that as a result of the "special considerations" given to Scotland there are now more unemployed there than there were in 1951 in spite of the fact that a quarter of a million people have left Scotland?
  Sir E. Boyle: The hon. Member asks me about 1951. I am simply pointing out that so far the results of the Local Employment Act, which we passed at the end of 1959, have proved decidedly beneficial to Scotland.
  Mr. Hamilton: Will the hon. Gentleman consult the Prime Minister and the Secretary of State for Scotland? If they cannot agree on anything else, at least they might agree on the figures they publicise. The figures they have given for jobs in the pipe-line have been three different figures from three different Ministers in the same Government.
  Sir E. Boyle: The hon. Member must recognise that figures for jobs in prospect do not remain constant the whole time. I should have thought that was commonsense.

  Universities (Admissions)
  Mr. Chetwyndasked the Chancellor of the Exchequer whether he will consult the university authorities with a view to establishing a central clearing house to facilitate a more simple and orderly process for admissions to universities.
  Mr. Selwyn Lloyd: Admission of students is a matter for the universities themselves, and the universities are
  1130
  already examining the possibilities of a clearing house system such as is suggested by the hon. Member.
  Mr. Chetwynd: As the Chancellor is responsible for finding most of the money for the universities, will he ask them to deal with this as a matter of urgency? As the matter stands, they find it almost impossible to get admissions this year and will find it even worse in the years ahead. Will he bear in mind, in particular, the difficulties of women students and have a better arrangement before the next year begins?
  Mr. Lloyd: I am sure that what the hon. Member has said, with which I agree, will be taken note of by those concerned.

  Wages, Salaries and Dividends
  Mr. Stonehouseasked the Chancellor of the Exchequer when he now expects the Government's pay pause policy to be discontinued.
  Mr. Selwyn Lloyd: I have nothing to add to or subtract from what I said in the House on 7th November in reply to the right hon. Gentleman the Leader of the Opposition.
  Mr. Stonehouse: Is the Chancellor aware that that was a most unsatisfactory reply? In view of recent developments, is he not behaving very like the emperor without clothes? Does he know that the rest of the country see that his pay pause policy has collapsed in ruins around him? What has he done to fulfil the pledge he gave on 25th July, as reported in column 223 of HANSARD for that day, to the effect that the policy on wages would be worked out to relate them to productivity?
  Mr. Lloyd: On the first part of that question, I do not agree with the hon. Member at all. As I have said, the purpose of the pay pause is to try to check increases in costs, which is of primary interest to British industry and exporters. If it fails, it will be a very bad day for the people who have to earn their living in this country. In reply to the second part of the question, I am certainly carrying out what on 25th July I said I would carry out, but I do not think the time is yet ripe to make a statement on it.
  Mr. Prior: Is the Chancellor aware that support for his pay pause has rested largely on the assumption that it would be fair to all sections of the community, whether organised or not? Will he bear this in mind in negotiations which are taking place, or have taken place in the last week?
  Mr. Lloyd: Certainly I will.
  Mr. H. Wilson: In view of the Chancellor's notable triumph at London Airport in this matter last week, would he now agree that all he has achieved is that the Government are standing firm on the principle that agreements can be broken but, so far as the purpose of the pay pause is concerned—namely, keeping wages down—they have utterly failed in that wages have been raised at London Airport more than they would have been under the original application? If that is to be the pattern in future, could he not have solved the problem for teachers by promoting everyone to be a headmaster?
  Mr. Lloyd: The Question deals with the general issue. I still maintain that it is in the national interest that there should be restraint in increases in personal incomes. The problem facing the country is to export enough to earn our living in the world. That depends on costs, and, as the right hon. Member knows full well, personal incomes, wages and salaries are a very large element in costs.
  Mr. Wilson: Will the Chancellor now say, in view of all that has happened in the last week in the pay pause, whether the Government now intend to reverse their decision in respect of some of the agreements that have been broken? Secondly, will he say whether in his view the pay pause is intended to extend to dividends and rents?
  Mr. Lloyd: In reply to the first part of that question, I have nothing to add to the original Answer or to the statement I made in reply to the Leader of the Opposition in the debate on 7th November. In regard to dividends—[HON. MEMBERS: "Rents."] The right hon. Member asked about dividends—[HON. MEMBERS: "And rents."] In regard to dividends and all other forms of increases in personal incomes, I hope that my request will be taken note of.
  Mr. Grimond: Is the Chancellor oblivious to what has been happening in the real world in the last two or three days? Does he still go on saying that he hopes this policy will succeed in face of what is happening before all our eyes? How does he reconcile what is happening with his refusal to do justice to white-collared workers?
  Mr. Lloyd: I do not accept at all what the right hon. Member says. With reference to the one specific matter, the settlement in the electricity supply industry, the Prime Minister is to make a statement at the end of Questions.
  Mr. Jennings: Would my right hon. and learned Friend agree that it is abundantly clear that the results of his policy are that strikes pay?
  Mr. Lloyd: I do not accept that at all.
  Mr. Donnelly: Could the Chancellor say when a pause is still a pause?
  Mr. Lloyd: I think the hon. Member can work that out for himself.

  TRADE AND COMMERCE

    Fielden Bridge, Auckland (Site)
    Mr. Boydenasked the President of the Board of Trade what progress is being made with the development for industrial purposes of the Fielden Bridge area, adjacent to the St. Helen's, Auckland, site; and how many inquiries have been received for industrial development there.
    The President of the Board of Trade (Mr. F. J. Erroll): The Board's regional office in Newcastle-upon-Tyne, has shown this site to six firms so far, as well as suggesting it to other inquirers. One firm is known to be interested in the site.
    Mr. Boyden: Would not one of the answers to this problem be building roads and making other improvements to this site? Would the right hon. Gentleman follow his hon. Friend's statement in Scotland and take full account of the problems of South-West Durham? May I remind him that there has been no reduction in male unemployment in this area since the passing of the Local Employment Act?
    Mr. Erroll: I noticed the hon. Member's Question about roads asked to the Minister of Transport on 15th November. As to employment in Durham generally, I gladly give the assurance the hon. Member asks.

    Census of Production
    Mr. Cleaverasked the President of the Board of Trade whether he will reallocate the items included under the different headings in the Census of Production in order to give more useful information to the metal working industries.
    Mr. Erroll: Representatives of industry are consulted about the Census of Production questions to ensure that the information collected is in a useful and practicable form. If the hon. Member has any suggestions to make I shall be glad to consider them.
    Mr. Cleaver: Is my right hon. Friend aware that a number of industrialists are very dissatisfied with the information which is produced? Is he aware, for instance, that under the heading, "Art Metal Ware," reproduction brass ware is merged with ornamental gates and under "Agricultural and Horticultural Appliances," brass sprays and spraying equipment are merged with apparatus for keeping chickens, and the resulting information is not very helpful to the trades concerned?
    Mr. Erroll: I should be very glad to look into the cases brought to notice. We try to make the information collected as useful as possible to industry, and to this end well over 250 trade associations are consulted. We shall be glad to hear other representations corresponding to those mentioned by my hon. Friend.
    Mr. Cleaverasked the President of the Board of Trade what is the annual cost of producing the Census of Production; and why three years elapse between the end of the year to which it refers and the publication of the Report.
    Mr. Erroll: The average annual cost of taking the censuses of production is estimated to be about £220,000. Most of the information is made available well within three years, but the Census is a basic inquiry directed to many firms, and to collect all the returns and publish
    1134
    all the results inevitably takes time, though less than formerly.
    Mr. Cleaver: Is my right hon. Friend aware that stale information is quite useless to industry, if not dangerous? In view of the costs concerned and also the fact that if we enter the Common Market we shall need quick and accurate information, will he do what he can to expedite production of this information.
    Mr. Erroll: The first results are made available within a period of twelve months and on the census as a whole we do quite well—much better than the United States.

    Exempt Private Companies
    Mr. Leatherasked the President of the Board of Trade how many exempt private companies have been registered in the last 12 months for which figures are available, and for the immediately preceding 12 months.
    Mr. Erroll: Exempt private companies are not registered as such and exemption is often not claimed until many months after incorporation. The number of private companies registered in 1959 was 28,989, in 1960, 34,058, and in the first ten months of 1961, 28,365. On past experience some four out of every five companies on the register file exemption certificates in due course.
    Mr. Leather: is not my right hon. Friend aware that one of the conclusions which one is forced to draw from these figures is that the opportunities deliberately to mislead the public are increasing every day? In view of the fact that there still seems to be no prospect of the Jenkins Committee reporting in the foreseeable future, will not my right hon. Friend now take steps to redeem the Government's promise to introduce legislation during this Session to deal with the more obvious abuses in company law?
    Mr. Erroll: I do not agree with the conclusion which my hon. Friend chooses to draw from my answer. The Jenkins Committee is working hard, and I do not think that it will be so very long before it is able to produce its report. In the circumstances, I do not agree with the third part of my hon. Friend's supplementary question.

    Imports (Cost)
    Sir C. Osborneasked the President of the Board of Trade how much more United Kingdom imports for 1960 would have cost if the terms of trade had remained the same as in 1954.
    Mr. Erroll: If import prices had remained unchanged from 1954, the goods imported in 1960 would have cost £83,000,000 more.
    Sir C. Osborne: I am staggered by that figure, because I have seen it calculated as nearer £500 million. Could the figure be checked once more? What proportion of the extra money would have gone to the poorer parts of the Commonwealth to help raise their standard of living?
    Mr. Erroll: I will gladly check my figures again. It might be best if I wrote to my hon. Friend and told him how I arrived at the figures given in my Answer. It does not follow that if the terms of trade were different there would necessarily have been a bigger surplus available for overseas investment.

    Internal Reserves
    Sir C. Osborneasked the President of the Board of Trade to what extent the improvement in the United Kingdom physical trade gap is due to the running down of internal reserves; how much lower they are today than on 1st July, 1961; and if he will make a statement.
    Mr. Erroll: The reduction in the deficit on visible trade since the second half of last year has been associated with a sharp decline in the rate of stock-building, but total stocks in the economy continued to grow up to the end of June. Information at present available about stock movements during the third quarter suggests that there was no substantial change.
    Sir C. Osborne: Is it fair to assume that if there has been no drop in our internal material resources, therefore the real position between imports and exports has improved and there is no fake about it?
    Mr. Erroll: I can assure my hon. Friend that there is no faking about my figures.

    Communist Bloc Countries
    Mr. Swinglerasked the President of the Board of Trade what is the present rate of annual value of Great Britain's import and export trade with countries of the Communist bloc; what are the prospects for the expansion of this trade; and what estimate he has made of the extent to which these prospects would be affected by Great Britain's entry into the Common Market.
    Mr. Erroll: As the answer to the first part of the Question contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT. The prospects are that the trade in both directions will in general continue to expand steadily. As trade between the Six and the Communist bloc has increased steadily since the formation of the Common Market, there is no reason to suppose that our own trade prospects with the bloc will be significantly affected if we join the European Economic Community.
    Mr. Swingler: Can the right hon. Gentleman give a firm assurance that any present negotiations for the expansion of East-West trade and trade between the United Kingdom and the countries of the Eastern bloc are in no way being jeopardised by the negotiations to enter the Common Market?
    Mr. Erroll: Not as far as I am aware.
    Mr. Oram: Is the Minister aware of a report recently published by the Joint Economic Committee of the United States Congress advocating an economic embargo against trade with the Eastern countries in support of N.A.T.O.'s strategy. In view of the danger to this country's balance of payments, which was admitted in that Report, will the Minister take this opportunity of dissociating this Government from any such ideas of an embargo?
    Mr. Erroll: I have not studied the Report but I can assure the hon. Member that at present our policy of trading with the countries of the Soviet bloc remains unchanged.
    Miss Lee: Will the Minister note that neither the political prejudices of West Germany nor its dependence on American good will inhibits West Germany in

    1137
    developing its trade with the Communist bloc? Will he take the moral?
    Mr. Erroll: We seek of trade with all nations they pay their bills.
    Following is the information:

    UNITED KINGDOM TRADE WITH THE COMMUNIST BLOC

    Country

    Current Annual Rate*

    United Kingdom Imports

    United Kingdom Exports

    United Kingdom Re-Exports

    U.S.S.R.

    77·3

    44·4

    28·3

    Czechoslovakia

    13·6

    9·5

    1·2

    Roumania

    6·8

    13·3

    0·9

    Bulgaria

    2·9

    2·1

    0·1

    Albania

    —

    —

    —

    Hungary

    4·3

    5·3

    0·3

    Poland

    39·5

    20·7

    0·5

    East Germany

    7·1

    7·9

    2·1

    China

    26·9

    14·1

    0·3

    TOTAL

    178·4

    117·3

    33·7

    * 9 months of 1961 expressed as annual rate.

    General Agreement on Tariffs and Trade
    Mr. Holtasked the President of the Board of Trade what progress is being made in the current General Agreement on Tariffs and Trade negotiations for a 20 per cent. all-round tariff cut; and if he will make a statement.
    Mr. Erroll: Negotiations continue, but I cannot disclose details of them while they are in progress.
    Mr. Holt: Will the Minister give an assurance that notwithstanding our entry into the Common Market—which, in fact, makes this more urgent—the Government will energetically pursue a policy of getting all-round reductions in G.A.T.T. in order that when we enter the Common Market the discrimination which would otherwise affect our trade with the rest of the world will be lessened?
    Mr. Erroll: We are anxious to secure further liberalisation through tariff reductions, as much as ever before.

  PRIME MINISTER (SPEECHES)
  Mr. Donnellyasked the Prime Minister whether he will make available in the House of Commons Library the full text of his speech upon national policies at the Mansion House on 13th November, 1961.
  The Prime Minister (Mr. Harold Macmillan): Yes, Sir.
  Mr. Donnelly: Is the Prime Minister aware that I am particularly interested in his belated defence of his phrase "We have never had it so good" as a warning? In view of the fact that the Prime Minister has always been ready to ignore it himself and in view of what the Chancellor of the Exchequer said today, will he undertake to remove it from the mausoleum and to bury it in some appropriate seclusion?
  The Prime Minister: I thought that the hon. Member had asked for a copy of the speech to be placed in the Library in order that he might ask questions after he had read it, not before.
  Mr. W. Hamiltonasked the Prime Minister whether he will place a copy of the speech he made to industrialists in Glasgow on 3rd November on the subject of the Scottish economy in the House of Commons Library.
  The Prime Minister: No, Sir. My speech at Glasgow on 3rd November was made at a private luncheon, and I do not think that it would be usual or appropriate to place a copy of it in the Library.
  Mr. Hamilton: Does the right hon. Gentleman recall that he created the impression in the House last week that this occasion was of great moment for the Scottish economy as a whole and that it was important for him to meet industrialists? Is he aware that the president of the Scottish Unionist Association, a former Secretary of State for Scotland, said that the primary purpose of the Prime Minister's visit was to reorganise the Scottish Tory Party? Will the right hon. Gentleman therefore place in the Library a copy of his speech so that we may find out whether his journey was really necessary?
  The Prime Minister: I feel sympathetic towards the hon. Gentleman's request because it is always very flattering if people want to read one's speeches after they have been made. One of the difficulties is that no copy of it exists.
  Mr. T. Fraser: Does not the right hon. Gentleman recall that he told us last week that this speech referred to the need for expansion in the Scottish economy and that he was appealing to businessmen? Does he understand that we are anxious to see what in fact he said because, according to the reports, his speech was followed by an appeal from Sir Hugh Fraser to a great many men who had made huge sums of money in capital gains on which they had paid no tax to be generous in their contributions to Tory Party funds?
  The Prime Minister: The speech was made off the cuff so no copy exists.
  Mr. G. Brown: Like the Home Secretary's in Spain.
  The Prime Minister: The other difficulty is that the hon. Gentleman seems to take too narrow a view. Of course, I spoke largely about the future of the economy of Scotland and of course, it is true that the strength and future success of this island depends very much upon the return of the Conservative Party to power.
  Mr. M. Foot: Would not the amount of money which the Prime Minister raised for Conservative Party funds at this lucrative luncheon be quite sufficient to provide for the extra old-age pension at Christmas?
  The Prime Minister: That kind of observation is not only foolish but is quite out of scale with the problem.
  Mr. MacArthur: Is my right hon. Friend aware that the general view expressed in Scotland is one of great pleasure that he visited our country recently, that we hope he enjoyed his luncheon, and we hope that he will return many times to give us the benefit of his views on the economy in which he takes so much personal interest?
  Mr. Emrys Hughes: Is the Prime Minister aware that there is strong public opinion in the West of Scotland that it is below the dignity of a British Prime
  1140
  Minister to travel to Scotland to get money for the Tory Party funds out of take-over bidders?
  The Prime Minister: Of course I understand the hon. Gentleman's views about the people in the West of Scotland and their feelings and he is quite at liberty to express them. He is not a Scotsman and perhaps he expresses them all the better for that, but I have as much right to express my views, just as much as anyone else—just as much as any Welsh hon. Member.
  Mr. Hamilton: In view of the grossly unsatisfactory nature of the reply, I give notice that I shall raise this matter on the Adjournment.

  DIPLOMATIC FUNCTIONS (GOVERNMENT REPRESENTATION)
  Mr. Rankinasked the Prime Minister if he will instruct all Ministers to boycott official functions arranged by diplomatic representatives of Governments with whose defence and foreign policies Her Majesty's Government is not in agreement.
  The Prime Minister: No, Sir.
  Mr. Rankin: Is the Prime Minister aware that recently his Foreign Secretary boycotted a function at the Russian Embassy on the ground that their Government were dropping bombs? Was similar action taken with regard to American and French diplomatic functions when their Governments were dropping bombs? Will he be surprised if other nations apply the precedent which he has created to us if we begin to experiment with the neutron bomb?
  The Prime Minister: My noble Friend cannot attend all the receptions held by all the embassies on all their national days. On this occasion, as on many others, he was represented by a Foreign Office Minister.
  Mr. Rankin: Is the Prime Minister not aware that a statement was issued making it clear that the Foreign Secretary was not only boycotting the function himself but was seeking to get other people on both sides of the House, who had been invited, to boycott it, too?
  The Prime Minister: No, Sir. I think that in these circumstances it was appropriate that the Minister of State at the Foreign Office should represent the Foreign Office at this function.
  Mr. W. Yates: Is the Prime Minister aware that, generally speaking, this was a rather pathetic gesture for a great country like ours not to attend the national day of one of the greatest countries in the world? We ought to try to do better. They are not a bit impressed with it.
  Mr. S. Silverman: Is the Prime Minister not aware that according to many of the newspapers, which have not been repudiated, the Foreign Secretary himself let it be known that his failure to attend was intended as a protest against the Russian unilateral resumption of bomb tests? If he stayed away for that reason, will the Prime Minister say what useful purpose is served by these displays of moral indignation and self-righteousness? Is he not aware that all over the world these things are regarded as merely another example of the characteristic British Tory attitude that when they have the ace up their sleeves it is God Almighty who put it there?
  The Prime Minister: In reply to the last two questions, I still think that in the circumstances my noble Friend was very properly represented by a Foreign Office Minister.
  Sir G. Nicholson: Is the Prime Minister aware that the Foreign Secretary's action met the wishes and instincts of the great majority of the British people?
  The Prime Minister: Yes, Sir. I think that in the circumstances he made the right decision.

  SECRETARY OF STATE FOR AIR (SPEECH)
  Mr. Emrys Hughesasked the Prime Minister whether the speech of the Secretary of State for Air at Preston on 3rd November, on air strategy, represents the policy of Her Majesty's Government.
  The Prime Minister: Yes, Sir.
  Mr. Hughes: Is the Prime Minister aware that this speech appears to have been one of a series of speeches in which
  1142
  Service Ministers discussed the question of our capacity to bomb the civil population of the Soviet Union? Does he think that such speeches ease international tension? Would it not be a good thing, in view of what would happen to our civil population in similar circumstances, if statesmen on both sides stopped threatening each other?
  The Prime Minister: My right hon. Friend made no threats. Our air strategy is deterrent; it is a form of defence, not attack.

  GERMANY
  Mr. Warbeyasked the Prime Minister whether he will now invite President Kennedy, Chairman Krushchev and President de Gaulle to join with him in discussions on the basic principles of a peace treaty with Germany.
  The Prime Minister: While I would not exclude any means of reaching a solution to the wider problems such as a peace treaty with Germany, we are at present searching for the basis of an understanding with the Soviet Union on Berlin. This is the immediate question which must be dealt with.
  Mr. Warbey: I recognise the difficulties of a Prime Minister who has had to take over the Treasury as well as the Foreign Office, but does the right hon. Gentleman recognise that there can be no lasting solution of the Berlin problem without a settlement of the German question as well, and will not this certainly require a meeting at the highest level if we are to have a satisfactory result?
  The Prime Minister: The first thing is to deal with the Berlin problem.
  Mr. Shinwell: Does the Prime Minister agree that tension appears to be rising in Berlin, with the action of the East German Government in creating another wall, and so on? In the circumstances, can we afford to be complacent? Ought not some action to be taken, and has there not been undue delay?
  The Prime Minister: I hope that we shall be able to take action to try to deal with the problem of Berlin.

  MINISTER OF PENSIONS AND NATIONAL INSURANCE
  Mr. Ridsdaleasked the Prime Minister, in order to further the policy of Her Majesty's Government regarding assistance for old people, as announced in his recent speech at Guildhall, if he will consider appointing the Minister of Pensions and National Insurance to the Cabinet.
  The Prime Minister: I am confident that my right hon. Friend the Minister of Pensions and National Insurance will be fully able to forward the Government's policies for old people, whether he is a member of the Cabinet or not.
  Mr. Ridsdale: Does my right hon. Friend realise that it would mean a great deal to the older folk to have someone with a specialised knowledge inside the Cabinet rather than outside, and would it not underline the words in the Queen's Speech about maintaining the strength of sterling because no one has a greater interest in preventing inflation than the Minister of Pensions and National Insurance, since he knows the cost to the pensioner, to the Government and to the country if inflation is not stopped? Also, would it not allay the growing concern in the country about the resolution of the Government in maintaining the strength of sterling following the wage pause?
  The Prime Minister: Of the 21 member of the present Cabinet, 14 are in charge of Departments, and there are nine Ministers outside the Cabinet also in charge of Departments. We try to work as a whole, and I do not think that the power and authority on a special subject of a particular Minister is affected by any question of his membership of the Cabinet.
  Mrs. Slater: Does not the Prime Minister realise that, while it might help to have a Minister in the Cabinet, what the old people want is a practical demonstration of help, and the inference to be drawn, apparently, from what the Prime Minister said in his speech is that old people must wait for that practical demonstration?
  The Prime Minister: As regards a practical demonstration, the value of the pension now is higher than it has
  1144
  ever been at Christmas in the past. It is 16s. 6d. higher for a single person than it was at Christmas, 1951. What I was appealing for was not only for things on the material side but for the personal interest that people might take in old people to help them in other than purely material ways.

  OLD-AGE PENSIONERS
  Mr. Chetwyndasked the Prime Minister what instructions he has given to the departmental Ministers concerned to implement the policy, outlined in his speech at Guildhall on 13th November, concerning benefits for old-age pensioners at Christmas.
  The Prime Minister: In my speech at Guildhall I said that I hoped we would all try to see that old people are not lonely at Christmas.
  Mr. Chetwynd: Since the Prime Minister recognised in his speech that the old people had not shared in the general level of prosperity, is that all that he meant? Is it good enough for him to raise false hopes that something is to be done to help their material well-being, when what he really meant was that people should, perhaps, be a little kind to old folk at Christmas, which, important though it is, does not meet the real needs of the old-age pensioner? Will the Prime Minister consider asking the Minister of Pensions and National Insurance to double the old-age pension at least for Christmas week?
  The Prime Minister: No, Sir; I do not think that that would be a practical suggestion. [HON. MEMBERS: "Why not?"] We have discussed in detail the material questions of the rate of pension, and so on, and, as I have said, ours is the highest and most effective that there has ever been in the country. What I was trying to say on that occasion—I am happy to think that Members of all parties join in it—is that there is still room, whatever may be the material arrangements made, for personal effort and work on a different plane. It was for that that I was trying to appeal, and I am happy to feel that many hon. Members of all parties join in that appeal.
  Mr. Gaitskell: Is the Prime Minister aware that, while old people will, I am

  1145
  sure, greatly appreciate his concern for their loneliness, they would nevertheless appreciate a practical measure which only the Government can take? Will he explain just why it is impossible to double the old-age pension over Christmas?
  The Prime Minister: To double it for the whole year or for the Christmas period?
  Mr. Gaitskell: For Christmas week.
  The Prime Minister: That is an entirely different question as to the material benefits which are given by the pension. I think no one was under any misunderstanding about what I said, which was to make an appeal—I am happy to know that hon. Members join in it—to ensure that, even in the Welfare State and with all our various social services, people do remember that there is a great place for personal and human relations.
  Mr. Gaitskell: Is the Prime Minister aware that the old-age pensioners will take a very dim view of that explanation? Would he not have been well advised, before offering sympathy, to have devised some practical means of helping them?
  The Prime Minister: I do not think that they will take a dim view if they look back to 1951 and remember what their pension was like then.
  Mr. Lipton: As old-age pensioners are so much better off now than they were in 1951, what about taking some of the old people out of the Cabinet and putting them on the old-age pension in order that they may have the benefits?
  The Prime Minister: If we were to make a fair examination of the two sides of the House, it would be quite clear where the old-age pensioners were.

WAGES, SALARIES AND DIVIDENDS
The Prime Minister (Mr. Harold Macmillan): With permission, Mr. Speaker, I will now make a statement.
When announcing the series of measures introduced on 25th July in order to strengthen the economy at a time when sterling was under considerable pressure, the Government asked for a pause in
1146
increases in personal wages, salaries and other incomes. This was because for a number of years increases in money wages had persistently outstripped increases in production, with a consequent serious impact on costs and prices. The pause was also designed to give time for a long-term policy to be worked out, in consultation with both sides of industry, which would ensure a more satisfactory continuing relationship between incomes and production.
The policy of the pause has been maintained in the case of direct employees of the Government. It has been generally followed by local authorities and private industry. Here, the Government have had to depend upon those responsible for decisions being willing to follow the Government's advice: there can be no question of coercion. The same is true in the case of the nationalised industries, since the Government have no authority under the relevant legislation to issue a direction concerning a particular wage claim.
It is against this background that the recent decision in the electricity supply industry must be judged. The decision in that case rested with the Electricity Council, but the Government had left the Council under no doubt as to the importance which the Government attached to their policy about the pay pause. It is the case that previous settlements in the electricity supply industry have run either from the date of agreement or have been backdated, whereas the recent settlement dealing with a claim entered on 20th July, 1961, will not come into effect until 28th January, 1962.
Nevertheless, the Government do not regard this settlement as being consistent with the policy of the pay pause as announced by my right hon. and learned Friend the Chancellor of the Exchequer on 25th July. Accordingly, when my right hon. Friend the Minister of Power was informed, late on Thursday evening, that a final offer was about to be made, he expressed great disquiet and anxiety and emphasised the damage that a settlement in the terms proposed would do.
While there has been some improvement as a result of our short-term policies the economic situation remains serious, and it is still vitally important to prevent costs rising so as to avoid inflation and expand our exports. I must, therefore,

1147
urge all concerned, whether in nationalised industry, local authorities, or private industry, to make every effort to maintain a policy of restraint over wages, salaries and dividends.
Mr. Gaitskell: Could the Prime Minister explain what is the purpose of this rebuke to the electricity supply industry? Would it not have been fairer to have presented its point of view in a statement in Parliament? Is the right hon. Gentleman proposing to take any steps about this? If the Government have no power in the matter, does not all this point to the impossibility of trying to carry out a policy of wage restraint without the full agreement of both sides of industry? Will the right hon. Gentleman say what steps have been taken, or are being taken, to work out the long-term policy to which he refers in his statement?
The Prime Minister: It is, of course, true, as the House knows, that the Government have no statutory powers to settle the wages of any except their direct employees. It might be urged that they should take powers over the nationalised industries, but should they then take powers over private industry and local authorities? In that case we are moving a long way from a free society, which it is our purpose to preserve.
I am, therefore, convinced that the right way is to trust—as the right hon. Gentleman the Leader of the Opposition suggests—to influence and to suggest ways in which we should try to get general understanding. I am impressed by the willingness of all sides of industry to join together in trying to work out such a policy. We cannot, in a free society, do it by taking full authority over the whole wage structure of the country. We can try gradually to work towards a general understanding of what is best for all, and the Government will not abandon their policy because of a set-back in a particular instance. They will continue with their campaign.
Mr. Nabarro: While recognising all the complex reasons which have led to the inconsistency between the policy of Her Majesty's Government and the award by the electricity supply industry, could my right hon. Friend the Prime Minister tell the House what steps are being taken to prevent a repetition of
1148
this kind of thing in the nationalised industries, notably in view of the large pay claims at present pending from railwaymen and coal miners, both of whom are employed by the nationalised industries?
The Prime Minister: We must rely on those who manage this industry—public servants—to carry out what they think to be right. I am not dismayed merely because there has been one instance which has not fully carried out our policy.
Mr. Grimond: Have not the Government been in office for ten years? Are they now telling us that only now are they beginning even to think about a policy for wages, dividends and profits? The truth is that they are not abandoning a policy because they never have had one. They have had temporary expedients year by year which have totally broken down because there has been no indication of what is the Government's long-term policy. How does the Prime Minister reconcile the gross injustice between one group of workers and another?
The Prime Minister: No policy can operate successfully in a free society except by general acceptance and working together. The right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) seems to be suggesting that we should move towards a kind of Fascist society, where we would impose our will. That is not my view. Taking the past ten years as a whole, we have made an enormous advance in the standard of living of our people. This represents a great advance on anything known in the past. I do not abandon hope, for I am a democrat and I believe in doing this by democratic means.
Dame Irene Ward: Am I not right in assuming that my right hon. and learned Friend the Chancellor of the Exchequer said at the time of outlining his policy that he had had conversations with the chairmen of the nationalised boards? If so, did the chairman of the Electricity Council tell my right hon. and learned Friend that he did not agree with the Government's policy? What was the relationship between the chairmen of the nationalised industries and my right hon. and learned Friend? Is it not very unfair that the chairman

1149
of the Electricity Council did not tell the Government about this at that time?
The Prime Minister: The chairman of this particular board was well aware of the Government's views. That he made a settlement not altogether in accordance with our views I regret, but it would be a dangerous and revolutionary measure if the Government tried to make themselves responsible for the precise wage agreements of all the nationalised industries.
Mr. Gaitskell: Will the Prime Minister tell us what the chairman of the Electricity Council said to the Minister of Power and why he decided to make this agreement? Is the right hon. Gentleman aware that his answer to my earlier question absolutely confirmed the view which is strongly held on this side of the House, that the Government: have got themselves into an impossible position with their pay pause because of its unfairness between different: groups of workers? Would it not be wise, at this stage, to drop the pay pause as such and to start free and frank negotiation with the unions and employers and, in so doing, at least to try to give the impression that the Government are anxious to achieve social justice in the community?
The Prime Minister: I quite understand the right hon. Gentleman's view. It is exactly those negotiations and discussions which are going on. But these claims come in from time to time, dated on this day or another, and they must be dealt with. In my view, the main purpose and interest of all concerned, including especially the wage earners, is that wages should maintain their real value.
Sir D. Walker-Smith: Does not my right hon. Friend think that further claims from the nationalised industries will inevitably point to the precedent of the electricity settlement and that claims in the private sector will inevitably point to the settlements made in the nationalised industry?
Mr. W. Hamilton: On a point of order. Is it not the practice in this House for a Member who is a director of a company which has increased its dividends recently to declare his interest in that company?
Mr. Speaker: No. In my recollection, the practice of declaring an interest does not apply to Questions. It applies to hon. Members making speeches.
The Prime Minister: In answer to my right hon. and learned Friend's question, may I say that I hope that those who are responsible will take the view that it is their duty to support a policy which the Government have honestly put forward as being in the national interest—above all, in the interests of wage earners as well as other people. Whether they follow it we have not the statutory power to enforce, but we have the power to influence, and I hope that they will take note of this situation and will follow what is in the national interest.
Mr. Lee: We note the Prime Minister's desire to keep a free society and that when the chairman of a board decides that a wage increase is due he is reprimanded by the Prime Minister.
The Prime Minister will know that the chairman of the Electricity Council suggested that the increase should take place from 1st April. We also know that the Minister of Labour is signing wages council awards from 2nd April. First, are the Government saying that the pause should last until then and that it will then finish? Is the right hon. Gentleman aware of the great damage which is being done to industries such as the electricity industry, in which wages are earnings? In other words, to get an advance at all, men must leave this type of industry and go into industries where earnings are higher than wages. May I ask the Prime Minister whether his statement is one of intimidation and what will happen if another nationalised industry accords an advance to its workers?
The Prime Minister: I understand that the chairman put forward on his own authority what he thought was a fair solution. That he was driven from it by pressure does not alter the fact that he thought 1st April was the right day.
On the hon. Gentleman's second point, my right hon. and learned Friend the Chancellor of the Exchequer has said, I think today in the House, that he has not made up his mind. When it will be possible to achieve what we all want, namely, advances, not merely in

1151
money wages which are at once countered by a rise in prices, but in real wages which are of benefit to the recipient, depends on the circumstances.
I do not understand that there is a grave problem in this industry, but that it is carrying on effectively. Of course, so far as there is in some parts of the country what one might call overfull employment, the pull of labour on us is another problem which we have to face, particularly in certain parts of the country.
Mr. Lee: With great respect to the right hon. Gentleman, he is not seized of what I was saying. In the electricity supply industry, the majority of workers have not a payment-by-results scheme. The wage, in fact, is the gross earnings. In other industries, people are on a piece-work bonus, although the wage is the same, and they can earn much more. That is most dangerous to this type of industry, because it will lose men who will go elsewhere to get more money.
The Prime Minister: If we were to say that wage agreements have no meaning because of the bonus given by employers to attract employees, then we are in a bad situation.
Mr. Stonehouse: On a point of order. Since the Prime Minister has taken over the portfolio of the Chancellor of the Exchequer, and has answered Question No. 26, would it not be in order to ask him a supplementary question?
Mr. Speaker: That is not a point of order. As usual, I am in the hands of the House about this matter. I realise the importance and interest in this subject, but I do not think that we can debate it now without a Question before the House.
Mr. Gaitskell: May I put one supplementary question to the Prime Minister? [HON. MEMBERS: "Why?"] Because
1152
the Prime Minister has not answered the questions that I put to him, and I shall put them again.
The first is this: what did the chairman of the Electricity Council say? Is it not a fact that there is a serious shortage of labour in the electricity supply industry? How can the Prime Minister divorce this from a wage negotiation? Secondly, will he tell us precisely what consultations are going on at the moment about the long-term policy on this matter?
The Prime Minister: Whether or not the chairman of the electricity supply industry or the group of boards which form the industry thought there was a shortage of labour, had he thought it necessary to make a different offer to attract labour he would have made a different offer. He made an offer on 1st April. He was pushed from his date, and, obviously, it was not his judgment that it was necessary to put the date forward. It could not have been his judgment, otherwise he would have made it on his own.
Discussions are going on and I hope that it will be possible for the Chancellor of the Exchequer to make a general announcement about the arrangements he has made with the T.U.C. and with the employers' associations as to the broad management of the economy. Although that might not be directly associated with the wage structure, there should come out of it a better understanding of the circumstances in which the economy is working.
Mr. Callaghan: Give it back to the Minister of Labour.

NEW MEMBER SWORN
James Bennett, esquire, for Glasgow, Bridgeton.
ORDERS OF THE DAY

  TRANSPORT BILL
  Order read for resuming adjourned debate on Question [20th November], That the Bill be now read a Second time.
  Question again proposed.
  3.50 p.m.
  Mr. R. J. Mellish: I understand that I am to be followed by the Financial Secretary to the Treasury. It is right that it should be so, because the financial implications of the Bill are many and varied, and we shall be glad to hear from him on that subject. I did not know that he was very interested in transport, and we do not expect him to say very much about it. I think that the last time he had any interest in transport was at the time of the Suez affair, when he was concerned with the transport of troops.
  I am intrigued to know why, in heaven's name, we are to have the Home Secretary to wind up the debate tonight. I did not know that he was an expert on transport. I have been checking up on his varied career, and I cannot find that he has been associated with that Ministry, unless it is that he will tell us about the valuable contribution which coloured workers are making to the operation of the buses in London, which seems to me to be the only contribution which he could make. Somebody once suggested that the right hon. Gentleman may not even have travelled in a bus, though I do not think that that could be true. I shall listen to his speech with great interest.
  My Scottish hon. Friends are upset about this arrangement, because it appears that no one from the Scottish Office is to speak in the debate. I see that the Secretary of State for Scotland is here, and I hope he is listening, but we ought to have had a Scottish Minister taking part in the debate. I understand from some of my Scottish hon. Friends that on 4th December 125 passenger trains in Scotland are to be withdrawn. I also understand that on 8th January next year another 165 trains are to be pulled out of service.
  I should have thought that these are questions well worthy of the attention
  1154
  of the Secretary of State for Scotland. The Minister of Transport did not attempt to deal with them yesterday, and I can understand why. So you, Mr. Speaker, will realise why we suspect the decision of the Government to ask the Home Secretary to reply to the debate. What the purpose of that is we cannot visualise, and I only hope that he will try to deal with the points, which are of interest to us.
  I want to start where the Parliamentary Secretary to the Ministry of Transport left off last night. The hon. Gentleman posed two fair questions in his speech, one in which he said that he did not understand what the Labour Party meant by integration and co-ordination. I agree that the Labour Party never achieved complete integration. I think that the hon. Gentleman was basically right. The second point was that we did not achieve full integration under the 1947 Act because we left outside the orbit of nationalisation the whole question of the C-licence holder, and without that, we cannot have a policy of complete integration.
  What we did attempt to achieve under the 1947 Act was a policy of co-ordination, which was the first step towards full integration. I could argue that if the 1947 Act had been allowed to remain on the Statute Book a little bit longer, we should not be in the position with which we are faced today. Events would have shown that the financial plight to which the Financial Secretary will refer would not have occurred.
  The hon. Member for Guildford (Sir R. Nugent), in his speech yesterday, made a plea about a non-party approach. I do not know how many transport debates I have taken part in. I have lost count, but I remember that I made my maiden speech on the 1946 Transport Bill. I shall try to put before the House fairly and honestly the picture of the transport industry as I see it now, and not start apportioning any blame. We have gone beyond that. I want to paint the picture of the transport industry as I see it and show what relationship this Bill will have to its improvement. I could not be fairer than that.
  The figures that I shall quote, for the benefit of the Home Secretary, in case he wants to challenge them, come from the Minister of Transport's Department.

  1155
  Whatever we may say of the Minister of Transport, I want to put it on record that the officers in his Department are some of the best to be found in any Government Department. They certainly are reliable.
  Let me deal, first, with roads. In August, 1960, the Minister of Transport had a census of road vehicles. He had 100 check points. The checking was very carefully done on main roads and Class I roads. It took a week to do it, from 6 a.m. to 10 p.m. It was discovered that there was a 62 per cent. increase in traffic on our roads, and that 26 per cent. was due to the transit of goods. These are the Ministry of Transport's own figures.
  The position is probably considerably worse today. We know that since 1953 there has been a vast increase in the issue of A- and B-licences. The figures have gone up to the astronomical total of 201,000. As to the C-licences, they have now gone up to the fantastic figure of 1,205,000; that is the number of vehicles to which licences have been issued under category C.
  There we have the position on the roads. We all agree that our roads are absolutely choked. No matter what the Minister does or how much money is spent, so long as this trend continues we shall be in an impossible position. No one denies that. It will cost untold millions of pounds to sort it out.
  What has been the effect of that sort of traffic going on our roads? If we are to discuss transport, it is important to remember that transport does not start and end with lorries and trains. There are many other aspects with which we have to be concerned, and I concede that to the Tories. An hon. Gentleman who spoke last evening suggested that if it was more convenient far traders to have their goods carried by road, they ought to be allowed to do it. I interrupted and referred to the nation's interest, but I was told that I had no qualifications to speak on this matter of the nation's interest.
  I now turn to coastal shipping, to which the hon. Baronet the Member for Barkston Ash (Sir L. Ropner) referred yesterday. We very rarely talk about this industry in this House, yet here we are a maritime nation and one of the
  1156
  great nations so far as our fleet of coastal shipping is concerned. I wish to put it on record that this fleet is in a deplorable condition, and that under this Bill I would say—I do not know whether the hon. Baronet would deny this—that unless the sort of assurances which he was given yesterday are implemented, and a great deal more is done for coastal shipping, the position will be reached when we shall have no coastal shipping fleet at all. Does not the Conservative Party believe that? Hon. Members opposite ought to be interested. Do they say that because the private trader ought to have the right to send his goods by road, it does not matter what happens to coastal shipping?
  Are we not right to talk about transport in this wider sense and to look at the plight of coastal shipping? I am advised by the employers and the trade unions that in coastal shipping, from 1953 to 1960, 128 ships have been withdrawn from this trade. The fleet has been cut down to something just over 500 ships, and of that total the vast majority are probably needing replacement. How many ships are being replaced at this moment in that vital industry? Belfast should be interested in this, because it would hope to get some of the work made available, but two ships are all that are being replaced at present and they are tramp steamers. Are hon. Members opposite not interested in this? Do we still want a policy under which more and more traffic will go on the roads?
  One hon. Member said yesterday that coastal shipping must become more efficient. How can it become more efficient than it is? The industry has ports and facilities, and it is often forgotten, that when a ship arrives at a port either for discharging or for loading cargo, the matter does not end there. There are all the ancillary trades associated with it, and the Parliamentary Secretary to the Ministry of Transport who has responsibilities for shipping ought to be keen about this. We shall want to get his ideas at some stage, perhaps in Committee, on what he pro poses to do to safeguard it. My information is that an enormous amount of traffic has left coastal shipping and gone on to the roads.
  Mr. Geoffrey Wilson: May I ask the hon. Gentleman whether the number of small ships sailing under foreign flags has increased and, if not, why not?
  Mr. Mellish: I will come to the point about competition. I am dealing with coastal shipping, which is a specialised trade and a specialised job. The trade which the industry was normally doing has been diverted on to the roads, and in a good many cases competition with the railways was unfair to shipping.
  The Government talk about the Common Market. I understand that they are keen to go in. If this is so, above all else we shall need an efficient coastal shipping fleet. Without it how are we to compete with our competitors? What is often forgotten when the coastal shipping fleet is talked about is that these ships feed foreign ships; they are often used for this purpose. If we have not got a fleet, how shall we be able to do it? I know only too well that our Dutch and German competitors will be delighted if we enter the Common Market without a fleet capable of doing the job.
  Shipbuilding and ship-repairing yards are in a terrible state. This is a fact. I am not overstating the case. The hon. Baronet the Member for Barkston Ash will correct me if I am wrong in saying this. The hon. Lady the Member for Tynemouth (Dame Irene Ward), who is interested in coastal shipping, will interrupt me if I am saying something which is untrue. We all know that it is true, but when I talk in the House about the nation's interests I am told that I am not to discuss that because only the trader matters.
  Of course, it is cheaper to go by road. I do not deny that. It is cheaper to travel from point A to point B—that is to say, from door to door—by road. Hon. Members may accuse me of being political if they like, but this is why the 1947 Act was so right in its intention. What is this Bill designed to do? How can it achieve it? I have met Dr. Beeching and I regard him as a very able and intelligent man. I have no doubt that he is worth at least some of the salary he receives. Both Dr. Beeching and the Minister have the vague idea that under the Bill co-ordination and integration are still possible. I say frankly and
  1158
  sincerely to the House that with nearly 2 million goods-carrying vehicles on the road, as there are today, it is impossible to get co-ordination and integration.
  If I were in business on my own account and owned a lorry, or perhaps five or six lorries, is it really to be expected that I would co-operate with coastal shippers and talk to them or the railways about rates? Being a good private enterpriser I would be in business only for myself. I would try to get all the work I could at the lowest possible rate. This is good, efficient Toryism, but it is dangerous for the nation. I hope that hon. Members with more knowledge of shipping than I have will join in the debate. I can only say that the future of coastal shipping is so bleak that I am alarmed.
  It is rarely stated in the House that labour relations between employers and workers in the coastal shipping trade are among the finest in the country. The Minister of Labour will be very interested to know that labour relations are a credit to employers and trade unions. Dock workers employed at the small ports have a record in labour relations which is second to none in Britain. Yet their future is so bleak. If there is no shipping trade in the future, we shall all be able to understand why.
  I turn now to another part of shipping which is rarely discussed in the House. There are about 7,000 lighters in the London docks area. It may interest the House to know that in the last six or seven years they have lost over 1 million tons of traffic, mainly to the roads. The position has now reached such a farcical stage that refuse is carried by lorries on the roads. The people concerned would rather send 300 tons of refuse on the roads than take the trouble to send it down to the docks and put it on craft.
  How stupid can we get? This is not policy. It is chaos. It is asking for trouble to produce a Bill which sets up a number of boards but still leaves this great part of transport without any measure of control. I do not question the Minister's hopes and dreams for the Bill, but he cannot achieve them. It is not possible. I have been given a brief by those employed in the dock industry which has terrified me—and I thought that I knew quite a bit about the industry. They see no future even for the facilities which are already there.

  1159
  For example, the Minister may be interested to know—if he takes the trouble, he can quickly find it out for himself—that there are five small railway ports in the London area which are almost falling into disuse. During the last five or six years they have lost trade—mainly to the roads—to such an extent that they are now hardly functioning. I may be told that Britain does not care about this, but at least the Minister should be honest enough to say that. I plead with Tory members to understand why we get concerned about this problem. Private profit for a certain section of Britain should not be the only consideration.
  I do not know how any responsible person can say to the public that the roads are capable of taking all this traffic. We are told by the Minister's own officers that by 1970 there will be 17 million vehicles on the roads. Can any hon. Member imagine the state of the roads then? By that time there will probably be no coastal shipping trade. By that time the greatest river in the world—the River Thames—will not be used to anything like the extent to which it should be used.
  I do not deny that the 1947 Act had faults, but in view of its financial implications it was essential for it to be looked at again by a Labour Government if elected. We should have had to examine carefully how far we could have gone with C-licences. I will now make a personal observation. I see no reason at all why we could not have introduced another licence and taken away from this sector—namely, C-licences—the vast majority of vehicles which are doing the work designed for A- and B-licences. The Labour Party must admit this and say frankly that the 1947 Act was the beginning, but certainly not the end. It would have been amended.
  I do not intend to take up too much of the time of the House, because you, Sir, have expressed the desire that other hon. Members should take part in the debate. I know that you have a long waiting list, Sir. However, I could not speak in a debate of this nature without saying something about our inland waterways. This should appeal to the Home Secretary. I do not know whether he knows that in Britain there are over
  1160
  2,000 miles of inland waterways. These could be our greatest heritage. These could be something which we are proud to hand over to our children. They go through some of the most wonderful parts of Britain. But what a story! Because of lack of finance, in the main, and because of our inability as a nation even to care for these waterways, hundreds of miles have fallen into disuse.
  What do the Government propose to do about it under the Bill? As I read the Bill, the British Transport Commission, which now controls many of them, will have to show proof of their economic purpose. Everything must be judged on private profit alone. It does not matter about Britain so long as a balance sheet can be produced which at the end shows that a profit has been made. What sort of people are we that hand on to the next generation a country which is even fouller than the one we inherited?
  I ask the party opposite to try, for once at any rate, to look at this in a non-party and non-political way, as the hon. Baronet the Member for Guildford said. I know that I speak for hon. Members on both sides of the House when I say that I want to see Britain become much greater and more competitive. I do not think this can be achieved if we concentrate on one section of transport—a free enterprise section—at the expense of others.
  I want to say something about London Transport. Here I pay tribute to the Minister. It is not often that I pay tributes to him. I think that his policy here is absolutely right. He says, "I shall do my best to achieve some priority for public transport by getting private motorists out of the way and off the main roads. There will be no parking and no right turns. They have to go round the side turnings". Whatever else happens, I shall always support him in this policy, because public transport must have priority. Ninety-three per cent. of the people coming into Central London daily still have to use it.
  However, it is no good the Minister saying that unless he has a plan to better and extend public transport. There is absolutely no excuse for saying, for example, that there will be no extension of the tube services, although every expert has recommended it. We

  1161
  are told that the money cannot be found to pay for an extension of the Victoria tube, which has been outstanding for years.
  Everyone knows that if the tube were built it would relieve congestion on the streets by about half a million people every evening. The money should be found somehow and somewhere. It would be found if only we had a real transport policy which was not based on the attitude of the Government, which seems to have driven them almost frantic throughout the years. Their attitude is that they must somehow smash what we introduced in 1947.
  The Government are now in their eleventh year of office. If they made all these things run better and much more efficiently, they would get the credit for it. They could always claim, "We did this and made it run much better". But they started, in the 1953 Act—and the hon. Member for Guildford must take his share of blame—to wreck it to such an extent that they have never been able to look back. That is the tragedy. They have never had the courage to say, "What we did in 1953 was wrong, let us look again." They might then be identified with a policy almost akin to that of the Labour Party, and that would be terrifying.
  I am extremely worried about transport, not only as it is now but as it will be in the future. I have not attempted to deal with the Bill in detail—that can be better done in Committee—but I must quite frankly say that I do not see what it will achieve. I am sure that Dr. Beeching and the Minister of Transport want to see the transport that we all want—a co-ordinated linking, so that the right traffic goes by the right means; slow traffic on the river, non-urgent traffic on the railways, specialised traffic carried by coastal shipping. But how can that be achieved by this Bill? In that respect, it is absolutely hopeless. I ask the House to talk in the spirit of co-ordination when dealing with the Bill and the transport industry.
  In this debate, roads and railways, have, quite understandably, dominated our thoughts and will continue to do so, but I plead with the Minister and hon. Members opposite to try to remember the other aspects of transport. If they do not want the kind of transport of
  1162
  which I have spoken, let them tell us, so that we may know what our future is, but do not let us humbug; and if they will not have transport treated as a co-ordinated whole, let them tell the House what they propose to do to encourage nearly 2 million private enterprise A, B and C licence holders to co-operate in co-ordination. If I can have the right answer to that my fears will be largely allayed.
  4.12 p.m.
  The Financial Secretary to the Treasury (Sir Edward Boyle): It is always a pleasure to follow the hon. Member for Bermondsey (Mr. Mellish). I think that the last time I had that pleasure was two and a half years ago, when we were discussing the rather different subject of denominational schools. I shall not this afternoon attempt to answer him on the theme of coastal shipping except to say that I know that my right hon. Friend the Minister of Transport and his colleagues will have noted what the hon. Gentleman said, and will have noted, too, the speeches made yesterday afternoon by my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) and by my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner).
  As this is the first time in eleven years that I have been invited, and may well be the last time that I shall ever be invited, to speak in a transport debate, I shall venture just one comment on the subject of C-licences. I think that the hon. Gentleman will agree that when considering the increases in C-licences during the last ten years, one must consider not only private traders but the growth of local authority services as well, which has, I think, contributed considerably to the growth—
  Mr. Mellish: Infinitesimal.
  Sir E. Boyle: I do not think that the hon. Gentleman is right in that remark.
  The only other thing I want to say by way of introduction is that, for reasons I have given to the hon. Member for Bermondsey, I very much regret that it will not be possible for me to be present for the whole of the rest of the debate, although I did listen to most of it yesterday.
  My right hon. Friend the Minister of Transport yesterday dealt with the Bill in its entirety, and outlined the main

  1163
  features of the financial reconstruction which is one of the principal objects of this Measure, and I propose to concentrate my remarks on some of the main financial provisions of the Bill. I am sure that I do not have to stress to the House how important these financial provisions are. I welcome the fact that they received general approval yesterday, and I must say that I cannot help sympathising with the view expressed in this morning's Press that the House has received this part of the Government's proposals with noteworthy equanimity. [An HON. MEMBER: "Hear, hear"]
  I shall start with debt reconstruction—but perhaps I might add just one word of comment in reply to the hon. Member who said "Hear, hear". If any hon. Member during the last half-hour, has recalled the late Mr. Aneurin Bevan's remark about the acres of boredom hon. Members would have to endure when listening to technical subjects, let him at least not say that he has not been warned.
  The financial arrangements are set out in their bare essentials in paragraphs 39 to 42 of the Explanatory and Financial Memorandum. The financial effect of the reconstruction is simple in its essentials, even though the details are complex. The two main parts are the recasting of the capital obligations of the British Transport Commission and the setting up of new ones for the new undertakings. I will deal, first, with the recasting of the existing obligations.
  The biggest item, in money terms, will be the assumption by the Treasury of responsibility for outstanding British Transport stock, which amounts to £1,444 million. This means that interest on this stock will be met in future out of general taxation instead of out of the Commission's receipts, as at present, and the Government will also be taking responsibility for redeeming and refinancing this stock when the various issues mature. The latest maturity dates range from 1972 to 1988. The rights of the stockholders will be fully safeguarded under the new arrangements, and there will be no loss of security or income.
  The next biggest item is the extinction of the Transport Commission's liability to
  1164
  repay Exchequer advances for capital purposes under Section 42 of the Finance Act, 1956. The House will probably recall—I do, because I was then Economic Secretary—that in 1956 arrangements were made for the B.T.C. and other nationalised industries to obtain their capital requirements by loan from the Exchequer instead of by the issue of Government guaranteed stock on the market.
  By the end of 1960 these advances to the B.T.C. amounted to £470 million and, on the assumption that the vesting date under the Bill is 1st January, 1963, the total of these advances may then be in the region of £700 million, but this, of course, will depend on a number of factors; in particular, on the precise level of investment this year and next.
  The third main obligation which will be extinguished will be that to repay the loans made to the Commission under the Transport (Railway Finances) Act, 1957, in this case to meet revenue deficits. I expect that the House will recall that, in his Budget speech in 1960, Lord Amory recognised that the financial position of the railways was such that there was no prospect of these loans being repaid and that, accordingly, the Government had decided to change to voted grant as the method for financing the revenue deficits of the Commission. The powers under the 1957 Act are, therefore, no longer being used, and the amount of such loans outstanding at the end of 1960, which is approximately £300 million, will not change further between now and the vesting date which, as I say, will, in all probability, be 1st January, 1963.
  Those three changes—the transfer to the Treasury of responsibility for British Transport stock, the cancellation of the Commission's obligation to repay capital advances from the Exchequer and, thirdly, the cancellation of its obligation to repay deficit loans made under the 1957 Act, will together mean that the community as a whole will be assuming responsibility for debt amounting to, roughly, £2,450 million. That is on the best estimate that can be made of changes resulting from further capital borrowing in the meantime.
  I must tell the House that this is not a dead weight of debt, because the new undertakings will each have initial capital obligations to the Exchequer and, in

  1165
  working out the initial capital liability of the new undertakings, certain existing obligations of the British Transport Commission will not be recreated—as I will explain more fully in a moment or two.
  At this point, perhaps I should, for the sake of clarity, emphasise one general aspect of the financial reconstruction being carried out by means of this Bill. Whereas, at the present time, the Transport Commission has a dual indebtedness—that is to say, an indebtedness to stockholders in respect of British Transport stock, and also to the Exchequer in respect of advances from the Minister—the new bodies, when set up, will have a single indebtedness to the Exchequer, because the Treasury will have assumed full responsibility for British Transport stock.
  I might also remind the House that a substantial financial reconstruction would have been necessary even if there were to have been no alteration in the total combined capital liability of the organisation. A substantial reconstruction would have been necessary simply because the Transport Commission is to be replaced by five new bodies.
  I shall go on to say something about the treatment of the past revenue losses. The Government announced in the White Paper on Railway Reorganisation, last December, that in the process of the financial reconstruction, the accumulated revenue losses of the Commission would be written off. The Bill provides for this in Clause 39. The new organisations will, therefore, start their existence with a clean slate so far as the past history of revenue losses is concerned.
  Mr. Walter Monslow: I should like to ask the Minister about Clause 39.
  Sir E. Boyle: I have a lot to say presently in answer to the questions which the hon. Member asked yesterday.
  Just how much is likely to be involved in this write-off of past revenue losses? I can well believe that the formula in subsection (3) of the Clause may seem formidable. This is because—I am putting as simply as I can—in providing for the write-off, we have to take account of the Special Account set up by the 1957 Act, which, as it were, chronicles the
  1166
  accumulating losses of the Commission and aggregates together those incurred before the 1957 Act enabled deficit loans to be made, those covered by loans and also those in respect of which voted grants have been made since April, 1960.
  We have already written off the losses financed by Votes since April, 1960; they were written off as we went along because they were covered by outright grant. It will be the same with the revenue deficit of 1961, which is covered by the current Vote, and also, subject to the decision of Parliament, with the revenue deficit in 1962. Hence, Clause 39 provides for the disregard of losses already written off in the way I have described.
  The best estimate that can be made of the extent of the write-off as at the end of 1962, ignoring, as I have said, deficits financed from voted grant, is £475 million. When one considers the £475 million plus the deficits financed from voted grant, the House will understand what I meant when I spoke at the outset about the noteworthy equanimity with which the House has received these proposals.
  We thus have £2,450 million of capital obligation of the Commission, of which £475 million, representing accumulated revenue losses, will be finally written off, leaving approximately £1,975 million worth of liabilities to be apportioned among the new undertakings. Clause 39 goes on to provide for that apportionment.
  As far as can at present be estimated, of the £1,975 million about £1,575 million will he attributable to the British Railways Board and the remaining £400 million to the other statutory boards and the Holding Company. The apportionment is expected to be broadly in accordance with the net book values of the assets vested in the new undertakings. It will be made by order of the Minister in the form of a Statutory Instrument subject to annulment in this House.
  The £1,575 million which I have mentioned in respect of the railways may well seem a staggeringly high figure, and so, indeed, it is. Hon. Members should, however, bear in mind that the Bill also provides for a substantial part—between one-third and one-half—of that debt to be placed in suspense. This suspended debt will represent the written-down value of the assets created before

  1167
  1956—that is to say, before the modernisation plan—and we expect that the amount to be placed in suspense will be between £650 and £700 million.
  Mr. Arthur Holt: Can the hon. Gentleman say whether the Government seriously expect that any interest will ever be paid on the suspended amount?
  Sir E. Boyle: The hon. Member is anticipating my next sentence.
  I was going on to say that it remains to be seen, on the one hand, whether the fortunes of the railways improve sufficiently to enable them to meet the obligations represented by this suspended debt and, on the other, whether some of the pre-1956 assets represented by the suspended debt will, in the light of further experience, be found to be over-valued. I am not being drawn into making a global forecast of the kind that the hon. Member suggests at this moment just when we are at the beginning of our voyage on the Bill. If what I have described were to happen, there are provisions for adjusting the suspended debt accordingly.
  That will still leave the railways as at vesting date with, possibly, £900 million worth of debt to the Exchequer on which interest will be payable and to which repayment obligations will attach. Even this figure, which is substantially less than the total figure of debt attributable to the railways, may seem high, but this is broadly the measure of the investment in railway modernisation since the beginning of 1956.
  Although the railways are still passing through a difficult time, the Government see no reason why it should be thought that the burden is an unfair one, especially in view of the fact that the reorganisation effected by the Bill will set up a British Railways Board able to concentrate on the task of running the railways freed from burdensome restrictions on their commercial freedom and directed by the best managerial brains that we can find to undertake the task.
  I come now to answer one or two of the detailed questions asked yesterday by the hon. Member for Barrow-in-Furness (Mr. Monslow), of whose speech I took careful note. The best estimates avail-
  1168
  able at present for the commencing capital debts to the Exchequer of the other authorities are £165 million in the case of the London Transport Board, £90 million for the Docks Board, £19 million for the Inland Waterways Authority and £137 million for the Holding Company. If hon. Members are quick at mental arithmetic, they will have seen that those figures add up to a little more than £400 million. I think that it would be accepted that the saving phrase "Errors and omissions excepted" would be reasonable in this instance. These figures, like those which I have mentioned for the Railways Board, are subject to possible variations depending on the precise detail of the division of the undertaking and the incidence of borrowing and investment up to vesting date.
  The hon. Member also asked about the differences between the estimates of capital liabilities, which I have given, and the figures mentioned in the White Paper. There were bound to be differences, because the White Paper figures were based on the 1959 accounts, whereas we are trying now to forecast the position at the end of 1952. Since the end of 1959, there has been further substantial capital expenditure, particularly for the railways.
  The capital liabilities of the Transport Commission were stated in round terms in the White Paper as £2,000 million, whereas the estimate for the end of 1962, as I said earlier, is now £2,450 million. These figures, as, indeed, all those which I have mentioned, do not include the liabilities of the Commission in respect of superannuation provisions and Savings Bank deposits. These are expected to amount to about £300 million at vesting date and almost all of this liability will fall to be transferred to the Railways Board.
  The losses to be written off were put in round figures as £400 million in the White Paper and the figure now estimated for the end of 1962 is £475 million. This left a liability put at £1,600 million in the White Paper, divided as to £1,200 million to the Railways Board and £400 million to the other activities. Of the £1,200 million for the Railways Board, it was estimated in the White Paper that £800 million would fall

  1169
  to be treated as being in suspense, leaving approximately £400 million as what one might term live interest-bearing debt.
  Today, the estimates for the end of 1962 are that the total capital liability—and once again let me make it quite clear that I am not including in this figure liabilities in respect of superannuation provisions or Savings Bank accounts—will be £1,975 million, that is, £2,450 million less the written-off sum of £475 million. Of the total of £1,975 million about £1,575 million will be attributable to the Railways Board. In turn, of the £1,575 million a sum of £650 million to £700 million is expected to be put into suspense, a lower figure than the £800 million in the White Paper because of further depreciation in the meantime in the pre-1956 assets. This leaves about £900 million of live debt for the railways, the figure which I have already mentioned. The White Paper assumed a figure of £400 million but, as I have said, the present figure is £900 million.
  I apologise to the House for giving all these figures but I thought that it would be convenient to have them out of the way at the start.
  Mr. Monslow: Can the hon. Gentleman give the rate of interest under Clause 39 (6) and the period of repayment of capital debt?
  Sir E. Boyle: I have not forgotten the rate of interest about which the hon. Member and the right hon. Member for Vauxhall (Mr. Strauss) have asked. I shall have something to say about that.
  Mr. A. C. Manuel: In the bulk figure which the hon. Gentleman gave of the capital holdings, has he taken into account any written-down value of British Railways as we know them ensuing from the closure of branch lines and a contracting of the industry?
  Sir E. Boyle: Everything relevant has been taken into account, but if the hon. Member wishes to pursue a particular point on how the figure was arrived at, perhaps he will write to me, as this is a difficult subject.
  Mr. Charles Mapp: May I ask the hon. Gentleman whether in writing down the values of branch lines in future that item will be brought into the suspended account or will fall into the
  1170
  £900 million to which he has referred? Will it come out of the revenue-earning capital of the new Railways Board? The railway superannuation provisions and the savings account amount to £300 million. Is that figure additional to the £900 million, or is it included?
  Sir E. Boyle: The £300 million is additional. On the other point, I can only ask the hon. Member to read again what I said a few minutes ago on the subject of the suspended account.
  Mr. David Webster: When was the last valuation made of the assets of the Transport Commission?
  Sir E. Boyle: I shall have to look up the date, because I am not in regular day-to-day touch with the Ministry of Transport or with the Commission's affairs.
  Before I finally leave the subject of debt reconstruction, I should like to add two points. The first is that the figures which I have quoted inevitably contain an element of estimation, because we are looking ahead to a position more than twelve months hence. Secondly, I must emphasise that the writing-off of debt does not mean that the transport undertakings are relieved to that extent and everything else remains exactly the same. Far from it. To the extent that debt is written off or suspended, to that extent it is shifted from the undertakings on to the shoulders of the community at large, that is to say the taxpayers.
  The debt which is written off, or suspended, represents money raised from the public by the Exchequer and there can be no question from the point of view of the Exchequer or of national finance of writing off or suspending the service of the underlying debt to the community as a whole. This is important and the House should remember it.
  Mr. G. R. Strauss: I have followed, broadly, what the hon. Gentleman has been telling us, but I cannot understand how it is that the live debt, as he calls it, of British Railways has increased to £900 million in the Bill when it was proposed to be £400 million in the White Paper. Meanwhile, losses have been taken care of and the increase seems to me remarkable. I should be grateful for information.
  Sir E. Boyle: My right hon. Friend the Home Secretary will be replying to many points at the end of the debate. When the right hon. Gentleman looks at what I agree is the very large figure of £900 million, he must remember not only the investment that has taken place since the White Paper was published, but also the prospective investment between now and the proposed vesting date. We are looking at the position not between 1959 and today, but between 1959 and 1963.
  A number of hon. Members have asked what rate of interest will apply to the commencing capital debts of the new bodies. The Government have given a great deal of thought to this. It might be thought reasonable to say that since these are new bodies, being set up with fresh debts, from the aggregate of which the accumulated losses of their predecessor undertaking have been shorn away, therefore the rate should be the appropriate rate operative for new borrowing on the vesting date. There would be a good theoretical case for adopting this principle, but there are also practical considerations which we must bear in mind.
  If we assume, as I think it only right, that interest rates at the time of vesting will not be very different from present rates, and if, therefore, we assume a going rate at vesting date of, say, 6 per cent., it is clear that the application of the going rate to the commencing debts would almost certainly involve an appreciable proportionate increase in the interest burden of some of the new undertakings, including those which can, we believe, maintain financial viability but for which the maintenance of viability would not be an easy task. In the Government's view it would be preferable for those undertakings to be set a realistic target of financial performance related to their circumstances and prospects, in the sort of way envisaged in the White Paper on the Nationalised Industries, rather than that they should be saddled at the outset with what may prove to be an unduly burdensome annual debt charge.
  The Government therefore propose, and this is the answer to hon. Members opposite, that the rates of interest on the initial capital debts of the new bodies
  1172
  shall be rates calculated by reference to the way in which the debts have been built up in the past. This will involve some very complex analysis and calculation and I cannot forecast what the precise effect will be. Such preliminary calculations as we have been able to make suggest that the difference between a 6 per cent. rate and what I might call a series of historically derived rates may be about £10 million a year initially, taking the new undertakings together.
  It is not possible at this stage to say what the effect on individual boards is likely to be, but the overall figures which I have mentioned show that the decision which we have taken will make a very substantial difference to the undertakings. I hope to be in a position to give more detailed information on this matter when we reach the Committee stage. The terms of repayment of the commencing debts will also reflect the way in which the debt has been accumulated in the past.
  Mr. Douglas Jay: Will the undertaking be paying in interest to the Exchequer more or less than the Exchequer will be paying to the stockholders?
  Sir E. Boyle: I do not think that I could answer that question at this stage.
  Mr. Strauss: While we appreciate that the hon. Gentleman is not giving detailed figures now, and that he will do that later, may I ask whether he agrees that what he says surely means that there would be an increased burden of debt on the London Transport Board which would have to be recouped in higher fares?
  Sir E. Boyle: We shall have to see how it works out when we get to the point. I am simply stating what I regard as the right principle to adopt, namely, that we want to fulfil the objective of the White Paper and give the nationalised undertakings realistic financial targets which they should be able to reach.
  Mr. Ernest Popplewell: In that assessment, what does the hon. Gentleman expect will be the interest which the boards will have to pay even after this reconstructed capital development takes place? Will it be over a given period

  1173
  of time and is it likely to increase with further capital development?
  Sir E. Boyle: I do not think that I can add to what I have said on this subject. When they read what I have said, hon. Members will see that we are adopting a perfectly clear principle for setting up just what the rate of interest will be. It is not that I wish to be discourteous to the House, but on Second Reading I cannot go beyond the statement of principle that I have just made.
  Mr. Popplewell: The Minister of Transport said yesterday that already the amount was likely to be £65 million per annum and that this figure would increase with further capital development.
  Sir E. Boyle: What my right hon. Friend said yesterday was perfectly correct and consistent with what I have been saying.
  I want now to turn to some other important aspects of the financial provisions—those relating to borrowing and lending and those relating to Exchequer assistance to meet revenue deficits. First, I deal with borrowing and lending. The Bill gives each body power to borrow from the Minister and fox him to lend to it whatever it is empowered to borrow. This alignment of borrowing and lending power is a logical step to be taken when the undertakings are expected to obtain most of their money, and all of their finances for capital purposes, from the Minister of Transport.
  I should here mention that the Bill empowers the undertakings to borrow temporarily from the Minister and not just to meet their longer-term capital requirements. We should normally expect the undertakings to finance short-term fluctuations in cash requirements by bank overdraft guaranteed by the Treasury, but this may not always be possible, given the financial requirements and the position of the banks, especially in circumstances like those of the present. We have, therefore, thought it right to enable the new undertakings, if necessary, to come to the Exchequer for their short-term requirements.
  The Bill does not provide for borrowing by means of stock issues. In the White Paper on the Financial and Economic Obligations of the Nationalised Industries, the Government explained why, in their view, there was
  1174
  no possibility of an early return to the system of borrowing by stock issue that operated for the nationalised industries before 1956, and the provisions in the Bill reflect that conclusion.
  Clause 19 sets out the borrowing limits of the new boards, and Clause 29 the borrowing limits of the new Holding Company. Here again, in cold print the figures in the Bill may seem high—for example, £1,400 million for the railways—but, as is explained in the Explanatory and Financial Memorandum, the limits for the four boards include the estimated amount of their commencing debt to the Exchequer. That was the arrangement made recently in the case of the Post Office Act, 1961.
  It seems an eminently sensible arrangement because it means that when part of the commencing debt is repaid—otherwise than by by new borrowing—a corresponding entitlement to new borrowing is automatically created. But at the same time the arrangements entirely preserve Parliamentary control over the totality of borrowing powers of the undertakings.
  As I was saying, the figures include, in the case of the four statutory boards, the estimated amount of commencing debt. In fact, the amount of what one might call "new money" contained in these figures is estimated as follows: in the case of the railways, £200 million, or, if the House approves the higher limit, £500 million; in the case of London Transport, £35 million, or, if the House in the case of the docks, £30 million, approves the higher limit, £105 million and that of waterways, about £10 million.
  It is estimated that the limits should meet the borrowing needs for about five years from vesting date, but, having regard to the usual form of borrowing Acts for the nationalised industries, the Government have thought it right to make a proportion of the new money for the two largest boards—Railways Board and London Transport Board—subject to further Parliamentary approval.
  Thus, if this Bill is passed in its present form, the Railway Board will, in effect, be able to borrow up to £200 million of "new money", which is the difference between the lower limit of £1,100 million in Clause 19 and the expected amount of

  1175
  its commencing live capital debt to the Exchequer of £900 million, which, as I have explained, is comprehended in that limit. But it will not be able to borrow any of the further £300 million, which is represented by the difference between the upper and the lower limits mentioned in Clause 19, unless and until this House has approved the making of an Order by the Minister to that effect. It will be the same with London Transport.
  Broadly speaking, I can say, particularly to those hon. Members who are rightly concerned with the issue of Parliamentary control of the expenditure of the nationalised industries, that these interim limits have been set so as to cover the borrowing needs of the railways for about two years from vesting date and these of London Transport for about three years from vesting date. The Government felt it right to take a shorter period of time in the case of the railways so as to give the House an opportunity to consider the financial position of the Railways Board in a general way at not too long an interval after vesting date.
  I should perhaps add that the interim limit for the London Transport Board covers only normal requirements. If the Victoria Line were to be undertaken, the necessary borrowing would involve going into the second tranche, which would, of course, require prior Parliamentary approval.
  Hon. Members may ask why the aggregation of commencing debt and requirements of new borrowing into a single borrowing limit does not apply in the case of the Holding Company. The reason is that the Holding Company group is expected to be able to finance a substantial proportion of investment for itself, and consequently its requirements of outside capital are expected to be low in relation to the amount of its commencing debt. Thus, if, in the case of the Holding Company, we had done as we did in the case of the four boards, and had aggregated the commencing debt and the power to borrow "new money", any small margin of error which might have arisen in trying to estimate in advance what that commencing debt will be would have produced a much larger proportionate
  1176
  variation in the amount of "new money" contained within a single aggregated limit.
  If the effect had been to increase at all substantially the entitlement to new borrowing, we hardly think that the result would have commended itself to the House. We have, therefore, been fittingly cautious and have set out in Clause 29 a specific limit on new borrowing by the Holding Company.
  I turn next to the financial obligations of the new bodies. The Bill provides that the four boards shall conduct their undertakings so as to ensure that the revenue is at least sufficient to cover outgoings, taking one year with another. As envisaged in the White Paper on the Nationalised Industries, appropriate targets of financial performance will be worked out so as to translate the general obligation, which is in the customary terms, into appropriate quantitative terms, in the light of the circumstances and prospects of the undertakings.
  But the Bill recognises that, in the initial period at any rate, it is unrealistic to expect the railways and the waterways to break even on revenue account, and, therefore, in its application to them, the general financial obligation is mitigated accordingly. The Holding Company is required to manage the undertakings vested in it as though it were a commercial enterprise, and the Government hope that its operations will result in substantial surpluses as some offset to the continuing burden on the taxpayer of railway deficits.
  Finally, I turn to the provisions for Exchequer assistance to meet the revenue deficits of the railways and waterways. The Bill provides for deficit loans or grants for those deficits arising in the first five years after vesting date. Assuming vesting date to be 1963, the five years would be from 1963 to 1967 inclusive. This power is limited to £450 million in the case of the Railways Board and £10 million in the case of the Inland Waterways Authority.
  These may appear to be very large sums, but it is surely better that we should take a realistic view of the likely scale of the revenue deficits of these bodies in their initial years of operation than that we should have to come to Parliament fairly soon after vesting date and seek additional deficit powers. In

  1177
  any case, it is damaging to these operations that we should constantly have to come to the House for more powers in order to carry out policies to which the House has agreed. I am sure that we are right in this case to take a realistic view of what the scale of revenue deficits is likely to be. The Bill also specifically authorises the payment of a deficit grant to the British Transport Commission until vesting date, and replaces the power which up to date has been given each year under the Appropriation Act.
  Some hon. Members may wonder why we are proposing to continue to provide what one might term a general subsidy to the railways, instead of adopting the recommendation of the Select Committee on the Nationalised Industries that specific uneconomic rail services, which may have to be continued for social reasons, should be given specific subsidies. For instance, some hon. Members may feel that the continuance of a general subvention will blur the distinction between what the Railways Board might consider, on the basis of its commercial judgment, should be the size and shape of the railway system, and what the public and Parliament may think desirable, for reasons which are perfectly arguable, but which go beyond purely commercial considerations.
  My right hon. Friend the Home Secretary will have more to say about this when he winds up the debate this evening, but at this stage I should like to explain why the recommendation about the specific subsidies is not being adopted. There are two main reasons. The first is that it is often extremely difficult to isolate and assess the loss on a particular part of the network. In any case, some services unprofitable at present may become remunerative later, and vice versa. The second point—and this is the more important—is that the problem goes wider than the railways and must be considered in the context of the nationalised industries generally.
  In the White Paper on the Nationalised Industries the Government announced arrangements for setting, in consultation with the nationalised boards, targets for their financial performance, and the White Paper specifically recognised that in setting and adjusting those targets it would be necessary to take account, so
  1178
  far as practicable, of the amount of commercially unprofitable activities carried on by the individual undertakings. So long as the railways are receiving Exchequer assistance to meet the deficit, the subsidy attributable to particular services will be reflected in that assistance.
  However, if any fears remain that the powers we are seeking to provide Exchequer assistance for the railways for the next five years may, in the absence of specific identified subsidies for particular services, tend to tilt the balance too far in the direction of maintaining uneconomic services at considerable expense to the taxpayer, let us remember that the Bill sets up a Railways Board designed to concentrate on the task of running the railways as economically as possible. That is the new Board's major remit in the Bill.
  Secondly, the situation is not that the Government are seeking powers to subsidise, proposing thereafter just to leave the taxpayer at the end of the day to foot a bill over which his representatives will have had no control in the meantime. The power to subsidise is a general provision and the amount of any subsidy proposed for a particular year will be subject to Parliamentary control in the ordinary way through the procedure of annual Votes. If the pace of rationalisation as reflected in the changing annual figures is thought by hon. Members not to be fast enough, or is thought by other hon. Members to be too fast, there will be ample opportunity for hon. Members on both sides of the House to say so.
  Mr. Percy Collick: I regard this as one of the most important statements yet made in the debate. Can the hon. Gentleman carry it further? Let us take, for example, the classic case of the railways north of Perth. It is commonly accepted by everybody who knows this subject that the lines north of Perth are what is called uneconomic. In the light of that, do I understand that the Government do not now intend to, assess the loss that may occur on that fairly extensive section of the line and give a subsidy proportionate to it, but rather to take it in the general deficit balance of the new Railways Board?
  Sir E. Boyle: The point I am making is that there is no provision in the Bill for specific subsidies for a particular

  1179
  branch line service whose purpose is primarily social rather than commercial. What I am saying is that there are two safeguards of some importance. The first is that one of the Bill's main objectives is precisely to ensure that the railways are run in a commercial manner, and we are setting up a Railways Board designed precisely to concentrate on the task of running the railways as economically as possible. The second is the point I made about Parliamentary control. I pointed out that there is no question of the Government seeking general powers to subsidise the undertaking, the taxpayer having to foot the bill, a bill over which his representatives will have had no control. If hon. Members feel that too much weight is given to purely commercial considerations, or not enough weight given to purely commercial considerations, there will be ample occasions in the House for hon. Members to make their views known.
  Sir Richard Nugent: Will my hon. Friend clarify this issue? As he has explained and as the Minister explained yesterday, the principle of the Bill is that the railways are to operate on the yardstick of what is economic. We know that there are certain sections of the railways, for instance in the northern part of Scotland, which are not economic. If they are to be run in future, when we have got through the transitional stage, how can they be justified as an economic operation? Why should not that be brought out clearly? Should not Parliament have to decide whether they should be run in the social interest and the interests of the nation?
  Sir E. Boyle: I do not think that I can add much to what I have said. When we are considering the financial targets for these industries—and this applies to all nationalised industries—it is open to the Government—indeed, it is one of their duties—to weigh purely commercial considerations and what have been called social service considerations. One always has to consider keeping a right balance between the interests of particular citizens and the interests of the community as a whole. I was going on to say that I sincerely hope that we will not forget the interests
  1180
  of the community as a whole and the importance of giving full weight to improving our commercial ability over the whole range of our economy if we are to avoid recurrent crises.
  I have already said that the whole object of setting up the Railways Board was precisely to ensure that full weight should be given to the commercial side. If hon. Members on either side of the House feel that rationalisation is going too fast, or too slow, they will have ample opportunities of expressing their views, and not just their view of a particular industry, but also as to whether the Government of the day are generally keeping a right balance in the financial targets between the purely commercial considerations on the one hand and the wider social considerations on the other.
  Mr. John Peyton: What was in the mind of the Select Committee was to put a duty on the Minister in case the railways said, "We cannot run this or that service at a profit and if you want us to do so, you must take on the liability for it". The Select Committee hoped that the Minister would then come to Parliament and make his proposals, saying what amount of money would be required to run an uneconomic service. Apparently, all that principle has been abandoned and we are not to have the source of loss clearly identified to Parliament. That is what we wanted.
  Sir E. Boyle: My hon. Friend is quite correct and I do not wish to burke the issue. The Bill does not embody the specific recommendation of the Select Committee but, in view of the arguments which I have just used, I believe that the objectives of the Select Committee will be achieved and that, because of the Bill, the right balance will be Kept between commercial and social service considerations.
  Sir Toby Low: It may clear our minds if my hon. Friend can explain exactly how it will be that Parliament will have control over decisions about the uneconomic services. As I understand it, the duty of running the industry and taking decisions of this kind is the duty of the Railways Board, but I have not observed any power given in the Bill to the Minister to interfere with that duty. If the Minister has no power, how comes it that Parliament has any power?
  Sir E. Boyle: I must confess that my right hon. Friend the Member for Blackpool, North (Sir T. Low) is the first I have heard to say that the Minister does not have enough power under this Bill. I recognise that it is essential for the Measure that we trust the Railways Board to concentrate on the all-important task of running the railways as economically as possible. The point I made about Parliament was that the total amount of subsidy proposed in any year would be subject to Parliamentary control in the ordinary way through the procedure of annual Votes. In addition, my right hon. Friend has direct control over the question of railway closures.
  As I recall as a former back bencher, it is possible to have Adjournment debates and so on on these subjects. [HON. MEMBERS: "Oh."] Certainly. I have taken part in one myself. I am simply pointing out two things. The first is that we must trust the Railways Board to perform its economic task properly, and the second that Parliamentary control will be adequate and that the objectives at which the Select Committee was aiming can be achieved.
  Dame Irene Ward: I, too, was a member of the Select Committee. Is my hon. Friend saying that the principle of not interfering in the day-to-day administration of the railways by Parliament is being thrown over? He speaks of ample opportunity. Can he define what "ample opportunity" is? Will we be able to ask for details of services, say, north of Perth? Will we be given the figures of the losses during the period when the general subsidy is in operation? We want to know whether we can have details of such questions freely given so that we can comment on them.
  Sir E. Boyle: There will certainly be details of the financial targets, but my hon. Friend the Member for Tynemouth (Dame Irene Ward) is coming on to a question with which she has always been associated—that of putting Questions about day-to-day operations. I am bound to say that it would be very difficult for the new Railways Board to carry out its task in the interests of the nation as a whole unless hon. Members fully appreciated the strength of all the arguments which arose in the years after the 1947 Act. I do not believe that too much
  1182
  day-to-day questioning can be consistent with the task that we have put on the Railways Board.
  Dame Irene Ward: Then we cannot have the answers.
  Sir E. Boyle: I should like in conclusion to refer to a point which was made yesterday by the right hon. Gentleman the Member for Vauxhall and a good many other hon. Members opposite. I think that the hon. Member for Swindon (Mr. F. Noel-Baker) put it in its simplest form. He said:
  "We on this side of the House see the railway system and transport as a whole as a public service".—[OFFCIAL REPORT, 20th November, 1961; Vol. 649, c. 1012.]
  But it is surely true that, when we are considering the future of the railways, or any other of the public services, we have to take into account the health and growth of the economy as a whole.
  If the public services take too much of our available manpower and capital, too little will be left over for such vital aspects of our economic life as private capital investment and exports. It is essential to the whole community that we should obtain good value for money in the development of our public services; and there are many who would say—I believe with much truth—that a more resolute pursuit of this objective would do a great deal to get us out of the cycle of recurrent economic crises, and to improve our national economic performance. If the public purse is used too often to uphold inefficient and relatively low productive forms of economic activity, this not only necessitates a heavier burden of taxation, but also lowers our competitive power abroad and reduces the rate of increase of our gross national product.
  I cannot see that there is any inconsistency between, on the one hand, social idealism, and, on the other, a more rigorous attention to costing in our public services and a stronger determination to ensure value for money over the whole width of the public sector of our economy. I have no doubt that if we carry out this policy, then the effectiveness of the whole range of our economic policies and performance will be greatly improved, to the benefit of all those whom we in this House seek to represent.

  1183
  I hope that it will be clear that the general effect of the new arrangements will be to confer more realistic obligations and powers on the new undertakings than those which exist at present—obligations and powers more in keeping with a time when there is such rapid development in road and air transport as well as railways.
  The price of realism means that the present-day taxpayer has to assume some of the debts entered into for the benefit of the travelling public and of industry and agriculture in their parents' and grandparents' day. This seems to us, given the safeguards that I have described, a reasonable price to pay for a reorganisation that will enable the new transport undertakings to make a fresh start.
  It is in that spirit that I ask the House to approve the Bill.
  5.6 p.m.
  Mr. John Hynd: I do not think that many hon. Members on either side of the House will disagree very greatly with the peroration of the Financial Secretary, but it seemed to have very little relationship to the matter that we are debating today and that we debated yesterday. I do not want—and I hope that he will not expect me—to follow him into the mass of figures that he has recited and which will require very close study.
  It is not the financial adjustment with which we are concerned as the main issue of this debate. What we are concerned about—and it came out very clearly yesterday, particularly in the Minister's speech and the speech of the Parliamentary Secretary—is the key issue of whether the basic industry of this country upon which all our economic activities are based—transport—shall be run as a purely competitive industry, or whether it shall have regard not only to public service but to the economic impact of its operations on all other branches of the economy.
  I am sure that many of my hon. Friends and a number of hon. Members opposite who were on the Select Committee would have been completely confused by the Financial Secretary's reference to the public service aspect. He said that he certainly hoped that we
  1184
  would not forget the community as a whole in this operation. He said that he was sure that there would be sufficient Parliamentary control through Adjournment debates over any attempt on the part of the Railways Board, or the Minister, to curtail or close down services. But first we have to get the Adjournment debate and, having got it, if we tried to raise the question of the taking off of one or two trains or the cutting down of one part of a line we would certainly be ruled out of order because it would be said that that came within the day-to-day administration. We know from experience that if we raised the subject of the closing down of the Great Central Line or the lines north of Perth we should get very little satisfaction from the Government, and have no power to enforce anything at all.
  If anything was made clear from the Minister's opening speech yesterday, it was that it was in direct contradiction with what the Financial Secretary was apparently saying today, that his intention and the intention of Dr. Beeching is that henceforth the railways must be run as a purely commercial concern and that the results will be judged on the balances in the books of the Railways Board and nothing else. Therefore, what is the good of the Financial Secretary talking about having sufficient regard to the general public welfare or the impact of the railways on other branches of the economy? The Government are still trying to put into operation the monstrous policy which was expressed by the right hon. Member for Woodford (Sir W. Churchill) in the 1950 and 1951 General Elections—"Set the people free; let each win for himself what prizes he can; let the best man win." That was the motto emblazoned on the banners of the Tory Party. That is what it has been trying to achieve ever since, except in certain instances.
  Earlier today we had a statement from the Prime Minister about the attempts of the electrical workers to win for themselves some prizes, and the recognition of the Electricity Council that they were entitled to those prizes. The Conservative motto is not to apply to them, or to the nationalised railways and other nationalised concerns, as against private activities and private interests.
  This has been the story of transport throughout the ages. I believe that about

  1185
  20 per cent. of the total industrial investment of this country is in transport. That is the measure of the importance of the industry, not merely to the shareholders or to the balance sheets but to every other economic activity in this country. Yet, right from the beginning of railway history, through the period of the destruction of the canals, and all the rest, there has been a constant state of chaos, and no policy has ever emerged other than that which was put into the 1947 Act.
  Most hon. Members know the history of the railways. We have heard a lot about the early railway "monopoly". It was not a monopoly; it was a question of competition between too many railway companies. There was, nevertheless, sufficient co-operation between them to bring about the destruction of our canals, a fact to which my hon. Friend the Member for Bermondsey (Mr. Mellish) referred. The price that we are paying for an inadequate and outdated canal service is the price that we are paying for just that free competition between the various branches of the transport industry which the Government are trying to bring in again between the railways and the road hauliers. In 1918 we had the problem of road competition cropping up, and it threatened to destroy the railways then. In the light of the special disadvantages created for the railways a Committee was set up by the predecessors of the present Tories, who were much more enlightened than their successors, in spite of the "new liberalism" of the new Tory Party, because the Tories in control in those days at least recognised that a vital public service had to be provided by the railways.
  The contribution of those Governments took the form of considerable subsidies for various branches and various parts of the service. What would have happened if the 1931 Report had not been published, and the railways had not been amalgamated? If nothing had been done, and we had allowed free play to private interests and to competition between the railways from 1918 onwards, the railways would have been bankrupted by road competition. Everybody knows that. It was
  1186
  admitted by the Government of the day. That is why the right hon. Member for Woodford, Lloyd George, and every other leading politician, as well as all the transport experts, advocated that railways and other branches of the transport industry should be brought into a co-ordinated service as a nationalised concern.
  If we had not done something about it in 1918, if we had followed the policy of the present Minister of Transport, road competition at that time would have taken the cream of the traffic from the railways and they would have been completely bankrupt. There would then have been a panic measure, as there was in the case of the coal industry before the war, when the Government poured in hundreds of millions of pounds to try to save it, when it was too late.
  Yesterday one of my hon. Friends said that there had been about twenty-three Acts of Parliament connected with transport since 1947. There were over 200 Acts of Parliament up to 1930, trying to bring some kind of order into this basic national service of transport—and none of those Acts succeeded. We had all the benefits of free competition at that time, and what the 1931 Royal Commission said about free competition is probably in most hon. Members minds, because it has been quoted often enough. Nevertheless, I shall quote part of it again. The Royal Commission said:
  "… it was opposition based on the interests of individuals … which placed such heavy additional capital burdens on our railways. … Much wasteful expenditure was also incurred in unnecessary competition between rival companies. This was due to the policy of Parliament"—
  and we are now again discussing the policy of Parliament—
  "which … deliberately fostered competition by authorising a large number of small separate undertakings … a policy which permits and, indeed, compels a number of agents to compete with one another for the same ton of traffic cannot be regarded as other than uneconomic."
  This is what the Minister is trying to bring in again. It was from the Report of that Royal Commission that the idea of the co-ordination of our transport services—road, rail, inland waterways and coastal shipping—emerged. Among

  1187
  other things, the Royal Commission reported on the
  "evil results of competition between rail and road"
  and warned that it would become
  "even more serious unless these services are co-ordinated."
  It was against the
  "nationalisation of the railways alone, leaving other forms of transport in other hands."
  Eight years later the Transport Advisory Council reported in almost exactly the same words, and added that
  "failure to achieve the necessary co-ordination would hamper the development of trade and the economic progress of the nation."
  That was the reason why the Labour Government brought in the Act of 1947. There was no party prejudice behind the Act; it was the logical acceptance of all the advice of all the experts who had ever examined the transport problem. This was the first attempt to bring about the co-ordination of road, rail and water transport. What has happened since? In the first two or three years, with the beginning of co-ordination, the Transport Commission was making a considerable profit. For the first time for twenty or thirty years even the railways were earning regular profits from their operations.
  The losses began soon after the Conservative Government interfered with that policy, sold off part of the road haulage industry, and changed the development plans of the railways. The £50 million profit earned in the first three years, until 1951, rapidly snowballed into heavy losses of the kind with which we now have to contend. Certain hon. Members opposite yesterday challenged one of my hon. Friends to substantiate his argument that the Government had been sabotaging railway development plans. In December, 1958, the then Minister of Transport admitted that:
  "The technical equipment of the railways … is long overdue. So far, British Railways have not been given a share of post-war capital comparable with that allocated to railways in many other countries."
  Yet the Financial Secretary told us that we must be careful to see that the railways did not get too much capital investment, or to see that nationalised industries generally did not get too much. What, then, did the previous Minister of Transport mean? This was the Government's own admission, and that is all that
  1188
  we mean when we say that the Government have deliberately, for their own purposes, sabotaged the proper development of our railway services.
  None the less, there has been progress. Year after year when we have debated the Reports of the Transport Commission, we have heard Conservative Ministers paying warm tributes to the progress made. Every year they paid warm tributes to Sir Brian Robertson and his colleagues on the Transport Commission and the Railway Executive, which was then operating. There was no question then about the efficiency of the railway development scheme. Why was it suddenly found that the schemes were impracticable and inefficient, and that the whole thing must be changed?
  We have now entered the Beeching era. Dr. Beeching is an interesting phenomenon in the political, industrial and economic scene. He was the man who was brought in and given an increase of £240 a week in order to try to persuade railwaymen earning £10 a week that we could not afford to give them another 2s. or 3s. a week. That was the beginning of the policy of the wage pause. Dr. Beeching received an extra £240 a wek for doing the same job as his predecessors, and now, under the instructions of the Minister, he has the job of defying all the history and experience of all the experts in transport, and he has to bring in this completely new idea that transport, and the railways in particular, should henceforth be run without any regard to the provision of a social service.
  Whatever the Financial Secretary may have said, it is clear that if the Railways Board is told that it must run on the most economic basis and earn as much profit as it can in as short a time as possible, it cannot afford to have any consideration for services which will not contribute towards that end. Those are the instructions given by the Minister.
  The abolition of common carrier obligation is extremely serious. I want to hear from the Government and the supporters of the proposal how they justify it. What will happen to the traffic? I understand that it has been said by representatives of the Commission that the traffic will go by road. Are the road hauliers going to take it? Why has this traffic been taken by the railways under the common carrier obligation until

  1189
  now? The reason is that it is essentially an uneconomic proposition to carry it unless there is an enormous charge for it which may make it almost impossible for it to be carried at all.
  This uneconomic traffic which the railways have subsidised is essential, and someone must take it on. Clearly, it will be good for the railways' balance sheet if they can dispose of it, because they will then be able to reduce rates on better traffics which were subsidising the poorer ones. But who will carry the traffic? If it is not carried, what will be the effect on the industries and activities for which it was necessary? Have the implications been examined?
  As I have said, the whole purpose is to make the railways pay. It was interesting to hear the Financial Secretary try to explain how this is to be done. It is to be done mainly by transferring £800 million into suspense, for which the Government will be responsible; by writing off £450 million. Those several hundred millions of pounds are to be taken over by the Treasury in order to do what? On the one hand, to relieve the taxpayers, we are told. But it is the taxpayer who is taking over the liability. Whether the money is paid to the railways in direct subsidies or taken over by the Exchequer, the taxpayers still have to provide it.
  If this is the way the Government are going to make the railways pay, I can tell them how they can do it better. It is easy for the Government to make the railways more profitable. All they have to do is to transfer still more of their cost to the Exchequer, or write off all their running expenses, and then they will have a clear profit.
  But that does not make the railways pay. It merely means that the liability is transferred from one book to another. It makes no contribution whatever except one—and I welcome the operation for this reason, and so do my hon. Friends—and that is that it enables the people responsible for running the railways to get on with the job without all the pinpricking about the heavy burden of debt which they are carrying. It also makes it more likely that railwaymen will be able to make their case than they have done when they have had this debt pointed out to them as an argument against giving them a decent wage. The
  1190
  fact remains, however, that the proposal does not contribute in any way to the greater efficiency of the railways.
  I want to ask a few questions about uneconomic services. I think that the Forth Bridge was a section of the railway service which was built by Government subsidy, but it is recognised as being in itself an uneconomic proposition. Why was it built, and why was it subsidised? It was because it was recognised that it contributed to the general railway service, and the fact that the general railway service was more efficient because the Forth Bridge contributed to the improvement of the general economy of Scotland.
  But if the year-to-year maintenance of the Forth Bridge is to cost such an enormous amount compared with any similar length of line, will it be closed and torn down? That would be an "economic" proposition, but what would happen to the rest of the railway service and the industries in the territories which the Forth Bridge feeds?
  What is the annual profit on the Great North Road? Has any assessment been made? If not, why not? If no income is made from the Great North Road, why should we not close it down as an-economic? That is the argument applied to the railways. What about the Hammersmith flyover? It cost £1¾ million. Where is the income from that? If there is to be no income from it, will the Government close it down because it is uneconomic?
  It makes nonsense to talk like that about the roads. Why is it not nonsense when we talk like that about the railways? The railway lines are there just as the roads are there. Money was sunk in the railway signal boxes, stations and tunnels many years ago. Those things are there just as the roads are.
  Surely the problem is how to get the maximum use of the facilities and the capital already at our disposal. That is the big question. This is the infrastructure of our economy. It is essential to industry in general, but unless we are going to use the railways, we are wasting it all. The arguments which I have mentioned might be applied to the Great Central Line or the lines north of Perth, but if one closes them, what will one have done? One will presumably have

  1191
  written off the capital sunk in those sections many years ago, and then one will have lost both the capital and the services. Why do not the Government write off the capital now but keep the services? They would then have no interest to pay, and they would have all this network laid down for them without having to pay anything for it. Then they would be able to run the branches of the service at a profit.
  On the subject of the Scottish railways, I should like to know whether it is Dr. Beeching's or the Minister's idea to close down the lines north of Perth. Those lines were built to serve the population of areas in Scotland which are uneconomic unless provided with sufficient transport services. As I said earlier, even the Tories of earlier days had enough sense to see the importance of this. If we close down those lines, where will the passengers go and how will the sheep farmers transfer their wool, mutton, and so on, to the market? Will they go by road—by bus or by road haulier? But suppose the buses do not pay and the road hauliers cannot make a profit—and it should not be forgotten that there is nothing to prevent them from stopping the services.
  Mr. Holt: As there are several methods of transport possible, would not the hon. Gentleman think it right to have a choice in northern Scotland? Would he not think it a good thing to try to assess which method would produce the transport services required in the most economical fashion? If he does that, is he not admitting that in the very sparsely populated areas of northern Scotland the railways cannot achieve this?
  Mr. Hynd: I agree entirely with the hon. Gentleman's proposition. That is precisely what the Labour Government tried to do in the 1947 Act. We tried to ensure that the most efficient and effective transport method was used in the right place for the right traffic. But if one is to do that, one must have control over not only the railways, but the roads and everything else to ensure that that is done. That is what we cannot do under present conditions, and even less so under the Bill.
  It may well be so that the roads provide the most economical transport
  1192
  system in certain parts of the Highlands. If that is so, and if we can guarantee that a service will be maintained, I would say that we should close down the railways and run a bus service or lorry service. But that is not the proposition. The railways are under Government control, and instructions have been given to Dr. Beeching and the Commission, apparently, that the railways must be closed down. It is clear that once they are closed down we shall not be able to build them again.
  When the railways have been closed down, the plan is to have buses and road hauliers operating—private enterprise. If at any time it suits them to curtail or close their services, what have we left? Nothing at all. What will happen to the hundreds of thousands of inhabitants in that part of Scotland? I would say that we should by all means have private buses and lorries up there if they are more suitable than the railways, but what steps can we take to ensure that they provide an adequate service, or to guarantee that that service will be permanent?
  That is where we come to the heart of the controversy. One cannot provide an adequate service of transport suited to the needs of the country by having one section of it under public control and leaving the rest of it to private enterprise and giving private enterprise all the advantages.
  Just a word about coastal shipping. We have heard a lot about it, and I just want to comment on what the Minister said yesterday. I could not improve on the information given by my hon. Friend this afternoon. The Minister says that we need not fear about coastal shipping because the Bill provides that the people concerned can apply to the Minister. Let me remind the House once more of what was said in the 1931 Report. It stated:
  "It must be borne in mind that the existence of an efficient and adequate coastal shipping service is of manifest importance, especially in time of war or civil emergency."
  It then talked about the importance of coal and other port traffic and went on:
  "Coastal shipping must not, therefore, be allowed to be crippled by either railway or road competition, since in emergency the railways and the roads cannot alone meet the needs of the situation."

  1193
  It concluded:
  "Its proper development, however, has been greatly handicapped during and since the war"—
  that is the 1914–18 war—
  "largely on account of the conflict which has prevailed between the coastwise trade and the railways. This has produced instability and in consequence the fleets have not been renewed … the coastal service … would be extinguished"
  unless something was done about it. Something was done about it. There was the 1947 Act, but that is now to be reversed.
  Under the Bill, we are told, the people concerned with coastal shipping will be allowed to go to the Minister and say, "The railways are charging too much on the stretch between the railhead and the docks", or they can say, "The railways are charging too little for this long haul. We could easily take it. It is not fair for the railways to undercut us". What can the Minister do? The Minister can reject their complaint and the railways can still carry the traffic, or the Minister can concede their case and instruct the railways to raise their charges.
  What impact will that have on the relations between the railways and the customer or the coastal shipping company and the customer? Surely, if a trader is quoted a rate and the coastal shipping people complain about it as a result of which the railways are forced to raise the rate, then the trader will not be very pleased about it. Why should the railways be forced to raise their rates when they can carry traffic much more cheaply? Where is now the principle of free competition? I should like to have some further answers on the question of coastal shipping.
  If we want to deal with this question of transport adequately and boldly we should go much further than the 1947 Act or any other proposition embodied in any other Act so far. Our first consideration is, I think, to relieve the pressure on the roads. That can be done, because there are facilities available for taking traffic off the roads and putting it on to the railways. The speech yesterday of my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) should have opened people's eyes to this. He talked about a £2,000 million annual loss by 1967
  1194
  owing to pressure on the roads, and one can add to that the estimate by the Road Federation of £190 million per year, representing the cost of road accidents at the present time. We can transfer much of this traffic on to the railways.
  One hon. Member opposite spoke yesterday about his South African experience. He said that the authorities there are in a position to say whether traffic shall go by road or rail, and that it mainly goes by rail. He quoted his experience of motoring from Capetown to Durban, saying that over a distance of about 1,000 miles he met very few lorries. He astounded me by saying that he wondered how the people of this country would like that. He did not say how the people of South Africa liked it, but I am sure that if they did not like it, it would have been changed by now. It would be wonderful to have those conditions on our roads instead of long queues of small cars behind lorries.
  I suggest that we should go even further to get the traffic off the roads. If the Minister has any compunction about deciding whether a parcel should go by road or rail, I would remind him that he was Postmaster-General a little while ago and that the postal service decides for itself. There is no choice there. The Minister did not speak in these terms when he was operating the postal service.
  We could attract the traffic to the railways without putting any pressure upon it or forcing it off the roads. We could do it in a number of ways. The Commission cannot, but the Minister can. First, we should not just reduce the fares and charges. We should provide free services on the railways for such bodies of people as workers genuinely travelling to and from work, and for genuine parties of citizens, such as old-age pensioners and others, and Service personnel. The hon. Member for Truro (Mr. G. Wilson) laughs, but we have already done it for members of the Armed Forces. Whether or not people pay a fare at the railway station, the cost of running the railways still goes on. If it takes two men to run a railway train loaded with traffic or passengers, it still takes the same two men to run that train empty or half empty. The carrying of these goods and

  1195
  passengers by rail would show a commensurate saving on the roads. We could certainly provide very much cheaper rates for them provided the traffic was sufficient.
  This may be regarded as revolutionary, but if we recognise the fact, as the Minister has to recognise it, that we have to have the railways, that they are an essential part of our transport system, and that one of the vital things which we have to do is to keep the railways used to the maximum extent by taking the traffic off the overcrowded roads, then why not do it in this way?
  The Parliamentary Secretary said yesterday that if the Socialist Party wants the railways to be run as a social service it will cost £100 million in subsidies. We are doing it already; we are doing it for trains which are running half empty and we are doing it for less service. Therefore, we must concentrate on getting the traffic back on to the railways at all cost. Every ounce of traffic and each passenger that travels on the railway represent a net saving to the roads and an economy to the country.
  The Parliamentary Secretary spoke of £100 million as though it were a fantastic figure. It is about two-thirds of what we have been giving to agriculture for years. If we stopped all the subsidies to agriculture, and even if all the farms closed down, we could still buy food from abroad, but if the railways were to close down we could not borrow them from abroad. Therefore, do not let us have all this humbug about £100 million.
  The real question is not whether the amount is £100 million or £120 million, or whether it is a direct subsidy to the railways or should be paid through the Exchequer, but what we get for the money. The answer depends entirely on whether the Government intend to face the necessity of having a co-ordinated system of transport which will be planned and in which all the facilities, road, rail, or whatever they may be, are utilised to the maximum extent and in the best interest of the country.
  The Bill does not provide for that, and for that reason I propose to vote against it.
  5.39 p.m.
  Mr. Geoffrey Wilson: I do not propose to answer the hon. Member for Accrington in detail, although I think—
  Mr. J. Hynd: May I point out to the hon. Gentleman, for the sake of the record, that I am the hon. Member for Sheffield, Attercliffe?
  Mr. Wilson: I beg the hon. Gentleman's pardon.
  As I was saying, although I do not propose to answer the hon. Gentleman in detail, I think that every point he has made will be covered in the course of my remarks. I would only observe, in general, that most of the hon. Gentleman's ideas, including that of free railway transport, are like the Report which he quoted—at least thirty years out of date.
  I welcome the Bill because it makes a clean break with the Act of 1947, which the Act of 1953 failed to make. Some hon. Members will recollect that at the time of the coming into force of the 1947 Act I was in the railway service, and for twelve months thereafter, and that I then resigned for political reasons.
  At the time of the coming into force of the 1947 Act I was adopted as prospective Conservative candidate with the full knowledge of the directors of the Great Western Railway. The British Transport Commission did not, and could not, object to my candidature, because it had at least 40 members of the party opposite who were in its employ at the time and who were candidates of one sort or another.
  I resigned because I felt it inappropriate to attack on public platforms the system on which my employers' organisation was being run—except in the most general terms—and to regain my freedom of expression I resigned from a four-figure salaried job and gave up pension rights for which I had worked for twenty years. I am sure hon. Members will accept that I did not take that step lightly or out of pique, or because I had any doctrainaire beliefs contrary to public ownership.
  In fact, in public I have always said that I believe Conservatism to be a balanced attitude of mind which seeks to apply the lessons of past experience to the problems of the present. That

  1197
  implies that one is not tied to any dogmas, and I see no reason why, in appropriate circumstances, there should not be public ownership of a number of undertakings if that is to the advantage of the public. However, with regard to the 1947 Act, I was convinced that it was founded on a number of fallacies which made it impossible for it to be a success. Having studied that Act and its workings for a year, I was all the more convinced of that, and I have never regretted that I resigned when I did.
  Mr. Charles A. Howell: The hon. Gentleman says that the experience of a year convinced him that that Act was a failure. Was the failure in respect of the carriage of traffic, or a financial one?
  Mr. Wilson: The hon. Gentleman has not understood what I was saying. I was sure that the Act was based on false assumptions, and that it could not be a success. In particularly, Section 3 of the 1947 Act, which hon. Members will recollect was the keystone of that Act, says:
  "It shall be the general duty of the Commission so to exercise their powers as to provide, or secure or promote the provision of, an efficient, adequate, economical and properly integrated system of public inland transport … for passengers and goods … in such manner as to provide most efficiently and conveniently for the needs of the public, agriculture, commerce and industry."
  If one compares that with the wording of this Bill, one will see what I mean. Clause 3 merely says:
  "It shall be the duty of the Railways Board … to provide railway services in Great Britain and, … such other services as appear … expedient and to have due regard … to efficiency, economy and safety of operation."
  In other words, whereas the Bill merely requires the Railways Board to provide such railway and other services as seem expedient having regard to efficiency and economy, the 1947 Act clearly required something in the nature of a social service.
  It is an attractive but most dangerous idea to regard transport as a social service, because it must do one of two things. It must either commit the State to vast and unlimited expenditure, or restrict the natural development of the pattern of transport. If the public are entitled to transport as a public service,
  1198
  logically they are entitled to the latest forms of transport, just as they are entitled to the latest form of equipment in hospitals under the National Health Service. Thus there is no reason why transport as a public service should be restricted to roads, railways and canals, forms of transport which are all obsolescent and which started in this country 50, 100 and 150 years ago respectively. If transport is to be provided as a social service, it would be logical to expect the provision of uneconomic helicopter services for all at cheap rates, and private cars for all at a cheap rate, in the same way as all are entitled to cheap false teeth. Such a proposition is, of course, absurd.
  Again, on the question of integration, which is very much linked up with this, the 1947 Act did not give the British Transport Commission power to integrate all these services even by road and rail. It gave the Commission control only of all the railways, about one-third of the buses, about one in a hundred of the lorries on the road, but none of the private cars. Short of a strict Communist type of control, such as very few Communist States themselves have, where no one but a commissar may have a private car and no one may have a private lorry, I do not believe that it is possible by central direction to produce a properly integrated service, and to integrate a small portion of the road services with the railway service is, in my view, bound to fail because competition is no longer between road and rail in the public services.
  If one looks at the figures of road traffic in the last ten years, that becomes clear. In the last ten years, the number of road vehicles increased from 4,409,000 in 1950 to 9,383,000 in 1960. The density of traffic, which was mentioned yesterday, has gone up to 46·5 vehicles per mile. The figure given yesterday was very much below that, but it is my information that the figure I have given is correct, and this compares with 21 vehicles per mile in America, and 13·4 vehicles per mile in France. This increase of traffic is not—and I emphasise "not"—in respect of public services either for passengers or goods.
  The number of buses, including coaches, on the roads has increased by only 1,086 in the last ten years. There

  1199
  were 77,636 buses on the roads in 1950 and 78,722 in 1960. The same applies to lorry services. If one considers the lorry services, including C-licences, one sees that the number increased from 895,272 in 1950 to 1,397,086 in 1960. If, as we know, there has been an increase of about half a million C-licence vehicles, it means that the number of lorries employed in services has hardly increased at all—possibly by 2,000, but not much more than that.
  The vast increase in the use of the roads has been almost exclusively due to the increase in the number of private cars belonging to private people. In 1950 there were 2,257,000 cars on the road, and in 1960 there were 5,525,000, an increase of 3 million. Thus, unless one is prepared to apply nationalisation not only to the C-licence lorries—and I think it was the hon. Member for Barrow-in-Furness (Mr. Monslow), who unfortunately is not in the Chamber at the moment, who suggested that we should—but also to private cars, it is useless to talk about the integration of road and rail services because the competition is with private cars and not with the buses or the lorries.
  The whole principle of integration becomes utter nonsense if one restricts it to the integration of the railway services with a very small part of the road services. Incidentally, if one believes in the principle of integration, one ought not to exclude, as the 1947 Act did, the air, because domestic air services are becoming a serious factor in competition with both road and rail services.
  Therefore, in my view, it is quite useless to go on with the principle of the integration of all transport as a social service which appeared in the 1947 Act. This principle was struck out of the 1947 Act by the 1953 Act, but, unfortunately, the 1953 Act did not also destroy the structure designed to carry out the purposes of the section which was amended. It is no use keeping in being a structure designed to do something which we no longer require to be done. Therefore, I think this Bill excellent in that it destroys the structure built for the purposes of the 1947 Act.
  It seems to me that the Bill has an entirely empirical approach, which I think the right one. We have a certain
  1200
  number of roads and a certain number of railway services, and we have to make the best use of them. At present we have about 209,000 route miles in this country, taking road and rail together, of which about 190,000 miles, or nine-tenths, is road, and 19,000 miles, or one-tenth, is railway. That one-tenth represented by the railways still carry 1,000 million passengers and just under half of the total quantity of goods carried in this country. But it does so at a very considerable loss which must be borne by the public, and, therefore, the public has an interest in seeing that the loss is as small as possible.
  At present that loss is not being borne evenly by the public. It may be an advantage to certain members of the public to have an uneconomic line still in use, but it will not be an advantage to people living in an area perfectly well served by some other service which is paying its way. So I think that we must consider ways of reducing the losses on the railways. At the same time we cannot abandon the railways forthwith, as some people might want to do, because it is quite obvious that the existing roads could not carry an additional 1,000 million passengers a year, plus double the amount of goods carried at present. Nor could we increase the building of roads so quickly that this could be achieved in a short time. We must not, as did our ancestors, assume that the present railway system is here for ever. At the same time, we must agree that quite a large proportion of it will have to be kept for a considerable time. Therefore, we should do our best to see that that portion pays its way as far as possible.
  The Bill sets about doing that in three ways, which were clearly set out in the opening statement by the Minister. The first is to make the structure less cumbersome. Among other things, the unfortunate chairman of the B.T.C. was given a quite impossible task, because, in addition to dealing with railways he had to deal with all sorts of other services which had precious little to do with railways—with road transport, and docks and with canals which have long since ceased to be a transport undertaking at all.
  An hon. Member mentioned canals. The narrow canals of this country are uneconomic now. It was not a mistake that they were constructed as narrow canals originally because they were

  1201
  economic then when they only had to compete with the horses and carts. They did so effectively, but there is no hope of them doing so with lorries or trains. These narrow canals are not now an economic proposition at all, although it would be more expensive to fill them in and abandon them than to keep them going. I think it well to transfer them to a separate authority, as would be done by this Bill, which, by charging proper rates for water and such other matters, might keep them going as an amenity with little cost to the State.
  I think it is a good thing that the Railways Board should concentrate its attention principally on the running of railways as railways, which should be quite enough of a job for any man. The reason why certain executives are paid high salaries is that there are few men capable of doing that sort of job. It is the market price for the job.
  It is quite sufficient to be able to deal with the railways without having to deal with a vast number of other things as well. But I am glad to note that by Clauses 3 and 33 railway hotels will be returned to the railway. Most of these hotels were built into the railway stations and were meant as an amenity for the passengers. I think it a good idea that they should be returned to railway control and kept in the company structure so that we get the best of both worlds—independent management and railway control.
  I also think it a good thing that the Inland Waterways Authority should be something quite separate from the railways. Of course, it will depend very largely on what sort of people there will be on the board. But I dare say that some of my hon. Friends will have something to say about the canals. It is a good thing that a number of ancillary services will be passed over to the Holding Company—Pickfords, the Atlantic Steam Navigation Company, roll-on-roll-off car ferry service, Thomas Cook and Son, and so on. They have only an incidental connection with the railway service.
  It has been remarked that there is power under the Bill for shares in those companies to be sold. There always were powers of that sort, and I hope that some day some of them may be exercised. If we have capital losses on
  1202
  the railways they might be offset by capital gains by the sale of some shares in undertakings which have little to do with railways as such. There will be an opportunity in Committee to deal with these matters.
  I think that some of my hon. Friends are worried about the powers given to the London Board and some about the fact that the Holding Company will have control of certain bus companies on the ground that the Holding Company has no connection with railways and that if railway directors are not appointed to the boards of these various subsidiary bus companies the high degree of co-operation at present existing between buses and railways may be reduced. That again is a small point which we may discuss in Committee.
  The second way in which the Bill deals with the improvement of the railways is by lightening the load of capital debt. This has shocked some people, but I think it inevitable in the circumstances. If we have to keep the railways going, I see no point in cluttering up the accounts with figures representing sums which are unlikely ever to be repaid. I regret that the Government have not seen their way to accept the recommendations of the Select Committee and I am sure that my right hon. Friend the Member for Blackpool, North (Sir T. Low) may try to catch Mr. Speaker's eye in order to express his view on this matter.
  I was attracted by the idea that particular services which were required in the national interest should be paid for by direct grant. We are not liberals; we do not believe in laissez faire. We certainly do not believe in laissez faire for transport only. We recognise that if through Government action people are encouraged to live in places where otherwise they would not live, or if through Government action the structure of the transport pattern is distorted, it is reasonable that the State should accept some responsibility for seeing that such areas are not left without transport at all.
  Mr. Holt: Since the hon. Gentleman has attacked the Liberals, I should like to ask him to remember that from these benches, a long time before it was suggested by the Select Committee, we were

  1203
  saying precisely what eventually the Committee suggested.
  Mr. Wilson: I was using the term "liberal" with a little "1" and in the liberal sense. The Liberal Party is capable of believing anything, and in my experience no two Liberal candidates ever say the same thing. So I do not know what the policy of the Liberal Party is regarding transport or any other matter. I have had two Liberal candidates opposing me and they advocated entirely different policies on this and on other matters. I was merely remarking that we think that the attitude of laissez faire certainly does not apply to this matter, although some people would have it that it does, and that there might be cases in which it would be necessary for a service to be maintained although it was uneconomic.
  Thirdly, there is the question of freeing the railways from restrictions which prevent the exercise of commercial freedom and the development of capital assets. Such action ought to have been taken long ago. It was asked for in the Square Deal campaign before the war, which, unfortunately, got diverted into other directions. A start was made in this direction in the 1953 Bill, and the present Bill has taken it very much further. I am still not sure, however, whether it has gone far enough.
  There are still a lot of odds and ends of very peculiar liabilities which the railways are left facing for no particular reason. One I remember mentioning in my maiden speech eleven years ago. That is the provision under Section 68 of the Railway Clauses Consolidation Act, 1845, under which railways have to maintain fences to keep out the cattle of adjoining owners. No other landowner has any such requirement placed upon him. It is absurd that the railways should still have this liability. Either the highway authorities should be faced with the same liability—which no doubt the farmers would like but which I do not think would be popular with the highway authorities—or the railways should be freed from the liability.
  I am told that repeal of that provision has not been included in this Bill because it concerns private rights vested in individuals and that repeal would complicate procedure. Nevertheless, there
  1204
  are still a number of odds and ends which should be dealt with. Railways have long since ceased to be a monopoly. If any substantial portion of them is to be kept going it is absolutely essential that they should have commercial freedom. Otherwise, the taxpayer will be called upon to pay large sums of money to keep them going.
  Included among the taxpayers are, of course, those who own coastal shipping. That leads me to the case of coastal shipping about which we have heard a great deal, and on which no doubt we shall hear more. It is true that Britain is a maritime nation and that we owe a great deal to our coastal shipping, in particular to the little ships. We have needed them in the past and may need them again in an emergency. It is in the national interest to do everything reasonably possible to encourage their trade. That trade has declined, and clearly it would be wrong if the railways could use taxpayers' money to drive them off the sea.
  However, I am not satisfied that the decline in British coastal shipping is due principally to the machinations of British Railways. Nor am I satisfied that this Bill would drive this shipping off the sea. Clause 54 is intended to protect coastal shipping. As the Minister indicated in his opening remarks, negotiations will go on between the parties concerned to see whether it is necessary to strengthen these provisions, as could easily be done in Committee.
  It is not a simple question of the long haul rates being cut by the railways. Those concerned fear overcharging in the short haul between the pit and the port, thus making it cheaper to carry goods from pit to destination by rail than by rail and sea. I suggested to the General Council of British Shipping that if it is faced with that sort of proposition it should inquire whether it could get the railway rate reduced to a reasonable amount by asking for a quotation from road haulage. I was told that this was impracticable because neither ports nor coalpits had facilities for loading other than by rail, that many of the ports have no road access, and, further, that there was no information as to comparative charges by rail or by sea because no traffic of this sort passed. But this is not a new problem.

  1205
  This problem has been faced by the china clay industry in Cornwall, which is a much bigger industry than many people suppose. Only one-third of its products are used in connection with the production of china, but that third supplies nearly all the raw material for the British potteries, not only china clay but china stone, both of which come from St. Austell. Traffic between St. Austell and Stoke-on-Trent originally went either all the way by rail or by rail to Fowey and then by sea to Runcorn. Very little goes that way now to Stoke. It goes almost exclusively by road and it is carried very largely in C-licence lorries. That may be very wasteful, but it is a fact.
  Pit owners have had to alter their sidings at the request of consignees so that they can take either railway trucks or road vehicles and because Fowey was designed to deal with rail traffic only. The alternative port of Par has been developed very much indeed. I pass that small port at least twice a week and I have noticed that, although formerly seldom did one see a ship there, now one sees six, seven or eight ships all being loaded with china clay by lorry. They are only small ships of about 600 tons and they are all foreign ships, new ships.
  On making inquiries from the Road Haulage Association about the possibilities of carrying coal by road, I was given these figures as estimates. About 190 million tons ex-pit are actually moved each year. Of that quantity, about 70 per cent., or 133 million tons, is moved by rail and 20 per cent., or 38 million tons, is moved by road. Ten per cent., 19 million tons, is moved by other means. The Association estimates that of that 38 million tons, 15·25 million tons are carried by A or B licence vehicles, and 22·75 million tons are carried by C licence lorries. The Association cannot vouch for the complete accuracy of the estimate as between A, B and C licences, but it insists that the roads carry about 20 per cent. of coal ex-pithead, and that it is possible to move substantial quantities of coal ex-pithead, more than are required by coastal shipping.
  Mr. Manuel: It is astounding to me that the hon. Member, with his railway background, should be advocating that lorries should convey coal to our docks,
  1206
  when one train can take 1,000 tons quite easily in one conveyance right on to the job without cluttering up the roads.
  Mr. Wilson: The hon. Member has not understood my argument. I am saying that it is not necessary to have any elaborate statutory provisions to prevent a railway overcharging because a consignee can say that if the railway overcharges he will send his goods by road. I am saying that the consignee could do that, and, in fact, has done it in the case of china clay. The answer for the railways is to look at their charges, to choose an appropriate rate and to undercut the road rate. At the moment the facilities are better suited for the railways than for the roads. The shipping interests have not so much to fear. They are making a great point about this, and it was made yesterday in the debate. They fear that they will be driven off the sea by the wicked British Railways unless they have some form of protection. That is not necessary, because if they wanted to they could get their services on the roads. That the decline of coastal shipping is due to British Railways I find a proposition difficult to accept.
  I have another small port in my constituency, Truro. It has ample quay space and lots of warehouses, and if it were properly dredged out it could be made a port for quite sizeable ships. Coastal shipping interests complain that the Coal Board and the railways in connivance have diverted their traffic and that coastal shipping lost the coal contract a Truro gas works to the railways. It is true that there are now few British ships using the port, but that does not mean that there are fewer ships. The actual number of ships using Truro has increased, and is going on increasing. There are plenty of ships of 600 tons or thereabouts, all foreign. They are bringing in grain and timber and fertilisers and taking breeze as a back cargo. If foreign ships can do that, I find it a little difficult to understand why our people cannot do it.
  There may be other reasons. Foreign ships may be given preferential treatment in coastal schedule rates in their own countries or they may have a subsidy through low interest rates for building. I know that the Ministry of Transport says that this is not so. It may be

  1207
  that the manning scales are different on the Continent, and we ought to see whether ours are appropriate. But for some reason, the Germans, the Dutch, the Danes, the Belgians and the Finns can produce new, modern and most attractive-looking little ships which are plying in our ports carrying our materials to other people—and that does not seem right.
  I am satisfied with the general framework of the Bill. It has gone a long way to improve the present situation. I congratulate the Minister on making an effort to produce a comprehensive Bill, and I am glad to be able to commend it to the House.
  6.12 p.m.
  Mr. Percy Collick: I propose to comment on some of the points made by the hon. Member for Truro (Mr. G. Wilson) as I go along. I was interested to hear what I thought perhaps the most irrelevant part of his speech—the reasons why he left the service of the railway. I think that I speak for all railwaymen, knowing that the hon. Member was a solicitor, when I say that we never regarded solicitors as being railwaymen. While we regret the loss of his services on the old Great Western or, to give it its more familiar name of those days, God's Own Railway, nevertheless it has been able to carry on without his services and without much disturbance.
  I come to what I think is the substance of the debate. I have listened in the House to many speeches by Ministers explaining Bills, but I do not think that I have ever been more disappointed than I was yesterday when I listened to the Minister of Transport introducing this Bill. It is one of the largest, if not the largest, the Government have presented to the House, having 142 pages, 91 Clauses and 13 Schedules.
  When I listened to the Minister's speech, frankly I do not think that I learned a thing which I did not know before, having read the Bill. It would have been better if the Minister had torn up half the brief which his civil servants had given him, because half consisted of what is already in the Explanatory Notes to the Bill. The other half was quite uninformative on
  1208
  the issues about which those of us who are interested in transport wanted to know.
  The remarkable thing is that the Government call it the Transport Bill. One would think that a Transport Bill of this size would in some way deal with the problems of modern transport, but the Bill does nothing of the kind. What is the major problem facing transport in this country at the moment? There is too much transport competing for too little traffic.
  Mr. G. Wilson: Certainly not.
  Mr. Collick: The hon. Member for Truro has had his opportunity, and he could have used his speech in a much more interesting way if he had told us why this is so. I repeat for his benefit that one of the problems of transport in this country today is that there is too much transport competing for too little traffic.
  Mr. Wilson: The hon. Member is thirty years out of date.
  Mr. Collick: The hon. Member astonishes me. If he reads any of the lectures which have been given recently to the Institute of Transport, or other authoritative bodies in this country, he will very soon learn the facts of life. In any event, I have stated my view.
  Because there is too much transport competing for too little traffic, and because we have little or no growth in the economy these days as a result of the Government's economic policy, the problem is growing worse instead of better. Because of all these other things which are common knowledge to hon. Members on both sides a the House, we face a situation in this country in which, because of the appalling congestion on our roads, more than 6,000 people are killed every year and more than 300,000 are injured.
  Would not one think that this is the concern of everybody connected with transport? Ought it not to be the concern of a Bill which claims to deal with transport? Is it not the question with which the House ought to be concerning itself? It astonishes me that throughout the debate there has not been a word on that subject from the Ministerial benches or from the back benches opposite, and yet this is one of the

  1209
  cardinal facts of transport with which the House ought to be concerning itself.
  At the same time, there is another fact: we have a railway transport system which had the reputation of being one of the best in the world and which is unused to such an extent that it is having the kind of results of which the Financial Secretary to the Treasury told us a short while ago. Yet the Government introduce a Transport Bill and do not attempt to deal with this problem in any way.
  Seeing our railways insufficiently used, and the congestion on the roads and the appalling casualties which result annually because they are congested, it seems common sense to me that any Government would say, in the light of this appalling situation, in which so many people are killed, in which 300,000 are injured every year, and in which the hospitals are filled with casualties, "We must do something about it."
  Surely any transport policy should be directed to seeing what could be done to bring about co-ordination of transport to put on to the railways some of the traffic which they are more suited to carry while allowing road transport to carry that which is most suited to its purpose. Surely there should be common ground between all concerned to solve this problem. Yet we have a Minister of Transport, in 1961—I regard it as pathetic—introducing an enormous Bill like this without saying a word about this sort of problem and treating the House to reading a brief which was so uninteresting that half the hon. Members present were nearly asleep before he ended.
  Mr. Mellish: He could have circulated it instead of making it.
  Mr. Collick: He could have circulated it in HANSARD for what use it was.
  If I am right in thinking that this problem ought to be tackled by co-ordination, I am very disappointed by the Bill, because it is no attempt at co-ordination. It is no use people talking about the Bill as if it co-ordinates anything worth co-ordinating. The only pants of the Bill which I regard as important are its financial provisions, which would have had to be dealt with anyway, as everybody knows, possibly the freedom given to the railways to
  1210
  dispose of their property, and their release from common carrier obligations.
  I concede that one could argue a case on any of those three heads. The rest of the Bill is quite unnecessary and useless. We could easily have dealt with those matters in a Bill within the compass of eight pages or so instead of occupying the time of the House wading through a Bill of this size which will fulfil no really useful purpose.
  The Parliamentary Secretary to the Ministry of Transport (Mr. John Hay): It will.
  Mr. Collick: Since the hon. Gentleman says that, I am tempted to remind him of what his right hon. Friend said yesterday.
  I listened to the Minister almost with a little pain as he spoke about the Bill and gibed at one of my hon. Friends on the Front Bench, saying that it would remove the 1947 Act. I wondered whether the Minister had woken up. Does he not remember that his own Government introduced the Transport Act, 1953, and it is that Act which this Bill is now designed to amend? I remember the passage of the 1953 Act. I remember the Minister saying that it was a new charter for the railways, it would put the railways on their feet, by 1961 and 1962 the railways would strike even, and he asked for the co-operation of railwaymen, leaving all political issues aside. That was the sort of thing which came from the Front Bench at that time.
  Mr. Hay Mr. Hay indicated dissent.
  Mr. Collick: It is no use the Parliamentary Secretary shaking his head. Let him read the speeches in HANSARD. The Minister said exactly that.
  Mr. Hay: Will the hon. Gentleman quote it?
  Mr. Collick: Of course I am not quoting. Anyone can look it up in HANSARD for that time in 1953. The Parliamentary Secretary was not interested in transport in those days, and he must admit that some of us who were in the House and took part in the debates know a little of what we are talking about. It is no good attempting to deny the obvious facts. That was what the Minister said then. Now the Government come forward with a Bill which

  1211
  tears to shreds their own 1953 Act and puts before us a new set of arrangements.
  We have a new man in charge of British Railways. I shall say something about that later. The only joy to be gained out of these present proceedings is that no Minister has openly told the House about all sorts of wonderful things which will happen with another new man in charge of British Railways. There is a very good reason for that which one can soon find on reference to the Bill.
  Clause 3 lays down the duties of the new Railways Board:
  "It shall be the duty of the Railways Board in the exercise of their powers under this Act to provide railway services in Great Britain and, in connection with the provision of railway services, to provide such other services and facilities as appear to the Board to be expedient, and to have due regard, as respects all those services and facilities, to efficiency, economy and safety of operation."
  I suppose that anyone reading that would say, at first glance, that it looks all right. But is it? Why have the Government omitted from that Clause what they put in their own 1953 Act? In that Act they added these words, in Section 25 (1):
  "and to the needs of the public, agriculture, commerce and industry".
  Those words have not been left out by oversight or afterthought. I have enough experience of Parliamentary draftsmen to know how very carefully they consult Ministers about what should go in and what should be left out. Those words have been left out quite deliberately, because the Government know—and the Minister should have told us yesterday—that they now do not regard it as a duty of the new railway authority to serve the needs of the public, agriculture, commerce and industry.
  I am deeply concerned about the omission, because it seems to me to be linked with other things going on behind the scenes and sometimes in front of the scenes. Last week, my postbag was full of letters from Scottish people who were worried about the great curtailment of passenger train services in Scotland. They feel that the country as a whole does not understand and they fear that something has gone wrong.
  Why should the new authority, they ask, be curtailing all these services in
  1212
  Scotland? They are told that it is only a beginning. What is the end to be? What will happen in Scotland. I do not wonder that some of my Scottish colleagues raised these matters very strongly yesterday. A Scottish Minister was not present then, and, apparently, we are not to have a Scottish Minister present now.
  It is fairly common knowledge among railway people that the lines north of Perth are what are called uneconomic. Some people may say that, because they are uneconomic, they should be closed. Is that the Minister's policy?
  Mr. Manuel: He says that it is.
  Mr. Collick: He does not say that it is. I want him to tell us what it is. His failure to tell the House that yesterday is one of the things I complain about. The right hon. Gentleman owed it to the House to say what the Government intend to do. Why do we have to wait for Dr. Beeching to tell us what he wants to do? This is the House of Commons, the place where we should learn these things. We should not learn them from what Dr. Beeching tells somebody else.
  Will the Minister tell us tonight for how much longer we are to have railways north of Perth or south of Exeter? The people in those areas are entitled to know. Have the people of Scotland to wait until they wake up one morning and read a report in the Press that Dr. Beeching, the new Railways Board, or somebody who has the power has decided that, because the railways north of Perth are not economic, there can be railways north of Perth no longer? The Minister ought to tell the House. My Scottish colleagues and I would be very interested to know, but we have heard no word about it.
  The only word from the Government benches came from the Financial Secretary to the Treasury earlier in the debate. I wondered whether there had been any collaboration on the briefs. The Financial Secretary, when he was questioned about it, seemed to stumble very much in his answers, a very unusual thing for him. I began to wonder whether there had been the close liaison there usually is between Ministers and Departments.

  1213
  The Financial Secretary told us that, since, under the new financial arrangements, the Government are to carry the financial losses in a collective sense, it will not now happen, as apparently was the intention, having regard to the Report of the Select Committee, that, for example, the supposed economic losses on railways north of Perth would be worked out and that amount would be carried as a direct subsidy.
  We have been given no information about this, apart from the remarks of the Financial Secretary to the Treasury, and I hope that the Home Secretary—who is to wind up the debate for the Government—will give an answer to these major points. This is tremendously important, for it involves men's livelihoods, the public interest and public services and industry in Scotland.
  It equally applies to other areas, including the south-west of England beyond Exeter. Will the railways beyond Exeter be maintained or are we to hear, perhaps at a future date, that they are uneconomic and, accordingly, the new Railways Board is to close them down under Clause 3 of the Bill? These are vital matters on which hon. Members require information.
  The new authority to be set up under the Bill will be called the British Railways Board. In the 1947 Act a Labour Government created the Railway Executive. What does it matter is one calls it a Railway Executive or a Railways Board? This fiddling about with nomenclature is beyond the wit of man. Can the Parliamentary Secretary explain the new name? What is the difference between a Railways Board and a Railway Executive? It was the latter that used to do the job, but it was a Conservative Government's 1953 Act which destroyed that Executive.
  By this Bill the Government are creating a Railways Board. Who will comprise it? Will Mr. Clore be on it? Why should he not be? Let us not be mealy-mouthed about this, because wrapped up in the Bill is the power to denationalise nationalised property. Consider Marylebone Station, for instance. What a wonderful site this would be for the financial "sharks", the "wide boys". Anyone who knows what is going on will be aware that people like
  1214
  Mr. Clore have their eyes on Marylebone. They have already fashioned what could be done with it and the Bill, when passed, will give them the power to do it.
  Mr. Webster: Will not part of the Bill allow the railways to develop these properties so that they will get the full value for the nation before what the hon. Gentleman suggests is done?
  Mr. Collick: That sounds quite plausible. The Bill allows the Railways Board to have power to sell this station and I see no reason why it should not sell it to Mr. Clore. That is what I was saying.
  Mr. Webster: And to develop it.
  Mr. Collick: Yes, the Board can develop it and I agree with that part of the Bill but it can, equally, sell it to Mr. Clore.
  I may seem to have a suspicious mind, but I have seen too much of this, and, as I have said, I know that Mr. Clore and some of the financial "sharks" already have their plans made for Marylebone. When I use the phrase "financial sharks" I do so having in mind what has been happening in the way of land property deals recently. What other phrase is justified?
  The plans are afoot and I want the Government—and I regret that the Home Secretary is not in his place—to say tonight exactly how this selling of land is to be done and what protection the public will have. Public money bought these site; and the public is entitled to know what is to happen to these assets.
  Mr. William Baxter: Can my hon. Friend say whether the Mr. Clore to whom he has referred is the Scottish businessman who met the Prime Minister the other day when the right hon. Gentleman visited Scotland? I understood that the Prime Minister met Scottish businessmen and I have seen a reference to Mr. Clore's name.
  Mr. Speaker: In common interest hon. Members should stay within the reasonable range of the subject matter of the Bill.
  Mr. Collick: I have no reason to know the Prime Minister's personal friends or his party friends. I am not

  1215
  in a position to deal with this matter. I was saying that everyone knows that these sort of things are going on. These incidents lead me to ask what is the purpose behind the new powers. The House is being asked to give these powers. We shall discuss the details of them later, but at the moment we are discussing the principles involved.
  While I agree that the Transport Commission—or now the Railways Board—should have authority to do this, there should be a check. After all, the public interest and public money is involved and the Minister should make himself accountable to this House so that hon. Members will know exactly what is happening.
  Another thing disturbs me about the new set-up. I have heard enough to lead me to believe—and I stand ready to be corrected if the Parliamentary Secretary wishes to intervene—that the people in charge of the new railways set-up will do what is to be known as "shedding certain traffics". If so, I understand that to mean that certain traffics which are at present carried by rail will be put on to the roads. If further traffic is to be moved from the railways to the roads there can be only one result; the already overburdened roads will be still further overburdened and, in turn, the accident rate will go up.
  Why should anyone concerned with making a success of the railways wish to shed traffics? Those responsible will probably say, "These are uneconomic traffics and we therefore want to shed them." But how far can this sort of argument be extended? If the new Railways Board will have power to shed traffics will it also have power—and I read from the Bill that it will—to close lines? And, in any case, where does the House of Commons come in? If my last remark is valid, can the closure of lines include the closing of stations or of any part of the railway system?
  Hon. Members opposite are constantly raising in Adjournment debates the closure of certain lines and I hope that they will follow this matter up so that we may get a clear understanding of who is to be the final arbiter on whether certain lines are closed and to
  1216
  what extent they are closed so that at least we know where we stand.
  There have been what I would describe as "soft tones" surrounding this subject. In recent years there has been a tremendous development of what I regard as the strongest lobby this House has seen for many years. We hear about the American House of Representatives and the China lobby. The road lobby in this House is as strong as any China lobby was in the House of Representatives. I should like to know how far this has influenced the Minister. We are entitled to know. I am sorry that the Minister of Transport is not present. I would much sooner say these things in his presence. All I can say is that he is having a long cup of tea.
  In the first speech that the Minister of Transport made in this House after he became Minister he said, "I thought that I knew what vested interest was until I came to this job". He told us that quite openly. I admired his brutal frankness. I had reason to know it before, but I was glad to have it confirmed by the Minister. What has he done about these vested interests? Has he fought them? If he has, what was the result of the fight? When I see the sort of things which are happening now, I begin to wonder how far this road lobby has gone in influencing the Government's decisions. If large sections of the railways are to be closed and if traffic is to be transferred from the railways to the roads, we know who will benefit. I do not think that this lobby is quite as disinterested as it would like us to suppose, and I have plenty of evidence to prove that. I want to know from the Minister how far it has gone in influencing the proposals in the Bill.
  When hon. Members quote figures from the Road Federation, a body not unconnected with the return of hon. Members opposite; everybody knows that it played its part in securing their return at the General Election—
  Mr. G. Wilson: I mentioned the Road Haulage Association, not the Road Federation. I obtained figures from the Association because I wrote to it and asked for the figures. I wished to know whether it was possible to carry large quantities of coal by road, and what I pointed out earlier was what I was told.
  Mr. Collick: I am sure that the Road Haulage Association was pleased to supply the hon. Gentleman with those figures. It invited me to apply to it for the same purpose, but I never used its services. I value my independence too much for that.
  I should like hon. Members to declare themselves a little more bluntly. Is it suggested that it is desirable that an enormous tonnage of coal, such as the hon. Member for Truro mentioned, should be carried by road, thus loading the roads with traffic with which they cannot possibly cope? We have been told that 20 per cent. of the coal output is carried by road. When people are being killed and injured on our roads because they are congested and about which the Government do nothing, what a mad state of affairs it is that it is all right for 20 per cent. of the coal output to go by road. What a Government! What a policy! That is what is enshrined in the Bill.
  May I say, in defence of Dr. Beeching, that I do not think that he makes any pretence of being jealous about the railways. That used to be the argument. I have heard it from the Government Front Bench. The Government said, "Now we have the services of a man in the railway industry who will lead us. We shall break even in 1961–62." I do not want to rub it in, but I told the House and the Government long ago that there was not the faintest chance of that happening, and it has not happened. How conveniently the Government shunted General Robertson out of the way. What a story that is. I hope that one day it will be told. The way that the Government treated him was a positive disgrace. He was sacked, and hon. Members opposite know that as well as I do.
  I had my disagreements with General Robertson, and I have expressed them in the House, but no man worked more honourably to make the road and railway services a success than he did. What did he get for his pains? He was treated by the Government in a way of which they should be thoroughly ashamed. They gave him the "sack" and £12,000, which I suppose was to sweeten him. They sent him up to another place. He was—what do they call it?—raised to the peerage. I would say that he was lowered to the peerage.
  1218
  Why did this happen? Because the Government appointed the Stedeford Committee and the then chairman-designate of the Transport Commission was a member of it. He made a report to the Minister of Transport which was so impressive that the right hon. Gentleman told the House that this was a man who had saturated himself in railway affairs for six months. At almost the next moment Dr. Beeching was appointed chairman of the Commission at a salary of £24,000, about twice the salary which was paid to the man who was previously in charge. Frankly, I have never heard of a more dishonourable thing. I do not know of a case—there may be one—in which a Government has appointed so quickly a man as chairman of a body whose affairs he himself was investigating. I do not think that that reflects any credit on the Government, or on the Minister responsible.
  There are two other things of importance that I wish to say. [HON. MEMBERS: "Oh, no."] Not long ago, after there had been a series of labour disputes in the railway industry and where the parties to them were responsible for the appointment of the Guillebaud Committee to deal with the wages problem among dissident railwaymen, the Prime Minister told the House that the Government accepted the principles of that Committee's Report. They were not wholly favourable to railwaymen—some of them were disadvantageous to them—but they were accepted honourably and, in the main, carried out. The railwaymen are very gravely concerned, because, according to a recent statement, those in authority on the employers' side in the railway industry have made it clear that they do not accept the principles of the Guillebaud Report. I may be wrong or I may be right in this matter. I am open to persuasion.
  I am glad that the Home Secretary has returned to the Chamber. I am sorry that he has been absent for so long, because I have been speaking of things to which I had hoped he would reply. Railwaymen up and down the country have been told that the new railway authority has overthrown the principles of the Guillebaud Report. This is a matter of profound importance to railwaymen. It is important in the interests of the morale of railwaymen that they hear from the Government whether this

  1219
  is the case or not. I hope that the Home Secretary will clear up this point when he replies to the debate.
  I conclude by making one point which I have mentioned before, but I come back to it. I should like to see those responsible for railway administration slash the cost of railway fares. Why not? Does anyone imagine that ordinary people go by charabanc from London to Edinburgh or Glasgow because they want to? Of course they do not. They go by that means because it is much cheaper than going by rail. I believe that if we had somebody in charge of British Railways who knew his job, he would slash railway fares. If he did, he would get the traffic back.
  I have never understood why those responsible for rail transport have not done this very thing long ago. Is it that the road interests again are so powerfully entrenched that no one dare do this? Will they tread on too many toes if they do it? I should like to see it done. I believe that, if it were done, it would get a large part of the available traffic back on the railways.
  What an experience we have had in railways since the war. There was a time when we had a civil servant in charge. There was a time when we had, with great gusto, a very distinguished general in charge. Now we have Dr. Beeching. I am a very simple person. I cannot get out of my head the idea that if we want the railways to be successfully run, they can be successfully run when we put a railwayman in charge of them. Let experienced and competent railwaymen have a go at the job. If we want a decent loaf of bread, we do not ask a butcher to make it for us. If we want the railways to be efficiently and competently run, let us go back to the days when we had competent railwaymen doing the job.
  There were days, and I well remember them, when on the benches opposite sat hon. Members of sufficient influence on the railways who would not have dared to allow a Tory Government to introduce a Bill like this. There is none now. The last—all honour to him—was the hon. Gentleman, then Sir Ralph Glyn, who used to sit for Abingdon. Those of us who were Members of this House at that time had a great admiration and respect
  1220
  for him, because he represented certain types of persons of great influence and experience who believed in the railways, who had lived with them, who knew and understood them and who knew and understood the railwaymen.
  All that has gone. What is entrenched over there now is the vested interest of road transport. It is very deeply entrenched. I say with a fair amount of confidence that I do not believe that the Bill will do anything that is worth doing, apart from the three things I mentioned earlier. For the rest, it does not matter.
  The Government have been twelve months preparing the Bill. It was twelve months ago that we had the White Paper. It has taken twelve solid months to produce this Bill. Why does the Parliamentary Secretary shake his head? Does he dispute the point? Does he want the date of the White Paper, which was issued twelve months ago, or, to be exact, eleven months ago? It has taken eleven months to introduce the Bill, and we are told quite frankly that the vesting date will be approximately at least another twelve months hence. That makes two years.
  By that time, I hope that we shall be that much nearer to the demise of the Government, and we shall have the effective answer to them. I also believe that when the people understand what will result from this Bill their answer will be the more clearly and decisively given.
  6.54 p.m.
  Sir Toby Low: In the course of the 45 minutes of the speech of the hon. Member for Birkenhead (Mr. Collick), a great many arguments have been put forward. If I were to try to answer even some of his extravagances—[HON. MEMBERS: "Have a go."]—I should be running the risk of competing with him in the length of my speech. I hope that the House will note, the next time Privy Councillors are accused of speaking too long, the balance between the speech that has just been made and that now being delivered.
  The hon. Gentleman mentioned one point to which I intend to confine my speech, and it is the point about uneconomic services, who is the arbiter, and so on. I had not intended to intervene at all in this matter—
  Mr. Manuel: But the right hon. Gentleman has notes.
  Sir T. Low: My notes were made up during the last hour.
  As this matter came up in the very clear and informative speech of my hon. Friend the Financial Secretary to the Treasury, and as he expressly referred to the Report of the Select Committee on British Railways at the time when I was Chairman of the Select Committee, I thought it was right that I should do what I could to defend, in front of the House, the views of that Select Committee, which was unanimous between the parties, and to press the Government to reconsider the decision to reject that unanimous Report.
  I should like to say at the outset, and I think that my right hon. Friends on the Front Bench know this, that I regard the Bill as a good Bill but regret that it is a little spoiled by its failure to deal in the right way with the problem of uneconomic railway services. By "the right way", of course, I mean the Select Committee's way. I hope that it is not too late for the Government to reconsider it and to get the right answer to this problem, because the problem is for the railways, as with all the nationalised industries, a very important, a very real and practical problem. It is not a theoretical problem. It is also a House of Commons problem, because accountability comes into it.
  As I understand the Government's proposals in this matter, they are that it is the duty of the chairman of the Railways Board—that is, Dr. Beeching—to run the railways on an economic basis. On that basis, he will be deciding what services should be run and what, on that basis, should be discontinued. Then, I understand that it is the Government's view that the Minister and Dr. Beeching will agree between themselves that, in return for Dr. Beeching running an unspecified number of what he has previously decided to be uneconomic services, the Railways Board's financial target will be adjusted. That I gather to be the meaning of the reference by the Financial Secretary to the White Paper on the Financial and Economic Obligations of the Nationalised Industries (Cmd. 1337), and the matter is dealt with there in paragraph 32.
  1222
  That means, in simple language—and the House must grasp this—that, as applied to the next few years, the taxpayer will have to provide, and we shall have to vote, an additional sum of many million of pounds above what Dr. Beeching would have considered necessary if he had not had to run those services, because the running of these services will make the loss greater. He will run these services because the Minister had asked him to do so and he will bear the losses on his account.
  Let us examine what this procedure amounts to. It amounts to a procedure in which the Minister, in his meetings with the chairman of the Railways Board, will instruct Dr. Beeching to carry on services which he does not want to carry on, and the carrying on of which conflicts with financial duty as set out in Clause 18 of the Bill. I know how annoying and bad a thing it is in debates, but I ventured to interrupt my hon. Friend the Financial Secretary to ask him where the Minister got his powers under the Bill. It is for the Railways Board to run the railways and not for the Minister, unless he is given the power.
  I have looked at the Bill. I have no special knowledge and have had no help in looking at it, but I imagine that the only power in it is the power given to the Minister to give general direction under Clause 27. I have always understood, and this was the evidence given by the Permanent Secretaries who came before the Select Committee on Nationalised Industries, that that power to give general directions does not include power to give a direction which is contrary to the financial duty of a nationalised industry. If that is so, I ask the Government, if they intend to proceed on this course, to have another look and assure themselves that powers are given to the Minister in the Bill—and that the House of Commons will agree to those powers.
  Supposing that the powers are there already—and it is with humility that I have raised the question whether they are—let us take the procedure a step further. How will this decision about uneconomic services be taken? Will it he taken precisely, service by service, or as from what the Financial Secretary said I expect will be the case, will it be taken by general discussion on the

  1223
  general problems of the railways and by a general agreement on the amount of money that should be involved? When will the House of Commons be informed about each decision as it is taken and the amount of money involved, that is, the amount of adjustment in the financial target? Will the House be informed before the decision has been implemented or after? In other words, will we be asked to vote the money because we must; or be asked whether we should vote it? Will we be asked whether uneconomic services should be or should not be carried on?
  All these points are important. I am sure that many hon. Members on both sides of the House will agree with the way I am putting this point. We should all be conscious that under previous legislation we have fallen exactly into the vice of which I am now talking. Therefore, in putting the point to the Government I do not think that any of us can put it wearing a clean sheet. This is a new point which the Select Committee has tried to bring to the attention of the House in its recent Reports.
  The points which I am putting are partly House of Commons points, affecting House of Commons control over the use of public funds needed to pay for activities carried on by nationalised industries for reasons other than commercial reasons. They are partly economic points and I shall explain in a moment what I mean by that. The House has clearly in mind this recommendation by the Select Committee. It was mentioned by the Financial Secretary and it is set out in the last part of the Committee's Report.
  As all hon. Members who were members with me of that Committee will agree, the aim was to achieve better and clearer accountability of these industries to Parliament and better control by Parliament over the things that Parliament should control. This question of activities which are not justified by economic considerations is just the sort of question which Parliament ought and must control if we are to have the nationalised industries run in the way we all want them run.
  The idea, surely, is that the accounts of the Railways Board should show the
  1224
  result of its commercial, economic activities and that it is the Minister who should come to Parliament and bear responsibility for those activities which we want him to see carried on although they are not justified on economic grounds. That is the gist of the Select Committee's recommendation.
  I should like to make here a point which has occured to me whilst listening to the debate. It is the absence of clear-cut accounting—which is not unrelated to the suspicion in the minds of the coastal shipping industry at the moment. The hon. Member for Birkenhead is not the only person who has a suspicious mind. That industry suspects that the Government, by paying the deficits of the railways, in effect, will be subsidising the railways in under-cutting freight rates. I hope and believe that that is not true, but I believe that suspicions like this breed on fuddled accounting systems.
  The Select Committee recommendation had another point in mind which I commend to the Government and the House. It is the importance of a clear-cut division of responsibility between the Minister, on the one hand, and the chairmen and members of boards of nationalised industries, on the other, for decisions necessary to the proper running of the nationalised industries. I believe that in this respect we can get that clear-cut decision only if we adopt something like the recommendation made by the Select Committee and that, however hard they try, the Government's proposal as now outlined to us will in one way or another blur that responsibility.
  The Government perhaps could mitigate the danger of this confusion by making it absolutely clear now that it will not be Dr. Beeching's duty to continue uneconomic services after a certain date and that it will be for the Minister to decide which shall be continued and which not. My right hon. Friend is the man to whom we as representatives of our constituents should go. We should not worry Dr. Beeching. We should let him get on with running the railways for us and not ask him to settle points which are not economic points but points of social and national interest. That is why we retain control of these nationalised industries, and that is why we ask the Minister to control them for us.

  1225
  I wish to come now to a point raised by the right hon. Member for Vauxhall (Mr. Strauss)—
  Mr. Strauss: Before the right hon. Gentleman comes to it, may I ask him another question? In this scheme which he has in mind quite important difficulties would arise in view of the present losses on the railways. It is clear that at least half and probably more of the services now run by the railways are uneconomic. Will the Board tell the Government that they must be financially responsible for all uneconomic services?
  Sir T. Low: I was about to deal with that point, which the right hon. Gentleman touched upon yesterday. My hon. Friend the Financial Secretary raised the matter, too, in one of the objections which he took to the Select Committee's recommendations. What is an uneconomic service? That is the point. The Financial Secretary rightly said that there are many services now which are uneconomic but which in the course of time will become economic through better management and equipment. Equally, there are some services which are economic now but which may become uneconomic, but do not let us worry about those at present.
  Surely, the uneconomic service is a service which it cannot be foreseen will be run profitably and which it cannot be foreseen will be run profitably after taking into account the action open to the management and those running the railways, and it is a service which has no other commercial merit such as being a feeder service. This was all spelled out in discussion in the Select Committee and I think that its members were quite clear about the difficulties which the right hon. Member for Vauxhall has put. They were quite clear also about what they were driving at. We on the Select Committee were driving at the sort of service that could not be justified on economic grounds because it was quite obvious that it could never make a profit.
  Unless we can get some precision into this business of uneconomic railway services, and of uneconomic activities of other nationalised industries, I do not think that we shall ever get the measure of financial discipline, without which the nationalised industries will never run
  1226
  as we want them to. Frankly, it horrifies me that one of the objections of the Government to the proposals we put is that it is not possible to sort out the economic from the uneconomic activities. If that is not possible, we shall never get financial discipline helping the Railways Board to run the railways properly.
  Mr. Strauss: If the chairman of the board is to decide these important matters, will not the Treasury have to abide by his decisions?
  Sir T. Low: The chairman will obviously decide on economic grounds. That is true. He is the only person who can. Having appointed him to do so, we must trust him. There would be a long stop, however, in that the Minister would be presented with the power to enable him to direct the Railways Board to carry on certain services, provided he paid for them. I am satisfied that that is a sensible proposal.
  The Select Committee thought about this matter and listened to evidence for nearly a year. We were perplexed, as others have been, about what could be done by the House of Commons and the Government to help the railways to run better, and we came to the conclusion that this was a good proposal. Having taken nine or ten months to think it out, I do not want to see it swept away in a few days or a few months.
  I want to end on this note. I have greatly enjoyed my four years' service as Chairman of the Select Committee on Nationalised Industries. But I believe that it was right for me to get out now because one person should not hold that office for too long. I have had two main objectives, and I believe that these were shared by my colleagues from both sides of the House. My first objective was to try to do something to establish financial discipline in the nationalised industries and in the Government's dealings with them. I do not believe, as I have said, that there will be this discipline unless there is a precise attempt to deal with the problem of uneconomic activities. Decisions should be taken about them precisely and openly. They should be taken by Ministers and should be reported to Parliament to be confirmed by Parliament, with all the repercussions

  1227
  clearly in our minds—financial repercussions as well as the effect upon our constituents.
  My second objective was to try to help Parliament in its search for the proper degree of accountability of the boards of nationalised industries, on the one hand, and of Ministers in their dealings with those industries, on the other. That is the House of Commons point. It is my sincere belief that the Government's proposals on this subject of uneconomic services confuses and weakens that Parliamentary accountability as compared with what we wanted. It does strengthen accountability compared with what it has been, but it weakens and confuses it compared with what we want.
  In the closing paragraph of our Report, the Select Committee showed clearly what we wanted. We said:
  "If this were done,"—
  that is, if our proposal were accepted—
  "there would be one important consequential advantage—the advantage that both the Commission and the Minister would become much more clearly accountable to Parliament for their separate railway responsibilities."
  They are separate, and they must not be confused.
  Thus, I put it to the House that there are good economic reasons and good House of Commons reasons why the Government should be asked to reconsider their attitude to this specific recommendation by the Select Committee. I know that my right hon. Friend the Home Secretary, with whom I have had the pleasure of working so closely, will pay attention to the force of these arguments.
  7.15 p.m.
  Mr. Arthur Holt: I am glad to follow the right hon. Member for Blackpool, North (Sir T. Low) and to say how much I agree with the whole line of his argument. I am sure that the point he has been making, about open accountability in the case of uneconomic lines which are also considered, for good reason, to be essential, should be accepted and the Bill amended, but I do not think it necessary for me to continue his argument.
  While there has been some progress in the arguments about transport which we have had over the years, there is, unfor-
  1228
  tunately, still a tendency to obscure the basic facts by a fog of sentiment and romantic ideas about some particular favourite form of transport that the speaker in question attaches himself to. It was noticeable once again today in a small part of the speech by the hon. Member for Bermondsey (Mr. Mellish) who indulged in nostalgic comments about our coastal shipping.
  I certainly do not tend to be an arid person who is uninterested in the different modes of transport. I am greatly attracted, in a romantic sense, by all forms of transport, and enjoy going on all of them. But romantic ideas about roads or shipping are a poor basis on which to work out a sensible transport policy, because the one thing that must constantly be borne in mind about transport policy is that the needs of transport are changing as rapidly as many other technical developments in the country today. If we do not move with these changes, and if we hang on to old forms of transport merely because they were great once upon a time, we shall do no great service to the country.
  In the light of all modern forms of transport, we need to concentrate the railways on services which they are most suitable to perform and not on what they once might have been most suitable to perform. We are saddled with a nation-wide railway network which, in many aspects, little serves the nation's transport needs.
  I know of no other way of deciding which method of transport is more suitable to use and to develop than by using the facts of economic return. This means building up, where it does not exist, a realistic costing system which takes account of the costs incurred by each form of transport. This raises in itself considerable difficulties, but if it were possible to do it, then we could relate the pricing of transport to costing.
  In road transport one runs into immediate difficulties, however. One thing we must do, for instance, is to see that these vehicles which create congestion somehow pay for it at the time they create that congestion. This is a very difficult thing to do. We have not succeeded in doing it yet. On some other occasion I should like to expand on that point.

  1229
  It is true, of course, that, through their taxes, those who use the roads more than pay for the whole of the up-keep of the roads and the building of new roads, still leaving a large surplus. While it cannot be said that those who use the roads are not bearing a fair burden of their costs, it can be said that they are not paying for the congestion which they cause in certain areas. That is a different matter and one which we shall have to tackle at some time before we can finally solve our transport problems, if we ever can.
  If the Bill's purpose is to get the railways into their correct relationship to the rest of our transport facilities, then I am fin favour of it. If it is to recognise that the idea that the railways should have a monopoly is now out of date, and if it is to complete the 1953 legislation, which was inadequate, those are other reasons for supporting it. If it is to set the railways free commercially to operate on a basis like that of the transport businesses with which they compete, that is yet another reason.
  However, it still has many illogicalities, as did the 1953 legislation, and I want to refer to some of them. I want to refer to the structural, commercial freedom and financial provisions of the Bill. I have no objection to having separate boards. Indeed, we have advocated this in the past and I am delighted to see that at last the canals are to be looked after by a separate Inland Waterways Authority. However, although the Minister has power, with the advice of the Railways Board, to appoint various people to the regional boards, there is no specific provision to say that there shall be at least one member of each regional board on the Railways Board. I should have thought that that was essential and that the most suitable person was the chairman of each regional board.
  Yesterday, when speaking of his disquiet about the Docks Board and the pipeline arrangements in the Bill, the hon. Member for Dover (Mr. Arbuthnot) made two points which require the Minister's answer. The Minister's wide powers are inevitable in view of the huge deficit and the extensive closures which are bound to take place if that deficit is to be wiped out. The Minister must be ultimately responsible because
  1230
  these are matters about which Parliament must concern itself. What is to be the power, however, of the Nationalised Transport Advisory Council? Is this just a piece of eyewash, or is it to be a serious body? Whether it is one or the other depends on whether it is to be given a fairly large and technically competent professional staff. If it is not to be given such a staff to help it to reach decisions on matters which the Minister may put before it, it will be eyewash.
  Where is the increased technical staff, which the Minister will obviously require if he is to use his powers under the Bill, to come from? The right hon. Gentleman does not have them at the Ministry and it has not been in a position in detail to examine the railway development scheme, for instance. Had it been otherwise, it is inconceivable that some previous decisions would have been made. There obviously cannot be two staffs, one in the Ministry and a duplicate at the behest of the N.T.A.C. Whether this Council will be of any importance depends entirely on where the professional staff is to be. I should like the Home Secretary to say something about that tonight. If the N.T.A.C. is to have only a small staff, it should be wound up, because it will serve no useful purpose.
  The commercial freedom to be given to the railways is a further advance on the 1953 Act because of the elimination of charges schemes and common carriers and so on. The advance is to be welcomed, but I am at a loss to understand why London Transport is still to be hampered. If the argument is good for the rest of the railways, it must be good for London, although I agree that the circumstances in London are different.
  The whole point of the approach in obtaining commercial freedom for the railways is to get the railway authorities into direct contact with the travelling public, making them answerable to the public. If the railways do not provide the public with the service it wants, at the right prices, the public will not use the railways. For that reason, it is unreasonable to fetter the London Transport Board with the charges scheme.
  Pursuing the same line of thought, it is also quite out of date to continue with consultative committees, either area

  1231
  or central, or with the transport tribunals. The railways are now up against so much competition of all kinds—their monopoly element now having almost entirely disappeared—that their future depends entirely on a satisfactory relationship between themselves and their customers. In closing down services which they cannot run efficiently and economically and which it is not essential to continue for other reasons, the railways must not be allowed to embalm those assets. Those lines should be put up for sale or lease by any other group of people who think that they can run a railway, or some other method of transport, on those lines. Local authorities may be interested in taking over some of the lines in some areas.
  Mr. Mellish: And running the services?
  Mr. Holt: Rail services or bus services or some other kind of service. I do not know whether the hon. Member for Bermondsey appreciates the wholesale extent of closures which are to take place under the Bill if the railway deficit is to be eliminated.
  Mr. Mellish: I do.
  Mr. Holt: He does.
  Many hundreds and possibly thousands of miles of railway lines are to cease to be operated by the railways. I entirely agreed with the hon. Member for Birkenhead (Mr. Collick) when he condemned the Minister for not being frank about this issue.
  Mr. Mellish: What the hon. Member for Bolton, West (Mr. Holt) is saying on behalf of the Liberal Party is that if it can be proven by costing that a stretch of line is uneconomic, it should be handed over to local enterprise to buy and run.
  Mr. Holt: I should have thought that the hon. Member was a little brighter than that. If the Railways Board decides that it cannot run something economically, it is to be under an obligation to close it down. That does not mean that somebody else will not think that he could run the same service economically. All I am saying is that there should be such a provision as a safeguard against the railway company closing down lines
  1232
  wholesale, when with a little more trouble it could make them run economically.
  Mr. William Ross: Why not impose a duty on the Railways Board to take that little more trouble?
  Mr. Holt: That is a rather difficult duty to impose in a Bill, although by implication it is imposed on anyone running a nationalised industry. Nevertheless, they may make wrong decisions. All I am saying is that these railways assets should not then be embalmed so that nobody else can have a go.
  As to the railway workships, I entirely agree with the remarks made by the hon. and learned Member for Crewe (Mr. Scholefield Allen) yesterday. I think that the Government are being niggardly in their attitude to the railway workshops. If they have facilities for manufacturing that cannot be fully utilised on work for the railways now, why should these assets be embalmed, allowed to rust and lay idle, and not be used for the benefit of the nation as a whole? Provided that the railway workshops' main work is for the railways, they should be given freedom to use their remaining productive ability for anything else that pays them. This seems to be basic commercial commonsense. If, in the process, they can produce something for export as well, I would certainly encourage them to do so.
  Turning to the financial provisions, what does the Minister expect to happen in the five years of grace covered by Clauses 22 and 23? Does he seriously expect that the deficit on revenue which he referred to yesterday as being about £80 million this year, without including interest charges—the £80 million loss that we are running at now—will be removed or even substantially reduced without wholesale closures of uneconomic activities by the Railways Board? If it is the Government's intention that this should happen, why does not the Minister stand at the Dispatch Box and say so?
  In the first place, it would save him a great deal of trouble if the nation knew that the great purpose of the Bill is to wipe out this deficit and that the way to do it, in the view of the Government, is by the wholesale closures of uneconomic activities. Too often, the Government take action, as they did

  1233
  earlier in the summer about the Common Market, to start on a great new step without taking the country into their confidence about their ideas. It is a kind of occupational disease of the Government not to make known what are their main objectives. It will get them into a lot of trouble. It certainly will in this case, unless they get over to the people that in a short while for large areas of rural Scotland, rural Wales and rural England there will be no railway services at all, either passenger or freight, then every time a line is put out of action there will be complaints, Questions in this House, Adjournment debates, and the Minister will have his time taken up in dealing with them.
  Sir T. Low Sir T. Low indicated dissent.
  Mr. Holt: The right hon. Member for Blackpool, North shakes his head. Does he not agree that this has to happen if the deficit of £80 million is to be reduced?
  Sir T. Low: I think that the hon. Gentleman, as he so often does, is greatly exaggerating the position.
  Mr. Holt: I should be delighted if I were wrong. But, as always on this kind of thing, the Government have acted in a thoroughly Conservative manner and have not made the allowances that they should have made. I should like to know from the right hon. Gentleman and his hon. Friends, if he supports the Government's line on this, how he thinks it will wipe out a deficit of £80 million a year, which is going up all the time. It is not a small sum, not even for the vice-chairman of the Conservative Party, who is probably accustomed to dealing in large figures. But £80 million a year will want some wiping out. The Government should have been frank with the House about it.
  Secondly, I am glad that the Government have been realistic about the writing down of the capital of the Transport Commission, although, here again, they have not gone as far as they should have done. I do not think that anyone in his senses could imagine that there would ever be any interest paid on the £650 million or £700 million which, I understand, is to go to suspense account. The Bill will undoubtedly provide the framework in which a number of impor-
  1234
  tant and necessary changes can be made in transport, and in particular the railways, and for that reason I support the Bill. But we are still dependent on whether the implications and intentions behind the Bill are carried out.
  It first depends on how the Railways Board carries out its duties. It has the dual and extremely difficult rôle of imposing large-scale closures of uneconomic lines which cannot be made to pay and which are not in any sense of the term essential, and, at the same time that it is doing this, it must carry out—and it will pay it to do so—a big advertising and promotional campaign particularly to win freight back to the railways on the remaining parts of the system, which it can well carry. This campaign will be useless unless it is backed with improved services for freight.
  For some time to come beyond the five years, there will undoubtedly be uneconomic services which are, for various reasons, essential and which it will be impossible for us to be able to do without, without completely disrupting the economy in a particular part of the country. I entirely agree with the right hon. Member for Blackpool, North that the Government must make specific arrangements about these uneconomic but essential services and must decide to take the responsibility for their continuing and of seeing that the finance for them is provided.
  The Government will have to see that far more determination is put behind the Bill than was put behind the 1953 Act. The Government failed to implement the purposes of that Act, and as a result we are in a mess. We are writing off £1,200 million worth of assets as worthless, and we have a deficit of £80 million this year. It is an extraordinary record of inefficiency and ineptitude, and, in many cases, of double-talk. It is probably the worst example in British history, by any political party.
  Mr. Mellish: But the hon. Member is going to vote for the Bill.
  Mr. Holt: While all this is happening there has not been a single resignation by any Minister of Transport. Neither has there been a resignation in protest by a Tory back bencher.
  Mr. Ross: And not even a vote against the Government by the Liberal Party.
  Mr. Holt: Reflecting over events of the last ten years, one can see that it is a monstrous distortion of values that a Minister should have thought it right to resign over the Crichel Down case whereas no Minister has thought it right to resign over the scandalous way in which the Conservative Party has mishandled transport policy.
  7.41 p.m.
  Mr. Grant-Ferris: I heartily support the Bill. It is a very large Bill, and it will take a long time to deal with in Committee. It is only natural that speakers this afternoon should have seized upon the things with which they disagree, and should have ignored all the good that is in the Bill—and there is a great deal of good in it. Whatever good there may be in it for the railways, there is no doubt that it can be the salvation of the inland waterways system, and it is with that aspect of our transport industry that I wish to deal.
  The news that there is to be a new, independent Inland Waterways Authority first broke upon us when the White Paper was issued by the Government at the beginning of the year. It was received with joy and acclamation by all those who have fought for this very thing for so many years. As one of those people, I can say that we have been very patient. We have waited for two and a half years for the Bowes Committee to report, only to see it divide itself into two, one half wishing the status quo to continue and the other wanting a separate authority. Needless to say, I and people like me follow the half that wants a separate authority.
  The Government then had serious doubts about what they should do about nationalised transport in general, and we were told that the inland waterways could not be dealt with on a separate basis but would have to be dealt with as part of a general scheme, if they were dealt with at all—and the election was not so far away. We were put off for the time being with the Inland Waterways Redevelopment Committee—a Committee upon which I had the good fortune to serve, and from which I
  1236
  learned a great deal about the system now existing. The work of that Committee has been of great benefit to the Minister, and it will certainly be of the utmost benefit to the new Authority. A great deal of the necessary survey work has been cleared out of the way.
  It is important to realise that this new Authority will be a really independent body. I do not want to rile hon. Members opposite, but I assure them that in this case integration has not been a good thing for the system. It has caused the inland waterways part of the transport system to be downtrodden and ground down by its very much bigger brother. Now we shall not have integration; we shall have real co-operation. I very much like a situation in which the chairman of the Authority will be on equal terms with his opposite numbers. They will all be equal in the eyes of the Minister. Above all, they will be able to go to each other and discuss their problems, and they will probably settle them without having to go to the Minister at all.
  Let me take a simple example of a situation which might arise. It probably will not, but it could. A regional railway board might wish to take some traffic which was at that moment being taken by a canal. The board might want to undercut the rate on that route in order to get that traffic. We all know that this has been done before, and it could be done again. But in the new situation we shall have an independent chairman, and I think that he will be able to settle the matter amicably with his brother chairman. If settlement is not possible, the Minister is there to hold the ring. I am sure we can rely upon any Minister, of whatever party, to hold the ring fairly and to see that justice is done.
  Mr. Strauss: The Minister will not have power to impose a decision if both chairmen feel very strongly about the interests of their concerns.
  Mr. Grant-Ferris: The right hon. Member means that he will not have power at law to do that.
  Mr. Strauss: He has not the authority.
  Mr. Grant-Ferris: I do not know about that. The right hon. Member may have studied that part of the Bill

  1237
  more closely than I have. But human nature being what it is, I am sure that those two men will settle the thing themselves. If they have to go to the Minister, whether or not the Minister has real power I am sure that he will be successful in ensuring a fair outcome. I do not want to flog that point, but I believe that it will be a great deal easier to arrive at decisions on questions between the various boards.
  I also greatly welcome the Commission's right to develop land, which it has not had so far. A great deal of land is not being put to the best use. The railways and the canals must see that everything that can possibly be turned into a money-making proposition should be dealt with. The pipelines will also be of inestimable value to the new Authority. We have the perfect route already waiting, on one of the most sought after lines in the country, namely, from London to the Midlands, up the Grand Union Canal. That is the perfect route. Under the Bill which was passed in the last Parliament an excellent agreement was arrived at between the promoters and the British Transport Commission whereby, when the pipeline is built, a very good rent will be payable, based upon the profitability of the line, in return for the wayleave given. That will also go a good way towards making the waterways pay in the future.
  I now turn to the remarks of my right hon. Friend yesterday afternoon. I am afraid that I did not like everything that felt from his lips in that part of his speech in which he dealt with inland waterways. To my mind, it showed a certain degree of old-fashioned thinking, which I thought the Ministry of Transport had got out of by now. I thought it would have learned exactly how things work in these days. I want to refer to one or two of my right hon. Friend's remarks. First, he said:
  "Its duty is not only to provide inland waterways services and facilities where expedient, but also—and this is really important—to formulate proposals for putting to the best use canals no longer required for transport. The Authority must also take all steps open to it to carry out such proposals, including, where necessary, the promotion of private legislation."
  Anybody reading those words and taking them at their face value would think, "That is a perfectly fair and normal thing to say." But anybody who
  1238
  knows how things have developed in this matter over the years knows that those are sinister words. They make it possible for the Authority to bring forward legislation to close down canals.
  The Minister went on to say—and to my mind, the thinking is rather slovenly, though I hope it is not meant to be so—
  "I must make it clear, however, that the new authority's duties may well involve the closure of canals, or their conversion or disposal if, thereby, the burden on the taxpayer can be relieved."—[OFFICIAL REPORT, 20th November, 1961; Vol. 649, c. 939.]
  That is all right, but I would not put it like that.
  On the basis of what has been proved by experience and on the basis of the recommendations which the Inland Waterways Redevelopment Committee has made to the Minister, I should have said, if I had been the Minister: "I must make it clear that it may be necessary, in the best interests of the taxpayer, to keep many canals open, for the experience of my Department is that, apart from all the other advantages, this is, generally speaking, the cheapest way of dealing with them." That puts a different connotation on the thinking of the Ministry.
  I realise that my right hon. Friend takes complete and full responsibility for everything that he says in the House. Far be it from me, with my experience, to suggest anything different. But one must remember that what is involved here is a fractional part of the immense amount of the subject to which my right hon. Friend and the Parliamentary Secretary have to devote their attention, and it may well be that sometimes words slip in which, on fuller reflection, they might not have wished to use. I suggest that the words which I have used show what the interpretation should be. Consequently, it is not altogether to be wondered at that we are still a little worried about how things will work out.
  I turn now to more cheerful topics. The Financial provisions of the Bill are certainly adequate if they mean what they say. I should like to know whether the provision relating to the possibility of obtaining loans up to £30 million really means just that, or is the £30 million whittled down considerably by the attachment of a share of the debt on the whole British Transport concern?

  1239
  For example, someone might say that the fair share of the canals should be £20 million, which would leave only £10 million remaining to be borrowed. That point makes a great deal of difference.
  Mr. Hay: If I might answer the question quickly now, my hon. Friend will see that Clause 19 (3) gives a figure of £30 million as the ceiling for the Inland Waterways Authority in respect of the principal of any money which is borrowed by the Authority and the Authority's commencing capital debt. So the £30 million includes both.
  Mr. Grant-Ferris: I was afraid that might be so. The Bill does not say anywhere what the allotment of that debt actually is. Apparently, we have not got as far as that yet, and that is the difficulty. Therefore, administratively, the possibility of borrowing £30 could suffer a very bad blow if an unconscionably large amount of it were to be taken up by debt. I do not say that that will be done, but I am merely pointing out what I think might possibly happen.
  One cannot help but welcome very much the provision for a £10 million grant in respect of revenue. I would especially like to thank my right hon. Friend for certain leniencies—they may have escaped the attention of hon. Gentlemen—attached to that part of the financial arrangement. They do not apply so much in other instances.
  I wish to mention something which seems to be a matter of detail but yet is offensive to a very large number of people. The Inland Waterways Association has been in being for about fifteen years and has been the spearhead of everything to do with the improvement of our waterways. I wonder whether there is anything sacrosanct about the term "Inland Waterways Authority". Would not "Board" or—dare I say it?—"Executive" do just as well, for that would save a clash? These days bodies are known much more by their initials than by their actual titles. I said this was a point of detail, but it gives offence to a very large number of people who feel that a little more consideration ought to have been given to a body of such standing. However, perhaps we can deal with this in Committee.
  1240
  The provisions relating to the buying and selling of water are wholly admirable, but there may be great difficulty in making anything really practical out of them. A great deal of legislation will have to be brought forward before the best possible use can be made of these excellent provisions to help the Authority to raise money. I cannot emphasise too much that a great deal of money will be saved by the Authority if it drastically prunes its staff.
  That may sound rather hard to some hon. Gentlemen opposite, but it is a fact that the waterways employ far too big a proportion of their people on indoor jobs compared with those outside really doing the work. I am sure that when the new Authority comes into being and directions are given by my right hon. Friend—he is very keen on this aspect and understands it very well—a very big saving can be made in that way and that the work will be done faster and better.
  Mr. Mellish: Ought it not to go on record that the Inland Waterways Division has done a fine job? Let us put that on record. Surely individual questions about its staff ought not to be raised? I should not have thought that the hon. Gentleman was equipped to criticise the Division in that way and that that was not the sort of thing to have said on the Floor of the House.
  Mr. Grant-Ferris: I do not want to upset hon. Gentlemen opposite, and I do not want in any way to be indiscreet, but it is widely known on the waterways that there are far more people than are necessary to do the work adequately. I am sure that there can be a considerable saving in this respect.
  I turn to another very serious matter. Clause 63 is ominous, to say the least. It seems perfectly normal until one reads into it and discovers what it really means. In effect, it relieves the new Authority of being sued in the courts by anyone wishing to use a canal unless it was unnavigable between 2nd May and 2nd November last. That is susceptible of proof in the courts. The question of what navigability is arises, and that is a most difficult point to settle.
  Take the Ashton Canal, for instance. I could take a number of hon. Gentlemen opposite in a boat and navigate the

  1241
  Ashton Canal now. It would be a test, but I think we should get through. It would be very difficult to say, after several years, that we could, in fact, have done that. In any case, the people who were going to bring the action might not be very wealthy people, and they could find themselves having to sue a much more wealthy body in the shape of this new Authority. I think that the Clause is very dangerous, and if it becomes enshrined in the Bill it could perpetuate many of the bad things which have been done in the past and which we want to avoid in the future.
  The question of this Clause highlights the question of the personalities of the new chairman and of the board of the new authority. This is right at the core of the whole thing. If the names of the chairman and the board are such as we would hope, then I would almost say that I would not mind that Clause being in the Bill. I would not like to go as far as that really, but I can almost say that I would not mind. If, on the other hand, we are not told who they will be, I hope that when the Clause is dealt with in Committee it will be resisted root and branch. I hope that that situation will not arise, and that we shall get a chairman in whom we can have every confidence.
  What sort of a man ought he to be? He must understand and believe in the system he has to operate. That cuts down the choice. He must have the confidence of the Government and the public which he is to serve. In addition, he must have the fire in his belly to make this great national heritage once again the pride of the nation. If he and his board can do that, he will receive the plaudits of the whole country and the cheers of many hon. Members, not least of all those of the Kennet-side Members who have done so much to benefit our canal system. If I may say so, with apologies to you, Mr. Deputy-Speaker, and to the author of Widdicombe Fair, they are Anthony Hurd, Percy Pott, Robert Grimston, Old Uncle Ted Leather, and all.
  If we get the kind of man I hope we will, we shall rejoice. Unless we do, the whole edifice which has been so carefully prepared and built up by my right hon. Friend and the Ministry will fall to the ground. I hope that before long
  1242
  we shall be given the name of the chairman, and that it will be somebody in whom we can all rejoice.
  8.3 p.m.
  Mr. William Ross: We have had three Government Front Bench speakers on this Bill. It is surprising how much ignorance still remains about its provisions. Members are still asking questions such as, what power has the Minister? What will be the position in relation to uneconomic services? What is the Railways Board going to do? This shows that someone has not done his job. I immediately excuse the Parliamentary Secretary, because I think that he tried very hard last night. We got considerable enlightenment from the Financial Secretary to the Treasury today when he addressed himself to the financial Clauses of the Bill. But what can one say about the Minister—"Lord Flyover"—himself? He came to that Box and read every word of a prepared brief asking us to give a Second Reading to a Bill, with a speech to which he was giving the first reading.
  It reminded me of the criticism of the sermon of a Scottish minister. There is much headshaking when one sees a minister with a lot of notes. After this sermon one of the elders was asked what he thought of it. He said, "Well, in the first place it was read; in the second place it was nae very well read, and, in the third place, it was no worth reading."
  The Minister should have come to the House and apologised for all that has been done and left undone by him and his predecessors over the past ten years. After all, let us not start blaming nationalisation. We have had a Tory Government for ten years, and they supposedly put the transport world right in 1953.
  I am surprised at the Liberal Party. The hon. Member for Bolton, West (Mr. Holt) spoke about double-talk and said how wrong the Government were about railway workshops. He talked about uneconomic services, and demanded the head of the Minister. He said that this was a scandal worse than Crichel Down, and then he said that he would vote for the Government.
  Mr. Holt: Surely there is a difference between approving a Bill which may go in the right direction and having confidence that the Government will carry it out?
  Mr. Ross: If the hon. Gentleman looks at Clauses 27 and 28, he will see the powers which he is prepared to give to a Minister who, according to him, is incompetent. Let the hon. Gentleman go to the Highlands of Scotland and proclaim that he voted in support of this Bill, remembering what it means up there.
  Private enterprise broke down in the provision of sea services to the Orkneys and Shetlands. The first thing the Tory Government did after the last election was to introduce a new measure of nationalisation to allow the Secretary of State for Scotland to build ships and pay people to run services to those islands. Are we to be denied that on the mainland because the Liberal Party trusts the Minister of Transport?
  This Bill follows as inevitably as night follows day. What was done in 1953 was the most deliberate act of sabotage against the transport system of this country. I say this without condescension. One of the best speeches I have ever heard was made today by my right hon. Friend the Member for Battersea, North (Mr. Jay). It was shorter than many other speeches in this debate, but he was telling the truth when he said that this is really a transport problem and that all we have here is a railway Bill.
  Our roads are choked with traffic. The Government sat by idly until 1953 and then, to make sure that the position would be very much worse, they decided to take some action. Let me add here that the decision was not taken in 1953. It was taken in 1946. On 16th December, 1946, when we discussed the Transport Bill, Sir David Maxwell Fyfe as he then was, now the Lord Chancellor, said that it would take ten years for the proposals of that Bill to become fully operative. But the party opposite did not wait for ten years. It had to get its hands on the profitable sections of the industry, and with the 1953 Act it destroyed the possibility of getting complementary, integrated, or co-ordinated services, and the chaos, about which my right hon Friend
  1244
  the Member for Battersea, North spoke, inevitably resulted from that action.
  It is not just that. We talk about deficits. Let us look at some of them. Paragraph 130 of the Report of the Select Committee on Nationalised Industries says:
  "Something has now been said about the revenue and the expenditure of the railways. Net receipts, the difference between the two, fell from £23·8 million"—
  that is, net profit—
  "in 1948 to £10·6 million in 1949, and then rose steadily to a peak of £38·7 million in 1952. The decline from then until 1958 was continuous"—
  all during the stewardship of a Tory Minister of Transport—
  "entering into a deficit"—
  this was when we got the deficit—
  "in 1956 to the tune of £16·5 million."
  After that there were deficits in 1957, 1958, 1959, and so on.
  Mr. Grant-Ferris: I hope that the hon. Member will not think me rude if I leave the Chamber now. There are not many canals in Scotland, and so I hope he will not mind if I go at this moment.
  Mr. Ross: Despite the Forth-Clyde Canal, despite the Caledonian Canal and despite many other canals in Scotland, I can assure the hon. Member that I shall not be mentioning them tonight. I hope that he is away to throw the Minister of Transport into one of them.
  This is the important thing. The financial troubles started with the Tories, and their Ministers of Transport sat year after year doing nothing to put right the conditions which the Tories had created, dating back to the 1953 Act. Nobody has yet mentioned the effect on the railways of the Government's financial policies and periodical crises. When the credit squeeze went on in 1957 the effect showed itself on freight traffic and in the revenues. It was a direct consequence of Government policy. The same thing is happening today. But let us appreciate that the Commission, with all the difficulties which confronted it as a result of Government action, did a pretty good job, and there has been far too much gloom about the prospects of the railways.
  The effect of the modernisation programme has been held up by this

  1245
  Government time after time. We are not yet getting the returns which we were supposed to get in 1960. The beginning of the returns from the modernisation plan are being held up even at the present time by the Government. There is very much more than a pay pause going on. This is what has to be contended with all the time. But we have more modern service in relation to freight. We are carrying more freight, and I think that we are carrying more passengers. All this is developing at the present time and we are getting improvements. In aggregate, we shall be getting far more traffic in Britain, if Britain is to be prosperous over the years. We should do more to ensure that we have the right kind of transport and not just the right kind of railways to deal with it. We cannot get that.
  Let the Minister read the Report of the Royal Commission of 1930. This problem was with us long before that. Let him read the Salter Inquiry of 1932 and he will find that nationalising the railways alone is no solution. It stated:
  "If allowed to continue unchecked or uncontrolled the evil results of this competition between road and rail will become even more serious and will not only adversely affect the financial stability of those who provide transport facilities but will also hamper the development of trade and economic progress of the nation. Nationalisation of the railways alone—leaving other forms of transport in other hands—would certainly not produce any real co-ordination of transport. It appears to us that without unification, however that may be accomplished, no attempt to bring about complete co-ordination would be successful."
  That is from the Royal Commission's Report on transport in 1930. It was in the implementation of it that we nationalised the railways and other forms of transport in 1945. I agree with my hon. Friend that we probably made a mistake in leaving out C-licences. That was a mistake which ought to have been put right by an all-seeing Conservative Government. But they did not go that way. Their purpose was to destroy the possibility of getting a sensible transport system in this country, and today they are dealing with the consequences.
  The only part of this Bill which really matters is the financial part. The rest of it could be left alone and the Transport Commission left to carry on. The Commission could have made as good a job of it as the new set-up, perhaps even
  1246
  a better job. But no. We must have our dose of "M and B"—the Minister of Transport and Dr. Beeching. "Beeching's Pills"—worth 24,000 guineas a box. They are to remove all the lines and put lines on the faces of those whose livelihood depends on the railways. This is the danger. But if we say this it is because the Government have not come clean with the nation, with industry and with the railways. One of the reasons why we still have some of the British Road Services left is that by 1953 industry realised their value and told the Government to stop.
  What is to happen now? Can anyone have any trust in the ruthless new dictator of transport and his elder, "Soutar Johnnie", the Minister of Transport telling him when he has forgotten to do something? Will the Liberal Party look at the negative powers of the Minister of Transport in Clause 27 of the Bill? It really is fantastic. In subsection (4) it states:
  "Without prejudice to the foregoing provisions of this section, the Minister may, after consultation with any Board, direct the Board to discontinue any of their activities, dispose of any part of their undertaking, dispose of any assets held by them, call in any loan made by them or exercise any power they may possess to revoke any guarantees given by them."
  The powers are purely destructive and we have a destructive crowd in this society of cheerful incompetents who are getting the support of the Liberals tonight.
  Mr. Hay: Before leaving that point, will the hon. Gentleman compare the subsection he has quoted with Section 4 (5) of the Transport Act, which is almost precisely similar in content?
  Mr. Ross: I have not a copy with me, but I am surprised that the Tories, with their powers of initiative, could not find something new after all these years. I should have been quite content. If this is his idea, why did he bother to touch the 1947 Act at all. Why not leave the law? It is because the Government touched it so destructively that I distrust these powers in the hands of a Tory Minister of Transport.
  Mr. E. Partridge: The hon. Gentleman is changing his ground.
  Mr. Ross: It is not a change of ground. What we want is a change of Minister, and then I might change my ground.
  At the present time in Scotland—I make no apology for returning to the Scottish point; it will apply in other parts of England and Wales—we are faced with the closing down—I think in the week beginning 4th December and then on 8th January—of nearly 300 train services. The trains will be withdrawn, and that applies equally to branch lines. I am going to declare my interest in this connection. It may be just as well for me to do so now because by the time we have the next debate on transport I may not have a constituency interest in transport. We used to have railway workshops and also to manufacture locomotives. We had big locomotive depôts and a railway centre. One of the worst hit constituency towns, because of the present closures and withdrawal of services, is Kilmarnock.
  There is no finer body of people than the railwaymen. They have given public service and provided public representatives all over the country. The old railway companies, as well as the nationalised industry, encouraged these men to take time off in order to give public service. The industry has provided a good number who have given loyal service in this House. These men are terribly disturbed. What is this going to do to the service and to the ability to recruit the right kind of main? Morale is going down, but it should be going up if we had the right kind of Minister paying attention to the railways and less attention to other things. The fact is that he has far too much to attend to.
  I am not yet in a position to be able to say what will happen to Scotland, although I have heard three Ministers speak in this debate. The Financial Secretary to the Treasury got a cheer today when he said that in all these financial matters we must bear in mind the true interests of the nation and not just the interests of individual persons. Many of those who cheered him did not realise what he was saying. He was saying that we had to bear in mind the true interests of the taxpayer and the Treasury. We must not bow to the demands of those who are suggesting that we must nave this social consideration in relation to
  1248
  uneconomic services continually presented to us. The Minister has run away from a recommendation made by this House.
  As a Member of the House of Commons, I had a certain pride when I heard the Chairman of a House of Commons Committee insisting that the Committee was entitled to get fair consideration for its proposal. The proposal was that the Minister should clearly designate those areas in the country in which he was prepared to subsidise services, and to do it in advance. Those were the words in the Committee's findings, but the Minister says, "No, we shall provide £450 million for five years." Within the use of that there will be concealed any uneconomic working that this commercial set-up will now operate.
  What is to be the position in Scotland and Wales? Some people say that every line north of Perth is uneconomic. They might also have said that every line west of Stirling and south of Edinburgh is uneconomic. There are hardly two lines in Scotland which would stand up to the economic test, but if all uneconomic lines were closed what would happen to Scotland? What would happen to the West Country? What would happen to our hope of any possibility of development of Scotland if that were carried out? I warn the Minister of Transport that any hon. Member who might have seen the Scots occasionally on the rampage has not seen anything yet if we get any of this slashing and cutting to such an extent that Scotland is written off as a possibility for economic development. It is as important as that to us, and we are determined that the Minister of Transport shall be aware of it.
  That is why we should like to have seen a Scottish Minister present in this debate. Goodness knows, we do not want to hear the Secretary of State for Scotland—we have heard him before—but it may be that we should want him to say something about Clause 12. Hon. Members opposite should be looking at Clause 12 to see what it is about. It is about pipelines. The Secretary of State is the expert on pipelines. He has been the expert on pipelines for years. All the jobs are "in the pipeline"—the bagpipe line. From the point of view of transport, from the point of view of the railways and of my constituency, this

  1249
  is very serious. We want to know what is to be the future pattern of the railways in Scotland, and how it is to be fitted in, or can be fitted in, to the other services.
  It has been said that we should close down the railways north of Perth. It is all very well to do that if other services are there, or if the Minister gives power to provide other services. In many cases there are not even roads to take their place. I wish the Liberal Party would wake up and appreciate the power it is giving to the crowd opposite. I sincerely hope that before the night is over the Home Secretary will clear this up. After all, he has a vested interest. I should hate to see him walking from Glasgow right up to Oban in order to get the boat to go to his house on Mull. Is that line going, or is it to be reserved to enable the Home Secretary to get there on holiday? Are we to have a line up to Inverness to enable the Prime Minister to go and see his noble relative?
  I hope we shall have some answers about the future pattern. There are men and women whose livelihood depends on this, men and women who have put their whole lives into the railways, believing in railways and believing that railways still have a chance. I hope that before closing down an effort will be made to build up passenger traffic. I have faith in modernised methods of conveying passengers. Failing that, I hope there will be no panic slashing. That is one of the dangers which is being built up enabling Dr. Beeching to carry out his destructive task. He has been played up as a wonderful man, but anyone could save this money. What shall we be left with in the end? We shall be left with a railway service which will not be able to play its part in any transport system.
  In 1953 the Government did enormous damage to the possibility of getting integrated transport. By using this Bill it might well be that they will do even greater damage to the efficiency of the transport system which is left and even deny the railways power to extend and provide the services which I still think they can provide because I still have faith in the railways. I come from a railway family. I am a renegade, but my father, my grandfather and my great grandfather were railwaymen. I want to
  1250
  see the men in the service given some hope. I want the Home Secretary to do what has not been done by any Minister of the Crown in this debate, address himself to the transport problem and the realities of the problems which face the railways and railwaymen today.
  8.28 p.m.
  Mr. John Peyton: The whole House shares the fascination which was expressed by the hon. Member for Kilmarnock (Mr. Ross) at the speech of the hon. Member for Bolton, West (Mr. Holt). Having denounced the Government and its members, he proceeded to explain his fears of what might be possible consequences of the Bill and then indicated his intention to support the Bill. Then, for the first time, did I conceive some possible reason why I might myself support the Bill.
  However, I was strengthened in my determination not to support the Bill by the clear and cogent speech of my hon. Friend the Financial Secretary to the Treasury this afternoon. The Financial Secretary made it clear that the task of Dr. Beeching was to run the railways as economically as possible. There, I think, is a source of the whole dilemma, in that the Minister and Dr. Beeching are liable to get their two tasks irrevocably mixed. I entirely agree with what was said by my right hon. Friend the Member for Blackpool, North (Sir T. Low).
  There are one or two comments which I should like to make on the Financial Secretary's speech, which was a very able and clear exposition of an extraordinarily complicated and sombre situation. As has been said, we have buried this enormous sum of money without even sounding one mournful requiem over the corpse. It would be as well if the House of Commons at least waved a friendly farewell to this £2,500 million of taxpayers' money which is being distributed in various directions, even if it did not weep too many tears over it. The Financial Secretary was a little optimistic when he said that yesterday the financial provisions of the Bill were welcomed. I listened to the whole debate, and in my view a very striking feature was that the financial provisions were entirely ignored.

  1251
  My quarrel with the main part of the Bill stems from the fact that out of it will not emerge any possibility of identifying to the House of Commons the sources of the losses which arise on the railways. Under the leadership of my right hon. Friend I spent many hours on the Select Committee last year listening to evidence from the Transport Commission, and a point which I found most difficult—a difficulty shared by other hon. Members—was understanding where and how these huge losses arose. It is a very complicated problem. I do not believe that we shall ever get to the root of it until we have a system which clearly delineates, as this Bill does not, the functions of the Minister and the functions of the chairman of the Commission or the Railways Board, call him what we will.
  I should like to refer briefly to one or two things which the Minister said in opening the debate yesterday. I welcome very much indeed the acknowledgement contained in the Bill that the Transport Commission's activities are far too large an empire for any one organisation to manage. One or two of us have been saying that on these benches for a number of years, and we welcome the Government's conversion to that view. I also agree with the decision to relieve the railways of the Transport Tribunal, which has virtually been abolished, except for London. I welcome the fact that the remnants of the common carrier liability are to go, and I welcome—I know hon. Members opposite have their suspicions on the point—the new-found freedom to develop the property of the railways which, after all, is one of their most important assets, which has been largely paralysed in recent years. I also welcome the provisions about pipelines.
  But I recall the article published by the Statist about ten days ago which started with words very similar to those quoted by the right hon. Member for Vauxhall (Mr. Strauss) yesterday—that small boys play trains and grown-ups play around with railways. Those words represent a very fair comment upon the rôle of successive Parliaments and successive Governments in dealing with this immensely complicated and intricate problem of the railways. The same article ended with the rather dreary prospect that before very long there would be another Bill. I share that awful fear, and it is for that
  1252
  reason, among others, that I am quite unable to support this Bill.
  I know that the Minister had a very difficult task in introducing what is a tremendously complicated and vast legislative Measure, but I was disappointed that in doing so he was not able to give a picture of his own position and of the powers which he enjoys, which seem, at least on first examination, to be very wide and considerable. As my right hon. Friend the Member for Blackpool, North said, however, there is a doubt about whether the Minister has quite all the powers which he may need if it is decided on economic grounds to prune a service which, in the national interest, for social or other reasons, it is really essential to retain. I doubt very much that the Minister has the power to give the necessary direction in such a case. I hope that the Government will accept my right hon. Friend's invitation and study the point carefully, and I hope also that at some time during the later stages of the Bill we shall have a clearer picture of the Minister's powers and his position in the matter than has emerged so far.
  I have referred already to my concern about the identification of the uneconomic services. That concern has not been set at rest during the course of the debate. My hon. Friend the Financial Secretary has told us—the optimists and the pessimists can read into it what they like—that the railways will be run as economically as possible. The pessimists immediately see a dreadful picture ahead. The optimists see something infinitely cheerful, with no need to worry. I myself believe that this is not the way to do it, and I very much regret that the advice of the Select Committee has, apparently, been rejected, and rejected finally.
  The crux of the problem lies in the question whether the railways will be able to win the battle to capture more freight and regain some of what they have lost. I am bound to say that my experience leads me to believe that a considerable internal revolution within the railways will be necessary if they are to do that. Their whole approach to the market will have to be very different. Unfortunately, the railways do not today enjoy the sort of reputation which we all want them to enjoy in the handling of

  1253
  freight with promptness and with care. These matters are of desperate importance if they are to have the least chance of making use of the opportunities which will be afforded to them under the Bill.
  I have referred already to the financial provisions and what my hon. Friend the Financial Secretary told us. It is sad that the debate has not afforded the House of Commons an adequate opportunity to examine the question whether this investment we are now making is a sound one. We all have strong positions dictated by past interests, past occupations and the rest. Nevertheless, it seems to me that, perhaps because of the confusion of the general picture, we have somehow been inhibited from examining the vital question, are we investing the taxpayers money wisely?
  The railways are bound, and quite rightly bound, to exploit the position in which they are now put. I have been rather surprised to hear some of the vigorous denunciations of the Bill made today, notably by the hon. Member for Birkenhead (Mr. Collick), who accused my right hon. Friends of being the slaves of the road haulage lobby. This seems the more surprising in the context of a Bill which offers very considerable Government subsidies to the railways to compete with road haulage.
  One must remember that Dr. Beeching is in duty bound to compete, to exploit his position as far as he can, and he will do so to the disadvantage of those other industries which run without subsidies, which pay their normal taxes—and taxes on their fuel as well—and which are tied to a licensing system.
  The independent docks and harbours in Britain, which handle 70 per cent. of the goods, will be at a serious disadvantage compared with the 30 per cent. representing those previously owned by the Transport Commission, and I urge the Minister to give further consideration to this matter to see whether he cannot meet the needs of all concerned in transport. Might it not be better if the 30 per cent. previously owned by the Commission were put on a footing more closely resembling that of the existing dock and harbour authorities? The Minister of Transport said yesterday that the Clause dealing with this matter is a holding operation and he did not in any way exclude the possibility of further
  1254
  action being taken at a later stage, particularly following the report of the Rochdale Committee. I welcome that, so far as it goes.
  The railways will also find themselves in competition with the privately-owned wagon industry. This is not a field in which hon. Members should give vent to great prejudice because this industry employs a great number of people and in the past has been responsible for a large volume of exports. This is a difficult problem which should receive the consideration of the Government before they merely allow the industry to perish, as it were, by default.
  My hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) yesterday made clear the dilemma in which the coastal shipping industry finds itself. I am well aware that for forty years this industry has been safeguarded against uneconomic competition, but I am puzzled to know how the circumstances have changed to warrant the sudden decision to sweep away these well-established safeguards. Clause 54 deals with coastal shipping but, in my view, it is absolutely worthless. Certainly it appears that by that Clause the industry is to be given the opportunity and privilege of a visit to the Minister, which it can demand as of right, so that it can say "We are facing uneconomic competition as a result of which our business will be ruined."
  But, by that time, the damage will have been done and the Minister's powers by that time—whatever they may be on paper—will be limited to his giving the industry a little advice on the prevailing price for scrap which they might get for their ships and indicating the way to the labour exchange for their crews. This is an unsatisfactory and serious position and, although I do not want to wax sentimental at great length, the House of Commons should be the first place in which an acknowledgment should be made of the debt that Britain has owed in the past to these small ships and the men who have sailed in them.
  We tend to forget these things and to ignore the claims of such an industry in the course of the passage of a vast Bill like this. I believe that in the not-too-distant future there will be a very serious charge by those who come after us that

  1255
  we neglected a small industry which did not ask for subsidies but merely asked to be given the opportunity of fair trading.
  This industry has already suffered fairly severe damage. I shall not weary the House with many statistics, but I should like to give one or two. In 1951, there were 970 ships. This year, 10 years later, that figure has diminished to 638. A total of 850,000 tons in 1951 has dropped to 626,000 tons in 1961. Forty-five thousand tons of new shipping were built in 1950. Next year there will probably be none. I think that those figures are sufficient to indicate the gravity of the problem which faces this industry. It is a foreign currency earner, and if we enter the Common Market, which I know the Government wishes us to do, surely it will be an industry of even greater importance than it is today.
  The 27 million tons of goods which are carried by this industry would be a very valuable prize for the railways to capture. The importance of this is perhaps rather greater than at first appears, because, if distance is taken into account, it becomes clear that coastal shipping is carrying out a much larger proportion of the domestic transport operation than the figure of 27 million tons indicates. The proportion would appear to be about one-fifth.
  I have attempted briefly to give one or two reasons for my disquiet about the Bill. In particular, I do not think that I have exaggerated in any way the importance of coastal shipping. I would dislike and detest the sight of this small but valuable and virile industry being swamped in the wake of a vast legislative leviathan of the kind that we are considering. These things happen almost by default, almost unintentionally and accidentally, because we had good reason for believing that they were the inevitable consequence of a plan which we thought was excellent, Sufferings such as those of the coastal shipping industry are almost unnoticed in the passing of a massive Bill of this kind.
  For that reason, I find myself completely and utterly unable to give my support to the Bill, and I very much hope that, before it passes through its later stages, the Government will take the opportunity of giving serious
  1256
  thought to some of the really grave transport problems which are enmeshed in it.
  8.49 p.m.
  Mr. Llywelyn Williams: I congratulate the hon. Member for Yeovil (Mr. Peyton) on the courage that he has displayed, particularly in the latter part of his speech.
  We have heard a great deal today about the exigencies of finance in the transport system. I am aware of the exigencies of time, and I must cram what I have to say into the short space of ten minutes. However, I feel that what I have to say is very important, because it has a powerful impact on the part of the country which I represent. I refer to the County of Monmouth, in Wales.
  Before I refer to that directly, I should like to say a few words about Clause 57, which refers to the setting up of transport consultative committees. I should like to assure the Home Secretary that the committee which met on 24th October last, at Newport, to discuss the closure of the eastern and western valleys passenger railway services is regarded, I regret to say, with a great deal of cynicism, if not contempt. It was described by the people present at that committee's proceedings as a mere puppet show and a farce, and it does no good to these committees for the ordinary public to regard them in that light. It seems that the committee had already decided, before hearing a word of evidence adduced against these closures, what its attitude was to be. I ask the Home Secretary, and the Minister of Transport, to see that these committees function in a really democratic sense.
  I want now to refer to Clause 3, which states:
  "It shall be the duty of the Railways Board … to provide railway services in Great Britain …"
  We deduce from the debate yesterday and today that the operative word is "provide". It is a word which lends itself to wide and varied interpretations, but I think that it will be quite fair to say that we on this side of the House are not actuated by irresponsible motives when we emphasise the importance of the social consequences of railway

  1257
  closures. We do not believe in an indefinite and indiscriminate continuance of uneconomic railway services. What we do ask is that, in the final balancing of these calculations, the right and proper weight should be given to the social consequences.
  I speak for 250,000 people who are involved in this threatened closure of the valley passenger rail services in Monmouthshire. It is generally admitted that the railway freight services in these two valleys are very lucrative. That is why we feel particularly aggrieved that the railways are prepared to carry the coal, but not the colliers, the steel but not the steel workers. At present, there is a daily average of 6,000 fare-paying passengers using the railways, and, also, 1,500 non-fare-paying passengers who are railway employees. These represent between 7 and 8 per cent. of the total population using transport in these Monmouthshire valleys.
  The Transport Commission claims that these passenger railway services are run at a loss of £165,000 yearly. The Commission readily admits that it could run a modified service at an annual net loss of about £77,000. In view of the fact that the freight traffic is so lucrative, surely we are not asking too much when we say that there should be a continuation of the passenger services as well in these valleys.
  What is the alternative? That is the important question for us in Monmouthshire. The Transport Commission's suggestions are almost ludicrous. We are informed that there may be some difficulties, but no real hardship, if all these railway passengers are compelled to take to road transport. There are two bus companies operating in these valleys—the Red and White, which is controlled by the Transport Commission, and the Western Welsh, which is associated with the Commission.
  I say that it is adding insult to injury for Western Welsh to say that it needs only three extra buses, and for Red and White to say that it needs only six additional buses, to cater for this tremendous augmentation of travellers on these roads.
  Diesel trains were introduced into these valleys a few years ago. We expected great things from that introduction, but, at the same time, some of
  1258
  the most lucrative of the train services were lopped off. The connecting links between the valleys and the main line are completely absurd. Every local train, with the exception of the first train in the morning, misses its main London connection, and the same applies in reverse. This is no incentive for people to use these trains.
  The most important point of all is that we do not have the roads in the western and eastern valleys of Monmouthshire to take an additional load. The traffic today is absurdly congested. The inevitable development is that road traffic will be on an increasing scale. There will be more and more vehicles of all sorts on our roads and the picture of ten years' hence that one can imagine is something like a nightmare. People sitting in London have no conception of the type of roads in the mining valleys of South Wales.
  I shall be followed in the debate by my hon. Friend the Member for Southwark (Mr. Gunter), who is one of the distinguished sons of my constituency. He was brought up in Llanhilleth and he knows that the road from Crumlin to Llanhilleth cannot physically be improved at all, because, on one side, the mountain comes precipitously on to the road and, on the other side, there is a drop of about 100 feet. In view of the possibility that the railway passenger service will be closed, I ask the Home Secretary to visualise what conditions will be like on these roads. The Eastern valley suffers from the same disability.
  The social consequences in the valleys of closing the passenger railway services will be serious. These are mining valleys and it has always been agreed in the House that no part of the community has suffered more from lack of amenities than the mining areas. We are losing miners from the pits, which is a serious problem for the National Coal Board and the National Union of Mineworkers. Many factors drive these miners away, but amongst them is the lack of amenities in the valleys vis-à-vis the towns. To take passenger services away from miners famous for their interest in sport and for their travelling in their thousands to Cardiff on great football occasions is to rob them of an important amenity.

  1259
  I want to make my indictment of these proposals and of the inability of the Bill to deal satisfactorily with these problems fit into the general pattern which I claim to see in Government policy throughout the years. There are innumerable instances of aspects of public enterprises which receive no support from the Government and when, because of that lack of support, they are not paying their way the Government feel justified in saying, "These services do not pay their way and, therefore, we must use the axe on them." When the drug bill rose, largely because of the tremendous cost of the products of American drug firms with subsidiaries in this country, the Government slashed the Health Service and imposed the 2s. per item charge on prescriptions. Collieries are to be closed, and now we have the closure of uneconomic railway passenger services.
  The Government have not helped. There has been no encouragement from them to make the valley railway services attractive by reducing fares and in other ways. Then, because these lines do not pay their way, the Government say that the services must be terminated. The social as well as the financial consequences should be taken into consideration.
  Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): Mr. Gunter.
  Mr. Stanley R. McMaster: On a point of order, Mr. Deputy-Speaker. I have sat through two days of this debate. Is no time to be given for a Northern Irish Member to express concern about rail and coastal traffic?
  Mr. Deputy-Speaker: The number of hon. Members who are able to catch the eye of the Chair is governed by the length of speeches. There have been many long speeches and, unfortunately, many hon. Members have been disappointed.
  9.0 p.m.
  Mr. Ray Gunter: I think that many hon. Members on both sides agree with me in feeling a sense of unreality about this debate. Hon. Members have told us of their interest and experience in transport. Many of us are fascinated by this industry, in which the movement of men and things is involved. But to me the debate has been
  1260
  a sorting out of echoes. The words of earlier debates, the lectures we have attended, the books that have been written over the past forty years—all have come winging their way down.
  The Bill puts us back to where we started forty years ago. The submissions of the Government and the contents of the Bill concerning this problem, which faces every industrialised country, are quite irrelevant. The Government are, in effect, dodging the issue of transport. The Bill brings us no nearer a solution of what everybody admits is a most complicated problem.
  I do not deny the complication of the problem. I ask the House for a moment to forget all doctrine about ownership. The fact is that transport as an industry has never been far from a condition of excess capacity. I know of no responsible transport authority, during y working life, whatever his politics, who has not argued that, at some point, the State must harmonise the operations of the different transport agencies as between themselves and in the interests of the community as a whole, and that the Government of the day, whatever their political colour, ought to encourage each agency to undertake that part of the total work which, with its own special qualities, it can most efficiently and economically perform.
  In a debate on this subject twelve months ago, I reminded the House that for forty years, whatever the politics of the transport men concerned, there has been general acceptance that, particularly in a highly-industrial State, those principles must be maintained if we are to have a satisfactory solution to our problem. The strange thing about this debate is that no one has really argued against this conception. No one has put a real argument against the views of Eric Geddes, Arthur Salter, Josiah Stamp and other great authorities in transport. The confusion on our roads and the tragedy of our railways stand out for everybody to see. We know the cost to the nation, the real cost to the nation, of uneconomic working, whether it be on the road or rail. Traffic which should be on the road—yes, let us say it—is on rail, and vast quantities of traffic which is on the roads should be on rail.

  1261
  The party opposite has loved to abuse my party as being the party of the doctrinaire, but it is the Conservative Party which for forty years has been indicted of being dogmatist and obsessed by its own doctrines. It has a dogmatic belief in the virtue of competition, except when capitalist amalgamation and capitalist restrictive practices are concerned.
  In 1953, the Tory Government deliberately set the clock back, deliberately went back upon what the great transport men of the past had been arguing, and they provoked a deliberate and calculated and destructive competition in the transport industry. They robbed the British Transport Commission of a large proportion of the road commercial interests and they promoted costly competition, and there are hon. Members opposite who know the truth of that statement. As far as I know, the real reason for it has not been stated in the debate. Why was it that decent, good, sound policies for the national need were sacrificed? It was because that was the price which the party opposite had to pay to the road haulage interests who had poured their money into the winning of the 1951 General Election. The national need did not stand up to it.
  I now say, perhaps to the surprise of my hon. Friends, that the last glint of hope which I see in the present situation is, strangely enough Dr. Beeching; not because of his known policies so far announced, but because he is learning so rapidly. If he will now completely disregard anything the Minister tells him and proceed with that deep study of the history books of transport, which he has undertaken over twelve months, and will use that great intelligence and integrity to keep himself primed on the facts of life, I have great hope for him. I think that the Minister has caught a hot potato.
  Speaking to the Institute of Transport, Dr. Beeching has revealed the facts. He has come to an understanding of what Arthur Salter meant and what Eric Geddes meant forty years ago. I hope that the Minister will listen carefully to what Dr. Beeching is saying, for he is on what the Minister thinks to be the wrong track. Dr. Beeching said:
  "To me co-ordination of transport means the use of each of the various forms of transport to do those things which it can do best—best in terms of quality of service and cost.
  1262
  It also means avoidance of that condition when all forms of transport are competing blindly for all forms of traffic. Although most people accept the desirability of co-ordination in this sense, the plain truth of the matter is that transport, as an industry, has never moved very far away from the condition of excess capacity and blind competition."
  So I say "hurrah" to Dr. Beeching so far.
  He went on with this Socialist philosophy and said:
  "If each form of transport is to be developed so as to have enough but not too much capacity to deal with those traffics which it is best suited to handle, then there are certain things which it is necessary to know. First, we must know what each form of transport can do better than the other forms, in terms of quality of service and cost. Secondly, we must find out about the whole national pattern of transport requirements, in terms of the characteristics which determine the relative suitability of traffics for one form of transport or another."
  Forty years after, that was an extended version of the first Minister of Transport's speech on this subject. Forty-one years ago, that was what the first Minister of Transport said, and since then we have had twenty-two. They have all gone through this agony and Dr. Beeching—bless his soul—in twelve months has arrived at exactly the conclusion which the first Minister of Transport reached.
  Let me add the final wonder. He went on to say—and I like this—
  "Nothing could be more harmful to the transport industry than to have a part as large as the railways continue in poor health and flailing around in its efforts to survive.
  We, the railways, mean to survive, by getting out of business which is unsuitable for us and getting more and more of that business which we can handle best, by handling it best. In that way, we shall contribute more to the co-ordination and orderly development of transport than we have so far. If"—
  and these are the significant last words—
  "the whole of the transport industry adopts a similar approach …"
  I submit to the House that the real importance of Dr. Beeching's statement, which, as I say, is an expanded version of the statement of the first Minister of Transport, lies in whether the whole industry adopts a similar approach. This Bill has nothing to do with that problem, because Dr. Beeching is not to have anything to do with roads in the private sector or canals. Therefore, how can we

  1263
  be assured that the whole of the industry will have this approach which, very rightly and properly, Dr. Beeching has arrived at?
  In the Bill there is not a single word about machinery for arriving at that conclusion. I hoped that the National Transport Advisory Council might be helpful in this respect. I soon discovered that it had to deal only with the nationalised side of transport. But the greatest blow of all was when I read—and I say this to the Minister as a railwayman—that the Minister could be the chairman.
  I submit that, unless we can get the Minister to be of the same mind as Dr. Beeching in his approach to the transport industry of the country, this Bill will do nothing to solve the real problems of transport. We can have direction and control, indeed we can have a measure of co-ordination within the public sector of transport, but if the private sector is to run wild What difference will it make in the end? It will simply mean the collapse of the public sector.
  We all know what is happening on the roads of Britain. In 1950, there were about 4½ million vehicles on the roads. Today there are 9 million. The number of goods vehicles has increased from 852,000 to 1,405,000. What hope is there of getting sense into this? Unless we can get order and planning and co-ordination into the private sector as well as the public sector, there will indeed be little hope. I say to the Minister, who unfortunately is known in the railway world not as the Minister of Transport but as the Minister of road Transport, that I regret that in his approach to so many of these matters he had not the vision to go further and realise the concepts that lay behind the 1947 Act. I would admit some of the defects of that Act, but I sometimes think that the Minister of Transport today has been the biggest barrier to the exponents of reform since gin was discovered. He has driven the railwaymen to drink. Hundreds of thousands of decent citizens who drive their cars on our roads are frustrated because they cannot get home. They call at the local first, and then go home and quarrel with their wives. Then the Home Secretary comes along and
  1264
  talks about juvenile delinquency because of drunkenness—and all because the Minister of Transport will not do a bit of planning; because he will not put his mind to the real problem of transport.
  I now turn to the vexed question of uneconomic working and the closing of branch lines. We must all get one thing straight, on whatever side of the House we sit. We cannot keep railway lines open if there is no need for them. If there is no public need for them, they must go, just as with the mines. If it can be proved beyond peradventure that the public interest can be served by a more economic form of transport we should not shrink from making a change. We should not hold on too much to the past. We must always remember that because of the philosophy of the party opposite far too many hundreds of miles of track were built in the 19th century. Money was quick and easy, and so we were over-tracked.
  But surely the Minister must ensure that alternative transport is available, and is more efficient and more economic. So far we have had no proof of that. So far there has been no question of unfolding a road policy in which the roads will meet the increasing needs of road haulage while, at the same time, branch lines are being closed. In other words, there has been chaos and confusion.
  I want to consider Dr. Beeching's attitude to this matter. I respect his honesty. In view of all that has been said about uneconomic working, let us be quite clear what the present chairman of the Commission feels about the closing of branch lines, and uneconomic working. He is quite clear in his mind; the determination of social needs is not his job. That is not to say that he does not argue that there may be a case for keeping open uneconomic lines for social needs. He is clear in his mind that it is not his job to determine it, but that it is the job of the Minister.
  I should have thought that there would have been provision in the Bill to set up machinery to enable the Minister to determine this. Nothing in the Bill provides a means of deciding how this should be done. I agree with the right hon. Member for Blackpool, North (Sir T. Low); it would have been far better if the Bill had contained provisions which, as the Select Committee

  1265
  suggested, would have enabled questions of uneconomic lines, branch lines and projected closures to be brought to the Minister and analysed. Dr. Beeching could have said, "This does not pay, and as far as I can see it cannot be made to pay, and you must now go to Parliament to see whether it wants the line kept open, and to determine the amount of money involved" I wish that the line suggested by the Select Committee had been followed.
  But there is another aspect of the problem of the closure of branch lines and uneconomic working that we must consider very carefully. Most transport men are of the opinion that the great areas of population, where the commuter traffic is very heavy, cannot be made economic propositions, but that they serve such a great social need that there is a case for the Government to subsidise them. I am no great authority on London traffic, but I am told that the building of the Victoria-Walthamstow line would be of the greatest help towards solving the problem of London traffic.
  What is wrong with getting away from the actual costing of the operation and taking into consideration what will be saved in what might be called the intangibles—the cost of irritation and frustration, and the loss of man-hours occasioned by congestion in this part of London? I should have thought that it would be a reasonable proposition for the Government to subsidise something which could make such a great contribution to the solution of our problems.
  We ought to consider the problems of other nations when we are considering our own. We can learn a great deal from other countries facing similar problems. Some extraordinary things have been happening in the citadel of capitalism, the United States. A great exercise is going on there at the present moment. Since 1945 seventeen railroads have been closed to passenger traffic and 5,000 passenger trains have been withdrawn. One American authority, Mr. Chet Huntley, has said:
  "… we are living in the twilight of the American passenger railroad."
  Now out of the blue comes the rub. Great American cities are protesting vigorously that their roads cannot carry the great commuter traffic, and it is
  1266
  argued that the great cities will have to restore some of their passenger train facilities. Lewis Mumford, the great American authority on urban transport, has said—I hope the Government will bear this in mind when talking about some of the closures:
  "It is very likely that within another ten years we will have to re-invent the railroad system to perform the functions that no other form of transportation does. And where we do, it will be at a colossal cost compared to the cost of keeping up the present system."
  Consequently, I believe that there is the greatest need for caution before we close passenger lines.
  My hon. Friend the Member for Abertillery (Mr. Ll. Williams) has spoken about the closing of passenger lines in the western and eastern valleys of Wales. One Government Department says that it hopes that within a comparatively short time there will be a township of 55,000 people at Cwmbran. But it will not have a railroad to serve it. I urge the Government and the British Transport Commission to be very cautious and to examine the situation carefully before they close branch lines which may well be needed in the future.
  I now want to say a few words about railwaymen as a body. I believe—hon. Members opposite will, I am sure, agree with me—that the railwaymen, one of the most respected bodies of workers throughout the last century, have been kicked around as no other body of workers has. It is no wonder that today their morale is pretty low. I am not speaking of the lower-paid workers alone. I am associated in another sphere with members of the British Transport Commission general managers and departmental chiefs, and everywhere these people are sick at heart. There is no fire left in their bellies after ten years of Tory interference in their industry. Never have I known men so dispirited as these men are today, at a time when we require their ability and initiative to steer us through our most difficult period. They have been kicked around and submitted to criticism about the financial position, and there has, of course, been the alleged bad management. The Minister of Transport never fails to reflect upon the "bad management" of the railways.

  1267
  What is the position? The Commission and the area boards have been in existence since the 1953 Act, and they have comprised a total of 55 persons—15 in the Commission and 40 in the area boards—and only two of them were professional railway managers. The appointees to the area boards have been, by and large, members of the Conservative Party. They were the "new blood from business" that was drawn in. Railway management passed during the last ten years from the hands of professional railwaymen to the hands of people who had not a clue about the real problems of transport. The area boards consist of "nice people with nice manners, but they ain't done nothing at all."
  This is to be perpetuated. We are to have area boards in future under this Bill. We have witnessed in this industry hours and hours of time spent by good railwaymen at high level, general managers and departmental chiefs, teaching the amateurs the facts of life. These were the people who constituted the area boards, and they did not even have any great interest in the industry itself. I suggest that at least in this difficult and awful period for railwaymen the Government should give us back a bit of our pride by letting us have some professional railwaymen to manage the concern.
  At a speech at Peebles in Scotland last Saturday, Lord Hailsham said to the young Tories:
  "Let us not regret the closing of old railway lines or worked out pits."
  Quite right too. I am with him all the way in this part of his speech. We have to face the future. We have to do away with obsolete ideas. It is no good having hang-overs from the last century. Lord Hailsham then put away the jester's cap and adopted the ecclesiastical gown. He called for a return to the seemly virtues of honesty, service, and morality which our ancestors cultivated and which many think we have abandoned for good. Impeccable language, but, coming from the source it did—a prominent member of the Conservative Party—just a little nauseating.
  I suppose it is a matter of political history that the Conservative Party in its lush days preaches to the people to follow false gods, and when, as a result of its policies, a material crisis occurs in
  1268
  our economy, honesty and morality are preached to the workers and they are called to discipline.
  In 1953, in the transport world, politics were debauched by the 1953 Act. It was the payment which had to be made to the road haulage interests, and I find in this Bill again a tremendous defence of the private interests of road haulage in this country. I cannot detect one iota of any regard for the national need for a solution to our transport problems. Before my Lord Hailsham proceeds to preach to us about integrity and honesty, let him bring back a bit of it to the benches opposite.
  9.28 p.m.
  The Secretary State for the Home Department (Mr. R. A. Butler): I naturally approach taking part in a transport debate with due modesty. All subjects have their House of Commons' atmosphere, and I am well aware, having attended transport debates before but not having taken part in them, of the rather emotional atmosphere which supervenes on this occasion.
  I congratulate the hon. Member for Southwark (Mr. Gunter) on the major part of his speech, leaving aside the political flair at the end. We are glad to see him back today, as, unfortunately, he was unable to attend yesterday owing to an indisposition. I hope that the House will sympathise with him in having come back in obviously splendid form to take part in our debates.
  The hon. Member for Bermondsey (Mr. Mellish) used an expression in his speech which I think should be an example to all Front Bench speakers for its brevity and modesty, that we were proposing to smash up what was introduced in 1947. That is not in the least the spirit in which we shall enter upon this debate. If in the course of a transport debate we can get away a little from this atmosphere, it will be rather a good thing for the future of British transport.
  The hon. Member for Southwark made a considerable advance in that direction by his quite impartial and warm praise of Dr. Beeching. I hope that my right hon. Friend the Minister will take care to convey that as early as tonight so as to warm the cockles of the heart of Dr. Beeching.
  Mr. Denis Howell: Has he got any?
  Mr. Butler: On this occasion. I think that the hon. Gentleman quoted from Dr. Beeching in a very attractive way about the future of transport, and I was rather impressed by a leading article in the Financial Times today about transport which I think contains a great deal of sense. In case, as has happened on previous occasions, the atmosphere deteriorates in the latter part of my speech, I should like to make the serious remarks at the beginning so that at least they are on the record. The article says that the Minister
  "would be the last to claim that the new Transport Bill in any way 'solves' the transport problem."
  I should like to say openly to the House—I have attended the whole of this two-day debate, except for the normal interludes when one has to go out of the Chamber, and I have listened to the majority of the speeches—that I hope it will be realised that the Government are fully aware of this situation and do not pretend that it does solve the whole of the transport problem. The article goes on:
  "… needs"—
  that is of transport—
  "cannot be discussed in a vacuum without consideration of the commercial factors."
  And the whole of the rest of the article, including the phrases about Dr. Beeching and the ways in which he has tried to stimulate the railways, is to the effect that we have to go through this stage before we can possibly reach the proper co-ordination of transport as a whole. I would say firmly to the House, and to the country, that the object of this Bill is not finally to co-ordinate transport. I hope that can be achieved one day. But I hope the phrases read out of Dr. Beeching will be achieved in this country, but the object of this Bill reading from the Explanatory and Financial Memorandum is:
  "The main purpose of the Bill is to reorganise the structure and finances of the nationalised transport undertakings at present carried on by the British Transport Commission and to give the new undertakings greater commercial freedom."
  We have to go through that stage, I believe, before we can reach the stage which the hon. Gentleman so much
  1270
  wants and which the House clearly so much desires.
  The approach of the Government to the Bill has been much encouraged by the speech of the right hon. Member for Vauxhall (Mr. Strauss). After all, there is in the Bill a great deal of which he approved and I think that we should register that. He first approved the greater part of the financial arrangements. The Government have drastically written down the debt. The right hon. Gentleman applauded us for that. He says gone is our repugnance to subsidising the railways. He welcomed the new powers over land, of which I shall be saying something later in answer to his questions. He also applauded the abolition outside London of the powers of the transport tribunal. He applauded our proposals for canals and thought that we were humane about pensions. That is not a bad start in approaching a major Bill supposed to excite the ire and animosity of the Opposition.
  The hon. Member for Southwark concluded his speech, as we rather expected—we have an affection for him in this regard—with an appeal for the railwaymen. According to the hon. Member they have been driven to drink, and juvenile delinquency has resulted from the Government's transport policy. The hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) referred to the lowering of morale. I think that I might turn to a recent issue of the Railway Review of 10th November and see what it has to say about the Bill. It approaches the climax by degrees, and starts:
  "The new Transport Bill appears rather like the visitor we have expected for a long time. … He is not a two-headed monster. He is not what we feared. …
  It is the same with the Bill. The shocks we were preparing ourselves for have fizzled out."
  These are the railwaymen who are "taking to drink" and whose morale is low. The article goes on:
  "There are a number of things in the Bill which we have advocated, especially the financial provisions."
  That is the main object of the Bill. It continues:
  "The hotels are not to be sold off to private enterprise yet."
  Hon. Members: "Yet".
  Mr. Butler: I am reading the article. It says:
  "The railways will be able to develop their valuable land sites. There are greater opportunities to make flexible commercial arrangements with our customers. The Boards are believe it or not, released from common carrier obligations as regards carriage by rail and inland waterway and from statutory obligations to provide certain facilities."
  I should have thought that article was a rather encouraging one for the Government and gives the lie to what hon. Members opposite have said.
  Mr. Popplewell: Having the same article—
  Mr. Butler: I have the article here, too.
  Mr. Popplewell: Will the right hon. Gentleman give way?
  Mr. J. Hynd Mr. J. Hynd rose—
  Mr. Speaker: The situation is a little confused because the right hon. Gentleman gave way simultaneously apparently to two hon. Members on the Opposition side. We had better see what happens when the right hon. Gentleman resumes his speech.
  Mr. Popplewell: If the right hon. Gentleman will give way, seeing that I have been mentioned—
  Mr. Butler: I do not think the hon. Member need worry for I was about to say, because I do not believe in quoting things in part, that the article goes on to be more critical. It regrets the wrong policies in the past and ends on the note:
  "We must find the right element of public service …"
  about which I agree, but I am very glad that the earlier part is in the terms I have mentioned and that this gives such a very great credential to the Government on this occasion. Like the Railway Review we take pride in the financial provisions of the Bill, the liberalisation of the railways from certain shackles about which I shall now speak.
  Mr. Popplewell: Will the right hon. Gentleman give way?
  Mr. Butler: No, Sir.
  Mr. Popplewell: On a point of order, Mr. Speaker. Is it not the general
  1272
  practice of this House when an hon. Member has been referred to and intervenes to try to protect himself that the hon. Member who has mentioned him gives way, particularly if he is a Minister?
  Mr. Speaker: As I had occasion to explain yesterday, whether or not a Minister gives way involves no point of order for me.
  Mr. Popplewell: Will the right hon. Gentleman give way?
  Mr. Butler: I only mentioned the hon. Member as saying that the morale of the railwaymen was reduced. I did not impugn his honour in any way or his intellectual capacity. I see no reason to worry any more about this article because I want to get on to more serious aspects of this issue which it will take me all the time left to answer. I must make a few short observations, again in answer to the right hon. Member for Vauxhall, about financial reconstruction.
  I should like to assure the House that, much as I admire my hon. Friend the Financial Secretary to the Treasury, I am not going into the same detail—nor have I the capacity to do so—as he did earlier this afternoon. I simply mention one point which the right hon. Member for Vauxhall asked earlier in the debate should be answered in the winding-up speech. That is as to the size of the live starting debt of the railways, which is about £400 million in the White Paper and comes out at £900 million now. I think it important for me to answer that because I think people want to know what the answer is. The main reason why the figure has risen to £900 million from £400 million as it was in the White Paper is that it now covers items of investment expenditure not charged to capital account, the debt of the hotels and the railways shipping services and, above all, the cost of the new investment since 1959, less depreciation.
  This amounts to the colossal figure of £390 million. That accounts for the discrepancy between the White Paper figure and the present figure. This is a very large sum of money and it is hardly appropriate, nor does it lie in the mouths of hon. Members opposite, to say that the Conservative Government have starved the nationalised industries

  1273
  in order to make them unworkable. But if this figure does not bring home the argument to the right hon. Member for Vauxhall, let me describe the extent of investment under our Government.
  The railway investment figure, I am informed, for 1961 is likely to be about £147 million. This large sum is no less than £100 million more than was being spent in 1951, ten years ago. It allows the Commission to go ahead with all the major schemes and programmes to which it was clearly committed and to embark upon a number of new schemes which have been considered and approved.
  As my right hon. Friend the Minister of Transport, has explained, provision is included in the Bill for the Railways Board's investment expenditure but, as he also explained, its future modernisation must be geared to the outcome of the traffic studies to which I referred in my opening remarks, and which Dr. Beeching has begun, and to the board's ability to service the debt involved in fresh investment. That is all I have to say about financial reconstruction, for my hon. Friend the Financial Secretary to the Treasury has dealt with it very fully today.
  I want to deal with two subjects of some controversy which have arisen in the debate, being raised by hon. Members on both sides of the House. One is coastal shipping and the other is uneconomic services. We are aware of the anxiety of hon. Members about coastal shipping. My hon. Friends the Members for Barkston Ash (Sir L. Ropner) and Yeovil (Mr. Peyton), the hon. Member for Bermondsey, my hon. Friend the Member for Truro (Mr. G. Wilson) and many others have referred to the plight of coastal shipping. Figures have been given to show how very small is the number of the coastal tramp steamers which were the pride of Britain and which still ply their trade round our coasts.
  The best thing that I can say at this hour of the night on the subject of coastal shipping is that my right hon. Friend the Minister of Transport has made it clear that meetings between the two chairmen involved—the chairman of the General Council of British Shipping and Dr. Beeching—have already taken place, are continuing and are to
  1274
  be continued under the Minister's chairmanship. I do not think that we shall find a solution to this problem in the debate or the winding up speech tonight, but we may find it in these discussions, and I assure hon. Members who have been involved in this subject that we hope that these conversations will prove successful.
  It is clear that under Clause 54 the Minister has a power of direction. That is under the terms of subsection (2). If the charges in question are likely to contribute to a deficit on the railway account—that means, in simple language, if the railways try to undercut the shipowners' charges at public expense—there is power of intervention. That is covered, whatever the results of these talks. On the other hand, if the railways overcharge for the short haul the Bill as it stands makes no provision for that. We had better realise that on Second Reading, because it is a point certain to be discussed in the later proceedings on the Bill. That is how it stands in the Bill, but the discussions to which I have referred are proceeding and I think we must await their result.
  Mr. Mellish: What about discussion with the road transport commercial sector?
  Mr. Butler: That is another subject, and there are plenty more to discuss. Hon. Members have been concerned about the method of financing uneconomic or unprofitable railway services for which there is a strong social demand. My right hon. Friend the Member for Blackpool, North (Sir T. Low) intervened as Chairman of the Select Committee which made a recommendation on this point. The Select Committee recommended that specific uneconomic railway services should be subsidised. In paragraph 50 of the White Paper on the Reorganisation of the Nationalised Transport Undertakings, the Government said that this was a matter which affected interests wider than transport and they would consider it. But at the end of that paragraph it was said:
  "For the time being, railway losses on any such services will in practice be covered by the contributions proposed from public funds."
  So, if money is necessary, it will be there. That is the first point to establish in dealing with this subject.
  Sir Leslie Plummer: Will it be there for the Colne Valley line?
  Mr. Butler: I intend to refer to the Colne Valley line, because I feel deeply about it.
  It was made clear in that paragraph of the While Paper that railway losses on any such services would, in practice, be covered by the contributions proposed and, therefore, the money is there. But, as many hon. Members have said, and as was said by my right hon. Friend, that does not solve the problem.
  In the White Paper Cmnd. 1337 on the Financial and Economic Obligations of the Nationalised Industries, arrangements are made clear for settling, in consultation with all the nationalised boards, targets for their financial performance. This follows upon the provisions of the White Paper issued a few months earlier. It is made quite clear in paragraph 32 of Cmnd. 1337 that to the extent that it is required to provide for commercially unprofitable services a board would be entitled to ask for an adjustment in its financial objectives. This means that not only is the intervening period covered with money for this purpose, but, when the financial objectives are set, account will be taken if a board is required to provide for commercially unprofitable services.
  The hon. Member for Deptford (Sir L. Plummer) referred to a line in my constituency which has, unfortunately, been closed. I could do nothing about it because my right hon. Friend had made his decision. The hon. Member for Kilmarnock (Mr. Ross) referred rather tragically to the possibility that I might wish to visit the Island of Mull and there might be no railway services available for me. The hon. Member for Birkenhead (Mr. Collick), who made a very moving and long speech earlier today, spoke of the possibility of there being no railways north of Perth. How, therefore, will the needs of any of us, including Scottish hon. Members who attach particular importance to this point, be met?
  I can only assure the House that any commercially unprofitable service can be covered within the formula of paragraph 32 of Cmnd. 1337. The sole difference between the Government and the Select Committee is that we do not propose
  1276
  that individual schemes should be financed ad hoc. When the Commission met the Select Committee, it pointed to the difficulty of itemising individual services and costing them. While we shall not be able to show individual schemes financed ad hoc, the services retained by the Boards should be covered by the financial targets laid down.
  I turn now to the procedure.
  Mr. Thomas Steele Mr. Thomas Steele (Dunbartonshire, West) rose—
  Mr. Butler: I shall try to explain this matter first and then give way. It is a very difficult point.
  My right hon. Friend the Member for Blackpool, North gave me the impression that he thought that all these matters would be decided in conversations between Dr. Beeching and my right hon. Friend. That is not quite correct. The existing procedure is laid down in Clause 57. My right hon. Friend the Member for Blackpool, North said that he thought that the Minister's only powers were to be found in Clause 27 of the Bill, which is the main Clause under which the Minister gives directions, but, if he looks at the procedure under Clause 57, he will see that by subsection (8) the committee has to report to the Minister and the Minister has to give his consent to any proposal by the Board to terminate a line.
  My right hon. Friend said that there were two matters to which the Select Committee attached importance, and I noticed that there was in the House support for his view. First, that the decision should be taken by Ministers, and, secondly, that there should be accountability to Parliament. He further quoted from a paragraph in the Report of the Select Committee which stated that both the Commission and the Minister should have separate railway responsibilities.
  I claim that under the Bill, contrary to the impression that has been created by some earlier speeches, the decision that a line shall not be closed is separate from the Commission and is entirely for the Minister. Moreover, if hon. Members study Clause 57 (11) it is there—and not in Clause 27—that the Minister can give such directions to the Board concerned as he thinks fit. Therefore, the social responsibility is, in fact,

  1277
  reserved to the Minister and the Minister is accountable to Parliament. Thus the situation is not exactly as it was stated to be in earlier speeches.
  As I say, the Minister will be responsible to Parliament. Not only can he be available on Adjournment debates, but I know of many ways in which it is even possible to get round the rules and put down a Question. The Minister will be accountable to Parliament in respect of the Votes annually, in respect of the annual day for considering the nationalised industries, and if there is any other way we can find to make him accountable to Parliament it is our idea to get as near to the wishes of the Select Committee as we possibly can in the later stages of the Bill.
  I hope that this will show hon. Members, whether they represent Scotland or elsewhere, that we are trying to deal with uneconomic lines in a sensible way by dividing the responsibilities of the Executive with the responsibilities of the Commission and making the Executive responsible to Parliament.
  Mr. Manuel: Does the right hon. Gentleman recognise that before the Bill and the part of it he has mentioned become operative there may be many closures of branch lines in Scotland? The indication which he has given of the protection by the Minister would not apply in these cases.
  Mr. Butler: They would be covered by the existing procedure, and we hope that the new procedure will come in directly the Bill becomes law. But if the hon. Gentleman is anxious about a particular case I hope that he will communicate with my right hon. Friend.
  The subject of commercial freedom is the main theme of the Bill and I must refer to the excellent speech of my hon. Friend the Member for Dover (Mr. Arbuthnot) about docks. I would remind him that the docks are at present under consideration by the Rochdale Committee. We have noted the points my hon. Friend raised and my right hon. Friend the Minister of Transport will pay due attention to them. We have deliberately in this Bill freed the railways from some very difficult and archaic restrictions. We have relieved them of Section 2 of the Act of 1854, which was a general obligation to afford
  1278
  reasonable facilities for the forwarding of traffic.
  Secondly, we have relieved them of Section 2 of the Railway (Private Sidings) Act of 1904, and, thirdly, we have relieved them and the canals of being common carriers, which means that they can now refuse traffic of any kind which they were previously compelled to accept.
  The right hon. Gentleman the Member for Vauxhall raised doubts about whether this was a good provision and he asked me to reply. This provision is welcomed by the Railway Review. The right hon. Gentleman gave as his reason that it was illogical to remove this common carrier obligation if it was placed on private railway companies years ago. But he omitted to mention that circumstances have changed. Then there was a monopoly of transport for the railways. Now there is not and that is why the common carrier obligations have been removed.
  Mr. Popplewell: That is a completely wrong interpretation.
  Mr. Butler: Other examples of commercial freedom are the provision for the railways to fix their own fares, except in London, to develop their valuable property sites and to provide and operate industrial pipelines. In answer to questions concerning land, the Board's powers for land are subject to ministerial control in two respects: first, as to the provision of public money required for investment, and, secondly, where the Board desires to acquire adjoining land for the purpose of its business by compulsory purchase. The right hon. Gentleman asked whether we were handing the boards over to speculators. I remind him that we have removed the provision in Section 2 (3) of the 1947 Act by which the Commission was not allowed to have any dealings in land. The fact that it is now allowed to operate land transactions itself will make it much less prone to speculators than it was before.
  Before I conclude, I want to say a few final words about the spirit in which we approach this much needed reorganisation. The Government have been challenged by the Opposition on the ground that they are no longer treating the railways as a public service.

  1279
  I am not really sure what that means. In the White Paper the railways are described as
  "a great national enterprise and a vital basic industry".
  What the Government are now trying to do is to ensure that the railways pay their way and to create the competitive conditions in which they can do this. Unless the Opposition suggest that basic services should not pay their way, I do not see what we are quarrelling about.
  We have had the usual difficulty about integration during the debate. I thought that it was well brought out in an interchange by some back bench Members. My hon. Friend the Member for Wembley, South (Mr. Russell) said yesterday that he did not agree with integration and co-ordination because it meant
  "dictating to industry exactly how it is to transport its goods."
  The hon. Member for Bermondsey said, "Why not?" My hon. Friend said:
  "Because I do not think that industry should be dictated to as to how it transports its goods."
  The hon. Member for Accrington (Mr. H. Hynd) said:
  "We did it during the war."
  My hon. Friend replied:
  "A great deal of harm would be done to the whole operation of industry if we were to dictate to it like that."—[OFFICIAL REPORT, 20th November, 1961; Vol. 649, cc. 1007–8.]
  That illustrates the difference of opinion between the two sides of the House. We do not see how we can dictate to indus-
  try or to transport as to how goods shall be conveyed.
  The Bill provides for co-ordination within a competitive system. It provides it through the Advisory Council. It provides it in Clauses 3 and 7 for the railways and the London Board. It provides it in Clause 16. We believe that we have made provision for co-ordination. Hon. Members opposite failed absolutely in the 1947 Act to achieve integration. They deliberately omitted C licence holders. That omission, which was acknowledged by the hon. Member for Bermondsey and which has been referred to in the memoirs of Lord Morrison of Lambeth, of which for greater accuracy I have obtained a copy, rendered integration in the 1947 Act virtually impossible. Therefore, we are arguing about something which is not vital at present.
  What I said at the beginning of my remarks is the fact. The Bill is designed to improve certain services under the British Transport Commission. It is designed to give them a better financial basis. It is designed to encourage the process of free and rapid movement of people and goods from one place to another. I believe that the Bill will lead to wider co-ordination. It is that wider co-ordination that we have in mind, and it is because we are making the industry more efficient that I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 323, Noes 233.

  Division No. 10.]

  AYES

  [9.59 p.m.

  Agnew, Sir Peter

  Bossom, Clive

  Chichester-Clark, R.

  Aitken, W. T.

  Bourne-Arton, A.

  Clark, Henry (Antrim, N.)

  Allan, Robert (Paddington, S.)

  Box, Donald

  Clark, William (Nottingham, S.)

  Allason, James

  Boyd-Carpenter, Rt. Hon. John

  Clarke, Brig. Terence(Portsmth, W.)

  Arbuthnot, John

  Boyle, Sir Edward

  Cleaver, Leonard

  Ashton, Sir Hubert

  Braine, Bernard

  Cole, Norman

  Atkins, Humphrey

  Brewis, John

  Cooke, Robert

  Barber, Anthony

  Brooke, Rt. Hon. Henry

  Cooper, A. E.

  Barlow, Sir John

  Brooman-White, R.

  Cooper-Key, Sir Neill

  Barter, John

  Brown, Alan (Tottenham)

  Cordeaux, Lt.-Col. J. K.

  Batsford, Brian

  Browne, Peroy (Torrington)

  Cordle, John

  Beamish, Col. Sir Tufton

  Bryan, Paul

  Corfield, F. V.

  Bell, Ronald

  Buck, Antony

  Costain, A. P.

  Bennett, F. M. (Torquay)

  Bullard, Denys

  Coulson, J. M.

  Bennett, Dr. Reginald (Gos & Fhm)

  Bullus, Wing Commander Eric

  Courtney, Cdr. Anthony

  Berkeley, Humphry

  Burden, F. A.

  Craddoek, Sir Beresford

  Bevins, Rt. Hon. Reginald

  Butcher, Sir Herbert

  Critchley, Julian

  Bidgood, John C.

  Butler, Rt.Hn.R.A.(Saffron Walden)

  Crosthwaite-Eyre, Col. Sir Oliver

  Biffen, John

  Campbell, Sir David (Belfast, S.)

  Crowder, F. P.

  Biggs-Davison, John

  Campbell, Gordon (Moray & Nairn)

  Cunningham, Knox

  Bingham, R. M.

  Carr, Robert (Mitcham)

  Curran, Charles

  Birch, Rt. Hon. Nigel

  Cary, Sir Robert

  Currie, G. B. H.

  Bishop, F. P.

  Channon, H. P. G.

  Dalkeith, Earl of

  Black, Sir Cyril

  Chataway, Christopher

  Dance, James

  d'Avigdor-Goldsmid, Sir Henry

  Jennings, J. C.

  Pott, Percivall

  Deedes, W. F.

  Johnson, Dr. Donald (Carlisle)

  Powell, Rt. Hon. J. Enoch

  de Ferranti, Basil

  Johnson, Eric (Blackley)

  Price, David (Eastleigh)

  Donaldson, Cmdr. C. E. M.

  Johnson Smith, Geoffrey

  Price, H. A. (Lewisham, W.)

  Doughty, Charles

  Jones, Rt. Hn. Aubrey (Hall Green)

  Prior, J. M. L.

  Drayson, G. B.

  Joseph, Sir Keith

  Profumo, Rt. Hon. John

  du Cann, Edward

  Kaberry, Sir Donald

  Proudfoot, Wilfred

  Duncan, Sir James

  Kerans, Cdr. J. S.

  Pym, Francis

  Eccles, Rt. Hon. Sir David

  Kerby, Capt. Henry

  Quennell, Miss J. M.

  Eden, John

  Kerr, Sir Hamilton

  Ramsden, James

  Elliot, Capt. Walter (Carshalton)

  Kershaw, Anthony

  Redmayne, Rt. Hon. Martin

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

  Lagden, Godfrey

  Rees, Hugh

  Emery, Peter

  Lambton, Viscount

  Rees-Davies, W. R.

  Emmet, Hon. Mrs. Evelyn

  Lancaster, Col. C. G.

  Renton, David

  Errington, Sir Eric

  Leather, E. H. C.

  Ridley, Hon. Nicholas

  Erroll, Rt. Hon. F. J.

  Leburn, Gilmour

  Ridsdale, Julian

  Farey-Jones, F. W.

  Legge-Bourke, Sir Harry

  Rippon, Geoffrey

  Farr, John

  Lewis, Kenneth (Rutland)

  Roberta, Sir Peter (Heeley)

  Fell, Anthony

  Lilley, F. J. P.

  Robinson, Sir Roland (Blackpool, S.)

  Finlay, Graeme

  Lindsay, Martin

  Robson Brown, Sir William

  Fisher, Nigel

  Linstead, Sir Hugh

  Rodgers, John (Sevenoaks)

  Fletcher-Cooke, Charles

  Litchfield, Capt. John

  Ropner, Col. Sir Leonard

  Forrest, George

  Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

  Royle, Anthony (Richmond, Surrey)

  Foster, John

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Russell, Ronald

  Fraser, Ian (Plymouth, Sutton)

  Longbottom, Charles

  St. Clair, M.

  Freeth, Denzil

  Longden, Gilbert

  Scott-Hopkins, James

  Loveys, Walter H.

  Seymour, Leslie

  Galbraith, Hon. T. G. D.

  Low, Rt. Hon. Sir Toby

  Sharpies, Richard

  Gammans, Lady

  Lucas, Sir Jocelyn

  Shaw, M.

  George, J C. (Pollok)

  Lucas-Tooth, Sir Hugh

  Shepherd, William

  Gibson-Watt, David

  McAdden, Stephen

  Simon, Rt. Hon. Sir Jocelyn

  Gilmour sir John

  MacArthur, Ian

  Skeet, T. H. H.

  Glover, Sir Douglas

  McLaren, Martin

  Smith, Dudley (Br'ntf'd & Chiswisk)

  Glyn, Dr. Alan (Clapham)

  McLaughin, Mrs. Patricia

  Smyth, Brig. Sir John (Norwood)

  Glyn, Sir Richard (Dorset, N.)

  Maclay, Rt. Hon. John

  Spearman, Sir Alexander

  Goodhart, Philip

  Maclean,SirFitzroy(Bute&N.Ayrs.)

  Speir, Rupert

  Goodhew, Victor

  Macleod, Rt. Hn. Iain (Enfield, W.)

  Stanley, Hon. Richard

  Gough, Frederick

  MacLeod, John (Ross & Cromarty)

  Stevens, Geoffrey

  Cower, Raymond

  McMaster, Stanley R.

  Steward, Harold (Stockport, S.)

  Grant, Rt. Hon. William

  Macmillan, Maurice (Halifax)

  Stodart, J. A.

  Grant-Ferris, Wg. Cdr. R.

  Macpherson, Niall (Dumfries)

  Stoddart-Scott, Col. Sir Malcolm

  Green, Alan

  Maddan, Martin

  Storey, Sir Samuel

  Gresham Cooke, R.

  Maginnis, John E.

  Studholme, Sir Henry

  Grimond, J.

  Maitland, Sir John

  Summers, Sir Spencer (Aylesbury)

  Grimston, Sir Robert

  Manningham-Buller, Rt. Hn. Sir R.

  Talbot, John E.

  Gurden, Harold

  Markham, Major Sir Frank

  Tapsell, Peter

  Hall, John (Wycombe)

  Marlowe, Anthony

  Taylor, Edwin (Bolton, E.)

  Hamilton, Michael (Wellingborough)

  Marples, Rt. Hon. Ernest

  Taylor, F. (M'ch'ter & Moss Side)

  Hare, Rt. Hon. John

  Marshall, Douglas

  Taylor, W. J. (Bradford, N.)

  Harris, Frederic (Croydon, N.W.)

  Marten, Neil

  Teeling, William

  Harris, Reader (Heston)

  Mathew, Robert (Honiton)

  Temple, John M.

  Harrison, Brian (Maldon)

  Matthews, Gordon (Meriden)

  Thatcher, Mrs. Margaret

  Harvey, John (Walthamstow, E.)

  Maudling, Rt. Hon. Reginald

  Thomas, Leslie (Canterbury)

  Harvie Anderson, Miss

  Mawby, Ray

  Thompson, Kenneth (Walton)

  Hastings, Stephen

  Maxwell-Hyslop, R. J.

  Thornton-Kemsley, Sir Colin

  Hay, John

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

  Tiley, Arthur (Bradford, W.)

  Heald, Rt. Hon. Sir Lionel

  Mills, Stratton

  Tilney, John (Wavertree)

  Heath, Rt. Hon. Edward

  Montgomery, Fergus

  Turner, Colin

  Henderson, John (Cathcart)

  More, Jasper (Ludlow)

  Turton, Rt. Hon. R. H.

  Hendry, Forbes

  Morgan, William

  van Straubenzee, W. R.

  Hicks Beach, Maj. M.

  Morrison, John

  Vane, W. M. F.

  Hill, Dr. Rt. Hon. Charles (Luton)

  Mott-Radclyffe, Sir Charles

  Vaughan-Morgan, Rt. Hon. Sir John

  Hill, Mrs. Eveline (Wythenshawe)

  Nabarro, Gerald

  Wade, Donald

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

  Neave, Airey

  Walder, David

  Hinchingbrooke, Viscount

  Nicholls, Sir Harmar

  Walker, Peter

  Hobson, John

  Nicholson, Sir Godfrey

  Walker-Smith, Rt. Hon. Sir Derek

  Hocking, Philip N,

  Noble, Michael

  Wall, Patrick

  Holland, Philip

  Nugent, Sir Richard

  Watkinson, Rt. Hon. Harold

  Hollingworth, John

  Oaksnott, Sir Hendrie

  Webster, David

  Holt, Arthur

  Orr, Capt. L. P. S.

  Wells, John (Maidstone)

  Hope, Rt. Hon. Lord John

  Orr-Ewing, C. Ian

  Whitelaw, William

  Hopkins, Alan

  Osborn, John (Hallam)

  Williams, Dudley (Exeter)

  Hornby, R. P.

  Osborns, Sir Cyril (Louth)

  Wilts, Sir Gerald (Bridgwater)

  Hornsby-Smith, Rt. Hon. Dame P.

  Page, John (Harrow, West)

  Wilson, Geoffrey (Truro)

  Howard, Hon. G. R. (St. Ives)

  Page, Graham (Crosby)

  Wise, A. R.

  Howard, John (Southampton, Test)

  Pannell, Norman (Kirkdale)

  Wolrige-Gordon, Patrick

  Hughes Hallett, Vice-Admiral John

  Partridge, E.

  Wood, Rt. Hon. Richard

  Hughes-Young, Michael

  Pearson, Frank (Clitheroe)

  Woodhouse, C. M.

  Hulbert, Sir Norman

  Peel, John

  Woodnutt, Mark

  Hurd, Sir Anthony

  Percival, Ian

  Woollam, John

  Hutchison, Michael Clark

  Pickthorn, Sir Kenneth

  Worsley, Marcus

  Iremonger, T. L.

  Pike, Miss Mervyn

  Yates, William (The Wrekin)

  Irvine, Bryant Godman (Rye)

  Pilkington, Sir Richard

  James, David

  Pitman, Sir James

  TELLERS FOR THE AYES:

  Jenkins, Robert (Dulwich)

  Pitt, Miss Edith

  Mr. Edward Wakefield and

  Sir Harwood Harrison.

  1282

  1283

  NOES

  Abse, Leo

  Hayman, F. H.

  Parker, John

  Ainsley, William

  Healey, Denis

  Paton, John

  Albu, Austen

  Herbison, Miss Margaret

  Pavitt, Laurence

  Allaun, Frank (Salford, E.)

  Hill, J. (Midlothian)

  Pearson, Arthur (Pontypridd)

  Allen, Scholefield (Crewe)

  Hilton, A. V.

  Peart, Frederick

  Bacon, Miss Alice

  Holman, Percy

  Pentland, Norman

  Baxter, William (Stirlingshire, W.)

  Houghton, Douglas

  Plummer, Sir Leslie

  Bellenger, Rt. Hon. F. J.

  Howell, Charles A. (Perry Barr)

  Popplewell, Ernest

  Bence, Cyril

  Howell, Denis (Small Heath)

  Prentice, R. E.

  Bennett, J- (Glasgow, Bridgeton)

  Hoy, James H.

  Price, J. T. (Westhoughton)

  Benson, Sir George

  Hughes, Cledwyn (Anglesey)

  Probert, Arthur

  Blackburn, F.

  Hughes, Emrys (S. Ayrshire)

  Pursey, Cmdr. Harry

  Blyton, William

  Hughes, Hector (Aberdeen, N.)

  Randall, Harry

  Boardman, H.

  Hunter, A. E.

  Rankin, John

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

  Hynd, H. (Accrington)

  Redhead, E. C.

  Bowles, Frank

  Hynd, John (Attercliffe)

  Reid, William

  Boyden, James

  Irvine, A. J. (Edge Hill)

  Reynolds, G. W.

  Braddock, Mrs. E. M.

  Irving, Sydney (Dartford)

  Rhodes, H.

  Brock way, A. Former

  Jay, Rt. Hon. Douglas

  Roberts, Albert (Normanton)

  Broughton, Dr. A. D. D.

  Jeger, George

  Robertson, John (Paisley)

  Brown, Rt. Hon. George (Belper)

  Jenkins, Roy (Stechford)

  Robinson, Kenneth (St. Pancras, N.)

  Butler, Herbert (Hackney, C.)

  Johnson, Carol (Lewisham, S.)

  Ross, William

  Butler, Mrs. Joyce (Wood Green)

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

  Royle, Charles (Salford, West)

  Callaghan, James

  Jones, Dan (Burnley)

  Shinwell, Rt. Hon. E.

  Castle, Mrs. Barbara

  Jones, Jack (Rotherham)

  Short, Edward

  Chapman, Donald

  Jones, J. Idwal (Wrexham)

  Silverman, Julius (Aston)

  Chetwynd, George

  Jones, T. W. (Merioneth)

  Silverman, Sydney (Nelson)

  Cliffe, Michael

  Kelley, Richard

  Skeffington, Arthur

  Collick, Percy

  Kenyon, Clifford

  Slater, Mrs. Harriet (Stoke, N.)

  Corbet, Mrs. Freda

  Key, Rt. Hon. C. W.

  Slater, Joseph (Sedgefield)

  Craddock, George (Bradford, S.)

  King, Dr. Horace

  Small, William

  Cronin, John

  Lawson, George

  Smith, Ellis (Stoke, S.)

  Crosland, Anthony

  Ledger, Ron

  Snow, Julian

  Crossman, R. H. S.

  Lee, Frederick (Newton)

  Sorensen, R. W.

  Cullen, Mrs. Alice

  Lee, Miss Jennie (Cannock)

  Soskice, Rt. Hon. Sir Frank

  Darling, George

  Lever, Harold (Cheetham)

  Spriggs, Leslie

  Davies, G. Elfed (Rhondda, E.)

  Lever, L. M. (Ardwick)

  Steele, Thomas

  Davies, Harold (Leek)

  Lewis, Arthur (West Ham, N.)

  Stewart, Michael (Fulham)

  Davies, Ifor (Gower)

  Lipton, Marcus

  Stonehousa, John

  Davies, S. O. (Merthyr)

  Logan, David

  Stones, William

  Deer, George

  Loughlin, Charles

  Strachey, Rt. Hon. John

  Delargy, Hugh

  Mabon, Dr. J. Dickson

  Strauss, Rt. Hon. G. R. (Vauxhall)

  Dempsey, James

  McCann, John

  Stross, Dr.Barnett (Stoke-on-Trent, C.)

  Diamond, John

  MacColl, James

  Swain, Thomas

  Dodds, Norman

  McInnes, James

  Swingler, Stephen

  Donnelly, Desmond

  McKay, John (Wallsend)

  Symonds, J. B.

  Driberg, Tom

  Mackie, John (Enfield, East)

  Taylor, Bernard (Mansfield)

  Dugdale, Rt. Hon. John

  McLeavy, Frank

  Thomas, George (Cardiff, W.)

  Ede, Rt. Hon. C.

  MacMillan, Malcolm (Western Isles)

  Thompson, Dr. Alan (Dunfermline)

  Edelman, Maurice

  MacPherson, Malcolm (Stirling)

  Thornton, Ernest

  Edwards, Rt. Hon. Ness (Caerphilly)

  Mahon, Simon

  Timmons, John

  Edwards, Robert (Bilston)

  Mallalieu, E. L. (Brigg)

  Tomney, Frank

  Edwards, Walter (Stepney)

  Mallalieu, J.P.W. (Huddersfield, E.)

  Wainwright, Edwin

  Evans, Albert

  Manuel, A. C.

  Warbey, William

  Fernyhough, E.

  Mapp, Charles

  Ward, Dame Irene

  Finch, Harold

  Marquand, Rt. Hon. H. A.

  Watkins, Tudor

  Fitch, Alan

  Marsh, Richard

  Weitzman, David

  Fletcher, Eric

  Mason, Roy

  Wells, Percy (Faversham)

  Foot, Michael (Ebbw Vale)

  Mayhew, Christopher

  Wells, William (Walsall, N.)

  Forman, J. C.

  Mellish, R. J.

  White, Mrs. Eirene

  Fraser, Thomas (Hamilton)

  Mendelson, J. J.

  Whitlock, William

  Gaitskell, Rt. Hon. Hugh

  Millan, Bruce

  Wigg, George

  Galpern, Sir Myer

  Milne, Edward J.

  Wilcock, Group Capt. C. A. B.

  George, Lady Megan Lloyd (Crmrthn)

  Mitchison, G. R.

  Wilkins, W. A.

  Ginsburg, David

  Monslow, Walter

  Willey, Frederick

  Gooch, E. G.

  Moody, A. S.

  Williams, D. J. (Neath)

  Gordon Walker, Rt. Hon. P. C.

  Mort, D. L.

  Williams, LI. (Abertillery)

  Gourlay, Harry

  Moyle, Arthur

  Williams, W. R. (Openshaw)

  Greenwood, Anthony

  Mulley, Frederick

  Williams, W. T. (Warrington)

  Grey, Charles

  Neal, Harold

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

  Griffiths, David (Rother Valley)

  Noel-Baker, Francis (Swindon)

  Wilson, Rt. Hon. Harold (Huyton)

  Griffiths, Rt. Hon. James (Llanelly)

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

  Winterbottom, R. E.

  Woodburn, Rt. Hon. A.

  Griffiths, W. (Exchange)

  Oliver, G. H.

  Woof, Robert

  Gunter, Ray

  Oram, A. E.

  Yates, Victor (Ladywood)

  Hale, Leslie (Oldham, W.)

  Oswald, Thomas

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Owen, Will

  TELLERS FOR THE NOES:

  Hamilton, William (West Fife)

  Padley, W. E.

  Mr. John Taylor and

  Hannan, William

  Pannell, Charles (Leeds, W.)

  Mr. G. H. R. Rogers

  Hart, Mrs. Judith

  Pargiter, G. A.

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

  BUSINESS OF THE HOUSE
  Proceedings of the Committee of Ways and Means exempted, at this day's Silting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Marples.]

  TRANSPORT [MONEY]
  [Queen's Recommendation signified.]
  Considered in Committee under Standing Order No. 84 (Money Committees).
  [Major Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to provide for the reorganisation of the nationalised transport undertakings now carried on under the Transport Act, 1947, it is expedient to authorise—
  A. The payment out of the Consolidated Fund—

  (1) of any sums required by the Minister of Transport for the purpose of making loans to any of the Boards or the Transport Holding Company established under the new Act;

  (2) of any sums required to fulfil any guarantee by the Treasury of the repayment of, and the payment of interest on, any money temporarily borrowed by any of the said Boards or the said Company.

  B. The payment out of moneys provided by Parliament—

  (1) of any sums required by the Minister—

  (a) for making grants to the Railways Board and the Inland Waterways Authority established under the new Act to meet any deficit on revenue account arising during the period of five years beginning with the vesting date (as defined in the said Act) but so that the aggregate of any such grants (together with any loans made by the Minister to meet such deficits) shall not exceed, in the case of the Railways Board, four hundred and fifty million pounds or, in the case of the Inland Waterways Authority, ten million pounds;

  (b) for making grants to the British Transport Commission to meet any deficit on revenue account or interest on loans made by the Minister to the Commission to meet such deficits;

  (2) of any expenses incurred by the Minister in consequence of any provision of the said Act setting up a Nationalised Transport Advisory Council;

  (3) of any expenses incurred by the Minister in consequence of any provision
  1286
  of the said Act amending the constitution and jurisdiction of the Transport Tribunal;

  (4) of fees and allowances to referees and boards of referees appointed by the Minister of Labour under any provision of the said Act relating to compensation or pensions, and allowances to persons giving evidence before any such referee or board;

  (5) of any increase in the amount so payable under the Road Traffic Act, 1960, in consequence of any provision of the new Act amending the powers of the traffic commissioners in relation to the carriage of passengers by road in the London Passenger Transport Area or by the London Board established under the said Act outside that Area;

  (6) of any increase in the amount so payable by way of rate-deficiency grant or Exchequer equalisation grant under the enactments relating to local government in England and Wales or in Scotland, which is attributable to any provision of the said Act relating to the liability of the said Boards to rates;

  (7) of any administrative expenses incurred by the Minister of Transport by virtue of the said Act.

  C. The remission of any obligation of the British Transport Commission to make payments tinder section forty-two of the Finance Act. 1956, or section two of the Transport (Railway Finances) Act, 1957, in respect of sums advanced to the Commission by the Minister under those Acts.
  D.—(1) The transfer to the Treasury of all rights and liabilities of the British Transport Commission in respect of stock created and issued under section eighty-nine of the Transport Act, 1947, and the treatment of that stock as if it had been created and issued under the National Loans Act, 1939;
  (2) the payment out of the Consolidated Fund of any sums which may be required by the Treasury for making payments to the British Transport Commission under any transitional adjustment of interest or dividends in consequence of any provision of the new Act transferring to the Treasury the investments comprised in the redemption fund established by the Commission in respect of the said stock.
  E. The borrowing in any manner authorised under the National Loans Act, 1939, and the payment into the Exchequer of any money needed for providing or replacing any sum required by the Minister for the purpose of making loans to any of the said Boards or the said Company.
  F. The payment into the Exchequer and the re-issue out of the Consolidated Fund of any sums required to be so paid or re-issued by virtue of any provision of the new Act.—[Mr. Marples.]
  Resolution to be reported.
  Report to be received Tomorrow.

  WAYS AND MEANS
  Considered in Committee.
  [Major Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  TRANSPORT BILL
  Resolved,
  That, for the purposes of any Act of the present Session to provide for the reorganisation of the nationalised transport undertakings now carried on under the Transport Act, 1947, it is expedient to authorise any incidental charge to income tax or profits tax which
  1288
  may arise from any provision of the new Act modifying Parts X and XI of the Income Tax Act, 1952 (which relate to certain capital expenditure), section four hundred and eighty-two of that Act (which relates to certain statutory transfers of property) and section seventeen of the Finance Act, 1956 (which relates to expenditure on dredging), in their application to the British Transport Commission and the Boards established under the new Act in connection with any transfer of assets and functions from the Commission to the Boards.—[Mr. Marples.]
  Resolution to be reported.
  Report to be received Tomorrow; Committee to sit again Tomorrow.

  EDUCATION (STATE SCHOLAR SHIPS AND TRAINING OF TEACHERS)
  10.15 p.m.
  Mrs. Eirene White: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the State Scholarships Amending Regulations No. 4, 1961 (S.I., 1961, No. 1621), dated 21st August, 1961, a copy of which was laid before this House on 29th August, in the last Session of Parliament, be annulled.
  Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): Do I understand that it is the wish of the House to take the other Prayer at the same time?
  That an humble Address be presented to Her Majesty, praying that the Training of Teachers (Grant) Amending Regulations No. 2, 1961 (S.I., 1961, No. 1622), dated 21st August, 1961, a copy of which was laid before this House on 29th August, in the last Session of Parliament, be annulled.
  Mrs. White: I suggest that that would be convenient.
  The two sets of Regulations under consideration touch upon the same matters of principle and very largely coincide on matters of detail. The reason for praying against them is not that we have any objection to them as they are at present administered. They were made in August this year and affect the present practice for giving grants to students. However, we thought it only right that, as so much of this aspect of educational administration is governed by delegated legislation, we should use this opportunity to discuss some of the matters involved. We shall shortly be concerned with the Committee stage of the Education Bill, which is an enabling Bill and does not include the sort of details contained in these Regulations. Before we reach the point at which Regulations under the Bill when it is enacted will be made, it is only right to discuss some of these matters.
  The Regulations are fairly narrow. They are primarily concerned with the dependants' grants which may be paid to students who are in teacher-training colleges, or who are holders of State scholarships at universities. There is one point concerned with State scholarships which has nothing to do with dependants, and that is the amount of
  1290
  money which a State scholar is permitted to keep without inquiry into the means of himself or his parents. That amount is fixed by these Regulations at £50. I think that my hon. Friend the Member for Southampton, Itchen (Dr. King) would like some explanation from the Parliamentary Secretary about why the State scholar is allowed to keep only £50, whereas the holder of an open award is allowed to keep £100. However, I do not propose to go into that subject further. We had a long discussion some time ago on State scholarships and I now propose to turn to the matter of dependants' allowances.
  A student can obtain an allowance for wife or child—or husband, if that case should arise—or other dependant only in certain fairly strictly defined conditions. He has to be 25 on 31st July in the year in which the course starts. Alternatively, he may have kept himself by his own earnings for a period of at least three years. If he has done National Service, half of that time may count towards the qualifying period of three years.
  I draw the attention of the House to the fact that his age at the time when the course begins or when the award is offered—and the award is normally offered before the course begins—must be as laid down. If he qualifies or would become 25 after 31st July of the year in which the award is offered—and he may be studying in a teacher training college for at least two years and possibly for three—he may be 27 or 28 and still be considered dependent upon his parents. That is how I understand the Regulations and the correspondence which I have had from the Ministry on individual cases. If he should be married but had not been over 25 before 31st July of the year when the award was offered, he is not eligible for dependants' allowances for his wife or any children.
  This is not normally of great importance to State scholars who are usually a good deal younger. However, it can arise with State studentships and I ask the Parliamentary Secretary to make clear whether the Regulations cover State studentships. If they do, it is a serious matter. A State studentship is normally awarded for post-graduate

  1291
  work, research work, which means that someone who is going on after his first degree to undertake research is not eligible for marriage allowance nor dependants' allowance unless he was more than 25 in the year when the award was offered.
  I contend that this is quite unrealistic in the light of modern conditions. People are marrying very much younger. I was at my old college at Oxford not so very long ago, and I inquired about some of the new graduates who had gone down the previous year. The number of those who had married or were about to marry was quite astonishing, to my mind, compared with the very small number of my generation who married as young as that.
  I recall that when I was at college, although a number of girls married fairly soon after they had gone down, only one married immediately on going down, and she married her tutor. The present idea of university students is, of course, quite different. We are told on all sides that they mature earlier. They certainly marry much sooner, and start their families much younger. Whatever one may think about it, these are the facts. If our grants provisions do not take account of this, then we shall lose people either for the teaching profession, in the case of the teacher training grants where the older people may be concerned, or for research in the case of State studentships for graduate research. We may lose very valuable people who will be discouraged from continuing their training or research because we are not taking account of their way of life, and we are asking them to remain unmarried or remain without dependants until an age which may be 27 or 28.
  I would illustrate what I am saying by referring to two cases on both of which in recent months I have corresponded with the Ministry. One was the case of a young man in training who approached me because he felt that he was in a position in which he should be treated as an adult. This young man was 24 when he started his teacher training, but because he was 24 when he started, the fact that he was 25½ when he came to see me was neither here nor there. It is the year in which the award is offered that is the qualifying date.
  1292
  This young man had been in the Armed Forces, had been drawing a subaltern's pay and had been living an independent, adult life. He then took employment, but for just less than the two years which would have qualified him for a grant. He then decided that his real vocation in life was teaching and he entered the teacher training college. He was told that, because he was under age and had not quite done the three years, he had to remain dependent on his parents who were subject, therefore, to a parental means test. He said that his total grant for this year, that is, from the spring of 1960 to the spring of 1961, was £3 6s. 6d. Obviously, his parents were in a position to make a contribution, but we can fully understand the feelings of this young man, who wished to get married. He said that he had already postponed marriage but that he felt that at the age of 25 it was not unreasonable to marry and he would be in some difficulty if he were still dependent on his parents because if he got married, because of the fact that he was not married before the course started, it would make no difference at all to his dependent status upon his parents. Therefore, we have a situation in which a young man whose sense of vocation must be very strong has to postpone his marriage and be prepared to take pocket money, and even his train fares, from his parents.
  He told me,
  "I was offered several posts in commerce, but turned them down. I still think I am doing the right thing, but do wish I could be allowed to pursue my studies as an independent adult."
  If I were in his position I would feel exactly the same. It is not even a case of a person qualifying at the age of 25; he has to be over the age of 25 even before the course starts, in July. I cannot help thinking that that is unrealistic in relation to modern trends.
  The young man to whom I have been referring was a teacher, and everyone knows how short we are of teachers. Every education debate we have is contributed to by hon. Members who say how short we are of teachers. We all know that the older teacher is very often a more stable and more mature person, and someone like that, with experience of life, is a most valuable person if he decides to take up teaching, and the last

  1293
  thing we should do is to discourage him. But equally important is research work in various fields in the universities. It is not only that research workers are needed for science and industry; we all know that with the coming expansion of universities and teacher training colleges we shall need far more staff. Therefore, the people who are now doing research work in universities, and who are the potential staff of the future, should be encouraged in every way.
  I have had the strongest representations from some of the staff at the University of London and from the Association of University Teachers in relation to the discouragement now given to people who are just on the borderline age of 25 and do not quite qualify. I have details of a case in respect of which I corresponded with the Parliamentary Secretary, in which these young people were asked to postpone for a year their research work, because then would then qualify for a marriage allowance. One young man in particular was 25 before the course started in October, but he had not had his birthday on 31st July and so did not qualify.
  His professor wrote to me in acute indignation, saying that it was perfectly absurd to discourage a young man—a promising research worker—and tell him to wait a year so that he could take up his grant, and that if he did that he would qualify for a marriage allowance. In his reply to me the Parliamentary Secretary said that there was no scarcity of applicants for such awards. When the professor heard this he wrote back to me saying that this was nonsense.
  The Parliamentary Secretary to the Ministry of Education (Mr. Kenneth Thompson)The Parliamentary Secretary to the Ministry of Education (Mr. Kenneth Thompson) indicated dissent.
  Mrs. White: I will leave the Parliamentary Secretary to read the whole of his reply to me if he cares to do so, but that was certainly the sense of it. He said:
  "Generally speaking, our grant conditions seem to be acceptable, and there is certainly no shortage of well qualified applicants for these awards."
  Mr. Thompson: My only complaint is that the hon. Lady describes that as my reply, whereas it is only half a sentence taken out of it.
  Mrs. White: I do not think that I have in the least misrepresented the hon. Member. I have now read the complete sentence. He said,
  "Generally speaking, our grant conditions seem to be acceptable, and there is certainly no shortage of well qualified applicants for these awards."
  That is what the hon. Gentleman said, but the professor who wrote to me said it was nonsense, that it may be true of some fields of study but is by no means true of all. His field of study is Chinese, and he referred to the recent report of the Committee under Sir William Hayter which suggested that we should pay far more attention to Chinese and cognate subjects than we do at present. I am informed by other authorities that there are other subjects where this is also true, where there is not a superabundance of well-qualified research workers and where conditions of this kind militate against persons going into research when they have an opportunity to go into commerce or industry.
  Therefore, I am certain that if we care about teachers and about increasing the supply of research workers, we should reconsider the conditions which we lay down for grants for dependants. I am well aware that the proposals in the two sets of Regulations are in line with the suggestions made in the Anderson Committee's Report and that it is open to the Parliamentary Secretary to quote that Report and say that the Government are putting its recommendations into effect. Although that may be a perfectly fair comment for him, it seems to me that this ought to be looked into again.
  We are not seriously suggesting that these Regulations should now be withdrawn—we have to go through this Parliamentary procedure in order to have an opportunity of discussing them—but we say that Sir Francis Hill's Standing Advisory Committee which has been set up to consider matters of detail relating to students' awards should look seriously at this matter. It should ask itself whether the Anderson Committee—which did a very good job but had many things to think about—took sufficient cognisance of the changes in social customs, particularly the change to earlier marriage, and, in particular, whether the age of 25 is now realistic,

  1295
  bearing in mind that it may in the event be 27, 28 or even beyond that. It should consider whether it might not be more sensible to reduce the age to 23. Again, it might be possible to say that whenever a person reached the age of 25, whatever period in the course it was, he should then be considered as an adult and treated as such, and should neither be considered as dependent on his parents nor regarded as banned from marriage and setting up a family to the detriment of his work. There is a very fair case for reconsidering the matter.
  I do not wish to labour the point that under the Regulations what I have been discussing applies only to men. If women marry and have children and ask for a grant, they can do so from the age of 21. While one can see some of the reasons for this, I think it is a case of sex discrimination in the wrong direction. Some of my hon. Friends may wish to argue that the age should be 21 for both sexes. The age of 25 for a man seems to be out of keeping with present conditions, and I hope that the Government will give further consideration to this point.
  10.35 p.m.
  Dr. Horace King: As a life-long feminist who has always fought for equal pay, I am grateful to my hon. Friend the Member for Flint, East (Mrs. White) for her plea for equality for men on the question of maintenance grants for adults.
  The Statutory Instruments Committee, on which I have the honour to serve, points out to Departments which submit amendments, and especially amendments to amendments to amendments, the need from time to time to consolidate and provide those who use them with Statutory Instruments which are easy to refer to.
  The one about which I propose to speak tonight, Statutory Instrument No. 1621, which deals with State scholarships, illustrates this point. I admit that the Regulations cover a fairly narrow field, but this is the fourth amendment that we have had since 1954, and paragraph 2 (1) says:
  These Regulations amend the State Scholarships Regulations, 1954(b), as amended by the State Scholarships Amending Regulations
  1296
  No. 1, 1955(c), the State Scholarships Amending Regulations No. 2, 1957(d), and the State Scholarships Amending Regulations No. 3, 1958(e), hereinafter called the existing Regulations.
  If we were not dealing with a problem which, I regret to say, is to disappear very shortly—the problem of State scholarships—I think I would have asked the Minister whether the time had not arrived to set out the complete Regulations, with amendments, instead of sending anyone who wants to consult them, or even wishes to debate them, searching through five different documents.
  It is important that we should know exactly what is taking place in this latest amendment to the Regulations. What the new Regulations do is to allow the State scholar to have a grant of £50, whatever the means of his parents, and whatever other financial awards he has won.
  In 1954 the grant was £30, but then if a State scholar had won any other scholarships they were subtracted from his £30, and if he had won more than £30 in other scholarships he lost his £30. This, then, is a welcome advance, in that we are giving unconditionally to the State scholar, £50, independent of his own means, and independent of his parents' means.
  The Minister is really conceding in one limited field a principle which he has said he accepts in theory but which he refuses to put into practice. That is, he is abolishing the means test for the State scholarship. It may be beyond the scope of the debate to argue this broader issue of the abolition of the means test for all university awards on the narrow matter of State scholarships, but I hope that we shall soon have an opportunity of doing so, and I urge the Minister to extend the principle which he is conceding in these Regulations.
  The State scholar is still left in an an anomalous position vis-à-vis many university scholarship holders. Open scholarships to universities, and, much more regrettable in the second half of the twentieth century, closed scholarships to universities from the public schools, are often worth more than £50, and anyone who wins an open scholarship to university, provided it is not

  1297
  more than £100, is allowed to have it whatever the means of his parents.
  I am sorry, therefore, that when the Minister decided to step up the figure from £30 he did not take the opportunity of raising it not merely to £50, but of making the State scholarship equivalent in financial value, as I am certain it already is in academic value, to the amount of the major open university scholarships.
  Unfortunately, State scholarships are to be abolished next year. I regret this for reasons which I have stated in the House before, reasons which were much more eloquently and ably stated by my hon. Friend the Member for Flint, East, in the debate she opened in the House on 21st December last year.
  I am certain that the Parliamentary Secretary, like his Minister, must often have read in Professor Brinley Thomas's minority Report to the Anderson Committee the arguments against abolishing State scholarships. He clearly shows that when we wipe out State scholarships we leave all candidates, except those with open scholarships, in a relatively uniform position, without any prestige or privilege attaching to the most brilliant scholars.
  Mr. Deputy-Speaker: Order. I hope that the hon. Member will not go wider than the Regulations we are discussing.
  Dr. King: With all respect, Mr. Deputy-Speaker, I hope not to trespass on the narrowness of this debate. I have to make these preliminary observations in order to make the point which I seek to make.
  The professor asks:
  "If State scholars are as able as the winners of open awards, why should recognition of merit be confined to the latter?"
  If that is true as an argument against the abolition of State scholarships, it is certainly true as an argument against the discrimination which still continues in these Regulations concerning the amount of money which the State scholar is allowed to have as of right compared with the amount that the university open scholar is allowed to have as of right.
  I welcome the raising of the sum from £30 to £50; I welcome the abolition of the means test, but I would urge the
  1298
  Minister to think again about the issue that he has raised, and the principle that he has conceded, in the action he has taken. The other important change in the Regulation is that it increases the maintenance grants paid to a mature student for his wife—"spouse" is the word used in the Regulations; I can never understand why—his children or other dependants. I have been through all five Statutory Instruments to see exactly what the Minister has done about these grants.
  A mature State scholar—an older State scholar—received for his wife in 1954 £121. This amount was raised in 1955 to £140 and in 1958 to £160. Under the new Regulations it remains at £160. I believe all these amounts to be inadequate, and I ask the Minister why, in 1961, he has made no change at all in the figure from what it was in 1958. When we turn to the children we find these interesting figures. In 1954, for the first child the student was allowed £44. That was raised in 1955 to £50, and now it is raised by a mere £5 to £55. But in 1954 the amount paid to all the children of the State scholar was the same.
  In 1955, however, all except the first child were cut back to £30, and that sum has now been increased by the meagre sum of £5 for the second child, while there is no increase for the third child or any other children. Therefore, the total amount that a man with three children will get under these Regulations is £14 less for his children than he would have got in 1954.
  I realise that there are very few "mature" students, because the word "mature" has a meaning under education law. By "mature" we mean over the age of 21, and now, by these Regulations, over the age of 25. There are very few mature State scholars, but those who have the courage to pursue a university or a technical course and have at the same time a wife and two or three children to keep, I think deserve better financial aid than is provided in these Regulations. Whoever it was in the Minister's Department who drew a distinction not only between the cost of the first and other children, but even between the cost of the second and third child, is pretty parsimonious.

  1299
  I suppose that it could be argued that because of the increase in children's allowances, and, because it is the job of the Minister to take away with one hand what the Treasury or the Chancellor has given with the other, the result is that whereas a mature student with three children was receiving in 1954 £133 for those children, under these Regulations, and when it is dearer to live in Britain, he will receive not £133 but £120. Moreover this Regulation tightens up the definition of mature student. He must now be over 25. Similarly, we are writing into another Bill which the House has to consider that the age of 25 is the minimum under which one can qualify for this kind of award. I believe the figure of 25 to be arbitrary and indefensible.
  The mature student must also have earned his own living for at least three years, if he is to qualify for an award. Only half the time he serves in National Service however, is counted as earning his own living, and I have always protested about that. I suggest to the Parliamentary Secretary that a man who serves his country for two years as a National Service man is earning his living as effectively and as honourably as anyone else in the country and it is outrageous that that should be counted as only half for the purposes of this grant. As I said, these Regulations improve the position of the student scholar slightly, and that of the mature student infinitesimally, especially if he happens to have three children. I hope that when the Minister is considering the problems of the university student he will think carefully over some of the points which are being raised in this debate.
  10.47 p.m.
  Mr. James Boyden: I wish to address my remarks purely to the maintenance allowance part of the Regulations. Most of the figures—the age of 25, the half of the period of National Service, the three years independent earning—must be conventional and any other figures would do almost as well. They have grown up haphazardly and have very little bearing on the present position of the older young people. Surely National Service qualifies as any kind of service and
  1300
  earning of income can do and ought to be accounted in full.
  I should have thought that the earnings rule, especially with a student of independent means, was a conventional notional figure and one year would do as well as three. I hope that the Parliamentary Secretary will tell us what magic there is in the period of three years. Surely the point is to determine whether a young person has been standing on his own feet economically. I hope that when these Regulations are revised again the figure framework will be given serious consideration.
  As the Regulations have grown up, I do not think that it has been appreciated that the students who have had a break and gone at 18 or 20 to a university have had a tussle with their social affairs. They have become students and they have to fulfil an obligation to a wife and children and, it may be, to a dependent relative. Within my experience of encouraging adult students to go to university I have had many cases in which the economic strain upon the wife has had a very deleterious effect on the husband's studies, and it seems to me that the Ministry of Education and the local education authorities should do everything within their power to overcome this difficulty.
  The Crowther Report makes a very strong point of the need to recognise in the curriculum of schools and colleges the growing maturity particularly of girls and of young people generally, and it emphasises very forcibly the point made by my hon. Friend the Member for Flint, East that men and women marry earlier. Perhaps I may quote one sentence:
  "Today, half the women in the country and a quarter of the men are married before they are 25."
  These Regulations penalise some of the best parts of our population, the people who have the brains, in this case mature students, and who have the guts to persist in their studies. They are being penalised against their contemporaries. This is a very serious problem in relation to grammar school boys and girls—the problem of easy earnings in industry pulling people away from study. Why the Ministry of Education and the local education authorities should perpetuate that at a stage when these young

  1301
  men and women are very responsible, and are undertaking very arduous intellectual enterprises, is beyond me.
  I want to mention a particular anomaly about which the International Union of Students feels very strongly and which these Regulations do nothing to amend. Students are practically debarred from assistance under the National Assistance Board. In the memorandum which it has submitted to the Hill Committee, the union states that it may well be the case that students are the only group in the community who are not eligible for assistance from the Assistance Board although they are in a full-time occupation which precludes them from earning. I will not labour the point except to state it, but I hope that in these and subsequent Regulations the Minister will give very serious consideration to this anomaly.
  Perhaps I could also turn to the financial difficulties of married students with children. As my hon. Friend the Member for Itchen said, the sum of money is almost derisory. How can a student keep a second child on £35 a year? Hon. Members opposite spend more in one night on a dinner party. They expect that student, with all the costs and difficulties of being a student, to keep his second child on £35.
  Many of us are anxious to create an atmosphere in which people will willingly come forward to the teacher-training colleges and places in universities and in some fields which are novel and not particularly applicable to the 18-year-old. Mention has been made of the need to study Chinese and Russian, and there is the need to study the social sciences. These are subjects which are particularly appropriate to mature people and particularly difficult for the 18-year-old. If the Government are to create the atmosphere in which people will come forward, every kind of little hardship which is put upon the mature student should be removed. Students must have confidence that every difficulty—whether they have old people dependent on them or young children—will as far as possible be removed by the Ministry of Education.
  I therefore do not base my case on the fact that hard cases make bad law, but on the fact that if we are to get things moving throughout the popula-
  1302
  tion and to pick up the few hundred extra people we need for all the activities which we want to pursue in the modern complicated world, then Regulations such as these, drawn in a niggardly way under the shadow of a Treasury Minister, should be revised.
  10.55 p.m.
  The Parliamentary Secretary to the Ministry of Education (Mr. Kenneth Thompson): I am grateful to hon. Members for providing an opportunity for discussing, however briefly, these Regulations. I find little difficulty in going a long way to associate myself with most of the remarks that have been made about the kind of objective we ought to have in setting our hand to this part of the job. We want to have the conditions right so that mature students as well as others will find their path as inviting as it can reasonably be made and as convenient for them as possible when they embark upon their courses of study.
  It is not wrong to say, as I said in a letter to the hon. Lady the Member for Flint, East (Mrs. White) in September, that there is no shortage of students coming forward. That is true. My resentment of her remarks arose because she categorised that as my reply to the case she had put. It was not. It was part of my reply, and I dealt with the main part of her case in the rest of my letter.
  Students do come forward in the numbers for which there are places available. Many of them undertake considerable personal burdens in so doing. Many of them, as the hon. Member for Bishop Auckland (Mr. Boyden) has just reminded us, may find life very hard as they go through the process. We must give great credit to those who pursue their courses when life is not particularly easy. The fact is that the students we want are coming forward. Many of us, of course, would like to see more and more opportunities of this kind. I shall come in a moment to what is really the nub of the matter, the dependant's allowance and the basis upon which it must rest.
  Mrs. White: I do not wish to interrupt the hon. Gentleman unduly, but will he not agree that there has been a good deal of criticism recently in academic circles that the number of awards available to arts students, which are dealt

  1303
  with by his Ministry as opposed to science awards which come under the D.S.I.R., is far too small? If the numbers were increased, the point about having adequate applicants might well be different.
  Mr. Thompson: Of course, there is room for great debate, which certainly could not take place on these Regulations, about how many awards there ought to be, and there would be opportunity for much disputation. It is enough, I think, for use to deal with the situation as we find it here.
  I am very glad that Opposition speakers said that they had no desire to oppose the Regulations. The purpose of the Regulations is to bring the conditions of the students referred to into line with the generality of students who will be affected as a result of the legislation now before a Standing Committee of the House. The question raised is really this: why do we fix the age of 25 and lay down the other conditions which a student must satisfy if he is to qualify for dependants' allowances and awards?
  It is essential that we should draw a line somewhere if we are not to lay ourselves open to the charge of allowing public funds to be used to encourage even earlier mariages even more generally. I am sure that the House would take the view that it cannot be right to allow public funds to be used for that purpose. But there are bound to be cases where it is right for the State to say that a student who qualifies in other ways by effort and intellectual ability but who, nevertheless, has some dependants should at a certain point have that fact recognised. It is open for debate where the line ought to be drawn.
  In the Ministry we are very much aware of the comparatively new phenomenon of very early marriage on a large scale right across society. As the House knows, it is presenting us with a good many different problems, particularly in education, where we are dealing with young people as our ordinary stock in trade, as it were. I suppose that we are affected more than any other Government agency. I do not suppose hon. Members would wish to take the view that 25 is the right age for ever and ever. Conditions are changing and I
  1304
  would not like it to be thought that the Ministry's mind is closed on this point. But, having to draw a line somewhere, 25 seems to be about the right age where the break should occur.
  In the changing conditions of our time we must be ready to reconsider this matter and I can assure the House that we are anxious to let our experience grow as to how the present Regulations are working out in practice and to be ready, if the time seems to indicate that a change is necessary, to make some change in the appropriate direction.
  The age of 25 is not the law of the Medes and Persians, which is never to be altered, and while the hon. Lady the Member for Flint, East quoted against the present age a particular case, I can assure her that I considered that case at the time she drew it to my attention and I have done so since. I remind the hon. Lady that wherever the line is drawn there will be a case like that of Mr. Scott—where, by an accident of the date of one's birth, or because of the phrasing of Regulations, someone will fall on the unfortunate side of the line. One cannot have statutory provisions which are so elastic that they fail for lack of definition. I hope that the numbers of cases falling on the wrong side of the line will be very small.
  The amount of the dependants' allowances is a somewhat different issue. I appreciate that it is possible for there to be any number of widely differing needs, but how much is enough? The Ministry is faced with rapidly growing bills on almost every front and the House is aware of the grave complications we face, day by day, in making sure that we have our priorities right in the disposal of such sums available to us.
  I do not suppose that anyone would pretend that the sums mentioned in these Regulations for the support of dependants represent easy living for anyone. They do not. They almost inevitably involve a certain amount of sacrifice and effort on those who benefit from them. But there is a limit and a pace of growth beyond which we cannot go. Sir Francis Hill has accepted the chairmanship of a Standing Advisory Committee which will ensure that the Minister's advice on the position of and demands on a student is constantly up to date. The questions we are debating

  1305
  now are among those that this Committee will be considering.
  I hope that the House will agree that for the purposes of these Regulations it is enough for us to give them time to work out the remaining period of the life of the State scholarships and then, having garnered in this extra experience of how the shoe is pinching or how the cap is fitting, bring to the House whatever proposals seem appropriate in those circumstances.
  The hon. Gentleman the Member for Southampton, Itchen (Dr. King)—who is knowledgeable in these matters and whose advice is of great value to the House—drew attention to the fact that we are amending amendments to amendments to amendments and I take his point. I will see what we can do, when this remaining period of the State scholarships runs out and we are called on to offer new Regulations, to take account of the hon. Gentleman's point. We may be able to design Regulations which will be a little less obscured by the great undergrowth that spreads up around these things as time passes.
  These Regulations are designed with the best intentions to see us through the period to the end of the State scholarships and I can assure hon. Members that we have taken note of the criticisms that have been made about their adequacy or otherwise and the terms of the grants in question. I hope that the House will invite the hon. Member for Flint, East to withdraw the Prayer.
  11.4 p.m.
  Mr. Frederick Willey: I am sure that the Parliamentary Secretary will not feel offended when I say that my hon. Friends will not be entirely convinced by what he has said. We appreciate that these are terminal Regulations and that there will be an opportunity—soon, we hope—of discussing new Regulations. It is in the light of that that I think my hon. Friend may be willing to withdraw the Motion.
  We appreciate the reference to the Standing Advisory Committee. We must, therefore, look to that Committee for hope, but it seems to me that in the debate an overwhelming case has been made out for the revision of these provisions and we hope that when the new Regulations come before us the pro-
  1306
  posals and suggestions of my hon. Friends will have been accepted by the Government.
  Mrs. White: In the light of that hope, I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  AFRICA (DIPLOMATIC REPRESENTATION)
  Motion made, and Question proposed, That this House do adjourn.—[Mr. E. Wakefield.]
  11.6 p.m.
  Mr. Humphry Berkeley: In referring to British diplomatic representation in Africa I shall try to be as uncontroversial as I can, but I feel bound to start by referring to some remarks which my right hon. Friend the Secretary of State for Commonwealth Relations addressed to me at the end of a reply to a question which I put to him in the House last Thursday. In the course of his reply the Secretary of State informed the House that his Department deeply resented certain remarks which I had made in a speech on 2nd November.
  I feel bound to say that it is not for a Government Department to express either resentment or approval of observations which are made in the House, and I feel somewhat surprised that my right hon. Friend should have thought it relevant or, indeed, proper to reveal to the House the views of his own civil servants. Naturally, I regret that my observations should have caused distress within his Department, but I do not feel that in my speech on 2nd November I said anything which was not either said or implied in the Report from the Select Committee on Estimates on the Commonwealth Relations Office, which was presented to the House on 15th July, 1959.
  Indeed, in the course of the inquiry which took place in the Select Committee, Sir Gilbert Laithwaite, then Permanent Under-Secretary of State for Commonwealth Relations Office, was questioned as many as four times by members of the Committee about the adequacy of the Commonwealth Service in the light of the fact that so many

  1307
  senior posts in that service were being given to people outside it.
  On one occasion, a question having been put to him about adequacy, Sir Gilbert Laithwaite replied:
  "I do not like admitting that, but I think it is partly because at the top of the Service, from which one would normally hope to be able to fill these posts, we have at the moment … not got the same supply as we would hope to have in three or four years' time …"
  Later, in reply to a similar question about adequacy, he said:
  "There is a realisation in the Service that … we have not been able to compete as effectively as we ought to for some of the higher appointments."
  There was also, in the course of the inquiry, a most revealing interview with Sir Archibald Nye, a former High Commissioner. He, after regretting the opportunity which the Commonwealth Relations Office had missed of recruiting members to its service from the Indian Civil Service, referred to the C.R.O., which he joined in 1948, as being at that time "a dog's breakfast." On the question of the adequacy of people to fill overseas posts, he went on to say:
  "Put bluntly, the men to fill the higher posts were just not there. The C.R.O. therefore had to go into the highways and bye-ways … to fill these appointments."
  When the Select Committee on Estimates considering the Commonwealth Service came to report, it had a number of revealing things to say. First, it said:
  "The task of the C.R.O. continues to increase as more colonies attain self-government, but it resources of manpower are already strained."
  It went on:
  "There is, in particular, a shortage of suitably qualified officers to fill the higher posts."
  and it added:
  "… there is clearly something wrong with a Service when so many of its top posts are offered to men who have made their careers elsewhere."
  The final quotation I wish to give from this Report is this:
  "… the C.R.O. should not miss the opportunity of strengthening itself by filling its vacancies in the new Commonwealth countries as far as possible from Colonial Service officers … The C.R.O. does not, however, share this view … Your Committee therefore recommend that every
  1308
  possible advantage should be taken of this source of recruits, and that the C.R.O. should throw over its inhibitions concerning the unacceptability of these officers to the new Governments …"
  I would like my hon. Friend the Under-Secretary to understand that I am confining my remarks to the problems of representation in Africa, because these are the only Commonwealth posts about which I can speak with some knowledge.
  We are told that the Commonwealth Relations Office is only too anxious to take on former Colonial Service officers, with experience of Africa, in its African missions, but, as a result of a series of Questions which I have tabled to the Commonwealth Relations Office over the last two or three weeks, this is the position which has been revealed. In Ghana, which is, I suppose the key Commonwealth diplomatic post at present, according to the answers which I have been given by the Commonwealth Relations Office, there is not a single member of the post who has ever had any experience in British territories in Africa.
  In the Federation of Nigeria, out of 26 serving officers with the rank of second secretary and above, there are only three who have ever had any experience in British territories in Africa. One of those served for two years as principal in Kenya; another served for two years as an information officer in Nigeria, and the third for seven months in a similar capacity. Out of the entire resources of the British High Commission in Nigeria, therefore, we have a total of four years and seven months' experience of work in British territories in Africa divided among three officers.
  I repeat that I am referring to Africa. It seems perfectly apparent from these figures that the Commonwealth Relations Office is not recruiting into its diplomatic service in Africa men who have considerable knowledge of British African territories. The Select Committee's Report makes it perfectly plain that the C.R.O. is reluctant to take these people, and I would like the Under-Secretary to tell us exactly why that is.
  For example, has the C.R.O. been advised by the former Colonial Territories that this is undesirable? During the last few weeks I have spoken to four former West African Governors, all of whom have told me that they regard it

  1309
  as being disastrous that we are not making use of the reservoir of African experience which we have. Is there tucked away in the C.R.O. a wise old administrator, somebody who is steeped in the folklore of Africa, who has given this advice—this advice which runs contrary to that given by the former Colonial Governors, or did the newly-arrived officers of the High Commissions, when they were set up, send back cables saying, "Fatal to send African experts here. We are getting along very nicely as we are"?
  It seems clear that apart from the reluctance of the C.R.O. to employ former British Colonial Service officers in Africa, the fundamental obstacle to their employment is that the C.R.O. insists that they should take an examination on transfer. The whole object of an examination is to assess an unknown quantity in a candidate about whom one has no previous records, but there is a stack of confidential information on every senior British Colonial Service officer, relating to every stage of his career, and this must be superior in value to any kind of examination.
  I do not want to appear personal about this, but many people in middle age are not attuned to taking examinations. I wonder whether the Joint Under-Secretary of State, for example, would view with composure among his manifold duties, the prospect of sitting for the School Certificate tomorrow. Only last week I was shown the common entrance examination paper of the Secretary of State's old school, because I have a godson who has gone there, having just passed the examination, and I doubt whether I could have passed that examination without prolonged and expensive coaching.
  The reply that the Commonwealth Secretary gave me to my Question, asking why an examination was necessary, was an astounding one. He said:
  "For posts which involve an appreciable amount of written work the Commission normally include written tests of a general, non-academic character."—[OFFICIAL REPORT, 16th November, 1961; Vol. 649, c. 646.]
  Are we to suppose that the Commonwealth Relations Office assumes that Deputy-Governors, Chief Secretaries, Permanent Secretaries, Provincial Commissioners and District Commissioners conduct their work orally? Do they
  1310
  have some sort of bush telegraph, in which any kind of calligraphy is completely unknown? Do these men come from a jungle where pen, paper and ink are unknown miracles? We must press the Joint Under-Secretary to give us an answer on this point.
  Towards the end of last week I saw in a certain journal details of questions to which senior and distinguished civil servants were subjected last time the examination was held. One was:
  "Give an account of the aspects of the modern world which have struck Mr. R. Van Winkle, who fell asleep in 1930 and awakened in 1961."
  The Commonwealth Relations Office appears to take a view of the Colonial Service which became out of date at the time of Sanders of the River"—and that book was written in 1903.
  I have quoted to my right hon. Friend the Commonwealth Secretary the very tragic case—and they are numerous because I have had many letters on this subject—of the Director of Information Services in a dependent territory about to become independent. He wishes to transfer to the Commonwealth Overseas Information Service, and he has been told that to do this he will have to return home at his own expense and sit for a written examination. Is it suggested that the C.R.O. requires written work of a higher standard than the Tanganyika Government require? Is it suggested that his views on Mr. Van Winkle will be of greater value than the confidential reports sent home by successive Governors about the standard of his work? Many people feel that it is a public scandal that men who have served Her Majesty faithfully overseas should be treated in this brutal and Pecksniffian way.
  I want to make one or two humble suggestions to my hon. Friend. First, will he please look into the possibility of setting up a joint committee composed of representatives of the Foreign Office, the Commonwealth Relations Office, the Colonial Office and containing on it some senior and respected former Colonial Service officer, such as Sir James Robertson? Will the committee, if it is ever set up, go into the whole question of the diplomatic needs of our missions in Africa, both for C.R.O. and Foreign Office? There were

  1311
  four of these missions in 1945. There are more than 30 today, and many of them are understaffed.
  Does not my hon. Friend concede that there is at least a very strong case in the Continent of Africa—which is unknown to most of our C.R.O. and Foreign Office representatives, however good they may be; they may have double firsts, but, by and large, they do not know Africa—for there being an adviser on African affairs in every diplomatic mission that we have there, similar to the oriental secretaries that we used to have in the Levant Service?
  I recognise that there would be many members of the Colonial Service who would be thought to be unsuitable for diplomatic posts of this kind. Obviously, some are elderly, and some are perhaps too paternalistic, but out of the 4,000 members of the service still in Africa there are probably several hundred who could be usefully employed in the African Foreign Office and C.R.O. posts. They would provide the very stiffening in the service which it is perfectly apparent from the Select Committee's Report is necessary.
  I approach the matter not from the point of view of the tragedy which has befallen the personal lives of many overseas officers, but from the point of view of the real need for Britain. It is in Britain's interest to have throughout our diplomatic missions men with African experience. They are there; we can have them. They will only be lost through the blindness of the Foreign Office and the Commonwealth Relations Office if they close their eyes to this very important need.
  11.22 p.m.
  The Joint Under-Secretary for Commonwealth Relations (Mr. Bernard Braine): Over the last three weeks my hon. Friend the Member for Lancaster (Mr. Berkeley) has been directing a series of criticisms against British diplomatic representation in Africa, especially in Commonwealth countries, culminating in his speech tonight. His theme has been that at a time when the responsibilities of the Commonwealth Relations Office are increasing while those of the Colonial Office are running down, we have failed to make full use of the great
  1312
  reservoir of experience in the Overseas Civil Service.
  If I may summarise his arguments over this period and tonight, it is that instead of opening the doors of the Commonwealth Relations Office to proven and experienced administrators, we are making it as difficult as possible for them by subjecting them to written examinations; that, partly for that reason and partly for reasons of prejudice and indifference, the Commonwealth Relations Office is failing to make proper use of first-class material; that as a consequence the Commonwealth Service is lacking in knowledge and experience of Africa; and that for these and other reasons it is inadequate in quality, or, to use my hon. Friend's actual words in his speech of 2nd November, its members generally:
  "… are of a markedly inferior calibre …"—[OFFICIAL REPORT, 2nd November, 1961; Vol. 648, c. 436.]
  These criticisms are superficial and misleading. They are unfair. They are wounding to a great service. What is more, they are based on a fundamental misconception of the rôle of the Commonwealth Service.
  For one thing, we are not comparing like with like. Unlike the Overseas Civil Service—
  Mr. Berkeley Mr. Berkeley rose—
  Mr. Braine: I cannot give way. My hon. Friend has had his say over a long period. He must listen to what I have to say.
  Unlike the Overseas Civil Service, whose members are the servants of the employing Governments, the Commonwealth Service is part of the Home Civil Service. That is a perfectly logical arrangement. The primary task—
  Mr. Berkeley: On a point of order, Mr. Speaker. The Joint Under-Secretary misrepresented some remarks that I made by leaving out what was, in fact, the most important part of the quotation. Am I entitled to correct him on a point of order?
  Mr. Speaker: This is a very short debate. The difficulty about that is that if it is true it does not raise a point of order.
  Mr. Braine: The primary task of the Commonwealth Service is to provide a

  1313
  channel of communication between the British Government and the Governments of independent Commonwealth countries, to heighten understanding of British policies, to further British interests and to facilitate co-operation in every possible way. Recruitment to its permanent and established staff, from whatever source, is conducted, therefore, through the Civil Service Commission, which is, of course, an independent body.
  In dealing with recruitment, there are two general principles which the Commission has to take into account. First, it is incumbent on it to see that the standard for admission to the Home Civil Service and the Commonwealth Service is maintained at the highest level. Secondly, it is obliged to take account of the fact that the work of the Overseas Civil Service, however responsible and dedicated, is not entirely similar in content and character or grading to that of the Home Civil Service and is substantially different from that of the Commonwealth Service.
  In appraising candidates, therefore, the Commission carries out tests it considers necessary to maintain the existing standards. At the higher levels interviews play an important part, though for posts which involve a great deal of written work it seems sensible, I would have thought, to include written tests of a general non-academic kind.
  Moreover, the Commonwealth Service, despite its heavy and growing responsibilities for representing Britain in the independent Commonwealth countries, is a relatively small one. I do not think that my hon. Friend realises this. Its administrative staff—and that is the staff in which members of the Overseas Civil Service are normally interested—totals only 160.
  The Overseas Civil Service, on the other hand, is still relatively large. There are almost 300 Overseas Service officers in Tanganyika alone doing administrative work. There are 1,130 in Africa as a whole compared with 160 spread over the entire Commonwealth.
  Thus, with the best will in the world, the Commonwealth Service could absorb only a tiny fraction of the Overseas Civil Service, and in suggesting otherwise my hon. Friend is doing a very great disservice to the very people he wishes to help.
  1314
  Even so, our small Commonwealth Service has absorbed a remarkable number of officers who have served in dependent territories—13 from the former India and Burma services, 21 from the Overseas Civil Service, and 11 from the Colonial Office itself, most of whom have spent a period of service in Colonial territories.
  Broadly speaking, ten years ago the administrative strength of the Commonwealth Service was about 120. Today, it is 160, and the total intake of 45 officers from other overseas services and the Colonial Office exceeds the growth in the size of the Commonwealth Service in the last ten years.
  I think that this should answer the astonishing and quite unfounded assertion made by my hon. Friend on 2nd November, and repeated tonight, that the Commonwealth Relations Office takes the line that it cannot recruit Overseas Service officers "since they are branded as colonialists".
  It is significant that on this very point the noble Lord, Lord Perth, speaking earlier this year in full knowledge of the facts as Minister of State for Colonial Affairs, said:
  "I should like here to pay a tribute to the readiness of the Commonwealth Relations Office, whenever they can, to take people from the Colonial Service into their scheme of things as they grow and have need of new recruits. I think they have been both forthcoming and helpful on that."
  I come now to my hon. Friend's charge that the Commonwealth Service is lacking in knowledge and experience of Africa. This charge cannot be sustained. My hon. Friend asked a Question last Wednesday about our High Commission in Sierra Leone. Three of the five senior officers, namely, the High Commissioner, the Deputy High Commissioner, and a First Secretary, have previous experience in Africa.
  Mr. Berkeley: For how long?
  Mr. Braine: My hon. Friend might have looked further. In the case of our High Commission in the Federation, nine senior officers share seventy-one years' experience of Africa between them, service in six African countries, and knowledge of six African languages. In addition to those currently serving in our African posts, one-fifth of our administrative staff have had previous

  1315
  service in Africa, and many more have specialised in African work in London.
  But this is the point. African experience is by no means the only requirement for manning our posts in Commonwealth Africa. Experience of other parts of the Commonwealth, however, experience of how the Commonwealth system itself works, both here in London and elsewhere, is essential, and so is knowledge and experience of Britain herself, because this is a representational job.
  The fact is that a great deal of the experience gained in the Overseas Civil Service, important and valuable as it is—and I would be the first to acknowledge its usefulness—is not nearly as relevant to the work of the Commonwealth Service as my hon. Friend seems to think. It is often much more relevant to work in the field of technical assistance, where there is an acute shortage of men and women with specialised knowledge of a certain territory, or of the language, customs, and needs of a particular people. In fact, of the 10,000 Overseas Service officers in Africa 85 per cent. are specialists who are not only outside the scope of this debate, but are specially equipped for continuing their work in the field in a world hungry for their services.
  My hon. Friend has suggested that a committee should be set up to consider how best the African experience of Overseas Service officers could be conserved. I hope that what I have said will have shown that his arguments about the use of African experience are not nearly as relevant to the requirements of the Commonwealth Service as he supposes. Neither is the Service of a size to absorb a large number of new people, nor can African experience be regarded as more than one of a good many possible criteria that have to be taken into account in its recruitment. Frankly, I do not think, therefore, that a committee would serve any useful purpose in this limited context.
  I appreciate that there is a problem here, but, looking at the matter in its broader aspects—that is, outside the restricted field of diplomatic representation—Her Majesty's Government are well aware of the wealth of African experience that is available to us in the
  1316
  Overseas Service and are anxious to use and conserve it as far as possible. That was the main purpose of the Overseas Service Aid Scheme, which was to make it possible for officers who so wished to continue to serve on in territories where their help was required. As regards other means of continuing to draw on this experience, I know that my right hon. Friend the Secretary for Technical Co-operation will always have this point closely in mind in considering the recruitment of staff for further service overseas.
  Within the Commonwealth Service, however, too great a degree of geographical specialisation in the affairs of, say, Africa or Asia, would not only create an undesirable rigidity in staff structure, which would eventually throw up at the top senior officers whose experience was based only on one part of the Commonwealth, but it would hardly contribute to the effective discharge of the Commonwealth Service's wider responsibilities.
  I now come to the last set of criticism—that relating to the quality of the Commonwealth Service. My hon. Friend cannot disconnect what he has said tonight from his remarks made earlier. Indeed, one must start on 2nd November and follow him through the various Questions he has asked to the comparatively innocuous remarks which he has made tonight. He made a good speech, full of fun, but taken in the context of all his remarks and observations, a great deal of what he has said would have been better left unsaid.
  My hon. Friend made the point—he is not original in this respect—that a number of top Commonwealth posts overseas have been filled in recent years by people from outside the Service. That is true. There are two reasons for this. First, the responsibilities of the Commonwealth Relations Office have been increasing very rapidly, especially during the last five years, and, quite naturally, our Department has needed some temporary assistance in filling its higher posts. Also at certain times and in certain places there may be sound reasons for appointing as High Commissioners men of special political background and experience. Neither of these reasons cast any reflection whatever on the quality of the senior staff of the Commonwealth Service.

  1317
  To adduce from this, as my hon. Friend has done, that in some way the Commonwealth Service is markedly inferior to the Foreign Service, is both unfair and inaccurate. Quality in human being As always difficult to measure in terms of statistics. It may, however, interest the House to know that there are in the Commonwealth Service 57 officers of the established rank of Assistant Secretary and above. These are the officers who abroad normally fill High Commissioner, Deputy High Commissioner or Counsellor posts. Of these, 25—almost one-half—have first-class honours degrees; 17—almost one-third—have served on full secondment to the Foreign Office in Foreign Service diplomatic posts abroad and have returned to us with good records; and 14 have had the experience of serving as Principal Private Secretaries to British Cabinet Ministers.
  My hon. Friend began his speech by objecting to the remarks made last Thursday by my right hon. Friend the Commonwealth Secretary. As to the propriety of those remarks, Mr. Deputy-Speaker, that is a matter which should be properly addressed to you and not to me. My hon. Friend should not be so sensitive. He should be aware that it is not the custom in the House, and never has been—and this is something that I do not think he should laugh
  1318
  about; and I hope that he will reflect on this—for hon. Members to make disparaging remarks about the Civil Service. Ministers are here to be shot at—no doubt we often deserve to be shot at—but not the personnel of our Departments. When, in addition, the remarks are unjustified and based on a faulty appreciation of the facts, they are bound to evoke a strong response. They did so from my right hon. Friend. As he made plain last Thursday in no uncertain manner, he completely rejects my hon. Friend's criticism of the quality of the service. He said that he had the highest confidence in the quality and experience of those who work at home and overseas in the service of his Department, and so have I.
  Mr. George Thomas: I am astonished at the way in which hon. Gentlemen opposite have been addressing themselves to one another tonight. I hardly thought that such violent adjectives would be addressed from the Government Front Bench to a Government back benches—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-four minutes to Twelve o'clock.