Commons Sitting of 13 December 1962

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

    Residential Development, Bristol
    Mr. Robert Cookeasked the Minister of Housing and Local Government and Minister for Welsh Affairs what proposals for residential development he has received from Bristol City Council for the Paul Street area of Kingsdown and St. Michael's.
    The Minister of Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph): No proposals have yet been received for the Paul Street area, but layout plans for the south-eastern part of the Kings-down site are at present under discussion between technical officers of the Corporation and my Department.
    Mr. Cooke: Will my right hon. Friend do his best in any consultations which he has with the Bristol City Council to ensure the balanced redevelopment of this area with plenty of homes and shops, particularly small shops?
    Sir K. Joseph: Yes, Sir, always remembering that the primary initiative is with the local authority.

    Improvement Grants
    Mr. J. H. Osbornasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware that the high cost of repairs associated with improvements is preventing many landlords and owner-occupiers from taking full advantage of the home improvement grants; and whether he will take powers to give assistance to provide long term loans for these repairs.
    Sir K. Joseph: Local authorities already have adequate powers to make loans for this purpose.
    Mr. Osborn: While I welcome the visit of the Parliamentary Secretary to Sheffield, may I ask whether my right hon. Friend is aware that one of the obstacles to Sheffield taking full advantage of the scheme in the exhibition is that the money is not readily available?
    Sir K. Joseph: I was not so aware; I had hoped that through one means or another the necessary money would be available. I will make inquiries.
    Mr. Frank Allaun: Is the right hon. Gentleman aware that although many councils make loans for old houses, they are being severely hindered by the high interest rates which they have to pay and consequently have to charge? Will he seriously consider cheap loans for this purpose?
    Sir K. Joseph: I cannot give the hon. Member any satisfaction on this, because local authorities have to pay the going rate in order to raise the money.

    Mortgages (Older Properties)
    Mr. J. H. Osbornasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he will take steps to provide loans to building societies and local authorities to facilitate the provision of mortgages on older properties.
    Sir K. Joseph: Local authorities already have comprehensive powers to provide loans for house purchase and are under no restriction in the amount they can lend. The possible needs of the building societies are part of a wider review I am making of the prospects for maintaining the growth of home ownership.
    Mr. Osborn: I thank my right hon. Friend for that reply. Is he aware that by one estimate alone there are about 4 million houses whose landlords cannot afford to make the necessary repairs and in respect of which assistance of this type would be welcomed so that the occupiers could buy the houses?
    Sir K. Joseph: I am making a review of the whole subject.
    Mr. H. Hynd: Is the right hon. Gentleman aware that local authorities still have to pay about twice the amount of interest which was required under the Labour Government? Is it not possible to narrow the gap?
    Sir K. Joseph: The hon. Gentleman must realise that, despite the higher interest rate and for reasons which go very wide, a far more massive programme on the housing and on every other front is being carried out under this Administration.

    Clearance Orders, Cardiff (Mortgage Payments)
    Mr. G. Thomasasked the Minister of Housing and Local Government and Minister for Welsh Affairs what advice he has given the Cardiff City Council concerning compensation for householders who are obliged to continue paying off their mortgages to the Corporation after their houses have been demolished under a clearance order.
    Sir K. Joseph: None, Sir. The matter was mentioned to me when I visited Cardiff on 23rd November, 1962, and I suggested to the Council that it should write to me; I have not yet heard from it.
    Mr. Thomas: Will the right hon. Gentleman undertake to consider amending the Housing Act, 1957, with a view to providing more adequate compensation for people who purchased their houses after December, 1955, without knowing that they were in a clearance area and who are likely to suffer, whether they have corporation or private mortgages?
    Sir K. Joseph: I know the importance of this question to the hon. Member's constituency, but he will know that there is to be an inquiry about some of the houses concerned and that no decision has yet been taken about those houses. I understand that representations have been made, unsuccessfully, to the Association of Municipal Corporations asking the same questions as the hon. Gentleman has asked, and that shows that this is not a widespread problem.
    Mr. Thomas: In view of the hardship, which the right hon. Gentleman acknow-
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    ledges, caused to people who have bought their houses outright or on private mortgages or on local authority mortgages, will he consider ways and means of relieving that hardship?
    Sir K. Joseph: I have invited the Council to write to me about this and I shall be glad to try to oblige it if it does write to me.

    Building Society Mortgages (Older Properties)
    Mr. Shepherdasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he has given further consideration to the possibility of restoring the Government assistance to building societies in connection with the purchase of houses built before 1919.
    Mr. Farrasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will reintroduce Exchequer advances to building societies for the purpose of facilitating the purchase of pre-1919 houses.
    Sir K. Joseph: The Government wish to see the growth of home-ownership maintained, whether by the purchase of existing or of newly-built houses. I am in consultation with the Building Societies' Association about the prospects of further expansion but I am not in a position to make a statement.
    Mr. Shepherd: Can my right hon. Friend now say whether or not he intends to include the provisions which previously obtained in respect of 1919 houses?
    Sir K. Joseph: That would need fresh legislation but I am in full consultation with the Association at the moment and intend to make a statement as soon as I can.
    Mr. Farr: May I remind my right hon. Friend that there are over 4 million houses which were built prior to 1914, and that the continuation of this scheme, which was inaugurated with great success, would be of considerable help in maintaining the condition of the properties?
    Sir K. Joseph: I have this sort of consideration in the forefront of my mind.

    Building Plans
    Mr. Wainwrightasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will estimate the number of houses that will be built under Her Majesty's Government's plans in 1962, 1963, and 1964.
    Sir K. Joseph: I estimate that 300,000 houses will be built in Great Britain this year and that about 273,000 of these will be in England and Wales. Next year I would expect to see an increase of the order of 5,000–6,000 on these figures. I am unwilling to forecast as far ahead as 1964, but I am hopeful that a steady increase will be maintained. I am sure the output will remain high.
    Mr. Wainwright: Does the right hon. Gentleman realise that these figures are not good enough? Is it not true that experts are saying that we want about 400,000 houses built each year, for the next 15 to 20 years? When will he do more to ensure that these old houses are demolished; that young couples can have houses to live in, and that the housing situation generally is what it should be?
    Sir K. Joseph: I agree that we need more houses. As I promised, I shall be making a statement on the whole subject as soon as I can.
    Mr. M. Stewart: Of the 280,000 houses to be built in England and Wales next year, how many will be council houses?
    Sir K. Joseph: More than this year.

    New Houses (Average Price)
    Mr. Frank Allaunasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware that the average price of new houses has risen by 23 per cent. since 1959; and to what extent he estimates this is due to the increase in land prices.
    Sir K. Joseph: I am aware of the source of the figure referred to by the hon. Member; but it would not be safe to base on it any generalisation about the effect of land prices upon house prices.
    Mr. Allaun: Is the Minister aware that the site costs up to 40 per cent. of the price of a house, according to the Build-
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    ing Societies' Association? Is he further aware that the L.C.C. recently had to pay £1,500 in site costs for each of 42 dwellings in Roehampton, or, allowing for interest, 33s. a week for this item alone; that many cities are now paying for land at double the price they paid in 1959 when the Government took off controls, and that the only solution is public ownership of land?
    Sir K. Joseph: The hon. Member will not expect me to agree with the last part of his supplementary question. But I hope that he will accept that there is an inter-relationship between demand, land prices and house prices. It may be that in the areas of greatest demand land prices react to the demand and thus affect house prices, rather than merely being a passive resultant of land prices and house prices on their own.
    Sir C. Osborne: Can my right hon. Friend confirm that the increase in new houses is due to a large extent to the fact that building wages in the last few years have risen by 17 per cent.? What proportion of the total cost of a new house is represented by wages?
    Sir K. Joseph: That is another question. Although building prices have risen substantially in the last two years, I must confirm that land prices have also risen.
    Mr. Mackie: If the Minister does not agree with my hon. Friend's solution, what is his solution?
    Sir K. Joseph: The solution is being seen every year, in the vast and steady increase in owner-occupation and local authority building, despite all the worries of hon. Members opposite—and we intend to see that that increase is intensified.
    Mr. M. Stewart: Surely there has not been an increase in local authority building. It is only half what it was eight years ago.
    Sir K. Joseph: Yes, but compared with the time of lower interest rates under pre-Tory Administrations local authority building is increasing, and will increase further—and not only on the housing front but on every front for which local authorities are responsible.

    Decontrolled Tenancies, London (Rents)
    Mr. Sorensenasked the Minister of Housing and Local Government and Minister for Welsh Affairs to what extent rents vary for decontrolled tenancies of one, two, three, four and five rooms in the London and Greater London area.
    Sir K. Joseph: Rents for decontrolled dwellings of the same size naturally vary according to the quality, condition and environment of the property. I have no information to show the extent of the variations, nor would it be practicable to collect it.
    Mr. Sorensen: Am I to take it that the Minister does not know—and that his Department does not know—not only where rents are excessively high but also what is the comparison between one area and another? If he does not know, is it not highly desirable that he should?
    Sir K. Joseph: I do not think so. Local authorities have powers to make compulsory purchase orders and send them to me for confirmation if they believe that a particular situation, with a combination of exorbitant rents and the threat of homelessness, makes it necessary.
    Mr. M. Stewart: When the Minister is considering whether or not to confirm a compulsory purchase order, does he not have to consider comparable rents in the neighbourhood? If he has not some such idea in mind as that suggested by my hon. Friend, how can he do that?
    Sir K. Joseph: Because that sort of fact is brought out at the inquiry.

    House Improvements (Circular)
    Mr. Frank Allaunasked the Minister of Housing and Local Government and Minister for Welsh Affairs what response he has received from local authorities to his circular of 2nd August, 1962, asking them to induce landlords to install baths, hot water and inside lavatories in houses requiring them.
    Sir K. Joseph: My circular had a much wider purpose than the hon. Member suggests. In any case, local authorities were asked to let me know their reactions by the end of the year, and many replies have yet to come in.
    Mr. Allaun: Is the Minister aware that some hon. Members feel that this circular, while it is belated and incomplete, is a good one, which indicates a welcome reversal of Government policy? Since replies have to be in by the end of the month, what steps is the right hon. Gentleman going to take to see that it is implemented? Is he aware that his Ministry is refusing grants to councils to cover the extra cost where the provision of baths requires the installation of bigger sewers to accommodate the extra water?
    Sir K. Joseph: I have told the House that I am reviewing the whole matter of improvement grants, and I shall be reporting on this to the House in a few months. Meanwhile, I will study with care the reports as they come in to me.
    Mr. Woodburn: Would the right hon. Gentleman pursue this matter with vigour, as it will make a fine contribution in providing work for the foundry trade in two areas of the country where that is vitally needed?
    Sir K. Joseph: The scheme has many blessings.
    Mr. Jeger: Is the Minister aware that much of the old property which needs modernising belongs to the British Transport Commission? Will he have a word with his right hon. Friend the Minister of Transport in order to ensure that more capital development is afforded to the B.T.C.?
    Sir K. Joseph: I understand that arrangements of this sort are being made.

    Houses (Allocation)
    Mr. H. Wilsonasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will discuss with local authority associations the problem arising when there is a dispute between two neighbouring authorities as to the responsibility for housing a particular family about whose residence there may be room for argument, with a view to the introduction of legislation for establishing machinery for settling by agreement, or in default of agreement, by arbitration, the authority which is to take responsibility.
    Sir K. Joseph: If disputes of this kind arise, I would expect the authorities concerned to be capable of resolving them

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    with good sense and good will. But if the right hon. Member will let me know of any case he has in mind, I will look into it.
    Mr. Wilson: Is the Minister aware that in areas of chronic overcrowding, such as Merseyside, there are frequent cases where a husband is having to live apart from his wife, and with his parents, and the wife is living with her parents, and there is doubt as to where the real residence is; and that this leads to the first local authority striking them from its housing list and they get no priority and have to wait many years before securing accommodation from the second local authority?
    Sir K. Joseph: I realise how unsatisfactory this can be. I hope that local authorities will sort it out for themselves. Only if it appears that they are unable to do so would I contemplate a general scheme.
    Mr. H. Wilsonasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware of the growing number of cases of Merchant Navy men, Service men and others who have applied for the allocation of a house by a local authority, but who find after years on the housing list that they are disqualified on residence grounds, particularly where one or other member of the family resides with parents in a neighbouring area; and whether he will take appropriate steps to see that on transfer to the housing list of a neighbouring authority they do not lose seniority.
    Sir K. Joseph: It is not the practice of local authorities to inform me of individual applications for tenancies. Housing authorities were advised in 1955 not to insist on a residential qualification for sailors, soldiers and airmen returning to civil life in areas where they have occupation or family connections. The great majority of authorities are understood to have adopted this advice.
    Mr. Wilson: I am aware of the Circular of 1955. Does that cover a Merchant Navy case as well as a Service case?
    Sir K. Joseph: Yes. But perhaps the right hon. Gentleman will send me the details of this case.

    Homeless Persons, Metropolitan Essex
    Mr. Sorensenasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will call for a special return from the local authorities concerned to show how many homeless or evicted persons in metropolitan Essex have been accommodated temporarily during the last 12 months; and in what areas this has been done.
    Sir K. Joseph: I am informed that the Answer to the first part of the Question is 576 persons. The accommodation provided was at Hornchurch, Abridge, Leytonstone, Stanway, East Ham and West Ham.
    Mr. Sorensen: May I ask whether the Minister is aware that in some areas of metropolitan Essex this type of accommodation for homeless and evicted persons is fully occupied and people have to be sent great distances? In those circumstances, can he say what he is doing to provide more accommodation?
    Sir K. Joseph: With the greatest sympathy, may I tell the hon. Gentleman that this is a question for my right hon. Friend the Minister of Health.

  LOCAL GOVERNMENT

    Land Prices
    Mr. Boydenasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will undertake a survey of land prices obtaining in different parts of the United Kingdom.
    Sir K. Joseph: No, Sir.
    Mr. Boyden: Does the right hon. Gentleman know the average sort of price obtaining in areas where there is extensive development? If he does, would he consider publishing it?
    Sir K. Joseph: That could be done only by means of an elaborate survey, and there is no need to have a survey to show that prices are higher in the prosperous areas and not so high in areas of less prosperity.
    Mr. Boyden: How can the right hon. Gentleman plan a massive building programme if he does not know and the

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    public does not know the price of land in these areas?
    Sir K. Joseph: Because demand is very high. If the credit arrangements can be made satisfactory and the land realised, I am satisfied that a massive building programme will continue as one already exists.
    Mr. MacColl: Is the right hon. Gentleman aware that, although no doubt it is true that prices in prosperous areas are higher than they are in less prosperous areas, it is true that even in the less prosperous areas they have gone up astronomically, and that that is a big handicap to all local authority building? Will he not at least try to find out the facts before he makes a policy for housing?
    Sir K. Joseph: I do not see the need for an overall survey. I am very ready to consider the problems in any particular area of which I am not aware where a local authority is restrained by the price of land. If any local authority feels itself restrained by the price of land and nothing else, I am sure that it will get in touch with me.

    Permanent Secretary (Speeches)
    Mr. M. Stewartasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether the public speech of the Permanent Secretary to his Department on Tuesday, 6th November to the Ham and Petersham Ratepayers and Residents Association concerning the future of Greater London was made with his authority.
    Sir K. Joseph: This was a small informal occasion when the Permanent Secretary undertook, because of personal associations with the area, to explain to a small gathering of residents the Government's proposals for the reorganisation of local government in Greater London as they had already been announced and explained by Ministers.
    This required no authority.
    Mr. Stewart: Is the Minister aware that it was not only a question of explaining, but of advocating these proposals, and that on the same informal occasion, which was quite fully reported in the local Press, the Permanent Secretary expressed the view that the
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    idea of a local income tax gave her the horrors, that it was a pity there was so much politics in local government, and that councillors are not what they used to be? Does not the right hon. Gentleman think that that was perhaps unfortunate?
    Sir K. Joseph: No, not in the very least. It is absolutely seemly and proper for senior civil servants to explain Government policy, including the advantages alleged for Government policy by Ministers, once it has been clearly announced by a Minister in the House.
    As for the last part of the question, the comments about councillors, my Permanent Secretary was repeating to a small gathering what she had said to a large gathering of local authority representatives, to which she had been invited to give her views on local authority representation and its prospects, with the permission of my predecessor, some two or three years ago.
    Mr. A. Royle: Is my right hon. Friend aware that this speech was much appreciated by the ratepayers in Ham and Petersham, and that his Permanent Secretary will always be welcome in my constituency?
    Mr. Stewart: May I press this point? Suppose, for example, local councillors, including local councillors who happened also to be Members of this House, start expressing in public, here and elsewhere, the opinion that high civil servants in the right hon. Gentleman's Ministry are not what they used to be. Will the right hon. Gentleman regard that as appropriate and happy?
    Sir K. Joseph: If it were true, it would be open to any Member of the House to make general observations of that sort, but I hope in no case observations on individual civil servants, particularly since the proper object of an attack is not a civil servant but the Minister who announces a policy.
    Several Hon. Members rose—
    Mr. Speaker: I think we must leave it, and indeed that the last question was hypothetical, and therefore out of order.
    Mrs. Butlerasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether the statement of the Permanent Secretary of

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    his Department to the British Waterworks Association on 14th November about consultation between the Government and the Metropolitan Water Board on reorganisation was made with his authority.
    Sir K. Joseph: In the course of proposing the health of the Association the Permanent Secretary took the opportunity of assuring the representatives of the water industry present that the Department greatly valued consultation with the industry, this having been queried with reference to the Water Resources Bill. She added that there had been consultation with the Metropolitan Water Board over the arrangements proposed by the Government for water in the Greater London area; this was a simple statement of fact, both I and my predecessor having discussed—though not agreed—the Government's proposals with representatives of the Board.
    Mrs. Butler: Is the Minister really supporting the view that the presentation of proposals with comments to be made within one month is consultation, particularly when the Permanent Secretary admitted that the proposals had been formulated long before they were made to the Water Board? Is not this offhand manner of replying in an after-dinner speech to reasoned objections very shabby treatment which justifies more than ever the demand for a full inquiry?
    Sir K. Joseph: Be that as it may, the choice of the word "consultation" was not that of my Permanent Secretary. The word was chosen and used by my predecessor and has been repeated by me. On that occasion neither I nor my Parliamentary Secretary, because of other obligations, could be present at the dinner. My Permanent Secretary therefore spoke in my place and simply referred to what had been said by my predecessor and by me.

    Senior Civil Servants (Public Speeches)
    Mr. M. Stewartasked the Minister of Housing and Local Government and Minister for Welsh Affairs what instructions are given to senior officials in his Department concerning the public expression of controversial political opinions.
    Sir K. Joseph: The instruction to all senior civil servants is that they should not take part in matters of public and political controversy.
    But it is of course perfectly appropriate that civil servants should explain to those concerned the policies of the Government of the day as they have already been announced and explained by the responsible Ministers.
    Mr. Stewart: Could not the Minister consider this again in view of the Answer be gave to the previous Question and the Answer he has just given, in which he said that the proper object of attack was the Minister? That is generally accepted. It is generally understood that one does not normally attack civil servants, but if civil servants open fire from under that flag of truce they cannot object if attacks are then made on them. Will the right hon. Gentleman look at this again? We have here a rather alarming precedent. It may have been a most lively and entertaining speech, but it was a highly controversial one. Some of the opinions would be considered by many of us to be highly debatable, and some of them very old-fashioned. Is it wise for senior civil servants to be brought into public controversy? Will the right hon. Gentleman consider what might be involved if this continues?
    Sir K. Joseph: I am absolutely satisfied about the discretion and propriety of my Permanent Secretary. She has taken only the opportunities which she was invited to take to explain policies that had already been announced by a Minister to those immediately concerned with them.
    Mr. MacColl: Would the right hon. Gentleman say when the Government announced their policy on local income tax which apparently caused such alarming and physical trouble to the Permanent Secretary? When this House debated the Local Government Bill there was no firm announcement of Government policy.
    Sir K. Joseph: I know, or at least I think, that the hon. Gentleman differs from his party on this issue, but it has been made clear from this Box time and again, and in Committee upstairs, that the Government do not see any panacea as an alternative to rates by way of local income tax or otherwise.

    Spoil Heaps
    Mr. Jegerasked the Minister of Housing and Local Government and Minister for Welsh Affairs what progress has been made in the conversion of slag heaps into public parks; and whether, in view of the need to provide useful employment in the areas where these are, he will make a statement.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. F. V. Corfield): The information available shows that in England and Wales 288 acres of spoil heaps have been reclaimed by local authorities for open space since the war. This may include public parks.
    My right hon. Friend and I would warmly welcome more applications for grant under the Local Employment Act, 1960, for schemes in development districts designed to bring derelict land into use or to improve local amenities.
    Mr. Jeger: Will the hon. Gentleman make that known to the local authorities, particularly in mining areas where there are these spoil heaps or slag heaps which are an eyesore? Where there is mounting unemployment, work of this nature could take care of unskilled or semi-skilled workers.
    Mr. Corfield: The answer to the first part of that supplementary question is "Yes". The hon. Gentleman may be interested to know that proposals in development plan reviews covering the period to 1981 include reclamation of a further 435 acres of spoil heaps, of which 52 are earmarked for open spaces, but I remind the hon. Gentleman that the actual work of clearing these heaps is not a big employer of labour.

    Smokeless Zones (Grants)
    Mr. Matthewsasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will take steps to ensure that grants paid to householders living in smokeless zones are extended to cover stoves and open fires behind glass, as is already the case in the North-East.
    Mr. Corfield: I would refer my hon. Friend to the reply which I gave on 6th December to a Question by the hon.
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    Member for Sheffield, Hillsborough (Mr. Darling).
    Mr. Matthews: Is my hon. Friend aware that there is an abundant supply of coke in the country, and that this is quite satisfactory fuel in stoves and other enclosed appliances, but is unsuitable for open fireplaces? Does not he agree that the concession that I have suggested would help to meet the demand for open fire smokeless fuels in clean air zones?
    Mr. Corfield: I cannot agree that all types of coke are unsuitable for open fires. Suitable quality gas coke will burn very well in approved types of open fireplace. Outside the North-East adequate supplies of open fire solid fuel, including gas coke, are available.

    Office Development
    Mr. Willisasked the Minister of Housing and Local Government and Minister for Welsh Affairs when he will make an announcement concerning the control of office development.
    Sir K. Joseph: I hope to make a statement about the office problem after the Christmas Recess.
    Mr. Willis: Can the right hon. Gentleman say whether he has also consulted his right hon. Friend the President of the Board of Trade to ensure that whatever is done is done purposely to bring about a much fairer distribution of this form of employment? Will he try to direct some of it to the North, and to Scotland?
    Sir K. Joseph: Yes. It certainly is Government policy to spread this employment over a wide range of areas.
    Mr. Costain: Will my right hon. Friend bear in mind, in producing this documentation, the fact that we are at the moment passing the Shops, Offices and Railway Premises Bill through the House; that this will make a number of offices obsolete, and that if office building is curtailed there could be a big rise in rents?
    Sir K. Joseph: Yes, Sir.

    Rates
    Mr. Liptonasked the Minister of Housing and Local Government and Minister for Welsh Affairs why he sent a

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    circular last week to local authorities on the subject of rates.
    Sir K. Joseph: To suggest the steps to be taken to bring the new lists to the notice of the public and to remind local authorities that the revaluation does not in itself justify any increase in either expenditure or balances.
    Mr. Lipton: In view of the obvious and understandable signs of panic in Government circles about the savage impact that the new regulations will have, will the Minister explain how it is that in this circular he asks local authorities to assume that the general level of values in the new list will be maintained, despite the large number of appeals that are likely to be made to local valuation committees? Have some secret instructions been given to those committees and, as a result, will any appeal against their decisions be a complete waste of time?
    Sir K. Joseph: In the nature of things there will be appeals, and some will be successful. What I was trying to avoid was the danger that local authorities would over-estimate the effect of this on their rate yield and thus provide a larger reserve. As for the last part of the hon. Member's typically slanted remarks, I am sure that the public will recognise that it is largely through taxes, but partly also through rates, that the cost of our vastly expanding social and educational services has to be met.
    Mrs. Slater: Does the Minister intend this as an indirect way of telling local authorities not to spend more on the social services?
    Sir K. Joseph: Certainly not. My colleagues on the Front Bench are continually explaining to the House, and are impressing upon local authorities, the expansion which the country desires in its educational and social services.

    Revenue
    Mr. Liptonasked the Minister of Housing and Local Government and Minister for Welsh Affairs what inquiries he is making into new methods of raising revenue for local government purposes.
    Sir K. JosephNone.
    Mr. Lipton: Is it not quite deplorable that the Government's mind should apparently be closed to any idea of solving the problem that arises because of the heavy and increasing burden of rates, which will be intensified by the new valuation that is about to come into force? Is it not quite clear that the Government will have to take some steps, at some time or other, to relieve local authorities of the increasing burdens in respect of education and other services, which are not really local authority responsibilities?
    Sir K. Joseph: The Government would certainly welcome a solution of this problem, but they believe that it would be wrong to encourage the view that there is an easy way out. At the moment the taxpayer pays more than half the cost of local authority services. Certainly our minds are not closed to any way of easing the burden on the ratepayers.

    Clean Air Act
    Mr. Fitchasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will take steps Ito amend the Clean Air Act in order to deal with the emission of sulphur dioxide into the atmosphere.
    Mr. Corfield: I am entirely in sympathy with the hon. Member's objective. The plain fact is, however, that in spite of continued research here and abroad we still do not know how to prevent the emission of sulphur dioxide. In the present state of knowledge the objective must be to keep down the ground-level concentration of the sulphur dioxide emitted. This is best done by effective use of the existing powers, under the Clean Air Act and Alkali Act, to require factory and other chimneys to be high enough to secure adequate dispersal.
    Mr. Fitch: Can the Parliamentary Secretary say whether he has impressed upon the oil industry the necessity of inquiring into the emission of sulphur dioxide into the atmosphere? Has any research work been undertaken at all?
    Mr. Corfield: I cannot give the hon. Gentleman details about the research and who has been doing it, but I know that active research has been going on

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    for many years. We are in close touch with it, but my advice is that there has been no significant break-through in this sphere.
    Dr. Stross: Can the Parliamentary Secretary say how much it would cost to treat oil so as to remove the sulphur and whether such cost is thought to be prohibitive at the present time? Has he noted that people who ought to know better tend to lay the blame on coal when in fact they should be blaming oil which has more sulphur in it, weight by weight?
    Mr. Corfield: That raises other questions. I am not competent to answer the hon. Gentleman's question about costs.
    Mr. Fletcher: Is the Parliamentary Secretary aware that his reply is totally unsatisfactory and that, as is generally known, the lethal consequences of the smog in London last week were due to a combination of sulphur dioxide and smoke? Is not it time that the Government did something to control the emission of sulphur dioxide so as to stop the intolerable conditions which Londoners had to suffer last week?
    Mr. Corfield: As I have explained, the results of research do not yet enable us to control the sulphur compounds. But I have assured the House that we are keeping in touch with the latest research and we shall, of course, put into action anything which is indicated as desirable.
    Mr. Fletcherasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether, in view of the effects of smog on life and health in London and elsewhere, he will consult local authorities with a view to expediting the full operation of the Clean Air Act.
    Mr. Corfield: My right hon. Friend will continue to urge and encourage local authorities to take the fastest possible action against smoke pollution in the black areas of England and Wales.
    Mr. Fletcher: Is the Parliamentary Secretary aware that some boroughs have indicated that they do not contemplate finishing their smoke control programmes until 1975? Is not it, therefore, desirable
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    that every step should be taken to ensure that smoke control remedies, which alone will prevent such fatalities as occurred last week, should be put into operation as speedily as possible?
    Mr. Corfield: I entirely agree with the hon. Member. I assure him that the programme which will be available to the House next week will be considered in great detail, and local authorities which appear to be in any way dilatory will be urged by my right hon. Friend to make more vigorous efforts.
    Mr. M. Stewart: Is the Parliamentary Secretary aware that Fulham sets a shining example in this respect? Will he ask the Permanent Secretary of the Department to make a speech to that effect?
    Mr. Renton: Does not the original Answer of my hon. Friend show that, in general, the London boroughs have been somewhat dilatory in exercising their responsibilities under the Clean Air Act? Is not it a fact that the recent smog would have been less serious had the London boroughs been more efficient?
    Mr. Corfield: I do not think that that is a fair criticism of the London boroughs. By and large, they are ahead of the rest of the country.

    Obsolete Liners
    Mr. Dalyellasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will grant subsidies to those local authorities who are contemplating providing floating homes in obsolete liners.
    Sir K. Joseph: I have had no proposals from any local authority to provide such accommodation. And I have no power to pay subsidy towards the cost of such accommodation.
    Mr. Dalyell: Would not the Minister agree that it is precisely in the river areas which are so desperately overcrowded that cabins for newly-married couples, who might not hit it off with their in-laws, would be desirable?
    Sir K. Joseph: I hope that we can increase our housing provision and so avoid the need for this solution, which

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    would have all sorts of implications regarding safety and other factors which would have to be taken into account; and which is anyway beyond my existing powers.
    Mr. Dalyell: But does not the Minister agree that this problem is with us now?

  TRADE AND COMMERCE

    Gramophone Records (Playing Time)
    Mr. Stratton Millsasked the President of the Board of Trade whether he is aware of the practice whereby gramophone record manufacturers sell 12 inch records lasting for less than 20 minutes instead of the normal 25–28 minutes, without giving any indication to the purchaser; and if he will seek powers to ensure that the playing time of a record is printed on the record sleeve.
    The President of the Board of Trade (Mr. F. J. Erroll): As to the first part of the Question, I understand that it is not the usual practice to indicate the length of playing time on the record sleeve. The Answer to the second part is "No, Sir". The length of playing time is only one of many considerations when choosing gramophone records.
    Mr. Stratton Mills: By what method can a buyer of a gramophone record discover that the playing time is falsified?
    Mr. Erroll: I am not a great buyer of gramophone records, but I am told that at most shops where records are sold facilities are provided for playing records before a purchase is made, so that there would not be the same need as my hon. Friend might think to require the playing time to be stated on the record sleeve.
    Mr. Stratton Mills: Is my right hon. Friend suggesting that all record purchasers should time records bought from reputable companies? Will he have a survey made to see how widespread is this practice?
    Mr. Erroll: I do not think so. There are many other reasons for buying gramophone records than the actual playing time, including the artistic quality and other factors. The quality of the reproduction inevitably deteriorates a little as the centre of the record
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    is approached, and therefore it might be a better buy to have a record with not such a long playing time. These are factors which I think are familiar to buyers of gramophone records. But if my hon. Friend wishes me to do so, I will look into the matter further.

    Trade with Roumania (Talks)
    Mr. Shinwellasked the President of the Board of Trade whether he is aware of the discouragement to British importers of Roumanian goods and to manufacturers wishing to export to Roumania caused by the delay in negotiating quotas for 1963; what was the reason for the Board's action in discontinuing the discussions in mid-September; and why nearly three months have elapsed without any resumption of these talks.
    Mrs. Castleasked the President of the Board of Trade why the trade talks with Roumania have been discontinued at a time when trade with that country has been expanding; and when it is proposed to resume the talks.
    Mr. Erroll: The negotiations, which began in August, raised certain difficult points which required careful and detailed consideration. They have now been resumed and will, I hope, be concluded shortly. The previous quotas, which expired on 30th September last, have been renewed for a period of three months to allow trade to continue meanwhile.
    Mr. Shinwell: Is it at all likely that negotiations have been resumed after this unnecessary delay because of Questions put on the Order Paper? Is not the whole position as regards East-West trade thoroughly unsatisfactory? Does not the right hon. Gentleman realise the importance of East-West trade, apart from certain security difficulties, in dealing with the problem of unemployment in this country?
    Mr. Erroll: Yes, I fully appreciate the importance of East-West trade and particularly the importance of securing adequate outlets for our exporters, whether they are situated in development districts or elsewhere. That is one reason why the negotiations have been protracted. While I am always glad to answer Questions tabled by the right hon.

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    Gentleman, or any other hon. Member, I can assure him that on thus occasion the tabling of Questions had nothing whatever to do with the resumption of negotiations.
    Mrs. Castle: Is the President of the Board of Trade aware that there is a great field for expansion of trade if the Board of Trade will drop its negative and dilatory attitude towards this matter? Is he aware that Roumania has the fastest growing economy of the Eastern bloc and is anxious to buy British plant? It is absurd that there should be this three months' delay. Will he negotiate increased quotas which certainly Roumania wants?
    Mr. Erroll: Quotas have certainly been increased in both directions in the last few years, but the Roumanians are, as we are, anxious to pay for imports. Shortage of sterling limits their capacity to buy.
    Mr. Maxwell-Hyslop: Will my right hon. Friend moderate his enthusiasm for East-West trade by remembering that it is worth indulging in only if we are paid either in convertible currency or in commodities which we need—which, incidentally, do not include food products?
    Mr. Erroll: I shall bear in mind what my hon. Friend has said.
    Mr. Shinwell: In view of the information which has come to hon. Members about the difficult problem which faces us in connection with various aspects of East-West trade, will the right hon. Gentleman look into the whole matter and, after the Christmas Recess, make a statement on the subject to the House?
    Mr. Erroll: I did conduct an informal review within my Department a few weeks ago on a number of aspects of East-West trade. If the House would like to have a statement after the Recess, I shall do my best to oblige.

    Machinery (Sabotage)
    Mr. Bottomleyasked the President of the Board of Trade what representations he has received about workers sabotaging machinery, so hindering his efforts to get industry to go from the Midlands to the North of England.
    Mr. V. Yatesasked the President of the Board of Trade what is the nature of the evidence which he has received regarding the sabotage by Midland workers of machinery which had been dismantled for reassembly in the North of England; what has been the consequent damage to production; and what effect this has had upon trade generally and exports in particular.
    Mr. Erroll: A case was reported to me in confidence by one of the heads of the company concerned. I understand that the matter was satisfactorily settled by the management and, so far as I am aware, has not been repeated.
    Mr. Bottomley: Ought not the President of the Board of Trade to substantiate what he has said either outside where he made the original statement, or in this House? Why does he go out of his way to create bitterness between one section of the community and another?
    Mr. Erroll: I should not at all mind substantiating the details if I thought that that would further the public interest, but, as the matter has already been settled, I think that to give further publicity to it would do more harm than good.
    Mr. Yates: As this allegation was made to millions of viewers on television, would not the President of the Board of Trade ask the Postmaster-General to provide some evidence of this or repudiate what obviously is a dreadful slur on Birmingham and the Midlands?
    Mr. Erroll: I think I was quite right to mention this particular example as one of a number of forms of pressure which tend to slow down the movement of factories to the development districts. In the context of that particular occasion, I think it was quite right and proper that I should refer to it in passing.

    RETIRED CIVIL SERVANTS (EMPLOYMENT)
    Mr. Masonasked the Prime Minister, in view of the number of highly placed civil servants who on retirement or resignation join industrial firms and other businesses within the

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    restraint period, if he will now give consideration to amending the instructions governing this practice, in particular by restricting the right to accept employment with a firm which has contracted with the department in which the civil servant last served.
    The Prime Minister (Mr. Harold Macmillan): The existing rule was laid down in a White Paper, Cmd. 5517 of July, 1937, and requires that all civil servants of the rank of Under-Secretary or above, and those holding certain other posts of a special or technical character, should obtain the assent of the Government before accepting an offer of employment within two years from the date of retirement. I am satisfied that this rule is adequate, and that Ministers give the most careful consideration to applications made under it. The question of the contractual relationship which a firm may have with a Department in which a civil servant has been employed is, of course, one of the factors which is always taken into account.
    Mr. Mason: Is the Prime Minister aware that in the last 10 years 126 civil servants and 65 military officers, who are subject to the Civil Service rule, have left within the two-year restraint period to take jobs in industry, and 82 of those civil servants went from the Ministry of Aviation to 56 firms which had contractual relations with that Department? Having in mind that the Ministry of Aviation has been subject to criticism by the Public Accounts Committee on its tendering practices and the radio contract awarded to Plessey, and that that firm has just received a Law Officer of the Crown, a Cabinet Minister and a high-ranking office—all of whom have gone within the restraint period—does this not indicate that there is a lapse in the rules governing transfers from the Service during the restraint period into these industries and that some sort of inquiry is warranted?
    The Prime Minister: No, Sir. I do not think there has been any change in the method by which the rules have been applied. I think that, broadly, the public as a whole gains from a certain interchange between the Civil Service and industry.
    Mr. Gordon Walker: Is the Prime Minister aware that, even if it is true that
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    the public gains, it is also true that there is very grave public disquiet—[HON. MEMBERS: "No."]—there certainlyis—about whether the general standard in these matters is falling? Does he not think that in view of this widespread concern it would be wise now to have a proper inquiry into this matter, maybe by a joint Select Committee?
    The Prime Minister: No, Sir. I do not think that is necessary. I think that the rules are being enforced and will be enforced.
    Mr. Gresham Cooke: Would my right hon. Friend agree that it is in the national interest that distinguished civil servants should join British firms from time to time, and that it leads to a greater understanding of the needs of Government and British industry? Further, does he agree that there have been no cases of abuse at all?
    Mr. Grimond: Is there not a case for inquiry from both points of view? Is it not inevitable today when the Government have so many commercial dealings that there is a change in the situation from what it was before the war? It may be desirable that civil servants should have more experience of industry, but is not this in itself a reason for having some inquiry into the matter? Is it altogether satisfactory that at present civil servants retire and go into industry but there is no comparable benefit from people coming from industry into the Civil Service? Is there not a need for a general inquiry into the present situation? Is there not disquiet in the country art large about this?
    The Prime Minister: In regard to the first part of that supplementary question, it is perfectly true that there has been a change in the range of Government purchase and work in connection with industrial firms from which they make large purchases. That, I should have thought, would have been a reason not for tightening the rule, but, if anything, for relaxing it—[HON. MEMBERS: "Oh."]—because it is inevitable if there is a movement that this should take place. In regard to the second point, which raises am interesting concept, I think it a good thing that there should be close relations between industry as a whole and the Civil Service, for both have something to learn from each

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    other. Although sometimes a civil servant goes long before his retirement date and that is a loss to the Civil Service, it is very often a gain to the general interests of the nation.
    Mr. Gaitskell: Does not the Prime Minister feel that the figures quoted by my hon. Friend the Member for Barnsley (Mr. Mason) about the number of civil servants who have left a single Ministry, the Ministry of Aviation, within the two-year period are very striking? Does he not feel that that merits some investigation? I appreciate that this is a difficult problem, but does not the right hon. Gentleman think that, in view of the fact that it is 25 years since the rule was originally made, it merits further inquiry?
    The Prime Minister: I should be ready to see whether I think the rule ought to he altered. A great deal has happened; the Ministry of Aviation in this period has lived through a great number of changes, from the Ministry of Supply and the Ministry of Aircraft Production. All this great complex which grew up in the war has been changed. I agree that these are important considerations, but I have not the slightest doubt that absolute propriety is observed. It may be that there is some case for looking again at the actual wording of the rule.
    Mr. Speaker: Mrs. Castle.
    Mr. Wigg: On a point of order. Will you, Mr. Speaker, give consideration to the circumstances surrounding the question and the controversy about civilian firms inasmuch as one of the firms concerned issued a writ, or threatened to issue a writ, for libel when this controversy was blowing up, which handicapped some of us as we did not want to infringe the privileges of the House in a matter which might subsequently be regarded as improper. Later, when they thought that the matter was over, they promptly withdrew the threat of a writ for libel. In those circumstances, although it is a little belated, if the facts were submitted to you would you consider the matter as one of Privilege?
    Mr. Speaker: I shall have to consider that, if and when it arises, but do not let us do it in the middle of Questions.

    MINISTER OF DEFENCE (SPEECH, WESTERN EUROPEAN UNION)
    Mrs. Castleasked the Prime Minister whether the public speech of the Minister of Defence on European defence projects to the Assembly of Western European Union on 4th December represents the policy of Her Majesty's Government.
    Mr. Warbeyasked the Prime Minister whether the public speech of the Minister of Defence to the Assembly of Western European Union on the subject of European defence projects on 4th December represents the policy of Her Majesty's Government.
    Mr. Zilliacusasked the Prime Minister whether the public speech of the Minister of Defence to the Assembly of Western European Union on the subject of European defence on 4th December in Paris represents the policy of Her Majesty's Government.
    The Prime Minister: The hon. Members will no doubt now have read my right hon. Friend the Minister of Defence's speech which has been placed in the Library, and will have seen that he made no reference to policy but, rather, presented a survey and assessment of some of the problems of defence as they confront the members of the Western European Union and, indeed, N.A.T.O. as a whole.
    Mrs. Castle: Would the Prime Minister tell us exactly what that speech means? Are the Government now prepared to play their part in the creation of a full-scale European deterrent? If so, is the right hon. Gentleman not aware that this move would be strongly deplored by all those who believe that the overriding need is for the creation of a nuclear-free zone in Europe by agreement with the Soviet Union? Will he concentrate all his efforts on that?
    The Prime Minister: That is a rather wider and different question. My right hon. Friend's speech is now available. In it he refers to some very important questions which must arise, but he did not declare the Government's policy. On the question of the so-called European deterrent, there are all sorts

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    of possibilities which have been canvassed. As far as I know, there is no proposal.
    Mr. Warbey: Is the Prime Minister aware that the Minister of Defence's speech was made at an Assembly composed of Britain and the Six just after the Assembly had passed without opposition a motion calling for the creation of a European component of a Western deterrent, and that the Minister referred to very large defence projects indeed, based on large capital resources and markets, and that everybody interpreted this as giving British support to the concept of a European nuclear deterrent?
    The Prime Minister: The very introduction of the word "market" must have made it almost certain that he did not refer to anything of the kind. I do not as yet know that the question of a European deterrent is even under discussion. [HON. MEMBERS: "Oh."] No plan has been put forward. Certainly there could be no market for a deterrent.
    Mr. Gaitskell: May we have clarification of what exactly is meant by a European nuclear deterrent and a N.A.T.O. nuclear deterrent, because it seems to me that judgment on this must depend on what exactly is envisaged, and nobody seems to know.
    The Prime Minister: We have put forward no plan. All sorts of plans have been discussed, as the right hon. Gentleman knows. I think that he himself has referred to such possibilities. But there are very big questions as to manufacture and control and as to what should be the nature of the control. So far these have not been resolved, and they have hardly even begun to be seriously discussed.
    Mr. Zilliacus: Would not the Prime Minister put an end to the doubts and misgivings which obviously exist by stating quite clearly that the Government are opposed to the creation of a European, N.A.T.O. or Common Market nuclear force and stand with the United States in demanding unified control of any such force?
    The Prime Minister: I am glad to see that on this matter the hon. Member ranges himself beside General de Gaulle.
    Mr. G. Brown: An important point is that much of the speech of the Minister of Defence was devoted to defending the British independent nuclear deterrent. Does not the Prime Minister think that it was a little untimely?
    The Prime Minister: The British nuclear independent deterrent exists. [HON. MEMBERS: "Where is it?"] It exists in a most powerful form, which, as the right hon. Gentleman knows, at the moment makes the major contribution in the West in the initial stages. I hope and believe that this policy of maintaining it will be satisfactorily carried on.

    UNEMPLOYMENT, NORTH-EAST
    Mr. Fernyhoughasked the Prime Minister, in view of the increase now taking place in unemployment in Jarrow and in the north-east region, what special steps he will take to deal with the problem.
    The Prime Minister: The North-East should benefit substantially from the expansionary measures that have already been taken, including the field of public expenditure.
    Mr. Fernyhough: Does not the Prime Minister recognise that the steps which have been taken are totally inadequate, that some of these steps have already been in operation for two years, and that the problem gets worse rather than better? Does he not recall the speech which he made at Halifax on 31st March, 1958, when he said that if the economic situation gat worse, the Government had plans ready on the shelves to put into operation? When are the plans going to be put into operation to find for the growing number of unemployed the jobs which they require?
    The Prime Minister: A great deal has been done both in general and in the particular sphere, and mare is being done.

    SPACE TECHNOLOGY
    Mr. Edenasked the Prime Minister Which Ministers have a Departmental responsibility for research into and development of the opportunities of space

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    technology; what are the particular spheres of responsibility of each Minister concerned; and which Minister is required to co-ordinate their various activities.
    The Prime Minister: There is a distinction between the capacity to launch a vehicle into space and the particular uses which may be made of that capability. My right hon. Friend the Minister of Aviation has a general responsibility for space technology. In consultation with him, the Minister for Science, the Minister of Defence, the Secretary of State for Air and the Postmaster-General are responsible, respectively, for scientific, defence, meteorological and communications aspects of space research.
    Mr. Eden: I was not quite clear from my right hon. Friend's reply exactly who is responsible for co-ordinating their various activities. Would he please look at this again? Does he not agree that there ought to be some central co-ordinating authority in order to ensure that the maximum advantage is taken of space and other scientific research by Government Departments, universities and industry?
    The Prime Minister: This is a very old and difficult problem of Governmental organisation. There are some who argue that if one takes a Minister and puts him in an office with a secretary, and makes him co-ordinate the work of other Ministers, it will produce the results that one wants. From some experience I have found that though that is a good method occasionally for certain specific purposes, on the whole the method of the Ministers mainly responsible working together is a more effective method.
    Mr. P. Williams: Does the Prime Minister recognise that what I suspect my hon. Friend was suggesting was not imposing a new Minister as overlord but making one of the existing Ministers responsible for co-ordinating and initiating policy?
    The Prime Minister: Yes, but I think that broadly speaking this system is working satisfactorily. There are two quite separate purposes. One is initiating and making the capacity to launch a vehicle, and the second is a great
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    variety of purposes, such as communications, which must be the chief interest of the Postmaster-General, and meteorology, which is a matter for the Secretary of State for Air, for which the vehicle is used when it has been launched.

    UNEMPLOYMENT
    Mr. Jayasked the Prime Minister which Minister is responsible for co-ordinating Government policy for bringing work to areas of unemployment.
    The Prime Minister: Co-ordination of the many aspects of national policy involved is best secured by consultation between the Ministers concerned in different aspects of the problem.
    Mr. Jay: Does that Answer mean that the Prime Minister has departed from the system which has been in force under almost all Governments since 1945 of placing the main co-ordinating responsibility on the Board of Trade? If there is no main co-ordinating Minister now, may not this be one explanation of the lamentable condition of these areas?
    The Prime Minister: On certain aspects it remains upon the Board of Trade, but the more general aspects, such as the general economic matters, rest with the Treasury.
    Mr. Dugdale: Is the Prime Minister aware that under this Government there are very few areas today in this country which are completely free from unemployment, and that the policy of moving industry from the Midlands and from London to the North can result only in an equalising of hardship all over the country?
    The Prime Minister: While we must now be the last to minimise this difficulty, it would be a great mistake to exaggerate it. Compared with the situation in many other countries, the situation in this country is a very powerful one. We have to strike, as right hon. Gentlemen know from their own experience, a very delicate balance. An unemployment figure of 300,000 means a boom and very heavy over-employment in some areas. When it rises to 700,000, it is very serious. Our real

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    trouble is surely not so much the general problem but the special problem of special industries and special areas.
    Mr. McMaster: In co-ordinating the Government's policy on unemployment, will my right hon. Friend the Prime Minister ensure that he also co-ordinates with the Ministers in Northern Ireland so that an area which has still a higher and more persistent unemployment problem, in the face of unemployment in this country, can continue to attract new industry?
    The Prime Minister: Yes. It is for that reason that we have had this very close relationship with the Government of Northern Ireland. My right hon. Friend made a statement on this the other day. I have had several meetings, and continuous meetings, with the Prime Minister of Northern Ireland.
    Mr. Gatiskell: Does the Prime Minister appreciate that merely to concentrate upon the special areas, although these are enormously important, cannot solve the problem if there is also unemployment in other areas of the country? What is necessary is general expansion, combined with special action to steer industry into the special areas.
    The Prime Minister: Yes. It is exactly that action which is being taken.

SKYBOLT MISSILE (TALKS)
Mr. Gordon Walker(by Private Notice) asked the Minister of Defence whether he will make a statement on the recent discussions he has had with the United States Secretary for Defence on the Sky-bolt missile.
The Prime Minister (Mr. Harold Macmillan): This is not the form of the Question which has been given to me.
Mr. Gordon Walker: Mr. Speaker, it is the form which I have submitted to you. I had understood that you had approved it.
The Prime Minister: The form of the Question I have received, to which I have been asked to reply in the absence of my right hon. Friend the Minister of Defence, is whether he would make
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a statement on his recent talks with Mr. McNamara. What the right hon. Gentleman has just asked is much more limited, because the talks covered a great number of problems, including the Skybolt problem. I merely wanted to make it clear that the Question as stated by the right hon. Gentleman is not the one which has been handed to me. I have received notice of a more general Question, to which I will make a more general reply.
My right hon. Friend the Minister of Defence is at present in Paris for the meeting of the N.A.T.O. Council. He will wish to take an early opportunity of making a statement to the House about his talks with Mr. McNamara when he returns.
Mr. Gordon Walker: May we take it for certain that we shall get a full statement on the various aspects of the discussions with Mr. McNamara, and, in particular, about the future of Sky-bolt, before the House rises? Will the right hon. Gentleman say whether he now seriously expects delivery of the Skybolt missile? Can he say how long notice the Government had of the apparent change in America's policy on this matter? Now that the defence policy of the Government is in such disarray, is it not urgently necessary that the Government should think out and produce in a White Paper quite soon a new defence policy based upon the actual resources of the country and its proper and true national interest?
The Prime Minister: I am very glad the right hon. Gentleman has justified what I began by saying by asking such a very general form of Question. I will try to answer the different parts of it.
My right hon. Friend hopes to make a statement on his return, and that will deal with the general subjects which he discussed with Mr. McNamara.
On the particular question of Skybolt, I hope to discuss this in some detail with the President of the United States during the course of next week. As President Kennedy has stated—yesterday, I think—no decision has been made. I wish to go into all the aspects of the matter and I hope as soon as possible to make a statement accordingly.
Mr. Gordon Walker: Mr. Speaker, may I make it quite clear that the Question that I asked was the Question that

581
you agreed that I should ask? At what point it got changed I do not know, but it was no fault of mine that it was changed.
May I press the Prime Minister on how long notice the Government have had of the probability that the United States would have to withdraw this weapon? Was it two years' notice, or no notice? How long notice did the Government have?
The Prime Minister: This weapon has been under development for a period. It has run into a certain number of difficulties. The Government of the United States are considering the whole problem and I do not wish to make a statement—indeed, I do not think that it would be in the interests of the country for me to make a precise statement—until I have had the opportunity of discussing every aspect of it with President Kennedy.
Mr. Grimond: Can the Prime Minister explain to the House how it came about that the Minister of Defence assured us, in the face of criticism, that Skybolt would certainly be produced and would be available to the Air Force? Can he explain, whatever may be the outcome of these conversations, in what sense it is an independent deterrent which depends entirely upon whether the Americans make it?
The Prime Minister: The present deterrent which we have and which will be fortified by Blue Steel will last for a considerable period and must gradually be replaced by a better instrument. If the American Government decide to continue Skybolt and, according to their arrangements with us, to deliver it, it will be independent in the sense that it will be our property. The warhead will be manufactured by us and will be under our sole control.
Mr. Shinwell: Will the Prime Minister say whether the Minister of Defence will have a perfectly free hand to make arrangements for Skybolt being provided for our defence, including its cost? Can we afford the cost which has been mentioned in the Press, amounting to many hundreds of millions of pounds? In his conversations with President Kennedy would it not be more desirable,
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instead of adopting defence measures which are very largely speculative in the context of a deterrent, to indicate our intention to build up conventional forces?
The Prime Minister: These are very great issues, much larger than could be discussed in question and answer. Our conventional forces have to be organised, as the right hon. Gentleman knows so well, to serve many rôles, and more and more today one of our problems is that the rôles all over the world have to be provided by very special forms of transport and armament. This is itself a problem, having also the rôle that we have to play in Europe. All these are very great and increasingly difficult questions as the specialisation of these types of transport, aeroplanes and armaments tends to increase. That is quite a different question from the British deterrent, which it has been the policy of succeeding Governments first to create and then to maintain, and which it is our policy to maintain, if we are able to do so.
Several Hon. Members rose—
Mr. Speaker: Mr. Gaitskell. Business Question.
Mr. Eden: On a point of order. Apparently it escaped your attention, Mr. Speaker, that I was rising to ask a supplementary question. I believe that I am right in saying that all the supplementary questions were asked from the other side of the House. May I, therefore, in the circumstances, be permitted to ask a question of my right hon. Friend on his statement?
Mr. Speaker: I listened to what happened. I thought that we could not continue this discussion without a Question before the House. We have a lot to do and very little time to do it in. That is why I took the course that I did.
Mr. Eden: Is it not possible for me to put one question to my right hon. Friend on his statement?
Mr. Speaker: The difficulty about it is that we have to stop at some point. If I yield each time in respect of hon. Members whom I happen not to see—a distressing task and duty—we do not get on.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Leader of the House whether he will state the business of the House for next week?
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): Yes, Sir. The business for next week will be as follows:
MONDAY, 17th DECEMBER.—Supply [3rd Allotted Day]: Motion to move Mr. Speaker out of the Chair, when a debate will arise on an Opposition Amendment relating to Unemployment.
Consideration of the Motion on the Anti-Dumping Duty (No. 2) Order.
TUESDAY, 18th DECEMBER.—Supply [4th Allotted Day]: Motion to move Mr. Speaker out of the Chair, when a debate will arise on an Amendment to take note of the Eighth Report, 1961–62, and the Third Special Report from the Estimates Committee.
Second Reading of the Betting, Gaming and Lotteries Bill [Lords], and the Betting Duties Bill [Lords], which are consolidation Measures.
Consideration of the Motion on the British Transport Reorganisation (Compensation to Employees) Regulations.
WEDNESDAY, 19th DECEMBER.—Consideration of the General Grant Orders and Transitional Adjustments Regulations for England and Wales, and of the General Grant (Scotland) Orders.
Consideration of the Motion on the Motor Vehicles (Variation of Speed Limit) Regulations.
THURSDAY, 20th DECEMBER.—SeCOnd Reading of the British Museum Bill, and Committee stage of the Money Resolution.
A debate on Pensions of the Armed Forces, on the Motion for the Adjournment of the House.
FRIDAY, 21st DECEMBER.—The House will rise for the Christmas Adjournment until Tuesday, 22nd January.
Mr. Gaitskell: Can the Leader of the House say on which day the Minister of Defence will be making a statement on Skybolt and his discussions with Mr. McNamara?
Mr. Macleod: I cannot commit him absolutely because, of course, he is in
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Paris now. But I hope that the statement will be made early in the week, on, say, Monday or Tuesday.
Mr. Grimond: Has the Leader of the House seen reports of a deterioration of the situation in the Congo? Will he discuss this matter with his colleagues so that the House may have a statement on this and on the attitude of Her Majesty's Government towards it before we rise for Christmas?
Mr. Macleod: There is a Motion on the Order Paper signed by a considerable number of hon. Members—I think a number of hon. Members on this side of the House—but all I can say on that is that the anxiety which that Motion reflects is very well understaood by the Government. The Foreign Secretary will be discussing these matters in Paris. Therefore, I think that we can leave the question of initiative to him.
Mr. F. M. Bennett: Might I, rather unexpectedly to me, reinforce a plea of the Leader of the Liberal Party by stressing that we might have rather more than a statement on the Congo and press for a debate on this subject before the House rises for Christmas? Does my right hon. Friend realise the widespread concern felt in this country about the threatened use of farce again to bring about a political settlement by the United Nations, a body which has spent years and years preaching self determination above all other considerations in obtaining settlements for the political futures of emergent peoples? Does he realise how much we feel a sense of repugnance about what may transpire?
Mr. Macleod: My hon. Friend will remember that I made it quite clear, speaking on behalf of the Government, that we fully understood the reasons why the Motion has been on the Order Paper.
I will, of course, convey to the Foreign Secretary and the Lord Privy Seal the question raised by the Leader of the Liberal Party and my hon. Friend.
Mr. Callaghan: May I call the attention of the Leader of the House to the fact that the Minister of Power comes last in the list for questioning next Monday and that today we have had a very important announcement about the possible take-over of Whiteheads, of Newport, by Stewart and Lloyds? In

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view of the repercussions that this could well have if the industry is concentrated on employment in South Wales, including the social repercussions, will the right hon. Gentleman ask the Minister of Power to make a statement on this, otherwise there will be no opportunity of raising it until, perhaps, the take-over has been concluded?
Mr. Macleod: On the general question, as the hon. Member perhaps knows, it is proposed that there should be some alteration in the roster of Questions which will affect the Minister of Power and which will be for the convenience of the House. On the particular question, I cannot promise that, but I will convey it to my right hon. Friend.
Mr. W. Yates: Can my right hon. Friend say whether he has observed that, so far, we have not had a statement from the Government or a debate about the situation in South-West Arabia, particularly the Yemen? Since the Foreign Secretary criticised me aid other hon. Members for going to the Yemen, could I suggest that criticisms of that nature are made on the Floor of the House and not in tittle-tattle at Conservative Party meetings upstairs?
May I also ask him whether he will ask the Foreign Secretary's mouthpiece on the Front Bench now to consider cooperating with the United States to recognise the Yemen so that we can have a debate, and debate it clearly, across the Floor of the House, and not upstairs?
Mr. Macleod: I would make it clear that I do not accept in any way the things that my hon. Friend has chosen to say about the Foreign Secretary or about those Ministers who speak on foreign affairs in this House.
It is well known that Her Majesty's Government take a different attitude from that of my hon. Friend about the situation in the Yemen. This does not, with respect, mean that Her Majesty's Government are wrong.
Mr. Greenwood: To help the Home Secretary make up his mind, may I ask the Leader of the House when he hopes to provide an opportunity for us to discuss the Motion standing on the Order Paper in the names of hon. Members on both sides of the House calling for
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legislation against race hatred and discrimination?
[That this House calls upon Her Majesty's Government to introduce legislation making the incitement of race hatred and discrimination an offence.]
Mr. Macleod: Not before Christmas. I have made it clear that my right hon. Friend the Home Secretary is anxious to make a statement to the House on this matter, but thinks it right—and I think that the hon. Member will agree with this—that it should not be made until all the cases are disposed of.
Mr. Mason: May I call the attention of the Leader of the House to the Motion standing in the name of myself and the names of 114 other hon. Members asking the Government to change their policy and allow deceased Service men to be brought home for burial if their families request it? While I recognise that there is probably not time to debate this matter before the Christmas Recess, will the right hon. Gentleman give an assurance that we can have a short debate on this topic shortly after we return?
[That this House views with great concern Her Majesty's Government's policy of burying deceased Service men abroad during peacetime; draws attention to the changed circumstances which will now allow all deceased Service men to be brought home if requested, by air trooping services, at little cost to Her Majesty's Government, thereby reducing distress to relatives, and causing unnecessary costs to families, and calls upon Her Majesty's Government to effect a change in this miserly and discriminatory attitude.]
Mr. Macleod: I cannot give that undertaking. There are, of course, the ordinary Christmas Adjournment debates for which, I think, Mr. Speaker has not yet made his selection.
Mr. Speaker: Yes, I have.
Mr. Kershaw: Can the Leader of the House say whether the Government are able to make any announcement about regulations or legislation concerning the number of people who have applied to stand for Parliament at by-elections in order to bring about a cessation of the scandal at Rotherham, which is bringing this House and the Armed Services into public contempt?
Mr. Macleod: I gave that undertaking at business time last week and I have confirmed that the Minister of Defence will make a statement on it before we rise next week.
Mr. H. Hynd: Has the right hon. Gentleman noticed the Motion standing in my name and the names of 60 other hon. Members on the question of railway superannuitants? As a statement about a settlement of the question was understood to be pending, is the right hon. Gentleman likely to be able to give us any news about this before Christmas?
[That this House welcomes the statement of the Government that it will introduce a new Pensions (Increase) Bill for public service pensioners, notes that the last Act was widely drawn to include most public service pensioners but that it still failed to bring in certain groups, such as railway superannuitants and former colonial servants, who have the same moral claims to recognition, and therefore urges Her Majesty's Government to devise ways and means of extending the benefits of its proposed legislation to all who have served the Government at home and abroad and who find that their pensions fail to match both the rise in the cost of living and comparable pensions now awarded for similar service.]
Mr. Macleod: No, Sir, I do not think so, before Christmas. As I understand the position, proposals are in front of my right hon. Friend the Minister of Transport, but I do not think that it would be possible to make a statement before Christmas.
Mr. Biggs-Davison: May I add a further plea to that made by my hon. Friend the Member for Torquay (Mr. F. M. Bennett) and the Leader of the Liberal Party and ask the Leader of the House, in relation to the intention that the House should rise on Friday of next week, whether he is aware that many of us would not want to go away for Christmas if there were a danger of Christmas being desecrated by yet another wanton United Nations attack on the people of Katanga?
Mr. Macleod: I think that I would prefer to rest on what I have said. Quite clearly, the Foreign Secretary will discuss this—perhaps he is discussing it
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at this moment. I am sure that I can, with confidence, leave this matter to him.
Mr. Wade: Referring to the subject of Katanga again—and so that there should be no misunderstanding of the view on the Liberal benches—may I ask the Leader of the House to draw the attention of the Foreign Secretary to a report in the Press today of a statement by an official of the British Consulate in Elisabethville to the effect that Katanga was determined not to surrender and that the whites were ready to blow the whole lot up? Surely it would not help towards a peaceful settlement if Her Majesty's Government appeared to be supporting Katanga in that attitude.
Mr. Speaker: We must confine ourselves to business in these matters, or we shall never get on.
Mr. C. Pannell: Does the Leader of the House recall that on Wednesday of last week the Report of the Select Committee on House of Lards Reform was ordered to be printed and that it was confidently expected in that Committee that the Report would be ready tomorrow? I can ascertain no firm date when it will be ready, so may we have an assurance that, in his office as Leader of the House, the right hon. Gentleman will take such action as he can to expedite something which we consider has been rather dilatorily done at the moment?
Mr. Macleod: It is rather difficult for me to reply to that question because, naturally, the House as a whole—and I am in no different position at all—has no official knowledge of this Report, or of a similar Report, until it is produced. But it will be a matter of only a few days and, certainly, it will be printed before we rise.
Mr. Pannell: On a point of order. I put it to you, Mr. Speaker, that the Leader of the House is quite off the beam here. Of course he has official knowledge of it. The Report was laid before the House. The Select Committee has finished with it and the House has ordered it to be printed. It is, therefore, the business of the Leader of the House to make inquiries. That is all I am asking him to do. I am merely asking when the Report is likely to be available. I have pointed out the dilatory nature of this business and the fact that it is at

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variance with the understanding we had. I merely asked the right hon. Gentleman to do something about it.
Mr. Macleod: I shall be very glad to look into this matter. So far as the almost constitutional point which the hon. Member makes is concerned, I am not sure that I necessarily agree with his analysis. Perhaps he will let me study it.
Mr. Driberg: While we are awaiting the statement by the Minister of Defence on his talks with Mr. McNamara, will the right hon. Gentleman try to arrange to have an urgent statement made on Skybolt, which might serve to clarify the situation at the conference in Paris, where, according to a report on the B.B.C. today, news correspondents are being given diametrically opposite and mutually hostile briefings by the British and American spokesmen?
Mr. Macleod: The hon. Member knows that statements on Fridays are always unsatisfactory. That is why I have given an undertaking that this statement would be made during the first day or two of next week.
Mr. D. Smith: Is the Leader of the House aware of the Motion on the Order Paper relating to the distribution of the rate burden? If so, will he consider providing time for a short debate on this subject in the new year, in view of the great importance of this matter to ratepayers?
[That this House, conscious of the necessary changes under the rating revaluation of premises due to come into force in April, 1963, believes that the time has now arrived for the rate burden to be spread more fairly amongst all citizens, for the financing of education to be transferred, by stages, to the national Exchequer, whilst retaining local control, and for a full inquiry into possible new methods of raising revenue for local government services.]
Mr. Macleod: At the moment I am dealing with the business before Christmas.
Mr. M. Foot: In support of what was said by the hon. Member for Cardiff, South-East (Mr. Callaghan) about a statement by the Minister of Power on the proposed, or suggested, take-over in the
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steel industry, would the Leader of the House urge very strongly upon the Minister of Power that he should make a statement about this most sinister possibility as early as possible during the week?
Will he also tell us when he proposes to take the Motion for the Adjournment of the House in case, by any chance, the Minister of Power has not made his statement prior to that moment?
Mr. Macleod: I understand that it is proposed to take that Motion on Tuesday. On the first point, I am very willing to make representations or to inform my right hon. Friend of the representations that have been made in the House, although, clearly, it is for him to decide whether he should make a statement or not.
Mr. Warbey: Could the Leader of the House tell us when he proposes to arrange for a debate on the Motion standing in the names of several right hon. and hon. Members on this side of the House, calling for a Select Committee to inquire into the conduct of the Government during the Cuban crisis? Is it not time that we had a debate to examine how the Government betrayed the people of this country during that period?
[That this House, noting the statement of the Foreign Secretary that, during the height of the Cuban crisis, the world was faced with the prospect of nuclear war; noting also the statement of the Prime Minister that at the climax of the crisis he assured President Kennedy of the full support of the British Government, thus exposing the people of Britain to the danger of annihilation without representation; calls for the appointment of a Select Committee to investigate the conduct of the Government in relation to the Cuban crisis, with particular reference to the working, during this period, of the arrangement for dual Anglo-American control of United States nuclear bases in Britain and of the general understanding for joint consultation on the use of American or British nuclear weapons anywhere in the world, and to make recommendations on the future use of American nuclear bases in British territory and on the political control of nuclear weapons by the members of the North Atlantic Treaty Organisation alliance.]
Mr. Macleod: I cannot think that that suggestion will be received with much enthusiasm in the House.
Mr. V. Yates: In reference to the disturbances two days ago at Dartmoor, in which five prisoners were seriously injured, may I ask the Leader of the House whether we have to wait until February before we can expect a statement on a disturbance of this nature in a prison?
Mr. Macleod: It is open to the hon. Member to put a Question down, but I will see that his point is conveyed to my right hon. Friend the Home Secretary.
Mr. Dalyell: May I ask the Leader of the House when he will find time for a debate on the Motion concerning the problems of the television industry and unemployment now standing on the Order Paper in the names of some of my hon. Friends?
[That this House, in view of the dismal propects for television manufacturers and component makers in areas of unemployment in the United Kingdom and in view of the fruitful research being carried out at the Mearnskirk Thompson Institute into educational television programmes in mathematics and English language for pupils in developing countries of the Commonwealth, urges Her Majesty's Government to present two television sets to each secondary school and one television set to each primary school over the next 16 months in areas of the Commonwealth and Colonies where educational programmes are being transmitted.]
Mr. Macleod: Any matter that affects unemployment will, presumably, be in order in the debate which we shall be having on Monday on an Opposition Motion.
Sir H. Studholme: With reference to the question asked by the hon. Member for Birmingham, Ladywood (Mr. V. Yates) about Dartmoor Prison, may I say that I have put down a Written Question to my right hon. Friend the Home Secretary on that very point?
Mr. Speaker: I should inform the hon. Member for Dudley (Mr. Wigg) that now is the time for him to raise any complaint of Privilege.
Mr. V. Yates: On a point of order. May I take it that what the hon. Member for Tavistock (Sir H. Studholme) has said about a Written Question does not rule out my request for a statement to be made to the House?
Mr. Speaker: Unless I have it wrong, the hon. Member asked a Question of the Leader of the House, to which he made a reply. That is so, is it not?
Mr. Yates: Yes, Mr. Speaker, but, with respect, the hon. Member for Tavistock has referred to the fact that he has put down a Question for Written Answer. This cannot be discussed in the House, and I am asking whether the Leader of the House will arrange for a statement to be made in the House next week on this major disturbance in the prison?
Mr. Speaker: I thought that that was the Question which the hon. Member had asked, and that it had been answered. The hon. Member for Dudley (Mr. Wigg) will be in order now in pursuing the matter which he raised with me.

QUESTION OF PRIVILEGE
Mr. Wigg: Since raising this question with you, Mr. Speaker, I have endeavoured to communicate with the hon. Member concerned about this. I told him that I would put a supplementary question. I have put the question to you, and I suggest that the matter must now rest in the hands of the hon. Member as to whether he wishes to raise the matter as a question of Privilege. All that I sought to do was to protect his rights, in view of the way in which the matter was dealt with this afternoon.
Mr. Speaker: Without expressing any view about rights protected or anything else, I will rule upon it, probably taking 24 hours to do so, if and when it is raised.

ORDERS OF THE DAY

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) (SCOTLAND) BILL
  Order for Second Reading read.
  3.56 p.m.
  The Secretary of State for Scotland (Mr. Michael Noble): I beg to move, That the Bill be now read a Second time.
  I am very glad to rise to move the Second Reading of a Bill which provides for the continuance of the Exchequer equalisation grant to Scottish local authorities and improves its distribution, and, at the same time, sets a limit to the extent to which the Exchequer—that is, of course, the taxpayer in general—has to make up the uncontrolled deficit on housing accounts which many Scottish local authorities incur. Without this Bill, the payment of Exchequer equalisation grant in Scotland would have to cease from 15th May next year. With the Bill, we shall be able to go on paying it according to principles long established, and, so far as I know, accepted by local authorities.
  For some years after the principle of Exchequer contribution towards the rating resources of the poorer authorities was established in 1948, successive Governments had to cast around for a fair distribution of the grant available, as between England and Wales on the one hand, and Scotland on the other. In 1956, we arrived at a formula which I believe has commanded general acceptance ever since. This fixes the total grant at such a figure that if the expenditure per head of weighted population in Scotland were the same as in England and Wales, the amount to be paid out of rates after grant has been paid would be the same per head of population in both countries. We thereby ensure that local authorities in Scotland and in England and Wales with similar financial resources and responsibilities get the same amount of grant.
  Let me make it quite clear that the Exchequer does not set out to equalise the actual amount of rates levied by local authorities in the two countries; this, under the system of local government, which we all wish to maintain, is a matter for each local authority to decide
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  for itself in the light of local circumstances, under any guidance or limitations that may be imposed by Statute. And this is where the problem arises. Once the percentage of grant which a local authority is to receive has been determined under the agreed formula, be it 5 per cent. or 55 per cent. the Exchequer at present contributes to all the authority's finances in that proportion, Thus the Exchequer pays part of the cost of housing deficits as well as all other services. Where a local authority's housing deficit is magnified by the charging of rents well below what their tenants are able to pay, it is entirely unreasonable that the general taxpayer, through the Exchequer, should be expected to contribute in the same proportion as he contributes towards the cost of the rent of the local authority's services.
  This seems to me a perfectly fair proposal. It reduces the grant income of local authorities by much less than the figures given in the P.A.C. report—in-deed by £900,000 in 1963–64. But we must draw a line where the contribution is swollen by unduly high deficits arising out of a misguided rent policy.
  This is the situation which was examined by the Committee of Public Accounts in Session 1960–61. In plain language its Report observes that, if rents are unduly low, housing deficits and expenditure ranking for grant are correspondingly greater, and that rental income in Scotland, as a proportion of housing costs, is less than half that in England and Wales, while the rate contribution is more than double. In consequence, and notwithstanding the very considerable total of regular housing subsidies paid by the Exchequer, a substantial proportion of equalisation grant reflects housing deficits. In 1958–59 some £2·4 million out of grants totalling £13·7 million paid to 78 major authorities arose in this way.
  The House may be interested to know that in 1961–62 the corresponding figures were £2.7 million out of the grant of £14.4 million which these 78 authorities received. Finally, the Committee came to a conclusion which is sufficiently brief and straightforward to quote in full. It said:
  "Your Committee are concerned at the extent to which housing revenue deficits resulting from low rents are met by the Exchequer

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  under the present statutory formula for calculating Equalisation Grant. The formula is due to be reviewed before May, 1963, and they accordingly recommend that early consideration should be given to the exclusion from the calculation of Exchequer Equalisation Grant of housing deficits which are due to the charge of unreasonably low rents."
  This is the Report of a Committee of this House. It is not a Report with any political bias. If the Government had failed to bring in a Bill to meet the recommendations of the Committee, the House would have been entitled to ask the reason. In accepting the recommendation, and giving effect to it in the present Bill, the Government have in mind that the question of the proper level of council house rents is not a question of rich against poor—
  Mr. Thomas Fraser: The right hon. Gentleman says that he is giving effect to a recommendation of a Committee of the House, but, in the Bill, is it not he who is construing what is meant in the recommendation by the expression "unreasonably low rents"?
  Mr. Noble: If the hon. Member will wait for a minute, I will come to that point
  In general, council houses are not allocated on the grounds of the tenants' income. It therefore by no means follows that the ratepayer and taxpayer, who have to make up any deficit in the cost of housing so far as it is not met by rent, are better able to bear the burden than the tenants. In fact, the reverse is frequently true. I fail to understand why maintaining rents at an artificially low level is regarded as a measure of social justice. In reality, it is the subsidisation of one fortunate section of the population by the remainder, without regard to their ability to contribute.
  It is not, however, the purpose of this Bill to fix rents. What we have to do is to fix a point beyond which deficits due to low rents will not be partly met by the taxpayer, who has no direct control over the local authority's rent policy, but by the citizens of the area. What standard do we set for this purpose? The Public Accounts Committee did not regard it as its function to suggest precisely what standard should be applied—and this is, I think, the hon.
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  Gentleman's point—but it did note that if housing deficits for the purpose of calculating Exchequer equalisation grant were restricted to one-third of housing subsidies, the grant would have been reduced by approximately £1·6 million in 1959–60.
  We have not, in the Bill, adopted this method of defining what proportion of housing deficits rank for grant. This is because the amount of housing subsidies received by a local authority depends not only on the number of houses, but also on the years in which they were built, and it would, therefore, be quite arbitrary to limit the deficit to a given proportion of the subsidies. Instead, in the Bill we propose a standard based on the new valuations, which must be regarded as the best current estimate of the fair rental value of houses in Scotland.
  The Bill provides that equalisation grant is ultimately to be restricted to what would have been payable if net rent income—that is, rents less rebates—had averaged 95 per cent. of the gross value of the houses. In the first and second years, however, the assumed average will be 85 per cent. and 90 per cent., respectively. I cannot regard this in any sense as a deduction from the amount of grant which is properly due to Scotland. The Public Accounts Committee has pointed out that certain Scottish local authorities are obtaining more grant than they are reasonably entitled to, and to restrict them to what they ought to get cannot, I suggest, be considered a deprivation. If, in fact, rents are raised to the minimum level embodied in the Bill, there will be no loss of grant under Clause 3.
  I agree, of course, that with higher rent incomes there will be smaller deficits, attracting grant in the ordinary way. But the loss of grant on this score is a relatively small part of the increased rent income. An authority with substandard rents and 25 per cent. equalisation grant, for example, keeps three-quarters of the proceeds of the rent increases.
  For Scotland as a whole, where the average grant is 20 per cent., local authorities would gain four times as much as the Exchequer. Since the object is to prevent local authorities obtaining more grant than they are reasonably entitled to, the Government could not,

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  I think, entertain the suggestion that the amount of grant recovered from them should be redistributed to Scottish authorities as a whole, for by that means Scottish authorities as a whole would be obtaining extra grant due to the low rent policies of some of them a state of affairs which, surely, no one could defend.
  The local authorities which might have stood to gain under such an arrangement will, under the Bill, still get the full amount of grant to which they are entitled under the agreed formula. Under the Bill we are restoring the position to what it would always have been if all local authorities in Scotland had been willing to adopt a rent policy which more equitably distributed the cost of housing between tenants on the one hand, and ratepayers and taxpayers on the other—
  Mr. Hector Hughes: The Secretary of State far Scotland has talked about equitable distribution, but is not the following the effect of the Bill? Certain contracts of tenancy were entered into by local authorities with certain tenants, charging certain rents. The Bill proposes to break those tenancies, reject those tenants, and substitute new rents. In effect, is not the Bill an outrage on the existing law of contract?
  Mr. Noble: The hon. and learned Gentleman raised this same point in the Scottish Grand Committee, but I do not accept his idea on this matter—
  Mr. Hughes: Answer it, answer it.
  Mr. Noble: But for this, the provisions in the Bill limiting grant contribution due to low rents would never have been necessary—
  Mr. Hughes rose—
  Mr. Speaker: Order. I do not understand the Minister to be giving way. If the Minister does not give way, the hon. and learned Member must not persist in trying to speak on his feet.
  Mr. Hughes: I have asked a perfectly serious and sensible question, Mr. Speaker.
  Mr. Noble: I agree that the hon. and learned Gentleman has asked a perfectly serious question. He also asked it when
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  the Scottish Grand Committee debated the principle of the Bill, and was answered by my hon. Friend.
  But for this, the provisions in the Bill limiting grant contributions due to low rents would never have been necessary. To the extent that local authorities realise that unduly low rents are not in the interests of the inhabitants of their area as a whole, these provisions will cease to operate, and their purpose will have been secured.
  In moving the Second Reading of the Bill, I have concentrated on the provisions which have attracted most attention, and which are the specific points covered by the reasoned Amendment, but I cannot conclude without reminding the House that there is much else in the Bill that is of importance to local authorities and ratepayers. In a number of ways, it is designed to effect improvements in the rating and valuation system of Scotland—some of them of a technical nature, but essential, none the less, in the light of experience.
  For these reasons, as well as for the provisions which I have dealt with at more length, I commend the Bill to the House.
  4.10 p.m.
  Miss Margaret Herbison: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill the effect of which is to reduce considerably the total Exchequer Equalisation Grant paid to Scottish local authorities."
  It is not surprising that the Secretary of State devoted all his speech to Clause 3 of the Bill. He was right to do so, since it was because of our strong feelings about the Clause and certain other provisions that we put down our Amendment. After having two mornings on the Bill in the Scottish Grand Committee, we decided that it was imperative, for two reasons, to bring the matter to the Floor of the House.
  In the first place, the Secretary of State, when introducing the Bill, gave a hopelessly inadequate explanation of it. We felt that, at least from that day until this afternoon, he would have an opportunity to get to know his own Bill in order to give us a clear explanation. As regards the Clause with which he

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  dealt, his explanation was certainly clearer, but it has done nothing whatever to convince us that our opposition its not justly founded. In the second place, we have brought the matter to the Floor of the House because we opposed so strongly certain provisions of the Bill that we felt we ought to register by vote our protest against it.
  The Bill is called the Local Government (Financial Provisions) (Scotland) Bill. Its effect will be to put local authorities in far worse financial straits than ever before. Indeed, many of them do not know now how they are to finance all the projects which they must carry out because of the duties already put on them by legislation.
  The rubric to Clause 3 reads:
  "Reduction of Exchequer Equalisation Grants in respect of low rent income."
  If I heard the Secretary of State aright, he said that this would amount to £934,000, almost £1 million, in one year.
  Mr. Noble: To keep the record straight, it is £900,000.
  Miss Herbison: It is close on £1 million by which the local authorities will be worse off compared with their position today, which is difficult enough.
  The right hon. Gentleman said that he could not understand how we on this side could regard unreasonably low rents as social justice. We have never said that unreasonably low rents had anything to do with social justice. It is wrong for the right hon. Gentleman, after our view was made clear in Committee, again to trot out that old "red herring". Does the Secretary of State regard the high interest rates imposed on local authorities for housing, for school building, and for all other purposes, as social justice? Does he regard as social justice the heavy burden which many ill-off people in Scotland have to carry in rates because of high interest charges? We have a right to ask him to answer that question.
  I tell him again, as he was told in Committee, that few, if any, hon. Members on this side are opposed to the payment of reasonable rents. It all depends on what is meant by reasonable or unreasonable rents. The right hon. Gentleman tells us that the recommendation
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  of the Public Accounts Committee was against unreasonably low rents. Is he sure that the rent which he will require under the provisions of Clause 3—85 per cent. of gross annual value, 90 per cent. the following year and 95 per cent. thereafter—is reasonable, particularly when one considers the different valuations throughout Scotland? The gross annual value of a house, say, £54, in one area which he would regard as the basis for a reasonable rent might be only a little over £30 in respect of an exactly similar house in another area. How is that to be reconciled with his requirement for reasonable rents? I have said that few, if any, of my hon. Friends are against reasonable rents, but I think that I can safely say that not one of my hon. Friends is ready to accept the dictatorial methods of the Secretary of State on the subject of rents.
  In Committee, on 27th November, the Secretary of State said at the beginning of his speech:
  "A healthy system of local government is an essential part of community life today. This means that local interest, local initiative and local responsibility must be reconciled with Exchequer financial support of local authorities on a massive scale."—[OFFICIAL, REPORT, Scottish Grand Committee, 27th November, 1962; c. 5.)
  The Government have decided that the Exchequer financial support of local authorities shall be decreased wherever possible and as much as possible. There is no doubt about that. What the Secretary of State or any member of his Government says about local initiative and local responsibility is a farce, not only because of the provisions of this Bill but because of the provisions of previous Bills. The Government have taken from the local authorities in quite a number of fields the initiative and responsibility which they should have.
  By the Housing (Scotland) Act, 1962, the then Secretary of State took powers to impose on every local authority in Scotland any level of rents which he wished to impose. I put this question to the present Secretary of State. Since he already has those powers by Statute, why is he asking for the powers in Clause 3? I can make a good guess, and it will be the guess of anyone who has studied the matter. At the last General Election, Scotland showed very clearly that it wanted none of this Government. Their record since 1959 has

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  proved disastrous for the Scottish people. If the Secretary of State were to use the power which he has under the Housing Act to increase rents, Scottish people would see clearly that it was he and his Government who were responsible for, perhaps, unreasonably high rents being charged.
  Some time ago the Secretary of State was appointed as the boss of the Scottish Unionist Party, because it was hoped that he would retrieve the Conservative Party's fortunes in Scotland. There is no sign of its fortunes being retrieved in Scotland rather the opposite. Now, as Secretary of State, he realises that if he had used the powers in the Housing Act it would have been too blatant, too easily seen, where the responsibility lay. He therefore resorted to the hole-and-corner method set out in Clause 3 because he thought that it would be more difficult for local authorities in Scotland to get over to the electorate where the blame for unreasonably higher rents should lie.
  The right hon. Gentleman has explained very carefully the provisions in Clause 3. If a council's net housing income is less than a certain percentage of the gross annual value of its houses, a deduction will be made. That was stated very clearly by the Under-Secretary of State when he wound up the debate upstairs. He was asked what consideration had been given to the question of rent rebates, and he said:
  "We have allowed for rebates by not prescribing 100 per cent. of gross value as the determining figure."—[OFFICIAL REPORT, Scottish Grand Committee, 29th November, 1962; c. 104.]
  In three years' time the determining figure will be 95 per cent. of the gross annual value. The hon. Gentleman says that this paltry figure of 5 per cent. should take care of all rent rebates.
  It is scandalous for the Government to take that line, particularly in a country like Scotland. Do not the Secretary of State and the Under-Secretary of State know about present conditions in Scotland? Do not they realise that, if every local authority in Scotland were to raise its rents to the gross annual value, it would be necessary to give many thousands of tenants a considerable rent rebate? They do not seem to be aware of that.
  Mr. John Brewis: Would not the hon. Lady agree that many people living in council houses in Scotland could well afford to pay more than the gross annual value?
  Mr. E. G. Willis: Why should they pay more if that is the fair rent?
  Miss Herbison: The Government have said that the purpose of the Bill is to ensure that people in Scotland pay the gross annual value. That is what we are dealing with in the Bill. I am dealing not with people who might be able to pay more but with people who will definitely not be able to pay any thing like the gross annual value.
  Let me say a few words about these people. Take the old people in council houses. The majority of them have to be housed by the county councils and town councils. I am very proud of what our local authorities have done in housing our odd people. It is a joy to go into their two-room houses, with modern kitchenettes and bathrooms, but very few of the old people occupying those houses could afford to pay anything like rents which will be asked for under Clause 3.
  What will be the position of the 94,000 unemployed people in our country living on a miserable pittance compared with the cost of living. The Government may say, "They can go to the National Assistance Board, which will pay their rents." But not all of them get money from the Board. It is of the greatest importance that local authorities should consider what rent unemployed people can afford to pay.
  We have a large majority of low-wage earners in Scotland. My hon. Friend the Member for Paisley (Mr. J. Robertson) gave some figures when we were discussing the Bill upstairs. For another occasion, I looked up the average earnings of people in the Midlands, in London and in the south of England. We are always having thrown at us the rents that people in England pay for council houses compared with the rents that people in Scotland pay for council houses, but never do the Government take into account the very big gap between the average earnings of people in England and the average earnings of

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  people in Scotland. Earnings play a very important part in considering what a person can afford to pay in rent.
  If we want a low-wage earner with a wife and family of small children to have all the benefits of living in a good council house, the only way that they will be able to enjoy those benefits will be through an adequate rent rebate scheme operated by the local authority. I am proud of what our local authorities have done in housing our old people, although it is not nearly enough because of the high interest rate policy of the Government. I am also determined that every young family in Scotland should have a decent house in which to live which they can make into a fine home. If the Government's policy as outlined in Clause 3 is carried out, it will be impossible for local authorities to operate a good rent rebate scheme. I do not know whether we shall be able to do anything about this because of the Money Resolution, but I assure the Government that we shall return to it in Committee.
  We are told that if an authority does not bring its rents up to the amount that the Secretary of State thinks right, it will have a deduction made from its Exchequer equalisation grant. This is the meanest way I have ever known by which a Government enforced their policy on local authorities in Scotland. Where is the money going to? It is not being used for other purposes in Scotland. It is being sucked back into the Chancellor of the Exchequer's coffers. Every penny that local authorities can possibly get from taxation is necessary for the job that needs to be done in their areas, even to give them a facelift. I know about this in my own constituency. We have had the Toothill Report and other reports about what should be done to attract industry to Scotland. But everything that the Government do is another step towards making it impossible to achieve that object.
  I now come to Clauses 8 and 9, which deal with the weighting of population. On 29th November, the Under-Secretary told us that
  "Although these areas have heavy commitments by way of schools, water and sewerage schemes and so on, their rating resources are rising through the building of new houses and
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  other properties. It was therefore felt that the weighting for increased population should be halved, so halving the extra grant, which would allow a special weighting to be given for the first time to certain areas of decreasing population."—[OFFICIAL REPORT, Scottish Grand Committee, 29th November, 1962; c. 101.]
  Surely, if the Government felt it necessary, as I think it to be, to give a special weighting—which means extra money—to those areas with a decreasing population, the Secretary of State should have found that money from the Chancellor of the Exchequer rather than use this mean and miserable method of taking it away from other local authorities in Scotland. What a reason to give, that because some areas had a decreasing population and, for that reason, they needed financial aid, the Secretary of State and the Government look around and say "Where can we get this extra money that we feel is necessary? Not from the more equitable form of taxation. We will go to other local authorities"—which, I again stress, are financially hard-pressed— "and we will take tram those local authorities the money to give to the others." So often do the Government rob Peter to pay Paul, filching much-needed finance from local authorities.
  My own County of Lanark will lose £246,264, nearly £¼ million, under the provisions of the Bill and Midlothian will lose £146,137. These are two important local authorities who need to attract much more industry to their areas, local authorities who, if they are to do that job, must ensure that their areas are made as attractive as possible. Only last week, Lanark County Council decided to do a job which should be done by the Government. I am delighted, however, that Lanark had the "guts" to do it. The County Council decided to build a factory on its own. I wonder why Lanark did not apply to the Government?
  Mr. James Dempsey: They would be wasting their time.
  Miss Herbison: The reason for not coming to the Government is that if the Board of Trade gets its hands on anything, the delay is so long that the industrialists who wanted the factory might have gone elsewhere. Therefore, Lanarkshire will do the job itself. I could not praise Lanarkshire highly

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  enough for doing it. This, however, will take more money to build something that the Government themselves should be doing, and yet it is that kind of authority which, by the provisions of the bill, will lose £¼ million. Other local authorities who are also much in need of work will be in the same position.
  These two provisions of Clause 3 and Clauses 8 and 9 are miserable. They show the attitude of the Government to local authorities. They show that the Government simply do not have a clue about Scotland's needs. They show that the Government have no idea how our Scottish people are having to live. The sooner not only these Ministers disappear, but the Government disappear, the better it will be for Scotland and our Scottish people.
  4.35 p.m.
  Sir John Gilmour: In supporting the Second Reading of the Bill, I should like to point out that to my mind any charge against the Government that they are not looking after the interests of Scottish local authorities is not well-founded. Over the last ten years, the proportion of help which the Government have given to local authorities has risen from 36 per cent. to nearly 44 per cent. That does not show that the Government are in any way unaware of the growing need for help which Scottish local authorities undoubtedly have, as do local authorities in England also.
  I am certain that progress has been made over the last ten years in the amount of help from the Exchequer to local authorities. It may be that in future we have to do more. I for one would be happy, for example, to see a change so that the whole of teachers' salaries should he paid out of the Exchequer instead of being proportionately paid by the ratepayers. Undoubtedly, over the coming years, the cost of education will rise and the burden falling upon ratepayers will increase. This is something which it will be necessary for us to consider.
  The Bill deals with the immediate job that was necessary of extending the Exchequer equalisation grant, as has been agreed by the working party, and that is the basis behind it.
  Mr. Willis: It does not extend it, it reduces it.
  Sir J. Gilmour: No. The total amount to be paid is still increasing and is likely to increase in future. It may be that in certain circumstances, under Clause 3, it could be reduced if people do not do certain things, but this is not of necessity a Measure which sets out to reduce the help that the Government are giving.
  Mr. T. Fraser: Did the hon. Member not listen to his right hon. Friend, who made it abundantly clear that whether local authorities did the right thing or not, they would lose?
  Sir J. Gilmour: They will not of necessity go on losing for all time.
  Mr. Willis: Scotland will lose it.
  Sir J. Gilmour: I certainly welcome the provision—
  Mr. William Baxter: Apparently, the hon. Member does not understand that the local authorities' total grant will be reduced by at least £900,000. Does not this have a bearing on the logic of his argument? He seems to have based himself upon a false premise in thinking that the grant for Scotland would be increased when it will be reduced. Surely, that must considerably alter the hon. Member's point of view.
  Sir J. Gilmour: The total amount by which the Government are helping local authorities is not being reduced. The proportion of the help given by the Government in general is increasing and has increased over the last years.
  Mr. Ross: No. The formula is exactly the same.
  Sir J. Gilmour: I agree that the formula for the Exchequer equalisation grant is being continued.
  Mr. Dempsey: According to local authority budgets during the last financial year, local authorities are paying much more of the costs of local services than they were in the past while the Government's contribution is much less.
  Sir J. Gilmour: I do not agree with that interpretation. I am certain that over the last ten years the proportion which the Government have paid is on

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  the increase This point can no doubt be explained by my hon. Friend.
  I also welcome Clause 2, because by transferring to the penny rate product it protects those authorities which might otherwise suffer under the mandatory relief, which we introduced last year in the Local Government (Financial Provisions, etc.) (Scotland) Act, for certain schools, charities and other things. But there is no doubt that the debate centres round Clause 3, and surely the question is not whether rents should be increased but to what level they should be increased.
  One trouble is that the figures available for all the significant local authorities rents are some 9 or 10 months out of date. The figures were published last February. One can see from them wide discrepancies between rates in different parts of Scotland with comparable circumstances of employment and wages. It is for that reason that the Government's action in trying to make certain that a fair level of rents is achieved is in the interests of the ratepayers of Scotland as a whole.
  We have the responsibility, as elected representatives, to look after the interests not only of those living in council houses, but of those who live in other houses whose rates are heavier because certain people are not paying their share of a burden which is not spread equitably. Clause 3 seeks to spread the burden equitably, and it should be supported.
  My own county, Glenrothis, has 3,000 houses, 475 of which at the moment are subject to rebate, the rent being about £43 and the rebate £10, bringing the rent down to £33. At the same time, in the county of Fife, rents are around £18. It is this sort of discrepancy which gives rise to the argument for an equitable spread of the burden.
  Mr. Ross: How much have the landlords of Fife been relieved of rates in the last few years? Who is paying their rates now for them?
  Sir J. Gilmour: I do not know whether the hon. Gentleman means landlords of agricultural property, but recent changes in rates have meant that farmers are paying a higher rate burden than they used to.
  Mr. Ross: I did not think that my enunciation was so very poor that any-
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  one could think that I said farmers. I referred to landowners.
  Sir J. Gilmour: Probably they all come under the same umbrella. If they own houses which were previously derated then they are now paying rates at a higher level. I myself am paying a considerably greater proportion of rates than I did 4 or 5 years ago, so that I am making a bigger contribution, as are my neighbours, than in the past.
  Mr. Ross: It is not true.
  Sir J. Gilmour: I can show the hon. Gentleman the figures if he is interested.
  Miss Herbison: If the hon. Gentleman is ready to show those figures, it would also be interesting for him to show us how much he gets in farming subsidies to help him pay the rates.
  Sir J. Gilmour: That is another question, dealing with support for the agricultural industry in general. The hon. Lady said that the local authorities will be in far greater financial straits, but I think that the ratepayers will be in far bigger financial straits unless Clause 3 is included in the Bill. This is the only way in which we can get an equitable spread of the burden among all householders, whether owner-occupiers or tenants of houses owned by local authorities or private individuals.
  Clause 5 makes a reduction of, and eventually irons out altogether, the transitional grants which were given after the last review. It seems to me that there have been some very violent changes in the Exchequer equalisation grant as a result of the recent revaluation, and there is some case for cushioning for authorities which have had a very sudden change brought upon them. The second part of the Bill will perhaps not cause so much excitement in Committee as the first part.
  On the other hand, it is fair to point out that Part 2 brings certain amendments to the Rating and Valuation (Scotland) Act, 1956, and that there are various points, particularly affecting Clause 18, which might have an effect not only on me as a farmer—and I declare my interest here—in the question of rate payment on agricultural houses standing empty, but also an effect on local authorities with houses standing

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  furnished and unlet and on which they are not receiving rates.
  What effect will all those have on the tourist industry? Should Government aid be used as an encouragement to those whose premises are used only on a seasonal basis but who pay the full quota of rates over the whole year? These and many other questions will be discussed in Committee, but I welcome the Bill in general. I am certain that my right hon. Friend is right in tackling the question in Clause 3, and I support him wholeheartedly.
  4.46 p.m.
  Mr. William Baxter: Like my hon. Friend the Member for Lanarkshire, North (Miss Herbison), who spoke so eloquently, I condemn this Bill as a very foolish Measure to bring before the House at this time. In various areas of Scotland we have such terrible conditions, especially high unemployment, that to reduce the grants of an area such as Lanarkshire by approximately £250,000 can only have a terrible effect upon the outlook of the people.
  Mr. John Brewis: The Exchequer equalisation grant for Lanarkshire in 1961 is up by £750,000.
  Mr. Baxter: Under Clause 8, the position is clear that Lanarkshire will lose a considerable sum of money and that this will have a very considerable effect on the general well-being of the area. This is not the only area having a big loss put upon it. If any Act of Parliament in any way undermines or impairs the well-being of a section of the community, then hon. Members who support it are not doing a service either to themselves or to Scotland. This measure is very bad for Scotland as a whole.
  Two of my colleagues, my hon. Friends the Member for Paisley (Mr. J. Robertson) and Glasgow, Craigton (Mr. Milian) made very important contributions in the Scottish Standing Committee on this subject. Their facts and figures have not been answered. I believe that they were correct. If they had not been, the Government would have denied them.
  In local government we have always had great difficulty when discussing the
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  grants that were to be paid out to local authorities. We never could find out the basis of the Goschen formula in order to forecast with any degree of certainty what the equalisation grant would be. We now have some idea of what we are to get in the not too far distant future, but that is to be based on the wrong assumption that the past is the proper basis of making the calculations.
  The Government are imbued by one spirit alone, and that is to increase the rents of local authority houses, they propose to alter the fundamental grants that are to be paid to Scotland. I say to the Minister that the wrong way to legislate for a country is to be bigoted or biased against one section of the community. It may be that we should give some serious consideration to the rent structure of local authority houses, to the rent structure of privately-owned houses, and to the many excellent people who provide their own cottage or bungalow, but I think that the whole question of rents and of the valuation of property should be looked at from an unbiased point of view and not in the manner in which it is contained in the Bill.
  I think everyone would agree that a reasonable rent should be paid for local authority houses. But what is the basis of a reasonable rent? Should it be based as contained in the Bill, which the hon. Member for Galloway (Mr. Brewis) seeks to support, on 100 per cent ultimately of the valuation of the property, which the district valuator, as an independent man, has decided to value at £x? The hon. Member for Galloway says that there is nothing wrong in asking the tenant of a local authority house to pay £x plus. Would any hon. Member buy a motor car knowing that the value of that car was £x and, because he is able to afford more, pay £x plus? It would be ludicrous. He would be paying cash down in all probability because he could afford to and get discount on the £x value. The hon. Member for Galloway has no right to ask or expect people to pay more than a proper valuation for their property.
  Mr. Brewis: If there is a very rich man, why should he not pay an economic price for his motor car and for his house?
  Mr. Baxter: There may be some justification for an economic rent, but there

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  simply cannot be any justification for a plus on the economic rent. There may be an argument for that, and the hon. Member is entitled to produce it if he so desires, but so far as I can see the question of rents of council houses should have been taken on a different basis and taken completely outwith the ambit of party politics. I think we all agree that we are entitled to pay the proper value for any particular commodity which we buy or use.
  How can we get a fair and equitable way of working this great problem of housing? I think we must do three things. We must look at council houses, special housing association houses and owner-occupied houses as one group. I do not think it is right that even the tenant of a privately-owned rented house should be called upon to pay more in rent than the actual valuation of the property. Neither do I think that the owner-occupier, in bad days, should be called upon to pay the full amount of rates or the full amount of Schedule A tax. There should be methods adopted whereby all sections of the community can get relief when it is necessary owing to their own personal circumstances.
  This Bill goes along the old stereotyped way. Even in rent rebates it says that the only people who will get rent rebates and who will contribute to rent rebate schemes will be the tenants of council houses. That is fundamentally wrong. I think that all sections of the community who contribute towards the well-being of the community in rent and rates should have the right not only to contribute to rent rebate schemes but also participate in them. I do not see why an elderly woman—a widow for that matter—staying in her own private house and who falls on bad circumstances should not be able to get some relief in the same way as a local authority. Neither can I see why a person staying in a rented privately-owned house should not get something.
  I would have liked the whole question of rents and valuations to be considered separately with a view to producing a scheme equitable to all sections of the community, but the Government have not sought to do that. I do not want to labour the point beyond saying that theirs is the wrong approach to a very difficult problem.
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  I know that many of my hon. Friends will not entirely agree with what I am now about to say. Clause 10 deals with derating. It is possible that derating will go by the board in a few years. Speaking as an individual, with some experience of business practice and procedures, I think that this is not the appropriate time for an alteration in the basis of the rating of industrial establishments.
  It is fundamentally wrong to put greater obstacles in the way of industrialists setting up factories in Scotland. We will be at a great disadvantage compared with Northern Ireland where 100 per cent. derating is in operation for an indefinite period of time and where one-third of the cost of equipping a factory is paid by the Northern Ireland Government. Northern Ireland at the moment may find its unemployment figures fairly high, but at least it holds out some hope that industrialists will come to Northern Ireland. In Scotland, on the other hand, we are putting obstacles in the way. On the one hand local authorities are prepared to build factories out of the rates to get industrialists to come to their areas and on the other hand we are putting up obstacles by doing away with the system of derating.
  If it were left to me, I would have no hesitation about encouraging industrialists to come to Scotland by giving them a long period free of rates and encouraging them to re-equip their factories. The lifeblood and stability of our country depend on nothing but its economic wellbeing and that we cannot have without industrial expansion. It is tragic that we should argue with two voices, one in favour of encouraging industrialists to come to Scotland and the other advocating putting obstacles in their way.
  I know that my hon. Friend the Member for Glasgow, Central (Mr. McInnes) has said that he knows of no industrialist who has found himself in difficulties, or been forced out of business, by his rates. That may be so, but it is the culmination of many small things which make the great problem, and it was the straw which broke the camel's back. Many people in industry do not know clearly and precisely and in great detail why they have had to go out of business, or why they have not developed their industry in a particular area. Scotland's

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  industrial development should not be impaired by one iota by taxation at the present time. If we are not to have industrial survival, many of the people now paying rates may be called upon to pay a greater price, a still higher rate of unemployment unless something is done, and that would be a great tragedy.
  I have an interest in the farming community, which receives subsidies. Subsidies can be good or bad, but the subsidies paid for housing are very good and I would like them to be extended to include people seeking to build houses for their own occupation. The whole basis of subsidies should be reviewed on a broader and much richer basis. Those who disagree about the subsidies paid to agriculture should remember that many of our industries on which our livelihood depends receive hidden subsidies in the form of tariffs. The purpose behind the subsidy paid to agriculture—although it may be violated at times, and perhaps the system might be altered to the benefit of all—is to give the people food at reasonable cost.
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): I am sorry to interrupt the hon. Member for West Stirling-shire (Mr. W. Baxter), but I feel no doubt that he is now going beyond what should be discussed on this Amendment.
  Mr. Baxter: One is sometimes tempted into the greater realms of other subjects. I thought it right to put on record the purpose of subsidies and to discuss whether the Bill will make a substantial contribution to our country's wellbeing.
  Mr. Willis: On a point of order. You will be aware, Mr. Deputy-Speaker, that Clause 14 deals with an extension of agricultural derating.
  Mr. Deputy-Speaker: Yes, I appreciate that it deals with agricultural derating, but I thought that the hon. Member for West Stirlingshire was going too far, and I directed his attention accordingly.
  Mr. Baxter: I appreciate your efforts, Mr. Deputy-Speaker, to keep me within the bounds of propriety. I am further grateful to my hon. Friend the Member for Edinburgh, East (Mr. Willis) for keeping me in order. I am between what
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  might be called the devil and the deep blue sea. [HON. MEMBERS: "Who is the devil?"] It is for each hon. Member to make his own assessment of that.
  We have paid subsidies in one form or another to industry and agriculture for a specific purpose and with our eyes open. It is true that agricultural houses are subject to full rating, but it would be a tragedy if we started to interfere with the present system of not rating land. The economic wellbeing of Scotland might be irreparably damaged if we levied rates on the land from which we get our food.
  Mr. T. Fraser: I do not want to quarrel with what my hon. Friend is saying about the rating of agricultural land, but will he say what he thinks of the proposition that the rates on farm buildings should be like those on any other buildings?
  Mr. Baxter: Agricultural buildings, like buildings associated with any industry or manufacturing process, should be absolutely free of rates. However, that does not go far enough in explaining the sequence of things. The tragedy is that in the Scottish Committees we are considering various aspects of local government without having a clear picture of the whole. I am not in favour of even the subsidies which are paid for houses, but I am in favour of a proper minimum income for all Scotland's people. That goes far beyond what is contained in the Bill, and I am trying, as I have tried on numerous occasions, to point out that the picture of Scotland's wellbeing is being distorted by small and insignificant Bills such as this without a proper picture of what we are trying to do.
  We ought to have a clear idea from the Secretary of State about what his aims and objects are and what he wants to see established in Scotland. He should have a clear concept of the road which he seeks to travel and not a hash of bits and pieces of legislation which do not fit into one whole. Scotland's economic wellbeing is essential if Scotland is to survive the immediate future. I make the simple suggestion that the whole economic planning of Scotland should be remitted to a Committee of the House

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  for investigation and inquiry and recommendation about its development of not only local but national government in Scotland for the years which lie ahead.
  5.9 p.m.
  Mr. John Brewis: The hon. Member for West Stirlingshire (Mr. W. Baxter), as usual, has made an interesting speech, and I found that there was much with which I could agree in his brand of Socialism.
  Mr. Ross: As one farmer to another.
  Mr. Brewis: Scottish industry has 50 per cent. derating for a few years yet, and we hope that the Bill will be an incentive to industry to come to Scotland.
  I should like shortly to bring the discussion back to the question of rents of council houses with which Clause 3 is concerned. Here I feel that there are in a way two worlds. There is the occupier of a council house in a low-rent district who finds himself in a very advantageous position. His rent is low, and to a certain extent it is made up for him by Exchequer subsidies and by rate deficiency subsidies.
  Mr. Willis: He pays higher rates.
  Mr. Brewis: He pays higher rates, and it goes round and round in a circle. Then there is the occupier of a privately-owned house who has to make up by extra rates the deficiency in the rent of a person in a low-rent council house. In Stirlingshire two years ago that amounted to a rate of as much as 13s. 5d. to make up the deficit on the housing account.
  Mr. John Robertson: Does the hon. Gentleman realise that in most of the industrial boroughs council tenants pay by far the largest proportion of rates? Perhaps I might quote Paisley as an example. Council tenants account for 50 per cent. of all households, but they pay 63 per cent. of the total rates.
  Mr. Brewis: There is still a deficiency on the housing account which must be made up pro tanto by those living in other than council houses. This does not seem to me to be social justice, because it means that people are anxious to become tenants of council houses and that waiting lists become inflated as a result. Also, it severely discourages owner-occupation. Builders are not pre-
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  pared to build new houses because they know that the level of rates is such that people are not prepared to pay the economic rent for the new houses being built. Similarly, it discourages another form of enterprise which has done very well in England, namely, housing associations which have built many houses in England. In Scotland practically none has been built under this scheme.
  What we have to realise is that really there are two different rents, and that we must not confuse them, which is what the hon. Member for West Stirlingshire did. There is the economic rent which a new house needs to cover the capital cost. This might be as high as £128 a year, and taking Scotland as a whole I think that the figure is between £70 and £85 a year. Then there is the rent which is fixed under the Rating and Valuation Act by an independent assessor from the Inland Revenue.
  Mr. Ross: Not in Scotland.
  Mr. Brewis: I think that in Scotland he is appointed by the local authority. Under the 1956 Act he is duty-bound to fix the gross annual value at what may be said to be a reasonable rent, taking into account the district and the circumstances of the house, but not taking into account the circumstances of whether the tenant is a rich man or a very poor one. As to the amount which can be said to be a reasonable rent, we have there an independent person fixing the gross annual value.
  Much has been said in comparing the rate of wages in England and Scotland. Rather less has been said in comparing the pre-war rents in Scotland with rents today. I understand that the pre-war average, taking council houses as a whole, was about 5s., and that today it is about 8s. 8d. or 9s., though perhaps the figure has risen slightly since the last review was made some months ago.
  Mr. J. Robertson: The hon. Gentleman really must do his homework better. Does not he realise that the pre-war rent included that part of the owner's rates which was transferred in 1956? The hon. Gentleman cannot make this comparison. He has not read the most recent report on rents which shows that in October of this year the average rent was 11s. 10d. This is a considerable increase over the figure of 8s. 9d. which he gave.
  Mr. Brewis: I am glad to accept the hon. Gentleman's figures, because he is usually extremely accurate. However, the rise in rents from the pre-war figure to that of today is nothing like the rise in total incomes in Great Britain as a whole. These have risen by 394 per cent. since 1938, and wages and salaries have gone up by 443 per cent.
  Mr. Ross: In Great Britain.
  Mr. Brewis: Yes. I agree that wages in Scotland are considerably lower than in England. In Committee the hon. Member for Paisley gave a figure of 17 per cent., so even on that basis incomes have gone up about three and a half times while rents have risen by nothing like that amount.
  Turning now to the subject of Clause 3 and the Exchequer equalisation grant which may be taken back if local authority rates do not reach the formula set out in that Clause, it must be remembered that the Exchequer equalisation grant used to be weighted population plus 25 per cent. which gave Scotland comparatively more than England. In 1955 it was altered to weighted population plus 38 per cent. I am ready to agree that for various reasons Scotland may need a bigger proportion of Exchequer equalisation grant than England and Wales. but if so I think we should put our cards on the table and say that we want a bigger proportion than we are getting, and set out our reasons. I do not think that we should try to get a bigger proportion of the grant by what I might call the back-door method of not raising the rents of our council houses to what is fixed by the assessor as a reasonable amount.
  Mr. Bruce Milian: Do I understand the hon. Gentleman to say that we were getting the same Exchequer equalisation grant as England and Wales plus 38 per cent.? That is not so at all. Is that what he said?
  Mr. Brewis: If the hon. Gentleman looks at the second investigation of the Exchequer equalisation grant, made in 1955, he will find that Greater London was left out of the formula, and that the weighted population of England and Wales, which previously had been 25 per cent., was put up to 38 per cent.
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  before the Scottish proportion was worked out.
  Mr. Millan: Does not the hon. Gentleman realise that the formula used at present is taken from the 1956 Act? This has nothing to do with the 1955 figures at all. The figures he quoted are completely inaccurate.
  Mr. Brewis: Perhaps the hon. Gentleman will have a chance to set it right. I am saying that since the 1956 Act the Exchequer equalisation grant has gone up.
  It has been said today that if council rents did not go up to the gross annual value there would be a loss of about £900,000 to Scotland, but if Scotland put rents up to the gross annual value there would be about four times as much money available to the local authorities. It is said that as a result of that the £900,000 would be lost to Scotland, but this is not necessarily so, because the housing deficits come into relevant local expenditure. If local authorities have more money, there is no reason why the relevant local expenditure on housing should not go up.
  We are told in the Toothill Report that landscaping could be improved, and that repairs to council houses could be improved. For example, I understand that many council houses have side-oven fireplaces which are not very popular. These could be replaced by more modern ones. There are many ways in which council houses could be improved. Then local relevant expenditure would rise, and there would not necessarily be a loss of this money in Scotland. For this reason I support the formula laid down in Clause 4, carrying out the recommendation of the Public Accounts Committee.
  Under Clause 8, Lanark and Midlothian are quite likely to lose considerable sums of money because of increasing populations, but Lanark has already gained £750,000 in Exchequer equalisation grants in 1961–62, and Midlothian gained £147,000 in the same year.
  Mr. Willis: It is rather difficult to keep correcting the hon. Member, but he is forgetting that both Midlothian and Lanark are receiving a greatly increased general grant because of their large educational programmes. Incidentally, they are losing money on those programmes.
  Mr. Brewis: The pamphlet on the Exchequer equalisation grant issued in 1962 shows that Lanark is up by £750,000 and Midlothian—the landward area—has gone up from £272,000 to £419,000. I support the proposal that areas with decreasing populations should receive a bigger grant. In areas where the population is increasing there will almost automatically be an increased rateable value. If a new factory is built there will be an increased rateable value—admittedly at only 50 per cent. On the other hand, the area covered does not increase. In an area of decreasing population the area is just the same. An equal number of roads has to be maintained, and the same interest repayments have to be made on funded debts. In addition, there is the decrease in rateable value.
  Miss Herbison: The hon. Member has said that those areas in which there has been an increase in population provide greater facilities for local authorities to receive more from rating. Does he realise that Lanarkshire is losing about £250,000 because of the growth of population in a local new town, although the expense of providing the new schools, new roads and other amenities has placed a great burden on the county? Rather than having £250,000 taken away, it should have been given something more.
  Mr. Brewis: I am sorry that I missed the point about East Kilbride. Even so, I would have thought that this would have increased the rateable value for Lanarkshire, although it will have the extra expenditure on capital works, such as roads and schools. To that extent I agree with the hon. Lady.
  I hope that my hon. Friend will be able to do something about the distribution of rural water and sewerage grants. A small town of 3,000 inhabitants should not be deprived of a grant merely because it is a burgh, while a bigger village is able to receive a grant under the provisions of the Rural Water and Sewerage Act. I hope that my hon. Friend will be able to give me an answer on this point. A place does not cease to be rural merely because it has 3,000 inhabitants. Many villages in England and Scotland have well over 3,000 inhabitants, but they are still rural.
  5.25 p.m.
  Mr. John Robertson: We have had a repeat performance from the Secretary of State for Scotland. He deigns to address us—I do not know that we are very much better off for what he says, or that we have a greater understanding of the Bill—and then he disappears without listening to any part of the debate. This has happened so often that I am beginning to wonder if it is a new pattern of behaviour.
  I listened attentively to the right hon. Gentleman, and I heard him say that the associations of local authorities in Scotland thought that the present method of calculating the global sum of equalisation grant was satisfactory. At any rate, that was the implication of his remarks. But I remember the associations' working party indicating that it was not content, but that it was prepared to wait until the revaluation had been carried out in England and Wales, and that was the time to take an entirely new look at the question of calculating the global amount. That revaluation has taken place, and this should have been the time for the new look.
  We are told that the present formula has been framed with the intention of ensuring that the rate burden per head of population in Scotland should be the same as in England and Wales, providing that the gross expenditure per head by local authorities is the same. Strangely enough, neither of these conditions is met at the moment by the sums put at the disposal of Scottish local authorities. I do not want to go into the figures again. They are on record, and I have heard no contradiction of them. If they are wrong I would have thought that the Secretary of State would have taken the opportunity of pointing out the fact. He has not done so.
  Surely it is desirable that Scottish local authorities should not be put in a less advantageous position than local authorities in the rest of Great Britain. We are told that there is a basis for dealing with them separately, but I cannot find it. The law is slightly different, but the principle is not. Consequently, the amount of money that ought to be paid out to Scottish local authorities should allow them to spend the same amount as English local authorities, at the same cost to the ratepayers.

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  I say this for the benefit of the hon. Member for Galloway (Mr. Brewis): it is remarkabe that the average weekly amount paid by the tenants of a council house in England, where the average council house has four-and-one-third apartments, is 9s. 9d., as against the 18s. paid by the tenant of a Scottish local authority house, who occupies three-and-one-quarter apartments.
  Another exercise which the hon. Member for Galloway might care to indulge in is this: if he calculated the rent per square foot of house let he would find that the rent per square foot of council house is higher in Scotland than in England. When comparing these things we must compare like with like and remember what we are letting. Figures are bandied about here far too easily.
  One does not need to look at a lot of figures to know that English local authorities are doing much more work than are local authorities in Scotland. The evidence is before our eyes. We can see the new civic centres which have been built, the new roads and the new work carried out by English local authorities—work which is not being done in Scotland. If this work were at a greater cost to the English ratepayer, to the man in a dwelling house, whether privately owned or local authority, one would not complain, but the fact is that all this extra work is being done at a lesser cost to the English tenant than to the Scottish tenant. This is where the Scottish Office has fallen down and let us down badly. It should be its job to see that we in Scotland get a fair share of Government grants, but in fact we have not been getting it.
  As we have been talking about housing, it is worthwhile to point out that there are two other aspects upon which the Government should give us the result of their considerations. The first is the remarkable fact that it costs very much more to build houses whenever one crosses that imaginery boundary somewhere about Carlisle—the Border. Prices immediately jump up, and the extra subsidies which are paid in Scotland on houses do not meet the extra cost of building them. It is no small matter. It amounts to £19 or £20 a year. It costs a Scottish local authority mere than it costs an English local authority
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  to pay for a local authority house, and the extra subsidy does not meet that additional cost.
  Secondly, in the industrial areas of Scotland local authorities, faced with a terrible heritage of private enterprise houses, are building from 40 to 50 per cent. of all the dwellings in their areas. In England the figure is 16 or 17 per cent. A town like Brighton can make a profit from a local authority house with a rent of 25s. per week, but in Scotland we could never do that; 25s. a week would never meet the housing deficit. In England it gives the local authority a profit on its housing revenue account.
  The hon. Member for Galloway spoke about the wealthy man and said that he should pay an economic rent. I do not know many wealthy men who stay in local authority houses, unless he does himself.
  Mr. Brewis: Is the hon. Gentleman aware that in Dundee, for example, local authority tenants include headmasters, company directors, bankers, contractors, civil servants, accountants and municipal officers?
  Mr. Robertson: This is quite so. In my own home town of Motherwell the 1919 houses were let to professional people because the ordinary working people could not afford the rent. This has been true from the time they were built. Rents are even higher now, and they are still the only people who can afford them.
  Mr. Brewis: What is the rent in Dundee?
  Mr. Robertson: I do not know. The hon. Member might have given the information.
  Mr. Brewis: Will the hon. Gentleman let me give it? It is 7s. 6d. a week.
  Mr. Robertson: I will look at this. I shall perhaps find that what is being said is not so.
  I have again read the evidence given before the Public Accounts Committee. It is fantastic how the Committee was misled, and the information given it by the Scottish Office was fantastic. Let us say that the Scottish Office made an honest mistake, but it is still fantastic

  623
  that hon. Members opposite do not recognise that wrong information was given about the level of rents.
  Mr. James McInnes: Will my hon. Friend develop the point about the inaccuracy of the evidence submitted by the officials of the Scottish Office, because I, too, read the Report and I disagree with him.
  Mr. Robertson: The Scottish Office informed the Committee that the difference in earnings was 5 per cent., despite the fact that a month previously the Secretary of State from the Box had given an Answer that it was 8 per cent. Another fact is that it was not indicated by the people from the Scottish Office when comparing rents that these were three-apartment houses which were being built in Scotland, compared with four-and five-apartment houses in England. This might not seem important, but I think it very important. If a man has a four-apartment house in Scotland, he is paying far more that the figure given as an average rent. I have quoted the figure before. In a four-apartment house in Paisley one is paying up to 35s. a week in rent and rates, which is more than the average rent and rates of a four-apartment house in England. We must be careful about this.
  Let us look at the question of wages. We were told that the difference was 17 per cent. This means that the gross wage, the amount at the top of the pay packet, is about £13, and that the man takes home about £11 10s. A man in a four-apartment house, with three children, has to pay rent and rates from his £l1 10s. Any hon. Member who suggests that £2 a week in rent and rates is a reasonable amount of money for that man to pay should try it for himself. It is fantastic. What one sees is that the people in greatest need, those with low wages and large families, occupy the larger local authority houses of four or five apartments. What is the level of rent? We should ask ourselves this question. If we were doing the honest thing the smaller family would pay the higher rent and those in bigger houses would pay less money. If we are considering the question of reasonable rents, we must relate them to income. They should not be related to the housing revenue account.
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  Introducing a housing Bill in 1919, Lord Addison laid down some principles which I think still hold good. The idea of the Government giving subsidies to local authorities to build houses was that ordinary working people should have houses of a standard which otherwise they could not afford. For long enough they have lived in slums. If we are guided by that principle we shall see how wrong the Government are about this Bill.
  5.40 p.m.
  Dr. J. Dickson Mabon: I shall be brief and concentrate entirely on Clause 3. I am extremely disappointed that the hon. Member for Galloway (Mr. Brewis) takes the attitude he does on a matter like this.
  In an intervention during the splendid speech of my hon. Friend the Member for Paisley (Mr. J. Robertson), which was just as good as the speech he made in Committee, the hon. Member for Galloway said that headmasters, civil servants, accountants, and so on, live in council houses. Hence Clause 3. Do I take it that that is the kind of argument which should be made, an argumentum ad hominem, that because headmasters and accountants live in council houses we must have Clause 3? It seems to be arguing from the particular to the general. Because the hon. Member and I may disagree with the level of rents in Dundee, should we twist the arm of every local authority in Scotland?
  What is the sense of all this in relation to Greenock? We do not have inflated waiting lists. I reject that argument which was put forward by the hon. Member. I sit in my "surgery" once a month to see constituents. Half the people who come to me raise matters which are not strictly Parliamentary questions, but questions about the allocation of housing. That happens even though half the population is now housed by the council. Every one is a Socialist in relation to this matter—they all want council houses because they are the only houses they can afford. There is no division of political opinion on this apart from 1 or 2 per cent.
  Mr. Millan: They may vote Tory.
  Dr. Mabon: They may vote Tory at the General Election, but hon. Members opposite do not really represent them

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  because they do not understand how these people live. They do not understand their incomes. I cannot sit and listen to the imposition of these arguments on these poor people without believing that hon. Members opposite are either basically wicked or basically ignorant. I prefer to believe the latter.
  Mr. Brewis: If the rent in Greenock for a council house is approximately £28 and the rent for a non-council house is an economic one, can it be wondered that everyone wants to live in a council house and that no private houses get built?
  Dr. Mabon: That may be an attractive argument from the other side, but no one could build a private house in Greenock or Gourock and be able to let it for rent to the average working man in the town. It is the highly exceptional person, someone with £1,200 a year, who could buy some of the houses being built in Greenock and Gourock at present. We have it on record from some of the best minds in the building societies that they will not take risks on mortgages for people with salaries of under £1,200 a year. Even that must be a very fierce strain for a man with a family of two or three children.
  It may be true that a man with a family in a council house getting a salary like that ought to do the decent thing and rent a house elsewhere or buy one, but that is not what the Bill is about. Under the Bill, the Corporation of Greenock is not to be allowed to lay down its own level of rents without very severe monetary penalties being imposed on it by the Government. The town has been cursed by unemployment for so long and has been losing many of its people year after year.
  I look at that and at the falling wages, with cuts in overtime and with short time working and unemployment going on for more than eight-week periods. At present, I am in active correspondence with the Chairman of the National Assistance Board about how scales are fixed and men who have been regraded are losing money. This is in a town where chronic unemployment lasts for so long that a man is
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  reclassified by the Ministry of Labour and, as a consequence, a wage stop is applied.
  On top of that, this is to be imposed without any right on the part of Greenock Corporation whether Conservative, Liberal or Labour, to be allowed to say that this is the amount of rent which ought to be paid. That is what we object to. The Secretary of State has no right to lay down what should be the rent in any town when he does not understand the problems of the community. Clause 3 says that the average rent in every town ought to be slightly more than the gross annual value, but what is to be the gross annual value? Who assesses it? It is almost metaphysical. The argument is that the rent should be that obtainable in a free market, all other things being equal.
  The present Minister of Health said in 1956 that by 1957 we would have a mathematical equilibrium between supply and demand for houses and, therefore, the Rent Act would be a good thing. Lot us not take this too far. The gross annual value is the keystone of the Rating and Valuation Act, 1956, which should be retitled the "Crude Income Tax (Householders Only) Act." The whole valuation in Scotland has gone completely crazy. Now the Secretary of State is trying to impose this arbitrary mechanism on the lives of decent people who are struggling to earn a livelihood. Some of these are the people I represent in this House.
  We do not have many headmasters, accountants or civil servants living in Greenock. We have honest working people who deserve a great deal more money than they get at present.
  Mr. Millan: What about doctors?
  Dr. Mabon: I embrace doctors in "honest working people". I am surprised that the savage attack on headmasters and others came from the source it did. If I asked my local council to carry out a survey of the incomes of our people, including those with cars and television sets, and so on, would that make any difference to the Government? Not at all. That has nothing to do with whether people should pay fair rents or not.

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  The hon. Member for Galloway talked about an economic rent, but what is an economic rent? At present, this £120 is made up of two parts. Forty pounds is the cost of building and is paid by the tenants and the local authority rate subsidy; the rest is to meet the moneylenders' charges. Thus of the £120, £80 goes in moneylenders' charges. I admit that we have not reached a state of society in which we on this side of the House could argue that there ought not to be any interest charged on publicly-provided houses. Not even Mr. Khrushchev has got to that stage, but the way in which interest rates have gone up under the Government is absolute madness.
  I suggest that this is the trouble in the whole affair. It is wrong for the hon. Gentleman to support a Government which has done all this and say that we must judge the economic rent as being what the moneylenders have to be paid as well as the cost of bricks and mortar and management costs. That is an outrageous argument. I believe in imposing a fair cent and that people would be willing to pay a reasonable rent. But my idea of what constitutes a reasonable rent is not the same as the hon. Gentleman's. I feel that in this matter the Government are going too far.
  I admire my hon. Friend the Member for Paisley and the way in which he has gone into this problem so deeply and revealed many things which came as a surprise to hon. Members on both sides of the House. We on this side knew that we had a good case, but we did not know that it was so strong. The most amazing tribute which my hon. Friend has received comes from the silence of the Secretary of State for Scotland.
  We have not had any of these figures from the Government. One must appreciate how an hon. Member exposes himself if in this Chamber he gives figures so emphatically as did my hon. Friend the Member for Paisley. But we have had no figures or counter-arguments in answer to him. Perhaps I may repeat briefly what he said: Scottish ratepayers pay more than English ratepayers; Scottish council householders pay more than English council tenants; Scottish workers earn less, substantially less, than English workers.
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  These are three important statements which must be refuted by Ministers. Otherwise, they will show themselves simply to be the catspaw of a Treasury which is laying down what shall be the case. Even worse than that. They are failing to maintain to the Treasury that the evidence presented to the Public Accounts Committee was unsound and that a proper analysis of this problem has not really been made, and that this is a bad Bill.
  Clause 3 is a wretched Clause. It is part of the whole process of Scottish legislation, over the last six years, which has crushed the housing programme. The queue at my political "surgery" is as long now as it was when I was elected to this House, seven years ago. That is not because the Greenock Corporation does not want to build houses. It is because, steadily, remorselessly, the Government are crushing the financial life out of the Corporation which cannot rehouse the people as speedily as it should. I shall be delighted to vote against the Bill.
  5.53 p.m.
  Mr. Cyril Bence: I do not want to speak for more than seven minutes, because I have given a promise, and, as I am a member of a political party which keeps its promises, I want to keep mine. Before I say anything further I must express my feeling of bitterness at the sort of criticism of the rent structure of Scotland which has been made from the benches opposite. This is a piece of legislation which is similar to that which we pass from time to time and by which, in effect, there is distributed to all sections of the people what I choose to call the unearned increment of a social collecting effort on the part of the whole community.
  We do this sort of thing from time to time. By various means we redistribute the unearned income and all sorts of people get the benefit. One section of the community which benefits is the tenants of council houses. Others include farmers, doctors and, perhaps, dentists. All sorts of people benefit from a share in the unearned increment of the association of the people in an economic effort. But the only people who are attacked for receiving that benefit are the tenants of council houses who, in

  629
  general, are members of the lowest income group in Great Britain. That I strongly resent.
  I wish to voice a complaint which I have received from the Burgh of Kirkintilloch. During the eleven years in which I have been a Member of this House the town council of that burgh has been noted as being an independent authority. It is independent of the Conservative Party and of the Labour Party although, fortunately, during the last five years it has become more independent of the Tory Party and less independent of the Scottish Labour Party, which is a good thing for the people of Kirkintilloch.
  The burgh has complained bitterly about the effect although they accept the principle of a 1d. rate in the gross valuation. The local authority has cited cases to show that it will suffer. In neighbouring burghs the average rent is £31 and the gross annual value of property is £40. These are average figures for all property. In respect of similar properties and groups in Kirkintilloch, the average rent is £39 and the average gross valuation is £51. Obviously, Kirkintilloch will get less equalisation grant on the basis of the product of 1d. rate.
  As has been said by the town clerk, the gross valuation of the burgh is no measure of the actual capacity of the people to bear the rate burden. In fact, it is a measure of the assessor's valuation of the burgh. Here we have a case—there are other cases in the county—where the assessor has not given a uniform valuation throughout. I have here a list of variations in valuation between Kirkintilloch and other areas. I have not time to quote it—and I do not think it would be fair to quote only a few of the instances—but in Kilsyth the Weir Jura houses are assessed at £45 while in Kirkintilloch they are assessed at £53. The Blackburn houses in Kirkintilloch are assessed at £62 gross value and in Kilsyth they are £50.
  The Kirkintilloch authority complained that it thought that the new valuation system was designed to provide same uniformity, but here there is no uniformity. Similar instances could be quoted in respect of Falkirk, Motherwell, Rutherglen, Airdrie, Coatbridge and Kilmarnock between the Weir Jura houses and the Blackburn houses. Where is the
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  uniformity between Kirkintilloch and other burghs when there will be a heavy reduction in the equalisation grant? Heavy obligations have been undertaken. There is an overspill agreement with Glasgow which means that a lot of development work must be done. It is admitted that grants will be given for this work but that will be nullified by the reduction in the equalisation grants. There is a lot of social work to be done in the new town of Cumbernauld and the county council will get extra in the way of a general grant to do that work. But that, again, will be offset by a reduction in the equalisation grant because of the application of the new grant.
  That is the complaint which I have to make for the Burgh of Kirkintilloch. I hope that during the Committee stage this matter will be re-examined, especially the part of the Bill relating to weighted populations and the modifications of the grant on the basis of a decrease or an increase in the population figure. I am sure that these matters will be referred to again by my hon. Friend. Having taken up my seven minutes, I wish success to the Amendment.
  6.0 p.m.
  Mr. Bruce Millan: Like other hon. Members on this side of the House, I want to devote my remarks particularly to Clause 3. The important thing which has come out of the debate which was not in the least clear from the speeches from the Government Front Bench in the Grand Committee is that, whatever happens under the Bill and whatever local authorities do about rent policies, the total amount of grant going to Scottish local authorities will be reduced. Everyone now understands that, with the possible exception of the hon. Member for Galloway (Mr. Brewis), who is still following the speech made by the Under-Secretary of State is winding up the debate in the Committee. The hon. Member for Galloway has still not cottoned on to the fact that the Under-Secretary in that respect, as in a number of others, was completely inaccurate.
  Under the Bill as a whole, the amount of money going to local authorities in Scotland will be reduced. I thought that the Secretary of State for Scotland was

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  a little more frank with the House today than he was with the Grand Committee. One of the things which we were trying to ascertain about Clause 3 was exactly how much the reduction in local authority grants would be. We have had a figure today—£900,000. It is still reasonable to complain that we did not get that figure before. Apparently, the Government had not then even worked the figure out.
  I repeat that the important thing about the Bill and the thing which justifies the Amendment is that the total grants going to local authorities in Scotland are to be reduced by £900,000. It may have been done in a certain way under Clause 3. The formula may have been related to rent levels, but the result is the same. We are losing £900,000.
  The Under-Secretary of State for Scotland (Mr. Gilmour Leburn): I want to assure the hon. Gentleman that when we discussed this in Grand Committee I had no wish in any way to mislead him. When he related it to Clause 3, the remarks I made were still appropriate. The point I should like to make now, so that there is no possible cause for misunderstanding and no possibility that anyone will accuse me of misleading the House, is this. While my right hon. Friend mentioned a figure of £900,000, he said that that was for 1963–64. That will rise to £1·3 million when the 95 per cent. applies. That will be the ultimate figure, the top figure. I should not like the House to debate this matter believing that the top figure is £900,000 when, in fact, it will become £1·3 million.
  Mr. Millan: I am grateful to the Under-Secretary for that. The point that I was making was that he was completely wrong in the Grand Committee. He has admitted that he was completely wrong. It is extraordinary that he should have been wrong, because this is not an incidental feature of the Bill. This is the main feature of the Bill. It is disgraceful that Government Front Bench spokesmen should have been completely misinformed about the basis of the Bill which they were introducing and commending to us.
  I made the complaint—I still make the complaint—that, assuming that the grant is to be reduced, this way of reduc-
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  ing it is not the way in which it should be done. It would at least have been a straightforward way of doing it if the Government had said to us, "Because of the lower rents for council houses in Scotland as compared with the rents of equivalent council houses in England and Wales, the total grant going to Scotland is too high and we therefore propose to reduce it". If the Government had done that, we could then have studied the question. We could have looked at the relationship between the total rate deficiency grant going to England and Wales and the total grant going to Scotland. We could have judged whether the Government's criticisms were justified.
  The basis of the Government's criticism is that Scotland is getting an unfair share of Exchequer equalisation grants. It is true that per head of population the Exchequer equalisation grants payable to Scottish local authorities, taking them in total, are higher than those being paid to England and Wales. This does not necessarily mean, on any reasonable assessment of what an equalisation grant is, that the amounts being paid to Scotland are excessive.
  The Secretary of State for Scotland, in a rather obscure part of his speech today—it is always difficult for anyone who is reading a brief which he does not fully understand to prevent it being obscure—seemed to suggest that the idea of the Exchequer equalisation grants was to make Scottish local authorities have a rate burden per head of population which would be roughly equivalent to the rate burden per head of population in England and Wales. A study of the figures and the formula given to me in a Written Answer on 5th December shows that this is not so.
  Comparing Scotland with England and Wales on a pure population basis, so that one is comparing one with one, the appropriate rate burden would have been £80·8 million. These figures are for 1961–62. The total relevant Scottish local expenditure for that year was £108·4 million. Deducting the one figure from the other, the Exchequer equalisation grant which would have to come to Scotland to reduce the rate burden per head of population for Scotland to that which it is in England and Wales is no less than £27·6 million.

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  I do not accept for one moment that the Exchequer equalisation grant paid to Scotland is excessive. It is only if that can be proved that the Bill can be justified. The whole question of whether it is done through a rents adjustment or not is irrelevant in the last analysis. The important thing is the total sum of money which is eventually going to Scottish local authorities.
  I admit straight away that the figures I have just quoted are affected by the fact that there is an addition to Scottish local expenditure arising out of low rent levels in Scotland. Even if an adjustment is made for that of the kind I mentioned before—about £8 million—it would still produce a figure for equalisation grant for Scotland of £19·6 million, which is still more than the figure of £18·9 million which we received in 1961–62 and considerably more than we would have got in 1961–62 if the provisions of the Bill had been operative in that year.
  Therefore, comparing the figures for Scotland with those applicable for England and Wales, I do not believe that it is right to say that, given the kind of conditions which the equalisation grant is meant to remedy, Scotland is getting an exessive proportion of the equalisation grant. It would be very interesting to do this as an exercise. The Government, who have the information, might care to do it. It would be interesting to take the United Kingdom as a whole from the point of view of Exchequer equalisation grant and apply the formula which at present applies to England and Wales to the whole of the United Kingdom and see what would be paid to Scottish local authorities. My guess is that it would be substantially higher than they are being paid under the present formula.
  If Scotland were treated completely separately, if we separated Scotland completely from the provisions regarding England and Wales, and if we calculated equalisation grant for Scotland on exactly the same formula as it is calculated for England and Wales, what would be the figures for Scottish local authorities? Again, my guess would be—I do not think that anyone could work out these figures, except the
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  Government—that Scottish local authorities would get higher payments of equalisation grant than they are getting under the present formula.
  It may be that at some time Scottish local authorities accepted the present formula. I know nothing about its history. However, it is clear that it is not accepted that under this formula Scotland, even under present conditions, is getting excessive payments of Exchequer equalisation grant. If that is not accepted—and my hon. Friends and I do not accept it—the whole basis for the Bill is completely gone.
  I said that the Under-Secretary was completely misleading in Committee upstairs about the purposes of the Bill. We must ask ourselves why he was misleading and why the Government chose to introduce this formula in this way under Clause 3. There are only two possible answers. First, doing it under Clause 3 in this way makes the attack on the local authorities' rents policy a great deal more emphatic than it has so far been, and, secondly, the Government honed, by doing it in this way, to deliberately mislead not only us but the local authorities as to the effect of the Bill.
  The Government wanted to persuade the local authorities what the Under-Secretary was trying to persuade us last week about the adjustment of their rents policy; that if the local authorities adjusted their rents they would lose no equalisation grant. If the figures given today are right, they will lose at present, under Clause 3, £900,000 rising to £1·3 million. But the Secretary of State has said that the additional Exchequer equalisation grant going under the present formula to Scotland, because of what he considers their unreasonably low rents, was about £1·6 million.
  The point is that if the Scottish local authorities increase their rents to what the Government consider are reasonable levels they will stand to gain £900,000 under Clause 3, but will lose £1·6 million in the calculation of the total Exchequer equalisation grant. In other words, the local authorities cannot possibly gain under the Bill. The Amendment is absolutely accurate and I have the greatest pleasure in supporting it.
  6.12 p.m.
  Mr. James McInnes: I wish to be brief, I do not want to deal with the notional rent income, the formula, or things of that kind, but I want to know why the Government have persisted, in recent years, in introducing penalising legislation upon local authorities, penalising the work they undertake.
  Earlier this year we had a Housing Bill which, in effect, related subsidies to a notional rent income. Now we have a Bill with a somewhat similar formula: a notional rent income based on a percentage of the gross annual value of the local authority houses coming within a local authority's housing revenue account. Why is it necessary to have these penalising forms of legislation? Surely the Government recognise that without any such legislation these last few years have seen local authority rents in Scotland rising all the time.
  In 1956, the average rent of a local authority house in Scotland was £14 19s. per year, but by 1961 it had increased to more than £26—and I confidently anticipate that by the end of 1962 it will average nearly. £30. Thus without any penalising legislation, Scottish local authorities, of their own accord, have increased their rents in recent years by almost 100 per cent. All this has been accomplished without the need of penalising legislation.
  If the Secretary of State persists in this attitude he will certainly not get the approval and co-operation of the local authorities in Scotland. I would have thought that the present Secretary of State would have been much better employed had he directed some of his attention and energy to the real problems confronting Scottish local authorities. Why, for example, does he not undertake an examination of the tremendous rent burden facing Scottish local authorities? A lot of figures have been brandished about this afternoon concerning the rate burden in this or that area. I wonder whether those who quote these figures realise that the rate burden in Scotland, which, in 1951, was £32 million has, after ten years of this Government, risen to £94 million—a tremendous increase?
  It is folly to believe that this increase has in any way been due to a low rent
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  policy. Low rents may have had some little effect on it, but it is not the main reason for the huge increase in the Scottish rate burden. If the Secretary of State examined the functions and structure of local government in Scotland he would find that local authorities today are operating services involving heavy financial commitments which the Government have passed on to them instead of retaining the financial responsibility themselves.
  Over the last ten years, by this and other Bills, the Government have deliberately indulged in a policy of unloading expenditure from the taxpayer to the ratepayer. I could quote one form of legislation after another which has been introduced to this end and I cannot understand—in the circumstances of today, when local authorities, of their own accord, are continuing to increase rents—why the Government find it necessary to bring in a Bill of this kind, with its penalising implications.
  It might have been better had the Secretary of State concentrated his energies on the tremendous problem of the cost of education. Local authorities spend a vast sum of money on this service and it all seems rather like the Government having "passed the buck" from the Government to the local authority. We need only look at education expenditure in, say, Glasgow—which is running at about £20 million—to see that this is so. We have only to think of the Mental Health Act. We did not mind asking the local authorities to operate that Act, but we do object to them having to bear the financial responsibilities under that Act. These are but one or two examples of passing the burden from the taxpayer to the ratepayer.
  It might have paid the Secretary of State to have given some consideration to the question of high interest rates. I found this afternoon that high interest rates in 1950 and 1951 were responsible for the local authorities paying £8,676,000. What are the Scottish local authorities paying today in respect of interest rates? Not £8 million, but £73 million, because of increased interest rates. I can think of the shabby trick which the Government played on the local authorities in 1957, when industry was rerated to the extent of 50 per cent.

  637
  It was then anticipated—and we are dealing with the question of derating in this Bill—that when industry was rerated to the extent of 50 per cent., this would have yielded to the local authorities about £2,300,000. What did the Government do? They said, "Oh, no; the local authorities are not to get the benefit of industrial rerating by 50 per cent., because we must set against this sum the loss in tax revenue to the Exchequer." Therefore, about 50 per cent. of the £2 million or so went to the Exchequer, and the remainder to the local authorities.
  During the Committee proceedings upstairs, I put a question to the Secretary of State asking him why he had decided to defer the full rerating of industry until 1966–67. Despite the speech of my hon. Friend the Member for West Stirlingshire (Mr. Baxter), I cannot appreciate why this is being deferred. It is not being so deferred south of the Border. Why, then, in Scotland? I did not get an answer from the Under-Secretary in Committee, but I hope that I shall get it this afternoon. I have no knowledge, and so far no hon. Member has produced any facts or figures, to show that the rerating of industry now would be a tremendous burden on industry. I do not believe that it would be a crippling burden on industry.
  Mr. Brewis: What about the shipyards? Would it not put an extra burden on the shipyards?
  Mr. McInnes: Speaking of industry generally, I have no knowledge and no evidence, and no one has submitted any evidence to me, that rerating would be a crippling burden on industry. We are all aware that industry gets relief in respect of the rates it pays through Income Tax. It receives an allowance through Income Tax, and to that extent that is another illustration of the reason for my belief that the rerating of industry would not place a crippling burden on industry. Why, in England and Wales, is rerating taking place next year? Why can it take place then in England and Wales, when we in Scotland must defer full rerating until 1966–67? I hope that the hon. Gentleman will deal with these points when he replies to the debate.
  6.24 p.m.
  Mr. William Ross: I want, in very few words, to tell the people of Kilmarnock that they will have their rents increased as a result of what the Government are determined to do here, and that that increase will be virtually double because of the double unfairness of what the Government are doing.
  First, however, I should like to congratulate the Secretary of State on his speech today. It would have been difficult for him to have been more confusing than he was on the last occasion, but we understood some of the things he said. I should be failing in my duty as a member of the Opposition if I did not castigate him for the speech which he delivered in the Grand Committee, and which, for political immaturity and Parliamentary inexperience, proclaimed how badly Scotland is being governed.
  I do not see how any hon. Member who represents Scotland at all can oppose what we are doing here tonight. Scotland will lose at least £900,000 per year, rising in two or three years to £1,800,000. It will not help the hon. Member for Galloway (Mr. Brewis) or his local authority by one penny that this penalty should be made specifically upon certain authorities.
  If, by reasonable rents, we had been able to distribute the burden more fairly in Scotland, I would not mind it at all, but here we are penalising some local authorities because they are taking more from the Exchequer than the Exchequer thinks they should get. We ought to be congratulating them. We are all trying to get money out of the Exchequer, and this is most unfair. I think that hon. Members opposite failed to appreciate that the flaw in their argument about this business of unduly low rents is the Government's failure to define what are reasonable rents.
  We in Scotland are worried about hard times, unemployment and consumer expenditure. Surely, this is quite the wrong time at which to try to force up rents. There is one right hon. Gentleman sitting opposite who for years and years was absorbed by the same prejudice which the present Secretary of State has—one that has lingered on for so long—that, somehow or other, we

  639
  must force up council rents. This was the only thing that the Government could suggest in municipal finance—to force up the scales of rents. This was their whole attitude in relation to anything else required in local municipal government, and it proved a poor spur to action.
  Last Session, the Secretary of State took unprecedented powers to do what he liked to local authorities and to fix rents. Therefore, we can now say that if the rents are too low in the opinion of the Secretary of State, the fault is his. He has all the power in the world, but, no, he must come along with this Bill and try to penalise local authorities in some other way. It just does not make sense. All it does is to save the Exchequer £900,000. This is a case of forcing up rents and arbitrarily laying down new standards of rents.
  Last year, the standard of rents was supposed to be the difference, or half the difference, between £60 and the average gross annual value, but now we have a new one, and it has not been justified yet, except that the Secretary of State, somehow or other, thinks that is fair for everybody. It is 85 per cent. rising to 95 per cent. of the gross annual value, and then he tells us that rent rebates have to be withdrawn from the income in respect of local authority rents.
  That means that there is to go into this calculation, to be borne by what he hopes are increased rents for one section of a town, what is required to give a reduction of rent to those who most need it. It is not the right hon. Gentleman and those in his position who will pay a penny of rent rebate—and I do not suppose for a moment that he is the poorest. Those in local authority houses alone will have to meet what is requisite in respect of rent rebate. That means that the level of rent, based on figures that the local authorities are given, has to be raised.
  The Bill is really unfair. The town in Scotland that is most generous in respect of rent rebate is Kilmarnock. It gives back £25,000 in rebates. I thought that an astounding figure, so I made inquiries. I found that we built a lot of the houses before the war, because we had enlightened councillors. But who are in the older houses? It is the older
  640
  people, not all of whom get National Assistance. These are the people who, according to the Secretary of State, now have to be supported by other council tenants, paying for rent rebates through increased rents.
  Where is our breadth of vision? This is a small, mean, miserable Measure, coming from a small, mean, miserable Government. Today, we should be arguing about something far wider than this in relation to Scotland. We have my hon. Friend the Member for Greenock (Dr. Dickson Mabon), on the one hand, and the hon. Gentleman with his private building, on the other. How many people are prepared, and are able, to build privately, and live in Greenock? They could be counted on the fingers of one hand. Who is prepared to do that in Glasgow? Private building is in no sense a possible solution for Scotland's housing needs. Those needs can be met only by the local authorities, but the Government are hamstringing the local authorities at every opportunity.
  Figures have been quoted by one after another of my hon. Friends. Why should we be isolating this one item of relevant local expenditure—the housing deficiency—and say that we must make a change? What about the other items? Is this just a start? Will Ayr be told that it is not charging enough for its putting greens, or St. Andrews told that it is not charging enough for golf, or some other authority that it is not charging enough for its deck chairs; and that if they do not put up those charges they will have something taken from their equalisation grant? The whole thing is nonsense.
  The Secretary of State would do a service for Scotland if he started battling for what we really need. If he listened to my hon. Friends the Members for Paisley (Mr. J. Robertson) and for Glasgow, Craigton (Mr. Millan), he would appreciate that the formula is unsatisfactory, and that he is making it even more unsatisfactory and unfair by the way in which he is now fiddling with it.
  6.33 p.m.
  Mr. Thomas Fraser: Those hon. Members who have sat throughout this discussion will agree that it was proper to have this debate on the Floor of the House. In the circumstances, it

  641
  was wrong of the Government to try to deny the House of Commons this discussion, but let it be noted that the only possible way in which we could ensure that we got it was by the Opposition putting down a reasoned Amendment. And the speech of the Secretary of State wholly conceded the assertion contained in that reasoned Amendment.
  The effect of the Bill is to reduce the total amount of Exchequer equalisation grant payable to Scottish local authorities, yet hon. Members opposite wonder why we should offer any opposition to it—
  Mr. Willis: They were not here to listen.
  Mr. Fraser: During most of the discussion, we have had the company of only the hon. Member for Galloway (Mr. Brewis) and the hon. Member for Fife. East (Sir J. Gilmour). Until very recently no other Scottish Tory was present—
  Sir Fitzroy Maclean: Is the hon. Member aware that I have been present during the whole of the debate?
  Sir James Duncan: So have I.
  Mr. Fraser: We will not argue who was or was not present. I have been here all the time, and I have eyes. If hon. Members opposite now want to say "I was here". I wonder why they did not venture to make little speeches just now, explaining why they intended to vote for a Bill which will reduce the Exchequer equalisation grant payable to local authorities in Scotland?
  I want to deal now with one part of the Bill which did not seem to be very controversial until it was mentioned by my hon. Friend the Member for Lanarkshire, North (Miss Herbison). Under Clauses 8 and 9, Lanarkshire will lose almost £4¼ million. The hon. Member for Galloway interrupted my hon. Friend and said, "But do you not realise that Lanarkshire got £¾ million more in 1961–2 than it did in 1960–61?" Why was that? It was because of revaluation and, according to the hon. Gentleman's own logic, that only proves that Lanarkshire has been cheated of £¾ million a year for many years previously. Why is Lanarkshire to get £¼ million less next
  642
  year? The answer is that the rules have been changed to do that, and they have been changed for the simple reason that the new town of East Kilbride is being built in Lanarkshire. Is that an advantage to Lanarkshire? The hon. Member for Galloway, who knows so little about this, is totally wrong in imagining that it is an advantage.
  The Secretary of State knows full well that the Lanarkshire education authority cannot get ahead with building schools in other parts of the county because of the need to build schools in East Kilbride for children coming out from Glasgow. The right hon. Gentleman also knows full well that the Lanarkshire County Council cannot get on with the construction, maintenance and improvement of classified roads in the county because almost all the money available for classified roads has to be spent in East Kilbride.
  We have appealed to the Secretary of State to recognise the existence of this problem. The amount of general grant is bound to be increased year by year, because the Lanarkshire County Council, with 10·5 per cent. or 10·6 per cent. of the total of general grant, us spending nearer to 15 per cent. of the amount of the capital investment in the building of schools. And where is it being spent? In East Kilbride. But while the total relevant expenditure for the calculation of general grant is increased by this heavier expenditure in Lanarkshire, the County Council of Argyll gets more general grant because schools are being built in East Kilbride, the County Councils of Kirkcudbright and Wigtown both get more general grant because schools are being built in East Kilbride, and the County Council of Perth gets more money in general grant because schools are being built in East Kilbride. We are being robbed all the time, and now we are being cheated of another £¼ million.
  The right hon. Gentleman knows that most of us on this side are in favour of fair rents. I have said this, and in 1958 I had the courage of my convictions by saying it to the local authorities in their own conference. I did not go behind anybody's back to say it. But I said then, as I say now, that we cannot deal with rents in isolation. One cannot get the tenancy of a house merely by paying the rent. One pays the rent and the

  643
  rates. No one advertises cigarettes at 1s. 3d. a packet if the price which one pays is 4s. 6d. One puts the duty and the real price together to get the cost. It is the same with housing: one has to put the rent and rates together to arrive at the true figure.
  The Secreary of State, in his very unfair speech, bearing in mind what was said in the discussion upstairs, once again made his comparison between English and Scottish rents without comparing the rates paid in England and Scotland and without comparing the valuations in the two countries. Valuation is the basis for the change proposed in Clause 3. He did not compare these other things because he was not willing to play fair with the House of Commons. He was not willing to give us a fair and full picture.
  The right hon. Gentleman knows full well that council tenants in Scotland are paying in rent and rates as much as council tenants in any other part of Great Britain. In any case, I should have thought that the time to increase rents for council tenants or for any other tenants was when the economy was expanding and when we had full employment. The local authorities under attack in Clause 3, and, indeed, in Clauses 8 and 9, are in areas with the greatest unemployment in the whole of Great Britain, and the victims of the Bill are the ordinary working people in those areas.
  The Secretary of State said that rents should be based on valuations and that we must accept the assessors' valuations as fair. But what does he say when it comes to industrial rating? He said upstairs:
  "When the results of the revaluation were studied, it was clear to the Government that the balance of valuations was not yet such that industry could fairly be fully rerated."
  Later, he said:
  "We expect that the 1966 revaluation will deal fairly with industry as against other subjects without the benefit of derating."—[OFFICIAL RFPORT, Scottish Grand Committee, 27th November, 1962; c. 18.]
  Nevertheless, he said that if rerating was not introduced the Government would have to make some other provision. He was saying that the assessors in Scotland have not made fair valuations when it comes to the rates to be paid
  644
  by the industrialists, but they have made fair valuations if they have provided a yardstick by which the Secretary of State can determine what is a fair rent for council tenants.
  In the present economic difficulties, the Chancellor of the Exchequer has seen fit to make certain concessions to stimulate the economy. He has decided to make more post-war credits available. He has decided on a reduction in the Purchase Tax on cars and to give increased investment allowances. All these steps are calculated to increase spending. That is the whole object of the exercise. What is the contribution of the Secretary of State, Scotland's Cabinet Minister? The country for which he is responsible has the worst unemployment figures in Great Britain. He, by introducing this Bill, is doing quite the opposite to what the Chancellor of the Exchequer is doing. He said today, and, in effect, says in Clause 3, that it is the plain duty of councillors, be they Tory or Labour—it would be a mistake to think that only Labour councils have low rents—in those areas in industrial Scotland with low rents and very high unemployment to reduce the spending power of the people in those areas.
  Every council tenant in those areas who is to have his rent increased under Clause 3 will have less money to spend on other things. Every local authority which suffers a reduction in its Exchequer equalisation grant under Clause 3 will have to take more money from the ratepayers, who will have less money to spend on other things. This applies particularly in areas of industrial Scotland with the highest unemployment figures in the whole of the United Kingdom. Yet the Chancellor of the Exchequer takes steps to increase spending power in London, the Midlands and every part of the country. He must speak with two voices, because I strongly suspect that Scotland's representative in H.M.G. always takes his advice from H.M.V. and does whatever he is told.
  The time has come for Scotland to have a Minister who will look after her interests and who will speak up for her in the Cabinet here in London, someone who will help to get us out of the difficulties in which we find ourselves instead of introducing a miserable little Bill like this, which can only make matters worse.
  6.46 p.m.
  The Under-Secretary of State for Scotland (Mr. Gilmour Leburn): Perhaps it would be most convenient if I were to wind up the debate by dealing with one or two specific points raised in the debate, leaving a number of others which would be best dealt with in Committee. I suggest to my hon. Friend the Member for Fife, East (Sir J. Gilmour) that his point on Clause 18 and the point which the hon. Lady the Member for Lanarkshire, North (Miss Herbison) and one other hon. Gentleman raised concerning the weighted populations under Clause 8 are best left for the Committee stage, particularly since we are dealing with an Order-making power by the Secretary of State subject to affirmative Resolution.
  Having dealt with one or two specific points, I should like to come to the wider issue raised by the Opposition's Amendment dealing mainly with Clause 3. First, I wish to refer to Clause 10 concerning the rerating of industry. I should have been tempted if there had been more time to speak at some length on the speech of the hon. Member for West Stirlingshire (Mr. W. Baxter), but I would rather deal with the points raised by the hon. Members for Hamilton (Mr. T. Fraser) and Glasgow, Central (Mr. McInnes).
  I am disappointed that the hon. Member have made so much criticism of the Secretary of State's decision to postpone industrial rerating until 1966, since it has been explained that rerating in 1963 would put an unreasonable burden on Scottish industry, which all of us, particularly at this time, are anxious to assist. I cannot see why hon. Members should complain so bitterly. No pledge was given that rerating would be introduced in 1963, as was suggested by the hon. Member for Glasgow, Craigton (Mr. Millan). The Secretary of State announced on 25th November, 1960, that it would be introduced in 1963 or, if that proved impracticable, as soon thereafter as possible. In July, 1962, he stated that it had been decided to postpone rerating until 1966 in the light of the new valuations.
  I appreciate the concern of hon. Members opposite for the rating position of local authorities and for the interests of the other elements, such as housing and shops. But, to keep the record straight, I
  646
  should say that, without rerating, Scottish industry, after the revaluation, increased its share in the rates from 7·5 per cent. to 12·9 per cent. The burden borne by householders as a result of the revaluation went down from 59·6 per cent. to 52·6 per cent. and the share of commercial and miscellaneous property went up only from 32·9 per cent. to 34·5 per cent. Industry certainly felt the draft of the revaluation, but that was not the only increase which it had to face.
  In 1959–60, its 75 per cent. derating had gone down to 50 per cent. This meant that its rates virtually doubled in 1959–60 and greatly increased again in 1961–62. From 1959 to 1966, Scotland will have had in eight years' full renting and two revaluations. From 1956 to 1963, the same length of period, England will have had eight years in which to assimilate full rerating and two revaluations.
  Without rerating, industry's percentage of the rate burden in Scotland is about 13 per cent., which is little below the expected English percentage after rerating of about 16 per cent. If Scottish industry were now fully rated, its share of total rate percentage would be over 22 per cent. I consider the decision taken by my right hon. Friend to be a fair and reasonable one.
  I should like to turn to the main principles of the debate. The Opposition Amendment claims that the effect of the Bill will be to reduce considerably the Exchequer equalisation grant paid to Scottish local authorities. As my right hon. Friend said, the Government cannot accept that this is a fair description. [HON. MEMBERS: "It is true."] It is true, but we cannot accept that it is a fair description of the effects of the Bill. Nothing in the Bill alters the method of calculation of the Scottish total, which is still based on the Sixth Schedule to the 1956 Act. In all the consultations which we have had with local authorities, there has been no suggestion that we ought to change this method.
  The calculation is not affected in any way by Clause 3. Thus, even if local authorities did not take steps to reduce their housing deficits, the housing charge on the rates would still go to swell the total of relevant Scottish expenditure ranking for grant. Clause 3 takes effect at a later stage in calculating the grant for individual authorities and then only

  647
  if their rents are unduly low. In consequence, the deductions under Clause 3 would affect only particular authorities.
  Hon. Members opposite have argued that if local authorities, seeing the effect that Clause 3 will have upon them, increased their rents and reduced their housing deficit, their relevant expenditure and, consequently, their grant would be reduced. Equally, it is said that the total relevant Scottish expenditure and the total Scottish grant is reduced. I accept that this will be so, but what I cannot accept is that this is either wrong or unfair. The position is no different here from any other economy in expenditure made by local authorities. Any local authority which effects a saving of any kind—say, by administrative economies, by the utilisation of more efficient types of plant or equipment or by achieving lower building costs—cuts down its claim for grant and, thus, the total of Scottish grant. Do hon. Members opposite suggest that this is wrong? If so, they are saying that grant should not be related to the cost of the services which it is intended to assist.
  However, as my right hon. Friend has said, any reduction in grant is outweighed by the increase in revenue, which must always be greater unless there is such a thing as a local authority receiving 100 per cent. equalisation grant.
  Mr. Millan: Will the hon. Gentleman give way?
  Mr. Leburn: I must get on, if the hon. Member does not mind.
  It has been argued that it is wrong to deduct rent rebates when calculating the rent income of a local authority under Clause 3. Let me make it clear that the Government regard rebates as an essential part of any rents policy. When, however, we are discussing the yardstick for equalisation grant, the Government's feeling is that it is reasonable to expect local authorities to attain an average rent of ultimately 95 per cent. of gross values after deducting rebates. I know that hon. Members opposite do not agree with this, but the Government hold the view that it is perfectly reasonable.
  It is left to the discretion of local authorities as to how they should do
  648
  this, whether they have high standards of rents with high rebate schemes or low standard rents with low rebate schemes. That is left largely to the discretion of the local authority. In neither case, however, would the provisions of Clause 3 take effect.
  Hon. Members have suggested that the fact that the average earnings in Scotland are less than in England makes it wrong to reduce the extent to which the Exchequer helps to subsidise rents. The Exchequer subsidy is, however, paid for by taxpayers in Scotland as well as in England and since council houses are in the main allocated according to the housing need—not according to income—we have the position that private tenants or owner-occupiers with low incomes are assisting council tenants, some of whom may be better off.
  It has also boon argued that where an area as a whole is depressed and suffering from unemployment, we should not insist upon average rents of 85 to 95 per cent. of gross annual value under Clause 3. Apart from the fact that low earnings and unemployment are not confined to council tenants, the condition of the area should be reflected in the valuations, which should be generally lower. I have formed the impression today that Opposition speakers have simply concentrated all their arguments on local authority council house tenants and that not one word has been said about the taxpayer or the ratepayer, who may well be less well off than the council house tenant.
  If the Opposition Amendment is meant to criticise the restriction of the amount of grant paid to particular local authorities which have incurred too high a housing deficit due to their policy on rents, it is also a criticism of the recommendations of the Public Accounts Committee—
  Mr. T. Fraser: Nonsense.
  Mr. Leburn:—that steps should be taken to limit the Exchequer contribution to deficits.
  Mr. Fraser: Rubbish.
  Mr. Leburn: It is not rubbish. It is true.
  Mr. Fraser: It is rubbish.
  Mr. Leburn: If it is meant to imply—this is the only other meaning which I can place upon it—than the grant which is withdrawn should be contributed to other local authorities as a whole, it runs counter to the Public Accounts Committee's object of limiting Exchequer payments arising out of unreasonably low rents.
  I invite the House emphatically to reject the Amendment.
  Miss Herbison: Before the Minister sits down, I wish to ask him one question. Is he completely satisfied with the work of the assessor in assessing houses, but
  totally dissatisfied with the work of the same assessor in assessing industry?
  Mr. Leburn: I made it quite clear to the Committee upstairs, on both days when I spoke, that we cannot look behind the assessments of the assessor. I am sure that that is right. We cannot challenge these assessments.
  Mr. Willis: That is no answer.
  Question put, That the words proposed to be left out stand part of the Question:—
  The House divided: Ayes 192, Noes 147.

  Division No. 18.]

  AYES

  [7.0 p.m.

  Agnew, Sir Peter

  Fraser, Ian (Plymouth, Sutton)

  Maclean, SirFitzroy (Bute & N. Ayrs.)

  Aitken, W. T.

  Gammans, Lady

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

  Allason, James

  Gardner, Edward

  McMaster, Stanley R.

  Arbuthnot, John

  Gilmour, Ian (Norfolk Central)

  Macpherson, Rt. Hn. Niall (Dumfries)

  Awbery, Stan

  Gilmour, Sir John

  Maddan, Martin

  Balniel, Lord

  Goodhart, Philip

  Maginnis, John E.

  Barber, Anthony

  Grant-Ferris, R.

  Maitland, Sir John

  Barlow, Sir John

  Gresham Cooke, R.

  Marten, Neil

  Batsford, Brian

  Grosvenor, Lt.-Col. R. G.

  Mathew, Robert (Honiton)

  Baxter, Sir Beverley (Southgate)

  Gurden, Harold

  Mawby, Ray

  Bell, Ronald

  Hall, John (Wycombe)

  Maxwell-Hyslop, R. J.

  Bennett, F. M. (Torquay)

  Hamilton, Michael (Wellingborough)

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

  Berkeley, Humphry

  Harris, Reader (Heston)

  Mills, Stratton

  Biffen, John

  Harrison, Col. Sir Harwood (Eye)

  Miscampbell, Norman

  Biggs-Davison, John

  Harvey, Sir Arthur Vere (Macclesf'd)

  Montgomery, Fergus

  Birch, Rt. Hon. Nigel

  Harvey, John (Walthamstow, E.)

  Noble, Rt. Hon. Michael

  Bishop, F. P.

  Hastings, Stephen

  Osborn, John (Hallam)

  Black, Sir Cyril

  Hay, John

  Page, Graham (Crosby)

  Bossom, Clive

  Heald, Rt. Hon. Sir Lionel

  Page, John (Harrow, West)

  Heath, Rt. Hon. Edward

  Bourne-Arton, A.

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

  Pearson, Frank (Clitheroe)

  Box, Donald

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

  Peel, John

  Boyd-Carpenter, Rt. Hon. John

  Hirst, Geoffrey

  Percival, Ian

  Boyle, Rt. Hon. Sir Edward

  Hobson, Sir John

  Pitman, Sir James

  Braine, Bernard

  Holland, Philip

  Pitt, Dame Edith

  Brewis, John

  Hollingworth, John

  Pott, Percivall

  Brooke, Rt. Hon. Henry

  Hopkins, Alan

  Price, David (Eastleigh)

  Brown, Alan (Tottenham)

  Hornby, R. P.

  Prior, J. M. L.

  Browne, Percy (Torrington)

  Hornsby-Smith, Rt. Hon. Dame P.

  Prior-Palmer, Brig Sir Otho

  Buck, Antony

  Howard, John (Southampton, Test)

  Pym, Francis

  Burden, F. A.

  Hughes-Young, Michael

  Quennell, Miss J. M.

  Butcher, Sir Herbert

  Hurd, Sir Anthony

  Redmayne, Rt. Hon. Martin

  Campbell, Gordon (Moray & Nairn)

  Hutchison, Michael Clark

  Rees, Hugh

  Carr, Robert (Mitcham)

  Iremonger, T. L.

  Rees-Davies, W. R.

  Channon, H. P. G.

  Irvine, Bryant Godman (Rye)

  Ridley, Hon. Nicholas

  Clark, Henry (Antrim, N.)

  Jenkins, Robert (Dulwich)

  Roberts, Sir Peter (Heeley)

  Clark, William (Nottingham, S.)

  Jennings, J. C.

  Russell, Ronald

  Cleaver, Leonard

  Johnson, Dr. Donald (Carlisle)

  Scott-Hopkins, James

  Cole, Norman

  Jones, Arthur (Northants, S)

  Sharples, Richard

  Cooper, A. E.

  Kaberry, Sir Donald

  Skeet, T. H. H.

  Cordeaux, Lt.-Col. J. K.

  Kerans, Cdr. J. S.

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

  Costain A. P.

  Kerr, Sir Hamilton

  Smyth, Rt. Hon. Brig. Sir John

  Craddock, Sir Beresford

  Kershaw, Anthony

  Spearman, Sir Alexander

  Critchley, Julian

  Kirk, Peter

  Speir, Rupert

  Crosthwaite-Eyre, Col. Sir Oliver

  Lagden, Godfrey

  Steward, Harold (Stockport, S.)

  Crowder, F. P.

  Langford-Holt, Sir John

  Storey, Sir Samuel

  Cunningham, Knox

  Leavey, J. A.

  Studholme, Sir Henry

  Curran, Charles

  Leburn, Gilmour

  Summers, Sir Spencer

  Dalkeith, Earl of

  Legge-Bourke, Sir Harry

  Tapsell, Peter

  d'Avigdor-Goldsmid, Sir Henry

  Lindsay, Sir Martin

  Taylor, Sir Charles (Eastbourne)

  Deedes, Rt. Hon. W. F.

  Linstead, Sir Hugh

  Taylor, Frank (M'ch'st'r, Moss Side)

  Digby, Simon wingfield

  Litchfield, Capt. John

  Teeling, Sir William

  Doughty, Charles

  Longbottom, Charles

  Thatcher, Mrs. Margaret

  du Cann, Edward

  Longden, Gilbert

  Thompson, Richard (Croydon, S.)

  Duncan, Sir James

  Loveys, Walter H.

  Thornton-Kemsley, Sir Colin

  Eden, John

  Lucas-Tooth, Sir Hugh

  Tilney, John (Wavertree)

  Elliot, Capt. Walter (Carshalton)

  MacArthur, Ian

  Touche, Rt. Hon. Sir Gordon

  Farr, John

  McLaren, Martin

  Turton, Rt. Hon. R. H.

  Fletcher-Cooke, Charles

  Maclay, Rt. Hon. John

  Tweedsmuir, Lady

  van Straubenzee, W. R.

  Webster, David

  Woodhouse, C. M.

  Vane, W. M. F.

  Wells, John (Maidstone)

  Worsley, Marcus

  Vickers, Miss Joan

  Whitelaw, William

  Yates, William (The Wrekin)

  Walder, David

  Williams, Dudley (Exeter)

  Walker, Peter

  Wilson, Geoffrey (Truro)

  TELLERS FOR THE AYES:

  Walker-Smith, Rt. Hon. Sir Derek

  Wise, A. R.

  Mr. Chichester-Clark and

  Ward, Dame Irene

  Wolrige-Gordon, Patrick

  Mr. Finlay

  NOES

  Albu, Austen

  Greenwood, Anthony

  Noel-Baker, Francis (Swindon)

  Baird, John

  Grey, Charles

  Oram, A. E.

  Barnett, Guy

  Grimond, Rt. Hon. J.

  Oswald, Thomas

  Baiter, William (Stirlingshire, W.)

  Hannan, William

  Owen, Will

  Bence, Cyril

  Harper, Joseph

  Paget, R. T.

  Bennett, J. (Glasgow, Bridgeton)

  Hart, Mrs. Judith

  Pannell, Charles (Leeds, W.)

  Benson, Sir George

  Hayman, F. H.

  Pargiter, G. A.

  Boardman, H.

  Healey, Denis

  Parker, John

  Bottomley, Rt. Hon. A. G.

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  Pavitt, Laurence

  Bowden, Rt. Hn. H. W.(Leics, S.W.)

  Herbison, Miss Margaret

  Peart, Frederick

  Bowles, Frank

  Hill, J. (Midlothian)

  Plummer, Sir Leslie

  Boyden, James

  Hilton, A. V.

  Pursey, Cmdr. Harry

  Bray, Dr. Jeremy

  Holman, Percy

  Rankin, John

  Broughton, Dr. A. D. D.

  Holt, Arthur

  Reid, William

  Brown, Rt. Hon. George (Belper)

  Hughes, Emrys (S. Ayrshire)

  Robertson, John (Paisley)

  Butler, Herbert (Hackney, c.)

  Hughes, Hector (Aberdeen, N.)

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

  Butler, Mrs. Joyce (Wood Green)

  Hunter, A. E.

  Ross, William

  Carmichael, N. G.

  Hynd, H. (Accrington)

  Short, Edward

  Castle, Mrs. Barbara

  Hynd, John (Attercliffe)

  Silverman, Julius (Aston)

  Chapman, Donald

  Irving, Sydney (Dartford)

  Silverman, Sydney (Nelson)

  Cliffe, Michael

  Janner, Sir Barnett

  Skeffington, Arthur

  Collick, Percy

  Jay, Rt. Hon. Douglas

  Small, William

  Corbet, Mrs. Freda

  Jeger, George

  Smith, Ellis (Stoke, S.)

  Cronin, John

  Johnson, Carol (Lewisham, S.)

  Sorensen, R. W.

  Crosland, Anthony

  Jones, Dan (Burnley)

  Soskice, Rt. Hon. Sir Frank

  Crossman, R. H. S.

  Jones, Elwyn (West Ham, S.)

  Steele, Thomas

  Cullen, Mrs. Alice

  Kenyon, Clifford

  Stewart, Michael (Fulham)

  Dalyell, Tam

  Key, Rt. Hon. C. W.

  Stonehouse, John

  Darling, George

  King, Dr. Horace

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

  Davies, S. O. (Merthyr)

  Lawson, George

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

  Deer, George

  Ledger, Ron

  Taverne, D,

  Dempsey, James

  Lee, Frederick (Newton)

  Thomas, George (Cardiff, W.)

  Diamond, John

  Lipton, Marcus

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

  Dodds, Norman

  Lubbock, Eric

  Thornton, Ernest

  Donnelly, Desmond

  Mabon, Dr. J. Dickson

  Thorpe, Jeremy

  Driberg, Tom

  McCann, John

  Warbey, William

  Dugdale, Rt. Hon. John

  MacColl, James

  Weitzman, David

  Ede, Rt. Hon. C.

  Mclnnes, James

  Whitlock, William

  Edelman, Maurice

  Mackie, John (Enfield, East)

  Wilkins, W. A.

  Edwards, Walter (Stepney)

  McLeavy, Frank

  Williams, W. R. (Openshaw)

  Evans, Albert

  MacPherson, Malcolm (Stirling)

  Williams, W. T. (Warrington)

  Fitch, Alan

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

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

  Fletcher, Eric

  Marsh, Richard

  Wilson, Rt. Hon. Harold (Huyton)

  Foot, Dingle (Ipswich)

  Mellish, R. J.

  Woodburn, Rt. Hon. A.

  Foot, Michael (Ebbw Vale)

  Mendelson, J. J.

  Wyatt, Woodrow

  Forman, J. C.

  Millan, Bruce

  Yates, Victor (Ladywood)

  Fraser, Thomas (Hamilton)

  Mitchlson, G. R.

  Zilliacus, K.

  Gaitskell, Rt. Hon. Hugh

  Moody, A. S.

  Galpern, Sir Myer

  Morris, John

  TELLERS FOR THE NOES:

  Gordon Walker, Rt. Hon. P. C.

  Moyle, Arthur

  Mr. Redhead and Mr. Ifor Davies.

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

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) (SCOTLAND) [MONEY]
  [Queen's Recommendation signified]
  Considered in Committee under Standing Order No. 84 (Money Committees).
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to continue with amendments the provisions relating to the payment or Exchequer Equalisation and Transitional Grants to local authorities in Scotland, to increase the limit of contributions payable to such authorities under the Rural Water Supplies and Sewerage Act 1944, to amend the law of Scotland relating to valuation and rating, and for other matters, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act of the present Session in the sums so payable,—

  (a) by way of Exchequer Equalisation or Transitional Grant under the enactments relating to local government in Scotland;

  (b) under the Rural Water Supplies and Sewerage Act 1944.—[Mr. Noble.]

  Resolution to be reported.
  Report to be received Tomorrow.

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) (SCOTLAND) [MONEY]
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Redmayne.]

EUROPEAN ECONOMIC COMMUNITY
7.10 p.m.
The Lord Privy Seal (Mr. Edward Heath): I understand that the object of my opening this short debate, which I welcome, is to enable me to make a statement to the House on the Ministerial meeting in Brussels which took place on Monday and Tuesday of this week and from which I have returned this afternoon. At the same time, it will also enable the right hon. Gentleman the Leader of the Opposition and his right hon. and hon. Friends, and right hon. and hon. Members on this side of the House, to ask questions not only about the last ministerial meeting but about the three Meetings on which I reported to the House on 22nd November.
654
In these circumstances, perhaps it will be for the convenience of the House if I confine myself now to an account, in the usual form and of the customary length, of the recent meeting. I will then endeavour to answer all the questions raised and to add any further comments I wish to make in winding up the debate, if I may do so by leave of the House. I hope that this procedure will give the House the information it requires and, at the same time, also leave the maximum amount of time available to other right hon. and hon. Members who may wish to speak and ask questions.
The Ministerial meeting took place on 10th and 11th December. The subjects discussed included the arrangements for Malaysia and Malta, the use of Article 234 of the Treaty of Rome, the negotiations with the European Free Trade Association countries, and the transitional arrangements for British agriculture. I will deal now with the two Commonwealth items.
First of all, Malaysia. It was agreed that the Community would be prepared to envisage negotiations with a view to concluding a trade agreement with Malaya and the territories which it is planned should constitute the Federation of Malaysia, if the latter so desired it. It is, of course, the case that the bulk of the exports of the Federation of Malaysia, approximately 85 per cent., will continue to enjoy free entry into the Community. This is because the common external tariff on so many of the products of principal interest to the future Federation is already nil.
It was, however, agreed that Malaya and these territories should have the same gradual application of the common external tariff as has already been agreed for India, Pakistan and Ceylon. Discussion on the tariff levels on some of the tropical products in which these territories are interested are still proceeding.
The Ministers of the Community also gave us their preliminary views about the solution of the problems which would face Malta in the event of our joining the Community. This was the consequence of the discussions at our last meeting. The Ministers felt that the arrangements to deal with Malta's problems should be such as to maintain

655
from the beginning a relationship between Malta and the enlarged Community as a whole. While the precise content of the arrangements would have to be examined further, it might include an element of customs union with the Community as a whole, while maintaining a continued free entry for the exports of Malta to the United Kingdom.
While they hoped that there would be an association with the enlarged Community as soon as the constitutional position of Malta made it appropriate, there would probably have to be a special protocol to cover Malta's problems as an interim measure. We are now consulting the Government of Malta about these proposals and we shall return to them with the Ministers of the Community at the next meeting.
We then had a discussion about Article 234 of the Treaty of Rome. This is the article which provides that the rights and obligations arising from agreements between member States and third countries, concluded before the Treaty came into force, should not be affected by the provisions of the Treaty of Rome. Member States should, however, take appropriate steps to eliminate incompatibilities between such agreements and the Treaty. They should, where necessary, assist each other to do this.
The members of the Community considered that Article 234 was not intended to apply to preferential agreements with third countries, but was intended to cover non-preferential agreements, such as the G.A.T.T. I confirmed that we shared this view and that there was no difference between us as regards the scope of Article 234. We accepted that the common external tariff should apply towards all non-member countries, except where special agreements had been negotiated by the time of our accession.
Arising out of the discussion of Article 234, the Ministers of the Six referred to the practical problems affecting the conclusion of the negotiations with our E.F.T.A. partners. They indicated that they thought that if our negotiations were successful there were favourable prospects for a satisfactory outcome of negotiations which have already begun with Denmark and Norway, but for practical reasons they foresaw difficulty in
656
reaching a rapid conclusion with the other E.F.T.A. countries.
This gave me an opportunity to explain again in detail the nature of the obligations which the E.F.T.A. partners have undertaken towards each other. I also pointed out that the other E.F.T.A. countries were anxious to begin negotiations as soon as possible. I expressed the conviction that, once the conclusion of our negotiations and those with Denmark and Norway was clear, it should be possible to complete negotiations with the other E.F.T.A. partners, which would not raise so many problems as our own, within a reasonable time.
I now turn to the questions affecting British agriculture. As the House will remember, the Ministers first discussed the transitional arrangements for British agriculture during the meeting of 25th to 27th October, but no decisions were then reached. At the meeting which has just taken place we had a further exchange of views after I had suggested that we might best handle the matter in a smaller, more restricted meeting. My right hon. Friend the Minister of Agriculture, Fisheries and Food was present at that meeting.
Mr. van Houten, speaking on behalf of the Community, opened the discussion by saying that they had further studied the problem. He made it clear on this occasion that horticulture had been placed on one side for the time being. They were ready to make a major effort to close the gap between us. They were prepared to envisage special transitional arrangements to deal with difficulties for British farmers and to take account of the problems arising out of our existing price levels.
They had seriously considered the difficulties voiced on altering our system of support at the moment of entry into the Community, but still took the view that the arguments in favour of doing so were preponderant. He said that the Six had also considered the British Government's pledge to maintain the percentage limits under the Agriculture Acts during the lifetime of this Parliament and were ready to take this into account. He then recalled the proposals they had put forward at the meeting at the end of October for replacing the present deficiency payments by producer or consumer subsidies.

657
Finally, he stressed that in the view of the Six any subsidies should be gradually reduced as the farmer obtained a larger part of his return from the market and should end by 1st January, 1970.
Following Mr. van Houten's statement, there was a very full discussion covering both the difficulties which the Six thought would be raised by our own proposals for transitional arrangements and the difficulties which we saw in theirs. This gave me an opportunity of clarifying our own proposals for the gradual phasing-out of deficiency payments and on the length of the transitional period. In addition, I offered assurances to the Community as to the way in which these proposals would be implemented. I also made it clear, once again, that the Government fully accepted the common agricultural policy for the single market period. The proposals we have put forward for this period, which are limited in number, are designed to adapt the methods of implementing this policy to the requirements of an enlarged Community.
At the end of this discussion, the Conference decided to establish a Ministerial study group to examine urgently the practical problems arising from the proposals made by both sides to deal with the transitional arrangements for British agriculture. It will do this commodity by commodity. The group includes the Minister of Agriculture of each of the seven countries participating in the Conference, or his representative, sitting under the chairmanship of Dr. Mansholt, one of the Vice-Presidents of the European Commission. This group will not in any sense be a negotiating group. Its work will be without prejudice to the position of any of the countries participating in the Conference, and it will report back to the Conference as a whole.
The group held its first meeting this morning when my right hon. Friend the Minister of Agriculture and I were present. The meeting is being continued this evening, and my right hon. Friend has asked me to tell the House that he greatly regrets that he will be unable to be here tonight for the debate on the Horticultural Marketing Council (Dissolution) Order, which will be handled by my hon. Friend the Parlia-
658
mentary Secretary to the Ministry of Agriculture.
The Ministerial study group will be meeting again tomorrow. It will submit an interim report to the next Ministerial meeting of the Conference on 19th December and a final report in time for the beginning of the first Ministerial meeting in January. The next Ministerial meeting will take place in Brussels next Wednesday. Thursday and Friday, 19th, 20th and 21st December, at which we shall deal with a number of individual Commonwealth items and hold a preliminary discussion of the institutional questions. It has also been agreed that the Conference will meet on 14th January for the whole of that week until 18th January and again on 28th January for the whole of that week, ending on 1st February.
These two long meetings should give the Conference an opportunity to discuss, with greater continuity than has hitherto been possible, some of the problems outstanding in Commonwealth affairs and British agriculture on which progress has already been made but on which no agreement has yet been reached.
I intend to continue the procedure over the Christmas Recess of publishing White Papers giving accounts of Ministerial meetings held in Brussels while the House is not sitting, and I hope that this will be for the convenience of the House.
7.23 p.m.
Mr. Harold Wilson: The House will be grateful to the Lord Privy Seal for this last of his series of statements to the House on the successive phases of the negotiations. Even if he never has very much success to report to us, at any rate he always reports with the greatest courtesy and gives us as much information as is possible in the time that he takes.
Before I come to the detailed negotiations, the first thing I must do tonight is to underline the very significant change of tone in Ministerial pronouncements about the Common Market during the past few days. We have had the President of the Board of Trade and we have had the Chancellor of the Exchequer. Enthusiasm for joining E.E.C. on anything like present terms now

659
seems very strangely muted. It is certainly very different from the halcyon days of Llandudno. I have referred before to the button marked "Yes"; the President of the Board of Trade was not wearing one last Saturday.
Now Ministers are falling over themselves to stress that it would "not be the end of the world" if we failed to get in. When I used these very words on 7th June, the Secretary of State for Commonwealth Relations took me to task at once from the Box and said that it would be a great misfortune. Ministers are now even hinting that there is a possible alternative—as we have urged at all stages in these negotiations. I wonder whether they troubled to inform the Prime Minister about this possible alternative before he wrote out his Llandudno speech. After all the jibes we heard in October, I feel that even Ministers are now coming to recognise that it was the speech at Brighton and not that at Llandudno which was realistic and responsible on this subject.
Obviously, tonight's statement was an interim report, and I was interested that the Lord Privy Seal said that next week the institutional arrangements are to be discussed. I hope this means that at long last he will come to the vital question of voting and the question of qualified majorities. I hope he will tell us about that tonight, because my right hon. Friend and others of us have emphasised the vital importance of the size of the vote required for a veto in view of the far-ranging effect of qualified majority decisions over the whole economic life of this country. I hope that tonight he will talk about the position of this House and of Parliament under the Treaty of Rome.
We have raised this subject many times. We have been promised answers—we had a promise from the Prime Minister in July—but we have never had a single cheep out of the Government Front Bench on this question. All we have had is a rather meaningless statement by the noble Lord, the Lord Chancellor, addressing someone down in Bristol during the Recess and leaving us in worse confusion than we started.
Tonight, I do not intend to deal with general issues, with arguments for and against going in, which we have debated so often in the past eighteen months.
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Nor do I want even to restate our own five conditions, the five safeguards, which we have laid down before Britain can consider entering. I propose to deal only with the details of the negotiations over the past month and to assess the position which we have now reached. I will take some of the points in series as the right hon. Gentleman did.
I come first to Asian manufactured goods. The Lord Privy Seal has secured minor concessions—I do not depreciate them—minor reductions in the Common Market external tariff for items such as hand-knotted carpets, coir mats, jute bags and East Indian kips—he had quite a fight over the last. But on textiles, which the whole House recognises as absolutely vital to any programme of Asian economic development, there has been no concession.
The negotiations for trade agreements with these Asian countries, we are told, will open three months after Britain's entry in, say, April, 1964, at the earliest. But when these negotiations open all our defences and all India's defences will be down, because by that time discrimination in the British market in favour of Asian Commonwealth manufactured goods will have ended and discrimination in favour of Europe against the Commonwealth will already be in force.
I ask the Lord Privy Seal—and he has never answered this question—why did he not insist on maintaining these preferences and on relating any concession from us to progress in these negotiations for a comprehensive trade agreement. Why did he not say, "No progress in the negotiations, no concessions in this matter"?
Now there is a question of what the White Paper called décalage. I rather regret this Brussels jargon coming into British White Papers. I looked up décalage in a dictionary and found that it did not mean what I thought it did—it is much less interesting. I found that it means unwedging; throwing a machine out of gear; shifting a pulley off a shaft; or generally getting out of phase. I would have thought that the right hon. Gentleman could have found an English word to express all that in a White Paper.
On this question of what he calls décalage, so far as I can understand it,

661
and the Lord Privy Seal has not given us full details of this, it would appear that Asian textiles have one programme for the application of the tariff, Asian manufactured goods yet another and other Commonwealth manufactured goods a third. I hope that when the right hon. Gentleman winds up tonight he will tell us what those three ranges are, because there is a feeling, on studying the White Papers and trying to correlate them, that in certain respects at least Asian manufactured goods will be worse treated than some of the goods coming from more advanced Commonwealth countries. The right hon. Gentleman realises in any case that to slow up the rate of décalage will simply mean a very heavy imposition of tariffs in the later years before 1970, and what we have been concerned with all along is not how we get to 1970 but what the 1970 position will be when we get there.
The next point is on raw materials. There is still no agreement on aluminium, newsprint, wood pulp, zinc and lead from developed Commonwealth countries Negotiations on aluminium and newsprint were held in November, but, to quote the White Paper,
"the Conference reached no conclusions".
There are reports—I hope that the Lord Privy Seal will comment on them—that the Six have rejected abolition of tariffs, but have agreed to concede a tariff-free quota for Britain for newsprint. and either a tariff-free quota, or a tariff reduction, for aluminium. I hope that tonight the right hon. Gentleman will tell us whether this statement, which has been widely reported, is true. Will the right hon. Gentleman also tell us whether the quota, if there is a tariff-free quota, for example, for newsprint, is intended to equal the whole present level of newsprint imports from the Commonwealth into Britain, or only a small proportion of them, and whether that tariff-free quota is merely a temporary transitional arrangement, or whether it is going to be permanent?
Turning to processed foodstuffs, we have had the kangaroo meat and canned rabbit, but will the right hon. Gentleman tell us something about the processed foodstuffs on which agreements have not been reached and how he sees the chances of agreement on them? As I
662
understand it from the White Paper, there are about 29 quite important processed foodstuffs on which agreement have not yet been reached, and we would like to know not only whether that is so but what is the total volume at the moment of the trade in these processed foodstuffs coming into the United Kingdom.
This list includes canned fruit. I think that the House knows the importance of canned fruit in the Australian economy. These large areas are settled by ex-Servicemen of World Wars I and II, and the importance in the minds of Australian people and the Government far transcends even the value of the trade in monetary terms. I remember negotiations in the G.A.T.T. conference eleven years ago when the Americans were willing to offer a substantial reduction in their tariff on raw wool from Australia, which ought to be one of the biggest prizes the Australian Government could have, but they set against that a reduction—not an abolition, not a reverse discrimination—on Australian canned food, and the Australian Government said that they could not accept even that reduction in the preference on canned foods because of the social importance of this settlement, even though in return they would have got a substantial opening of the American market for raw wool. If that was how they felt then, and I suspect that they have not changed their position on this, I hope the right hon. Gentleman will tell us tonight what he is doing to secure free entry for canned fruits.
We would also like to know about Canadian canned salmon. Again, there is a story that there have been some assurances or hints about tariff-free quotas for Canadian salmon for Australian canned fruit. Is this so? Again, is it proposed that tariff-free quotas would cover a volume of trade equal to the present volume of trade into this country from those areas?
Before I come to the fundamental issues of agriculture and the Commonwealth countries—and really these are two sides of the same medal, and the sooner this is realised the more progress we will make—there are three other questions arising out of the negotiations which I should like to put to the right hon. Gentleman.

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First, the right hon. Gentleman referred to Article 234. I gather from Press reports that some of the Six at any rate had unworthy suspicions about the Lord Privy Seal's good faith in regard to Article 234. They thought that, having come to a final settlement about the Commonwealth, he would use Article 234 relating to prior commitments to maintain Commonwealth arrangements that he had agreed in the general negotiations to scrap and would insist on keeping the E.F.T.A. agreement in being whatever else he might have agreed in Brussels. There was a lot of briefing to the Press from the Brussels powers last week that the Lord Privy Seal must be tied hand and foot on Article 234 lest he gets in by the back door what he has failed to get in at the front door of the negotiations. I understand that he has properly denied that he had any such intention, and I think that he was right to do so, because if he cannot win his points about the Commonwealth and E.F.T.A. in the main negotiations by a frontal attack, he should pull out of the negotiations. He should not use the back door, and I am glad that he has made his position clear.
When he gave his assurance about Article 234, did he raise the question of one prior commitment which is affected by this, one of the most important of all the prior agreement, namely, the Commonwealth Sugar Agreement? When I have raised points on the Commonwealth Sugar Agreement before, the Lord Privy Seal, has said, rather tetchily on one occasion, that he had not yet got as far as this. Perhaps he has not, but in view of its vital importance for the West Indies and other parts of the Commonwealth he ought to have, because I think he will realise that neither an offer of association to the West Indian countries, nor any development of the present sugar commodity agreement, will solve this problem. These areas must have the Commonwealth Sugar Agreement, and this must be a sine qua non of any settlement in Brussels. I wonder whether when he gave his assurance on Article 234, which he properly gave, he at the same time specifically reserved the Commonwealth Sugar Agreement?
Would he say a word on Article 234 about East-West trade? Is it the intention that any trade agreement we have
664
with Eastern European countries would have to lapse, would have to go, if Britain entered the Common Market? It is, one understands, a fact—the right hon. Gentleman will perhaps tell us whether this is true—that the Government are refusing to enter into long-term agreements with Eastern European countries and are only prepared to negotiate on a twelve-months basis because of the fact that we should have to scrap and curtail all this trade if we entered the European Economic Community. I hope the right hon. Gentleman can deal with this point. If he cannot, perhaps he might consider publishing in HANSARD the text of assurances that he gave on Article 234.
We would like to know the position on E.F.T.A. We were a little reassured by what the right hon. Gentleman said, because there were inspired stories last week that the Six were holding back even on the Norwegian and Danish applications until we were in. This has been dropped by the Six, but we still have the problem of the neutrals. I was glad to see a Press report that the Lord Privy Seal has been completely firm about the E.F.T.A. position in Brussels. From what he said tonight, that is the impression he was trying to give the House, that Britain cannot enter until the requirements of all our E.F.T.A. partners, neutrals and others, have been specifically met, whether by membership or by association, and I hope that the Six are now in no doubt whatsoever about the British Government's position on this, because we know that the British Government are fully committed.
I have a list of twelve detailed and specific commitments made by Ministers on the subject of E.F.T.A. in this House and elsewhere. Some had to be got out of them, but we got them in the end, and if I thought there was a danger that Her Majesty's Government might go back on the commitments I would read them tonight, even at the risk of wearying the House, but, despite the fact that the Government dishonoured their Commonwealth pledges, I think that the right hon. Gentleman intends to stand firm on the pledges to the E.F.T.A. countries. I am assuming therefore that the Government will stand by their word, and this relates not only to Norway and Denmark, but refers also to the neutrals, and that as regards the neutrals the Government will

665
stand firm not only on the acceptance of the neutrals as associates, but will stand firm on the timing of that acceptance.
On the question of associated overseas territories, the Government have rather given the impression that they have some concessions, that this convention on A.O.T. is remaining open for the African countries to think again. That is what the Convention said. It stands permanently open, so there is no real gain here so far as we can see, and I hope that the Lord Privy Seal will make this clear. If one of the African countries, say, Nigeria, does not accept A.O.T. status—and this is a matter which must be decided by Nigeria alone—and if some separate form of association is negotiated which goes less far than A.O.T. status, does not mean that Britain, on entry into the Common Market, would then be forced to erect discriminatory tariffs against Nigerian produce while allowing free entry of produce from ex-French territories in Africa, in other words, discriminate against Nigeria in favour of, say, Senegal, or other French territories? I hope that that will be made quite clear tonight.
I want to come to the main issue of the negotiations, on which we have now come very near deadlock—the issue of agriculture. As I understand the position—if I may try to summarise it—the Lord Privy Seal, having first sold the pass by accepting the Community's agricultural problem, still hopes that the prices fixed, commodity by commodity, will be reasonable—that is, low enough to permit a full inflow of Commonwealth imparts; while the Minister of Agriculture has sworn by Ceres and Pomona, or whatever gods and goddesses a Minister of Agriculture swears by, that prices will not be low enough to permit any such thing.
Having accepted the E.E.C. agricultural system, I understand that negotiations have reached near deadlock on two things—and I am still only summarising the position. The first of these is the Community's insistence that our two-price system, and its concomitant system of deficiency payments, will be wound up, cut off, dead, the moment that we enter the Common Market—as against the insistence of the Minister of Agriculture on a more lingering death. I have quoted in the House the very, very clear and categorical insistence by the Minister
666
of Agriculture, in that very brave speech of his on 6th June—which I now think that he would like to forget be ever made—that the deficiency payment system must continue for many years.
The second thing, as I understand it, is that although a working party has now been set up we may again be very near deadlock—and here the disagreement is perhaps as much between the members of the Six as between the Six and ourselves—about the financing of the Common Market Agricultural Fund and the ultimate disposition of the hundreds of millions of pounds of which British and other consumers are to be mulcted by the operation of this iniquitous import levy.
That is the position on agriculture, as I understand it. I hope that that brief summary—and I have put it with deliberate restraint—will be accepted by the House as a fair statement of the position that we have now reached.
Let me take these three issues one by one. First, the agriculture programme. Once again—and I am amazed at him—the Lord Privy Seal confirms that he has walked right into it as soon as they drafted it. Why? Has not it occurred to him that by accepting it he has made it impossible to get a price low enough to allow Commonwealth imports except by driving British farmers into bankruptcy? I gave him the whole argument on 8th November, and I repeated it in a letter to The Times last week. It is significant that the vast and highly articulate pro-Common Market lobby, never slow to rush into print, has not raised a single word of disagreement with the argument that I put forward in that letter. Not a single hon. Member of pro-Common Market persuasion, or a single pro-Common Market supporter in the whole country can defend or justify the Common Market agricultural system.
For fifteen years in this country we have reconciled the apparently irreconcilable requirement of cheap Commonwealth food imports with a fair measure of security for the British farming community. We have done it by this two-price system, bridging the gap between the two prices by guaranteed markets and price averaging when we were in power, and by deficiency payments by right hon. Gentlemen opposite. Now we

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are to have a single price if we go into the Common Market. Ministers delude themselves if they think that we shall get a price which will allow in Commonwealth imports and be fair to British agriculture, because, on a single price system, there is no such price. And for most agricultural commodities European prices are a good deal higher than ours.
Let us take wheat, for example. The French target price for wheat at present is about £35 9s. per ton. In Germany it is £43 3s. Comparable Australian wheat is coming into this country at between £20 and £25 a ton at present. That means that if the Common Market price is no higher than the French price there will be an automatic import levy of at least £10, or 40 per cent., on Australian wheat coming into this country, and if the final price fixed is anywhere near the German price the levy will be at least £18, or 72 per cent.
We have accepted the agricultural programme with the certainty of harming if not destroying either Commonwealth trade or British agriculture. But we have also accepted the likelihood of an increase in food prices of between 8s. and 10s. per head per week. The Lord Privy Seal gave some very revealing figures recently, which were published in the Daily Telegraph. I do not know whether they were meant to be published, but, on any calculation, they suggest an increase of from 8s. to 10s. per head per week. If this happens, what do hon Members think will happen to wages and industrial costs?
Then there is the effect of this levy on our balance of payments. It has been estimated that this would be £250 million a year, and possibly more. The right hon. Gentleman has accepted all this. For what? For fair words—and even some of those fair words have been qualified in the past two months. So we do not now know what they meant. We had some fair words on New Zealand in August. Since then, however, the French have made it clear that they do not accept what we thought was the general interpretation of those offers to New Zealand.
Having swallowed the camel, Ministers are now arguing about the question of transitional provisions. We have been
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told that the deficiency payments will end on the day that Britain enters the Common Market. There may be an easement for one or two products, where British prices are above the European level. That goes without saying. The Lord Privy Seal hinted that a possible extension will be allowed for a month or two in order to carry the Government up to the election without a too obvious repudiation of yet another pledge to British agriculture.
As for the agricultural fund—here we have a really monstrous proposal. The levies on our food would not accrue as tariff revenue to the Chancellor of the Exchequer. If they did he might use them for paying increased pensions, or for partial compensation of higher living costs, by cutting Purchase Tax on essentials—although, being a Tory, he would probably give the benefit to the Surtax payers, on the ground that they would need better incentives if we entered the Common Market. But he will not have a chance of making this decision, because this enormous revenue will have to go to the European fund, and it will be used partly to subsidise European agriculture and partly to subsidise exports of high-cost European produce in third countries, and so have the effect of penalising still further Commonwealth producers who have already been pushed out of the British market.
Let me tell the Lord Privy Seal what he should have done, and what he should still do. He should recognise that negotiations on detail, from now till Domesday, cannot solve the agricultural problem. We cannot accept the agricultural programme so long as it is based on this penal import levy, and if the Six persist we should join with the majority of the G.A.T.T. countries, including the United States, in declaring it invalid. That is what the right hon. Gentleman should be doing.
On 8th November I reminded him that this policy is contrary to the letter and spirit of the G.A.T.T. He disagreed. I ask him now, who was right? Ten days later the 18-member Committee of the G.A.T.T. condemned the E.E.C. programme out of hand, and fourteen days later the United States Secretary for Agriculture subjected it to a blistering attack. Why does the right hon. Gentleman, having this weapon in his hand, insist on

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always negotiating from weakness when he could negotiate from strength and insist on accepting something which he must know to be wrong when he could be fighting for what he knows to be right. It is because of this posture that the Government have adopted from the outset; because of the ministerial speeches; because of the spirit of Llandudno, and because of a Prime Minister who insists on treating these vital negotiations as an electoral gimmick, that we are in this weak position.
Let the right hon. Gentleman think again. Let him recognise that while the industrial Common Market can be outward-looking and liberal—and I believe that it is intended to be—the agricultural Common Market is restrictive, autarchic and Schachtian and is an offence to the trading interests of the free world. It will divide, not unite. We should have no part in it. I do not want to rub salt in by saying too much about the Acheson speech. I think Lord Attlee was right yesterday in saying that the Acheson speech was an attack not on Britain but on the Government of Britain. Ministers reacted against that speech last week, and I was rather surprised, because the Acheson speech was in fact Macmillan in an American accent. It was the same thing, the same theme, that we are nothing without Europe. That was the main theme of the Prime Minister's T.V. broadcast and his Llandudno speech. And there was his reply to Lord Chandos. After all the jibes at my right hon. Friend's thousand years of history, we got the lot from the Prime Minister—we got four hundred years of it at any rate, going right back to Philip II of Spain. I ask you!
I do not think that it is quite a parallel. I do not remember the Lord High Admiral of those days, Lord Howard of Effingham, negotiating with another Power for the weapons with which to defeat the Armada; or saying that we must have them if we were to have an independent defence policy. No. While I disagree with the Acheson speech as a description of the real mood and temper of the British people, and I disagree still more with his conclusions, one can see how anyone who has watched this country and the right hon. Gentleman from July, 1961, onwards could get the wrong idea of that temper
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and that mood. A lot of it derives from the posture of the Government.
It is from this posture that Ministers—I warned the House last May that this would happen—are trading defence and foreign policy for supposed economic advantage. We sabotaged the chance of preventing the spread of nuclear weapons by defending a French nuclear policy for which Ministers in their hearts had nothing but contempt. I make this further forecast. The Minister of Defence will be offering to save President de Gaulle £300 million and four years in time by offering him plutonium, if the Lord Privy Seal thinks this necessary to get another concession on processed food stuffs.
I began by saying that one or two Ministers—not, of course, the Lord Privy Seal—are beginning to lisp the language of alternative policies. We welcome it, but it is a bit late. Eighteen months ago we told the Government that they would negotiate from greater strength if they worked out credible alternative policies to strengthen their hand; policies to fall back on if our negotiating partners proved too obdurate. Earlier this year we indicated more than once what they should do. We set it out in our Brighton document. Let me conclude by opening the eyes of the Lord Privy Seal to wider horizons than those to which he has been confined for the last few months and to the basis of real negotiating strength.
First, whether in or out of Europe, we should turn our eyes towards an Atlantic trading community, indeed, one covering the whole of the free world rather than a community covering part only of Europe. In the last debate I referred to the Clayton-Herter Report to the U.S. Congress which I believe holds the key to the future in this respect. President Kennedy's trade expansion Act envisages negotiations within the spirit of G.A.T.T. with the enlarged Six, including Britain on one side of the table and the United States on the other. So be it, if we get in. But if entry becomes impossible, I recognise that there will be a big traumatic shock in Washington, though—let us be frank—more and more Americans are becoming worried about the implications of the E.E.C. policies especially in relation to agriculture.
When we have all had time to get over the shock, why not have the same negotiations with the United States, with,

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perhaps, a different shaped table; with the United States Britain, the Commonwealth and Latin America and the E.F.T.A. countries on one side and the Six on the other? I know that this would mean a small change in the United States legislation by including the Douglas Amendment. But after all the Chairman of the Ways and Means Committee of the House of Representatives made it clear that this was envisaged if the Brussels negotiations foundered. Out of the breakdown we could then erect a freer trading community for the whole of the free world, with, one hopes, agreement at long last on measures to increase the volume of international liquidity; with commodity agreements—after all the initiative did not come from the Six in Brussels; it has been on the international agenda for many years—with provision that if the Western world insists on having higher prices, and we do, for agriculture, any resulting surpluses should be made available to the hungry nations of the world. It may be time to reconsider Lord Boyd Orr's pronouncement regarding the World Food Board which was made many years ago at a time when it would have been more difficult to accept it.
It may be said that this is visionary and that American protectionists will never agree. Perhaps I have had as much experience of this kind of negotiation with the United States as anyone in this House. I am not sure, however, that the kind of negotiations which I have mentioned need be more obdurate or difficult than the kind of negotiations which the right hon. Gentleman has been having in Brussels all this time.
Because of this fear that these negotiations may not succeed or because of the greater likelihood that they will take a long time, my second point is that we should consider it all the more urgent that the Government should press on more urgently with improving the links of Commonwealth trade. By this I do not mean a Commonwealth free trade area. I have advocated that in the past, and I wish that we had one. I believe the Government should have made all-out efforts to get one. But I also believe that now the opportunity has passed.
The shock to the Commonwealth resulting from Ministerial treatment of
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their pledges this year has been too great to be able to get a Commonwealth free trade area now. But I believe that the atmosphere, particularly if the Brussels negotiations break down, would be such that a British Government—may I say that a new British Government would have a 100 per cent. better chance of success than this one—could then call a Commonwealth trade conference, and we could begin with the development plans and see what we could do to help with essential equipment.
I am not only talking of plans for the under-developed areas. What about a big development scheme in New Zealand where a textile mill has just broken down, for which we have some responsibility? What about a development scheme in Australia such as the scheme in the last decade, the Snowy River scheme? Experts and engineers should sit down together to see how our productive capacity could be integrated in these various production schemes. This could lead to a substantial increase in Commonwealth trade. Let us recognise that it could not be a one-way trade. It could not be unilateral. We should have to give guarantees about buying goods both from advanced Commonwealth countries and underdeveloped Commonwealth countries.
If we are to do this, it would mean reversing this laissez faire attitude of the past ten years, and it would mean forsaking our ideological worship of speculative commodity markets and a return to guaranteed markets at fair prices. I have said again and again that I do not accept the decline in Britain's trade with the Commonwealth as due to historically inevitable factors. Our decline in recent years, our relevant decline in Commonwealth trade, has been due first to Conservative ideology and a succession of wrecking measures breaking the links of Commonwealth trade—such as the futile restoration of the Liverpool cotton market, which has never worked anyway.
Secondly, it has been due to the miserable failure of large sections of British industry—there have been honourable exceptions—to capture Commonwealth orders Which were open to us. In the last debate I gave the House some figures showing that the decline has not been in

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Commonwealth imports as a whole. They have increased steadily. The decline has been in our share. We have lost the markets, despite preference, to exporters from Germany, Italy, Japan and the United States. If we are to win these markets, it will mean a major redeployment of our industrial resources on hard-core goods; the production of the goods which the Commonwealth and other countries want. We shall not win back the markets which we have lost with a soft-centre economy.
I will not develop my third point because it is more appropriate to another debate. It is the need for a virile reconstruction of our economy and industrial life on lines which we have urged for so many years. Every hon. Member in this House knows that, in Europe or outside, we shall be a backwater unless we ourselves, both sides of industry, Government and Parliament, effect a transformation in our economy so that we can recapture that lost dynamic; so that we can get British industry sparking again on all six cylinders instead of idling and misfiring.
I suggest this three-point alternative which we should be preparing. If the Government would even now at this eleventh hour seriously apply themselves to such an alternative, recognising all it would mean for both the external and internal economic policy, they would, at one and the same time, strengthen the hand of the right hon. Gentleman in negotiations and provide an alternative and viable policy to fill the vacuum, the dangerous vacuum, which we may face if, in January or February or March, we are faced with the clear realisation that the terms dictated to us in Brussels cannot be accepted without national humiliation. By failing to prepare such an alternative, the Government, on their own argument, are driving us into a position where there may be no alternative to unconditional surrender.
8.0 p.m.
Sir Anthony Hurd: The right hon. Member for Huyton (Mr. H. Wilson) has given us the benefit of his views at considerable length—much greater length than the Lord Privy Seal's speech. I shall try to follow the example of my right hon. Friend the Lord Privy Seal and speak for only a few minutes. [HON. MEMBERS: "The Lord Privy Seal
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will speak twice."] I shall get through my speech more quickly if hon. Members do not interrupt me.
My right hon. Friend has invited questions. I should like to be quite sure in my mind that he has been firm this week in making plain to the Six in Europe what is not possible for Britain in terms of food policy as it would affect consumers, as it would affect our own agriculture, and as it would affect Commonwealth agriculture. It seems that a lot of the cross-talk we have had reported to us in recent months has been due to the fact that for one reason or another the Six have not done their homework and have not grasped the elementary facts of political life in this country.
There are certain things which it is not possible for us to do. If the Six really want us to join the Community they must take note of that. They must adjust their ideas to meet us at least halfway. That is not merely a theoretical expression of view. It was one brought home to me in practical direct terms when I went to Brussels and had a talk with Dr. Mansholt at the Commission's office there.
We have this so-called common agricultural policy for Europe. I ask the Lord Privy Seal this. When we said that we accepted a common agricultural policy, we did not, I assume, think just in the terms of what was agreed on 14th January? That is a quite hopeless agricultural policy for an enlarged Community. It makes no sense at all when we have not only Britain, but Denmark, Eire and Norway in, to hinge the whole of agricultural policy on maintaining an extravagantly high grain price. The great majority of producers in the enlarged Community are concerned with livestock. That, also, is of major interest to the consumers in the Community.
It makes no sense for an enlarged Community to which we are now looking forward to hinge everything on a high grain price. It would make nonsense of Article 39 of the Treaty of Rome, which provides for improved conditions for rural communities, and so on. If we have wildly fluctuating prices for eggs and pig meat—to take very ordinary products produced by hundreds of thousands of farmers in Europe and here, commodities on

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which their livelihood depends—we would not have an agricultural policy which could endure or be tolerable for many years in Europe. I am certain of that.
I am glad that we have this Ministerial study group at work, in which my right hon. Friend the Minister of Agriculture, Fisheries and Food is no doubt taking a very active part. He, I hope, will be able to tell the Ministers of the Six what we mean by an agricultural policy. It is not merely a matter of fixing a high grain price to suit France or us, or something like that, but an overall policy which will ensure a decent pattern of agriculture and a rising standard of living for rural communities. There may be fewer employed on the land, but they should be able to earn a better living and produce more of the quality goods which consumers want at reasonable prices.
That is what we understand as an agricultural policy. We have achieved what we have done in the last twenty years by very different methods from those proposed for Europe. We have to accept the idea that our deficiency payments will have to be phased out, but we want it to be a gradual process. That I hope it will be, at least until 1970. We must not dismantle the Agriculture Acts, not only because it would be hazardous for us to do so, but because there is much in our policy which is set out in those Acts which Europe will need to apply for her own good whether we join the Community or not. Therefore, I say, "Do not throw something on to the scrap heap which has proved valuable to us and which is an object lesson to Europe."
I hope that the Minister of Agriculture, Fisheries and Food is making quite plain to the Six in Brussels what we mean by an agricultural policy and not only an agricultural policy for a transitional period. The Lord Privy Seal spoke of the Ministerial study group and what would happen in the transitional period. I am much more interested in what will happen after it and what Line of thought and principles are likely to guide the development of an agricultural policy in Europe. They have not got a policy at the moment—not what I regard as a policy.
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We want to know how their minds are moving and how they are thinking about the longer-term view and not merely of the transitional period of a few years. We can get through that, but we should like an assurance about the future before we go to our constituents and say, "We consider that the Lord Privy Seal and our Ministers as a body have gat acceptable terms for British agriculture," in this instance and, in the wider scope, for Commonwealth trade. It goes much deeper than the transitional period.
Another point I wish to put to the Lord Privy Seal is about Rhodesia. Some of my friends in Rhodesia are very anxious about their future in relation to tobacco and the market in Europe. They see that Greece, by association with the Common Market, has an opportunity to increase her production of tobacco by 20 per cent. They are asking whether there will be a market here or anywhere else for the tobacco they grow in Rhodesia and for the other crops on which they depend. Rhodesia has hardly been mentioned in these talks. We realise the reasons for that. Rhodesia's constitutional future is uncertain. But it would be only right and proper that the Lord Privy Seal should say a word or two about the prospects. Many good friends of ours in Rhodesia should know what future there is for them if we go into the Common Market, and how it may affect them.
My main concern is to get a clear view from the Lord Privy Seal about the Common Market agricultural policy for an enlarged Community. Let us be quite clear that the agreement of 14th January, reached in the small hours of the morning, or the long hours of the night, is not a policy for an enlarged Community which would endure, or which would be tolerable for us or the Community as a whole.
8.10 p.m.
Mr. Guy Barnett: It is with a feeling of diffidence that I rise to make my first speech in the House, and to do so in this very important debate. I think that hon. Members are aware that the subject of the debate earned some prominence in the by-election in the constituency which I have the honour to represent, and it was this fact which made me decide to ask the

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House for its tolerance and indulgence while I make my maiden speech.
I feel particularly honoured to be following the last hon. Member who represented South Dorset. I believe that he was respected on both sides of the House for his great independence of mind and that he has gained greater respect on this side of the House for that quality during recent weeks. May I hope that in representing South Dorset I shall to some extent attempt to follow him in that quality if not in some others?
There are one or two comments which I should like to make about the by-election in South Dorset in connection with this debate. It was said that the by-election campaign itself aroused an interest in the Common Market which did not exist in the constituency before the by-election took place. But I had plenty of opportunity of discovering that many people,in South Dorset were exceedingly worried and confused about the whole question of the Common Market and wanted a great deal more guidance than they were getting on the way in which the negotiations were being conducted and the possible consequences of our entry into the Common Market.
I should also like to point out that the prominence which this subject gained in the constituency is not due only to the fact that agriculture is a very important industry there. In fact, I believe that I am right in saying that there are only about 600 land holders in South Dorset, and, important as it is, agriculture is only one of a number of important industries in South Dorset.
If I may speak for a moment about the constituency itself, South Dorset contains a great variety in its scenery, its industries and its people. I was surprised to discover how many people living in the constituency today originated from elsewhere, and I was particularly surprised to note the many different parts of the British Isles from which they came. As hon. Members are aware, it is a very attractive part of the country, with its great links with pre-history and history and its delightful villages. In fact, I would go as far as to say that there is no other hon. Member on this side of the House—or perhaps only a few—who can claim to represent a constituency as beautiful as that which I represent.
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I should also like to point out that South Dorset is a developing constituency. There are the very famous stone quarries at Portland and Purbeck and, of course, the dockyards, but more recently, there have been added engineering establishments and the very exciting development of the atomic energy plant at Winfrith Heath. But I hope that in future in this developing part of the country a real attempt will be made to maintain the natural amenities, upon which the thriving holiday industry of South Dorset depends. This depends ultimately on proper town and country planning of the area to make sure that this is possible.
If I may turn to the issue of the debate, I should like to say a few words about agriculture. Of the 600 land holdings in South Dorset, about two-thirds are farms of less than 100 acres, and the great majority of these depend wholly or to some extent upon dairy produce. These farmers have had increasing difficulty in recent years as a consequence of rising wages and other costs, and they are already beginning to feel the pinch, particularly as the deficiency payments have virtually ended for milk production.
Farm earnings in the United Kingdom are still lagging seriously behind the earnings of industrial workers. I believe that this position is even more acute in Western Europe. Facts of this kind and the fact, too, that almost inevitably our entry into Europe on present terms will involve a rise in the cost of feeding stuffs are all creating great concern among small farmers in South Dorset. I believe that to a great extent they have a right to be apprehensive about the future.
I should like to tell the Lord Privy Seal and the House that this has grave consequences at present. Farmers, as the House is aware, have to invest for the long term, and many small farmers to whom I have spoken are anxious about the wisdom of investing in plant and machinery for their farms, or indeed in livestock, as long as their future remains as uncertain as it seems to be at present, while these negotiations are continuing.
May I add that it is not what one might term merely the bread-and-butter issues with which, as I discovered, people in the country are concerned. In addition to agriculture, people living on retirement pensions are very worried by the prospect

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of a rise in food prices. Many people expressed to me great fears about the possible development of unemployment and the inability of Her Majesty's Government to cure it. But ultimately, I believe, one of the interesting consequences of the conduct of the negotiations is to make our people more aware of some of the problems which Britain will face in the world and of Britain's place as it will be in the world in the future.
I am certain that whatever course we take about the Common Market, and whatever terms we ultimately succeed in getting, our entry, or otherwise, will have far-reaching consequences throughout the world. I hope that I am not overestimating the importance of the position of this country in this respect, but I should like to illustrate this point of view by mentioning the African Continent, in which I have lived and worked, because I believe that the possibility of African countries accepting associate status is relevant to the point which I am trying to make. It may be possible to get certain African territories to accept associate status, but, as hon. Members are aware, many African territories and some African politicians are opposed to the idea of accepting it.
It may be possible to talk them into taking a step of this kind. After all, I believe that for many of them this would involve certain financial inducements and possibilities of trade with Europe in the future. But I believe that the dangers of this step are to be seen in their own instincts against it which they have shown. It might have grave consequences on the political relationships between African countries in the future and also on the kind of part which African countries will be able to play in future world affairs.
I believe that it is reasons like these which should make us more concerned than perhaps many of us are about the consequences of the way in which we conduct the negotiations—the consequences as they are likely to be for countries in other parts of the world. This is the reason why I should like to end by saying that I believe that these negotiations, and their consequences, are likely to have far-reaching results beyond this island and, indeed, beyond the Continent of Europe.
8.20 p.m.
Mr. John Biggs-Davison: I am quite young in this House, and this is the first time that it has fallen to my lot to be able to congratulate a maiden speaker. I do so with very great pleasure, because the hon. Member for Dorset, South (Mr. Barnett) has spoken with fluency, with charm, with grace, and with a confidence which some hon. Members like myself who have been longer here may envy. I will not say that I was happy when I heard that the hon. Member had got "sandwiched" into the House. It is customary to say that we hope that we shall hear the hon. Gentleman again here on many occasions. I hope, perhaps, that those occasions will not be too many. I hope that he will forgive me for saying that. I very much appreciated what he said about his constituency. Dorset is a lovely county.
I do not think he knows that among his constituents are my parents. They did not vote for him.
Hon. Members: Who did they vote for?
Mr. Biggs-Davison: I am not going to enter into that, except to say that, as both the former Member for Dorset, South and the unsuccessful Conservative candidate were both friends of mine of long standing, the whole matter was most distressing. My distress has been relieved by the charm of the maiden speech to which we have listened. I hope that the hon. Member will look after my parents well. My father retired from the Army with an officer's pension in the nineteen-twenties, and if the hon. Gentleman can do something to raise it he and I will be tremendously grateful.
Like the right hon. Member for Huyton (Mr. H. Wilson), I detect and welcome a greater degree of realism in considering the question of the Common Market. It no longer appears to everybody as the European Eldorado and no longer do we hear from the City of London and the City of Westminster that British has to go in or go down. I feel sure, and I am glad, that the Government are now considering alternatives, both to give added strength to the Lord Privy Seal's bargaining position and also to provide for the possibility that an honourable entry cannot be obtained.

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Some of us on this side of the House offered some suggestions for alternatives in a letter to The Times, which I hope the Government have found helpful. The right hon. Member for Huyton posed some alternatives. I disagree profoundly with his alternative of an Atlantic union. I objected very strongly when the right hon. Member suggested that we should invoke G.A.T.T. against our European allies, because I believe that if we are going really to achieve a satisfactory arrangement as between the Commonwealth and Europe, we may ourselves have to secure some radical modifications of G.A.T.T. Of course. I quite understand that the right hon. Member for Huyton—I am sorry he is not here—has a feeling of paternity for this Agreement, which he signed on behalf of the Labour Government and which I believe has through its "no new preference clause" and its ban on discriminatory trading agreements done a great deal of harm to the Commonwealth and made it very difficult to unify Europe economically.
However, I agreed with the right hon. Gentleman that we should give more weight to E.F.T.A., and in our letter to The Times we stressed the importance of bringing E.F.T.A. and the Commonwealth together. E.F.T.A. has been under-estimated. It is extraordinary how this country is deluged with information and propaganda about E.E.C., to which we do not yet belong, but it is very difficult indeed to get any readable information about E.F.T.A., of which we are a founder member.
E.F.T.A. is useful and important. With the exception, I suppose, of Portugal and the Republic of Ireland, its member States are rich and productive countries. I think that the income per head of population in those countries is higher than in the Six. E.F.T.A. contains two great lending centres in London and Zurich. The merchant fleets of the E.F.T.A. countries have a preponderance of the active shipping of the world. As the hon. Member for Dorset, South pointed out, while in Brussels consideration is being given to how food in this country can be made more expensive, if we were to fall back or if we went forward—that would be a better way of putting it, perhaps—on an E.F.T.A.—Commonwealth basis, our own farmers,
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the old Dominions and those Scandinavian countries, which are almost honorary members of the Commonwealth, would give us the economic advantage and competitive edge of cheap food. We should also have the advantage that the shipping, air and insurance services of this country would be fully used.
I say to the Government that the Common Market is not all, but I am one of those who profoundly believe in political solidarity in Europe. Disunity in Europe has meant dependence for the nations of Europe. It has been deplorable that the European nations have not been able to organise an orderly process of decolonisation, because disorderly decolonisation in Africa has meant murder and misery for millions of people. It is regrettable that the European nations have not had a common policy at the United Nations Organisation where they have so many common foes.
I deeply deplore what the right hon. Member for Huyton said about France. I deplore what he said about the French deterrent, because I am convinced that, whether it is a British and a French, or an Anglo-French, or a European deterrent, if there is not to be deterrent power on this side of the Atlantic—the right hon. Member talked a lot about soft centres—we shall be a soft centre State condemned to cringe.
I do not agree with Mr. Dean Acheson that our world rôle is ended, but I agree with him that our special relationship with the United States has become top heavy and unequal. We and other European Powers, notably France, have non-European duties to perform. I was recently in Morocco and Algeria. The logic was borne in on me there that the Maghreb must be united but that it must be united, if it is to stand and prosper, at the side of France in a United Europe.
We have our responsibilities in Africa, and I would like to support what was said by my hon. Friend the Member for Newbury (Sir A. Hurd) about the position of the Central African Federation in relation to the E.E.C. negotiations. I have with me a letter from the Rhodesian N.F.U., and I will read just a sentence from it. It states:
"In view of the fact that our Government"—

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that is, the Federal Government
"have indicated their desire to be considered for associate status … it seems remarkable to us that our case should be accorded lower priority than the position of the minor dependencies and the trading arrangements for those Commonwealth countries which have refused association."
I hope that the Lord Privy Seal will say something about that when he replies.
This brings me to what the hon. Member for Dorset, South said about other African States. It is to the credit of the Lord Privy Seal and the Community that such favourable terms have been made available to the new African States, but it would be a paradox, having obtained good terms for the African Commonwealth members, though not quite such good terms for the Asian Commonwealth members, if three European nations of the Commonwealth—I mean Canada, New Zealand and Australia—were left a-drift on non-European seas.
To that extent, therefore, the Community must be outward-looking. "Outward-lookingness" is part of the jargon in use nowadays and I think that it is time it got a bit of definition. It seems to me one thing for Europe to look outward to its overseas partners but another for it to have to look outward to countries which are not part of Europe and, what, I hope, will be the Europe—Commonwealth system. It will not be possible for Europe to absorb all the surpluses of the United States, for example.
I was extremely perturbed by a leading article which appeared in The Times on 21st November, not necessarily because The Times expressed the mind of the Government, but because Europeans always seem to think that it does. The leader concerned Mr. Orvile Freeman, the United States Secretary of Agriculture's attack on the wicked protectionism of the Six. The article stated:
"Thus Britain's negotiations with the Six have quickly pushed the problem … on to a world plane".
The leader stated later:
"The American intervention is timely."
I would be grateful if the Lord Privy Seal would comment on this kind of argument because I can imagine nothing more likely to ruin negotiations with the French—which are, clearly, crucial in this business—than to say that "the intervention of the Americans was timely".
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It seems, from my discussions with French colleagues, that one of the difficulties is that it is thought on the Continent that we in this country are much more American than we are European. It is necessary, if we are ever to get a Europe-Commonwealth agreement, to establish that we are, firstly, loyal to our Commonwealth kinsmen—I find full understanding of this from Continental colleagues—and that, secondly, we are Europeans not Americans.
I recall the present Prime Minister making a speech in 1949. He spoke of a world dominated by Muscovite and American powers, and my right hon. Friend, who, of course, was not then Prime Minister, went on to say:
"I know there is room for a third. I am sure there is not room for a fourth."
If Community membership can be reconciled with our Commonwealth obligations and can strengthen the special trading relations of the Commonwealth—as the Community is strengthening the special trading relations between other overseas territories of Europe and the European Continent—all well and good. But if not, and if the honourable and essential terms cannot be obtained, then I repeat that the Common Market is not all that E.F.T.A. and the Commonwealth are together a great force and that they could become a greater force, until the logic of events brings together in London these three trading systems to help provide the world with an alternative, to the twin dangers of our time. The first is the catastrophe of an East-West collision. The second—and more present danger—which probably explains this attempted bloodless "Pearl Harbour" by our allies against us over the Skybolt—is a carve-up at our expense between the giants.
8.35 p.m.
Mrs. Barbara Castle: The Lord Privy Seal was very subdued in his opening speech, and rather unusually so. I think that the House got the impression very rapidly that he was less than enthusiastic about his own report, which is hardly surprising, because if we try to get under its officialese we find that the negotiations are face to face with catastrophe.
I think that the House is being unnecessarily gentle with the Lord Privy

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Seal tonight, because if he is in a mess, and he certainly is, it is entirely his own fault. It is astonishing to hear some hon. Members opposite, like the hon. Member for Newbury (Sir A. Hurd), coming along to the House tonight with an air of injured astonishment to say that the common agricultural policy will not help this country and cannot apply to it at all, and making the discovery that the British negotiators at Brussels have adopted it. The hon. Member for Newbury said that the common agricultural policy of the Six is not a policy which can apply to the enlarged Community.
When will hon. Members opposite realise that this has not been a question for negotiation at all right from the very beginning of our application to join? It has been a question of supplication, of "For heaven's sake, take us in." When the Lord Privy Seal tries to put a respectable gloss on his present difficulties, let us remember that this great fight that is going on this week, and which will go on next week and for months after in Brussels, is not a titanic fight at all. The fight is over. The right hon. Gentleman has capitulated to the interests of the Six, and all he is asking now is for marginal modifications of his surrender terms.
Realising what he has conceded to the Six in a desperate effort to get Britain in, the humiliation which the right hon. Gentleman is now facing from the refusal even of marginal adjustments to meet Britain's needs is all the greater. What a price this country is now paying for the Llandudno euphoria. The fact is that the Six are at this moment haggling even about the minor things for which the right hon. Gentleman pleaded. That is a measure of the lack of influence and status to which this country has sunk under the leadership of the Government, and also a clear indication that the Six are determined to use Britain's entry into Europe entirely for the purposes of their own advantage, and not ours.
Let us look at what the right hon. Gentleman has already given away. He has agreed to accept the common agricultural policy; and that is an agricultural policy drawn up by the Six in their own interests. It is a bargain struck between French agriculture and German
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industry, and, when it was struck, no one was concerned with the problems of this country and the Commonwealth. Yet the right hon. Gentleman has accepted it. He has accepted the abandonment of deficiency payments, and what he calls the gradual phasing out. But the principle has been accepted, and this entails, if we go in, having a complete change-over from the British agricultural system to the Continental one—what Mr. Winegarten, of the N.F.U., has described as a "stupendous undertaking"—and this was given away without so much as an attempt to bargain.
Again, the right hon. Gentleman makes no bones at all of accepting the financial regulations. He has seen nothing incongruous or unfair to this country in agreeing that not only should we put import levies on food coming here, but should then pay the proceeds into a common European pool. In other words, the Lord Privy Seal has agreed, quite willingly and not under duress, to tax our imported Commonwealth food.
I agree that he has got one or two exceptions that my right hon. Friend the Member for Huyton (Mr. H. Wilson) mentioned—kangaroo meat, rabbit meat and fish-liver oil—but whenever it has been something of substantial interest to our people the Six have been adamant. I can assure the right hon. Gentleman that to our own consumers, his victories have been laughable. There are not many work-class families that have kangaroo meat for Sunday tea, but very large numbers of them have tinned salmon and canned fruit. The only things on which we can get a victory are those in which no one is interested.
That being so, the Six have got the Lord Privy Seal to agree to a policy of deliberately stimulating imports of European food into the United Kingdom at the expense of the Commonwealth and, therefore, at the same time, of stimulating the high-cost production of Europe at the expense of the output of the world's more efficient and economic producers—a point already adversely commented on by Mr. Orville Freeman and by the G.A.T.T. itself.
Again, as a deliberate act of Conservative policy, the right hon. Gentleman has agreed to push up the British cost of living and, by that, our costs of production. How anyone can imagine that

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that will help us with our trading problems is beyond the comprehension of the ordinary man and woman in the street. That is why these basic facts are never put in simple words, but in the complicated language of Brussels. It is the death by a thousand details that the right hon. Gentleman is imposing on us.
Finally, the Lord Privy Seal has agreed that by paying import levies on food, levies that will go into the European pool, the British consumer will be putting his hand into his pocket to subsidise European agriculture, particularly that of France. This from a Government who fought elections on a pledge to bring down the cost of living. This from a Government who want to ease the burdens on the British taxpayer.
The Government are prepared to make economies at the expense of the British social services, the needs of our own hard-up people—old-age pensioners, the children, and the rest—but without a query they ask us to put our hands into our pockets to subsidise—and, therefore, to stimulate—the high-cost production of agriculture in Europe, and to subsidise Europe's exports unfairly against the rest of the world.
I should have thought that that was enough, that the Six had won enough—is not the humiliation and the surrender big enough?—but they are still not satisfied. In addition, they want all this immediately, and the signs are that the negotiations will stand or fall on it. They think that they have us by the short hairs, and that the Government have no room for manoeuvre—and, after Llandudno, can we blame them for thinking that? After the pitiable economic performance of the Government, can we blame them? Never has our fighting power or negotiating capacity been brought so low by any Government.
So all this is to come into operation immediately. What that will mean in practical terms, to give only one example, is that the cost of wheat going into our bread will increase by 50 per cent. in a single day. Mr. Winegarten has estimated that butter will jump to 6s. per lb. and that the price of cheese will go up by 50 per cent. All these changes would come in immediately.
The reason for this, given in the agricultural negotiations by the Six, and
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spelt out most clearly of all by the French negotiator, M. Couve de Murville, is that they know that the present low cost of food in this country gives us a competitive advantage against our European rivals.
Mr. K. Zilliacus: They had said so.
Mrs. Castle: M. Couve de Murville has said so. He said, "You cannot phase out your deficiency payment system gradually. You would be at a competitive advantage against the rest of us." What becomes of the wonderful argument that we have to go into Europe in order to sell more? One would never have believed it possible for the party of businessmen, as they call themselves, on the opposite benches to adopt that kind of economic policy. Why should we voluntarily throw away an advantage which our European competitors fear and want to destroy?
When the right hon. Gentleman protests the Six say, "But you can offset the impact of this on the cost of living in your country by introducing subsidies," and the right hon. Gentleman says, "Producer or consumer subsidies". I ask the right hon. Gentleman to be a little more specific when he winds up the debate. Is not there a very important difference between them? Is it not a fact that the Six countries are not prepared to allow us to apply producer subsidies in those cases in which the cost of our food is lower than that of Europe, that it is only consumer subsidies that we should be allowed to introduce except on eggs, pig meat and, perhaps, horticultural produce, the prices of which are higher than those in Europe?
I ask the right hon. Gentleman to tell us whether the Six are insisting that to meet these difficulties of the transitional period we should employ only consumer subsidies and why. There are two great snags here. First and foremost, they could only be transitional, anyway. By 1970 we should have to denude ourselves even of that help in fighting the increased cost of living. Secondly, the great advantage to the Six of the consumer subsidy over the producer subsidy is that it would be paid on imported as well as home-grown food. The Six do not miss a trick. It is we who are

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losing. That is why I think that the hopes of the farming community that producer subsidies can be continued in various forms will be betrayed by the Government.
It is obvious that these demands are intolerable. That is why we have had a very different tone from the right hon. Gentleman tonight. But it is not only on these marginal points that they are intolerable. The basic principles are intolerable, and the right hon. Gentleman has already accepted these. The fundamentals have been betrayed and it would be ironical if a breakdown should come over a marginal item when the Government were prepared to sell so much. How tragic it would be for the breakdown to come and for the Government to start talking about the need for alternatives when they have by their obvious willingness to betray the interests not only of the British consumer and British farmer, but of the British Commonwealth, done so much damage to the Commonwealth structure.
I do not believe that this Government can retrieve the position if the crunch comes. This is not a Government which could hope to rebuild our relationships with the Commonwealth psychologically or economically, because they have stabbed the Commonwealth in the back and they can never again rally the confidence and sense of emotional unity in the Commonwealth which alone provide the starting point for a constructive alternative.
The effect of the agricultural policy is only one small aspect of the whole Common Market question. It is a measure of the lack of clarity and thought with which the Government entered into all this that we should be so absorbed tonight in these details of agricultural policy over which there is the likelihood of a breakdown coining when we have not even begun as a House of Commons to discuss the far-reaching and wider issues which are involved in Britain joining the Common Market should the negotiations succeed.
The British public have been misled and under-informed about agricultural policy, but how much more have they been misled and under-informed about the wider political implications of Britain's entry. Here again, the Government have deliberately played down
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the inevitable trend towards complete political union in the Community. They have done it because they have never gone into this business on the basis of wanting to educate the public in the realities of joining Europe. The Government have wanted to lead them in blindfold.
Unfortunately for the Government, however, the people of the Six do not remain silent on this issue. We have just had the latest "blueprint" by the Commission of the Community of its programme for the next phase of development in Europe. The keynote of this report is that the Community must hurry up to complete the process of economic union, that it must hurry up the process of a complete co-ordination and approximation of tax policies within the Community, that it must hurry on to a monetary union and build up a European reserve currency and complete the progress of economic union.
The report goes on to make clear that that is not the final aim, for the logical outcome of that development, as everybody who is honest about this matter knows, is complete political union, also. The Commission makes this clear in its report when it states that
"It would be unrealistic to see a distinction between economic affairs—pooled in the Economic Community—and political affairs, the essential part of which still remained to be dealt with in a political union. … The European Community is in no way a purely economic venture, now to be paralleled by a political undertaking. On the contrary, it can be said that political integration has already begun".
It goes on to state:
"The Commission cannot but adopt a positive attitude to any extension of European unification to fields other than economic and social policy, and notably to defence, the non-economic sector of foreign affairs, and cultural policy. … Its experience warns it against solutions which would not contain an element embodying the Community interest."
That is frank. Anybody who is honest about this European venture would have admitted that from the start.
I disagree with my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), but I respect him for the fact that he has never attempted to disguise that he wants a complete United States of Europe, because that is the only way to get any kind of democratic control of the economic union that is

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being forged more and more closely with every month that passes.
If Britain joins the Community, it will not only be control of our agricultural policy that passes from the purview of this House. It will be the control of taxation policy, of exchange rate policy and, therefore, of social service policy and of planning policy. This House of Commons will become almost an empty shell and democratic power will become a myth. [Laughter.] Hon. Members opposite may laugh, but the alternative before us is either to recognise that fact and, therefore, try to recreate a democratic dynamic in the heart of Europe itself, or sit back, as the Government are always willing to do, and be ruled by a bureaucracy and a council of ministers. Of course, Members opposite like the unchallenged power of civil servants and of heads of Government. But we on this side of the House are democrats and, therefore, know that where economic power is given democratic control should follow.
A week or two ago I spent a couple of days in Paris, at a meeting of the Socialist parties of the Six, planning their united policy in the Community. Of course, it was not surprising to find that at the very head of their list of demands is one to press ahead as rapidly as posible with the creation of a political union and of a United States of Europe, in which a directly elected European Parliament would make the bureaucrats of Brussels answerable and would take control. This is the only democratic solution, particularly at present when, as the Socialist parties point out, economic union is pressing ahead in the form of increasing concentrations of economic and industrial power into a few stronger and stronger hands.
Are these civil servants in Brussels to remain irresponsible, answerable to no one? We are supposed to be fighting monopoly in this country. Would it not have to be fought and controlled even more in an enlarged Community? Therefore, if we are democrats we must believe that, where economic power goes, political control should follow.
These, then, are the fundamentals of the issue, and it is pathetic to see a few hon. Members opposite uneasily waking up to the fact of how much has already
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been given away while they have been asking about little details, such as what shall be the programme for the phasing out of deficiency payments, that are fundamentally irrelevant and unimportant when compared with these basic issues. They are overlooking the fact that the Government were willing, nay, anxious, pleading, to be allowed to sell the major passes of British interest and British freedom.
8.58 p.m.
Mr. Stephen Hastings: The hon. Lady the Member for Blackburn (Mrs. Castle) has made her usual spitfire speech, rather longer than usual and well worthy of the international Socialist brotherhood-sisterhood. She seeks to contrive the failure of the negotiations by any means she can, and, as we all know, a great many other hon. Members opposite see it that way as well. I sometimes wonder what sort of Britain it is that British Socialists of her persuasion look forward to.
I think I know. It is a sort of Titoist-Marxist paradise, neutralist, unaligned and unarmed. From this position they would seek to manipulate the world. I suppose that one is forced to say this of her and her hon. Friends—that perhaps this is a rather more logical position in relation to the Common Market negotiations, should they fail, than that of the right hon. Gentleman the Leader of the Opposition and of the right hon. Member for Huyton (Mr. H. Wilson), who seems to think that having arrogantly thrown over the Six we could suddenly call a world conference and create Atlantis. It is a little early for that.
I speak as one who fervently hopes that the negotiations will succeed. But it is better to be frank and say it—I suppose that many of us at this stage feel that the negotiations have reached a seriously critical point. I must say at the outset of my few remarks that I am not sure that it helps to make speeches which can be interpreted to mean that the situation would be just the same if we failed to get in.
I suggest that my right hon. Friend the Prime Minister engaged in these negotiations because he realised perfectly well that as a major industrial nation we could not continue as we were and as we are. If these negotiations fail, very little will be the same as it

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was before. As a nation, I suggest that we shall be faced with the most searching reappraisal perhaps in all our long history. This could be the position, more difficult even than the decision to join, difficult as that was, because I am not afraid to say that although there may be alternatives, there is no obvious alternative.
In this reappraisal, we might perhaps also, as my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) hinted earlier, in his most able speech, do well to reread, perhaps in a calmer mood than the country as a whole manifested last week, the speech of Dean Acheson. Although I do not agree with everything he said, there was much which should bring home to Europe and to us what our position could be. At a moment like this, it seems most important for us to look deeply and critically not only into the reasoning of the Six, but into our own as well.
Of course, we all realise, and it has been expressed tonight, that the basic difficulty is over agriculture, and here there is a very real problem on either side. Is there something more which can be described as fundamental at this stage? Have the French really some overall reservation about British entry? It is to this that I should dike to devote my few remarks and to make a plea for an understanding on this side, as well as the other, of the relative position of the French and ourselves. Is there not what I would describe as a chronic difficulty in Englishmen and Frenchmen understanding each other's point of view, even though they may agree about aims? This has been tragically the case before in Europe, and I hope that it will not prove to be an overriding difficulty in these negotiations.
I should like to try to define, as best I can, what I believe to be the French attitude, and I should be most grateful to have from my right hon. Friend the Lord Privy Seal his reactions on this. It seems to me to consist of a compound of two separate views which are in a sense contradictory, but which are, nevertheless, aligned against our position.
The first many of us may associate with General de Gaulle himself, and I suppose that it can most easily be
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described in such phrases as consideration for the "grandeur de la France"; la mission civilisatrice de la France, and so on. This attitude may seem to us in a sense arrogant, perhaps out of date, but I suggest that it is no more irritating to us than our insistence that we enjoy a special association with the United States has been irritating to the French. Neither of those attitudes, on our part or on theirs, is very positive or helpful in these negotiations at this time.
The second view which I believe the French hold might be associated with those more closely engaged in the negotiations. They hold a passionate belief in the supranational content of the Treaty of Rome, in the entity of the Community. Anything which derogates from the position of the Commission is, therefore, anathema. The reception of funds by the Commission is to them not only an economic exercise, but also a symbol of its authority, a symbol of the reality of the Community. Sadly, our system of deficiency payments appears to them in precisely this light.
I only wish that I could suggest a way round this dilemma of the French position and our own. Our own position on agriculture seems to me impeccable, I must admit, and, of course, the means of support upon which we have engaged to our farmers in this Parliament are rigid and cannot be changed. I find myself wondering, none the less, whether it is impossible to devise an alternative and equally effective means of support during the transitional period without the necessity of creating a new administrative machine. If we could do such a thing without offending the principle upon which the French take their stand, perhaps there might be a way out of the difficulty, but I realise well that what I am suggesting is ill-defined. But since I do not want to take too long, I prefer to leave it at that. What would be tragic, if it took place, would be if this great enterprise were to founder over something as imprecise as the agricultural policy which the E.E.C. has developed so far.
General principles are often as important to the French as precision of detail is to us. We have a perfect right to expect them to look sympathetically on

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what are our real and particular difficulties, but on their side they also have the right to expect us from time to time to appear to raise our eyes from the price lists and look at the horizon, even if it does not seem to be as closely defined as we could wish.
I should like to observe, in conclusion, that there is a disturbing parallel between our negotiations for entry into E.E.C. at this juncture and the Austrian attempt to join a Customs union, the Prussian zollverein, in the 1830s. Salutary reading it makes at this juncture—salutary for the right hon. Member for Huyton—and I would be glad to lend him the book. One finds the same arguments emerging as those being used today. It is almost uncanny. The Austrians had their reservations over the Eastern territories, their world position, and so forth, and this promising negotiation wandered on for years and then finally failed. It is my hope and prayer that we shall prove, as I am sure we shall, more farsighted and more successful than Austria in her day.
9.8 p.m.
Mr. Roy Jenkins: I find myself in the position, not altogether unhappy for someone speaking late in the debate, of being in substantial disagreement with most of the speeches to which I have listened. But not entirely so; I greatly enjoyed the extremely persuasive and able maiden speech of my hon. Friend the Member for Dorset, South (Mr. Barnett). Unlike the hon. Member for Chigwell (Mr. Biggs-Davison), I hope to hear my hon. Friend again on many occasions, and I do not even have some family votes to contribute one way or the other in the South Dorset constituency.
I think that we are all agreed that this is a fairly unhappy stage in the negotiations, but I suspect that we draw different conclusions from that. I do not draw the conclusion that we ought now to go very slowly and not mind how much longer the negotiations take. The negotiations have been going on for much too long already—for fourteen months.
It is an extraordinary situation and it is an extraordinarily unfortunate preparation for our entry into Europe, if that is to take place, that, when negotiations on matters of great detail are being conducted in a great blaze of publicity, a far greater blaze of publicity than ever the
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Six had directed upon them when they were drawing up the Treaty of Rome, every partial settlement has to be presented as either a victory or a defeat, according to one's point of view. Given this extraordinarily unpropitious beginning, the surprising thing is not that there has been, a movement of opinion in this country against going into Europe, but that there is a substantial body of opinion still in favour of going in, which I am glad to see.
I want to look at what seems to me, with the benefit of hindsight, some of the mistakes which have been made, and some of the dangers which confront us, and I hope that the right hon. Gentleman will not be surprised if I do this in the form of a criticism of the Government's position. I do not think that he will accuse me of having an excessively partisan approach on this subject.
It seems to me to have been a major misappraisal, and one which I hope will not be continued, to believe that we should stay on the threshold of Europe for a very long time, because this seems to me to be our position of maximum weakness. Having failed to go in at the beginning and to be there to play a part in the evolution so far of what we are joining, the position of getting in at this stage is one which I am sure maximises the weakness of this country. I am firmly convinced that once in, given the present balance of power within the Community, we shall be in a very much stronger position to influence its development in the way that we want to see it go.
Some people within the Community even say that we will have a position of leadership as soon as we go in. I think that it is wrong to put it in such strong terms as that, but I think that we will certainly offer a competing pole of leadership to some existing poles of leadership, and will be in a very strong position to influence what happens. But this we cannot do while waiting to get in, and nothing could be worse than to go on prolonging indefinitely this threshold position which has already gone on for far too long.
The second danger and mistake for which the Government are to a large extent, though not exclusively, to blame is that opinion in this country has been encouraged to become obsessed with the terms of our entry as opposed to the principle of whether we go in or not. I think

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that I carry my hon. Friend the Member for Blackburn (Mrs. Castle) with me on that. There is something much more important than the terms which emerge, and that is the principle of whether we want to go into Europe or not. My hon. Friend does not want to go into Europe—and I am not blaming her for that—because anything to do with the Community is anathema to her. This is understandable, but, whether one wants to go in or not, this is a matter of major importance. This is a decision of major importance, and I say that compared with the terms it is of the order of a hundred compared with five.
By suggesting that we are seeing things out of perspective, we do not, I believe improve our bargaining position in Brussels. It is, of course, difficult to know exactly on what our bargaining position does turn. I do not believe, as some hon. Members think, that it turns on, or is strengthened by, an attitude of complete reluctance to go into Europe at all. I do not think that we improve our position by saying that what is hapenning in Europe is not of major importance, that we do not care whether we go in or not, but, at the same time, the Community should give us terms which are favourable to us.
The strongest position is an attitude of extreme enthusiasm in principle, combined with being firm on particular issues which are of major importance to us, but if the whole thing is allowed to get submerged in an obsession with the terms, and to an increasing extent it appears in Europe that there is no evidence of public enthusiasm for the principle, I think that this makes the Six more reluctant to have us, and more reluctant to ease our conditions of entry.
Even given the decision to concentrate opinion in this country on the terms, I must say that the choice of the most important aspect of the terms which the Government have made is extraordinary. There are three main things which we have been discussing, and will presumably go on discussing. First, the Commonwealth position, secondly, the E.F.T.A. position, and, thirdly, the transitional arrangements for British agriculture. I would have thought that, except from the extremly narrow point of view of the electoral interest of the Government, the transitional arrangements for
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British agriculture—and they are now only transitional arrangements that we are discussing—were by far the least important of these three aspects. If the Government wish to present themselves as having a bold, forward-looking and visionary approach to this question, to concentrate upon this third aspect is ludicrous.
I also want to refer to the problem of E.F.T.A., although I prefer to see this in terms of problems of particular countries who want to become full or associated members of the Community. If we see it solely in terms of the E.F.T.A. pledge—which I always thought the Government entered into rashly and unthinkingly—Portugal stands on equal terms with Norway. This is not my view. What seems to me to be a more important approach, and one which is more likely to commend itself within the Six, is that we regard certain of these countries as being extremely desirable members of the European Community on their merits, and that we see no reason at all why they should not come in at the time that we do.
But it is important that we should not present this too much in terms—which would be false terms, in my view—that we want these countries in in order to constitute, with us, a sort of permanent blocking minority. If this is the picture that we have of the future—that we shall cluster in a sort of Scandinavian corner, perpetually voting in a minority—there will be little point in our going in. I hope and believe that what we shall try to do is to seek to have an influence on the majority rather than to cluster in a permanent minority.
We want these countries in—it would be extremely difficult to go in without Norway and Denmark coming in as full members on the day we go in—but we want them in as desirable members of the Community, on their merits, and not because we wish constantly to vote with them in a permanent minority bloc. Let me add this. Although the question of voting rights is very important, and it is not unreasonable to think that a situation might arise in which we could block a qualified majority—if, by chance, we voted with the two Scandinavian countries and with Holland—it is not easy to visualise a situation which would allow us to be a blocking minority voting

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solely with the two Scandinavian countries, and it would be an extremely difficult thing to ask, coming in at this late stage, that with the new members alone we should constitute such a minority.
The next danger, which has become a real one in the last few months, is that these negotiations may drag on to failure in a way not altogether dissimilar from the way in which the old Free Trade Area negotiations dragged on to failure in 1957–58. We all thought that they were going quite well, for a long time. The Government thought that they were going quite well, for a long time. But the Government faded to appraise the position. In those negotiations the Government consistently under-estimated the cohesion of the European Community. In other words, they really thought that Dr. Erhard would eventually deal with France for them and enable a Free Trade Area to be created. It did not happen. Moreover, the cohesion of the Community is a good deal greater now than it was five years ago.
Although it is an important factor, which will greatly influence our power once we are in the Community, that the Italians, the Dutch, the Belgians, and a very large volume of German opinion very much want us in, it would be a great mistake to think that any of them will risk breaking up the Community in order to get us in. Nor do I not think that there will be all that much of a dune if and when Professor Erhard replaces Dr. Adenauer. It would not be a wise thing to wait for that and to say that it is bound to solve our problems for us.
What do we do now? I believe firmly that these negotiations for British entry must either be brought to a successful conclusion by March or April, or they will, shall I say, never be brought to a conclusion? "Never" is a very big word to use in politics, but it is only just too big a word to use in this connection. It is tempting to say, "Let us wait for another Government" and in a way it is a great tragedy that these crucially important negotiations have to be conducted by a Government who are in a state of weakness and at the tail end of their power, as is the state of this Government. At the same time, I do not think that we should minimise the recoil away
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from Europe which, inevitably, there would be if, by the spring, we were forced to recognise that this set of negotiations had not succeeded.
I do not think that we could go back to the position of negotiating again for quite a long time to come. And by that time I think that the developments in Europe would have hardened to such an extent that we should have very little opportunity to influence them. A solid cliff face of European unity would then confront us. While I do not think that the present terms remotely merit the expression "humiliating", in five or seven years we might have to go in on terms which, while not humiliating, would leave no room for negotiation or for us to influence what was happening in Europe.
I think that the Six should ponder the dangers as well as ourselves. As I have said, I believe that the Government have gone into too much detail in these negotiations. The Government have lost their way in a morass of detail. But, at the same time, they having committed themselves to this position, it must be recognised by the Six that unless the Government are to get something clearly substantial out of the negotiations they will not be able to lead public opinion here into Europe. Equally, I think that the Six should bear in mind, as we should, the consequencies if the negotiations fail in the spring.
I am bound to say that I find it difficult to share the view of my right hon. Friend the Member for Huyton (Mr. H. Wilson) about the vista of cooperation throughout the world which would open up before us in that event. On the contrary, I believe that we shall be in for a decade of recrimination and bickering and weakness throughout the entire West. There will be blame all round. Some members of the Six will blame each other and some will blame us. Some will blame the Americans and the Americans will do their share of apportioning blame, and we shall partly blame the Americans, as perhaps will some of the Six, too. It will be an extremely undesirable situation, all round.
What about the position of this country? Economically I never thought that there was only a fifty-fifty argument for going in, but it is an argument

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on balance. The overwhelming argument is one of political influence. If we do not go in, our political influence in the world will shrink steadily and nothing which has happened in the past few weeks strengthens my view here. What about the special relationship with America today? There has not been much evidence of that strengthening. There is not much evidence that it is something, upon which we could effectively fall back on. And beyond the question of political influence there is the overwhelmingly important question of the mood in this country.
I do not see how a country making national psychological adjustments as difficult as we have been trying to make in this country during the past few years can get as near to Europe as we have got and then recoil without it having a tremendous effect on public opinion. If that came we shall get into a very bitter, complaining mood about the whole of the world.
I was not at all encouraged by the sort of possible alternative prospect which was opened up by the noble Lord the Minister for Science, speaking in Glasgow yesterday. He criticised all sorts of people. He said we had too much criticism from friends who got too used to friendship and ceased to care for our feelings, too much criticism from neighbours, from former enemies and from countries which are growing up. I think that that is a pitiful approach. If nobody in the world appreciates one it is not a bad idea to look at oneself to see what is wrong. I doubt very much whether, in private or national life, one gets people to appreciate one by complaining that they do not.
Equally, I do not think that one makes oneself a great Power by an exchange of letters between the Prime Minister and the President of the Institute of Directors, particularly if they are based on the view that anyone who criticises us wants to invade us and is to be compared with those who have done so in the past. Of course, many people feel that they would like to fall back on the Dunkirk spirit. The Dunkirk spirit was splendid in 1940, when the world was attacking us and we stood alone, but it is no good trying
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to stand as a bastion when the world wants to unite and not to attack.
By summoning up the Dunkirk spirit at present we shall achieve nothing for ourselves or for anyone else, except an increasingly isolated position.
Colonel Sir Harwood Harrison: rose—
Mr. Jenkins: I cannot give way. I am usually happy to give way, but I am about to conclude my speech.
This is a difficult time in the negotiations, but it is a time for the Government to show rather more courage than they have shown during the past few weeks and not to retreat. The fundamental basis on which I believe, and, I assume, the Government believe, it is right to go into Europe still exists. I hope that the Lord Privy Seal will negotiate toughly and quickly, and that he will not be deceived by the idea of false alternatives.
9.28 p.m.
Mr. Heath: Although this debate has been limited in time, I think everyone will agree that it has been of considerable interest. It has covered many detailed questions, but at the same time some hon. Members have dealt very fully with the wider issues.
Before I say something on each of these matters, perhaps I may be allowed to offer my congratulations also to the hon. Member for Dorset, South (Mr. Barnett) for the excellent maiden speech he made this evening. Like my hon. Friend the Member for Chigwell (Mr. Biggs-Davison), I also know the new hon. Member's constituency well, though not from a farming point of view but as a holiday-maker, a pastime in which one is not able often to indulge in these days.
Mr. Christopher Mayhew: We can arrange that.
Mr. Heath: Not, I hope, in the way in which the hon. Member for Dorset, South took his seat. His speech was extremely fluent and dealt both with local issues and the wider issues of European affairs. I agree entirely with what he said to the effect that, whatever the outcome of these negotiations may be, the effects are going to be very great right across the world. He quoted the

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case of the African countries, of which he has great personal experience. Let me say here that the African countries of the Commonwealth must decide for themselves what action they will take on the offer of association. They are independent countries, and it is entirely a matter for them. Our obligation in the negotiations has been to make alternative arrangements for those who decide that they do not wish to take advantage of it.
Turning to wider matters, I must say a word about the speech of the hon. Lady the Member for Blackburn (Mrs. Castle), who said that the House has never given proper consideration to the wider problems involved in these negotiations and in the application which we made in July of last year. I do not quite know what the hon. Lady has been doing in the last 21 months in the House, during which it has been debating these great issues. On 17th May, 1961, I devoted almost my whole speech to the wider issues, before we made the application, and I was then rebuked by the hon. Member for Leeds, East (Mr. Healey) for introducing an irrelevant topic into a foreign affairs debate. Since then there have been the great two-day debates in the House in which we have fully discussed the wider issues involved.
The hon. Lady began, as she said, by dealing pretty roughly with the situation and complaining that these negotiations had been a complete capitulation, with marginal attempts to effect surrender terms, and other graphic phrases of this kind which bear absolutely no relation to reality. She said that the negotiations are facing catastrophe. That, too, is far from the case. But what particularly surprised me was that she said that she believed this to be the case because of the arrangements which we have accepted in the Community. These arrangements were announced when the speech of 10th October last year was published; they have been public now for over a year. Suddenly the hon. Lady comes to the House and says that we have accepted the essential characteristics of the Community. Her own party, as quoted b) the hon. Member for Houghton-le-Spring (Mr. Blyton), issued a proclamation saying, "The Labour Party regards the European Community as a great and imaginative con-
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ception". The characteristics of the Community are its common tariffs, its common commercial policy, the common agricultural policy and the economic union. They are all in the Treaty of Rome.
Mr. H. Wilson: The common agricultural policy?
Mr. Heath: In Article 3 there is a reference to a common agricultural policy. That is in the Treaty of Rome as the objective of the Community.
Mr. Wilson: The right hon. Gentleman is playing with words.
Mr. Heath: The right hon. Gentleman knows that the proposals of the Commission, which were published before we entered into negotiations, the type of agricultural policy was foreseen, because the countries of the Six already had an agricultural policy which was based on the farmer getting his return from the market and not by Treasury subsidies. It was therefore obvious what the nature of a common agricultural policy would be. Consequently, it is surprising that at this stage the hon. Lady says, first of all, that she welcomes this noble concept of the European Economic Community and then that she objects to its characteristics, and then complains that in choosing to attempt to enter the Community we have accepted its major characteristics.
Mr. Wilson: We thought that the Government specifically had not accepted the Commission's proposals before we entered negotiations. In view of the fact that the Commission's proposals involve the import levy and all the rest, is the right hon. Gentleman telling us that before his speech of 10th October he had accepted the principle of an import levy on Commonwealth countries? In that case, how can he explain his demand for comparable outlets in the October speech?
Mr. Heath: I did not accept anything before the October speech. What I said was that the nature of a common agricultural policy could be foreseen from the Commission's proposals, which were published in part before we made the Paris statement. I will deal with comparability and the question of imports from third countries when I deal with

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the agricultural questions which the right hon. Gentleman raised.
The hon. Member for Stechford (Mr. Roy Jenkins) as usual made a most interesting speech. I wish to comment only briefly on it. He expressed a point of view which is based on considerable experience, and I do not in the least disagree with some of the points which he made. But he has attacked the Government's position in the negotiations. I appreciate the reason. In some cases he rightly refrained from expressing views on the attitude of members of the Community and in other oases he did not wish to attack the views expressed by his own Front Bench.
The hon. Gentleman said that it was a mistake to wait on the threshold. We have been endeavouring to carry on these negotiations, as I have said before, at a reasonable speed, commensurate with thoroughness. Indeed, it was at our suggestion that the objective of reaching the, outline by the end of July was agreed upon by all the members in the conference. It was at our suggestion that after the Commonwealth Conference we went to Ministerial meetings every fortnight instead of every month, as we had been doing previously. It has been at our suggestion that we have speeded up the meetings and got longer meetings, and we are now going to have the two full weekly meetings in January with which to deal with the major outstanding problems.
At the same time I have been pressed by the Opposition Front Bench not to set a deadline, nor to rush on with the negotiations. It has been said that it does not matter if it takes a considerable time. Again, the hon. Gentleman said that it is wrong to concentrate on the question of terms. Hare again, he finds himself at variance with his own Front Bench. In these cases, especially as to the Commonwealth, these matters have to be settled. They have matters of detail, complicated and very technical, and none more so than the matters of agricultural policy which the Ministerial group is considering today and is again considering tomorrow.
However great the decisions of policy are, and however big some of the issues are, the details have to be settled, and it is the members of the Community equally who want to see them settled,
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as we do ourselves. In exactly the same way, the details of the E.F.T.A. negotiations have also to be settled. I cannot agree with the hon. Gentleman that we are bogged down in detail. There is always that danger, and I am fully aware of that. Nor do I believe that they are dragging on to failure. Of course, everybody recognises the history of the Free Trade Area negotiations, and none more so than those who have studied them before going into these negotiations. The hon. Gentleman advises us that id would not be right to retreat. Nothing is further from our minds than retreat.
I am sorry that the hon. Lady the Member for Blackburn thought that this afternoon in making my report I was somewhat subdued. It is customary in making a report of that kind in the House, which is not a speech, to deliver it in merely a factual form and not a form in Which one is expressing views. That is the explanation.
I turn to the points of detail which have been asked. The right hon. Member for Huyton asked about the institutional questions. When we deal with them next week we shall have a first discussion of these matters, which will include the question of voting rights. That will necessarily mean the qualified majorities. I have told the House on previous occasions that these cannot be settled for the full Community without taking into account fully, and indeed in conference, the other members who are to become full members. Obviously it is easier to settle all these things at one time if one can do so, and the E.F.T.A. countries, as well as Eire, which has also applied for full membership, are involved here.
The right hon. Gentleman went on to mention the Lord Chancellor's speech at Bristol. If the right hon. Gentleman will refer to the Lord Chancellor's speech in the House of Lords at the end of last summer, he will find the question of Parliament and its powers and the effect of the Treaty of Rome dealt with very fully indeed.
Mr. H. Wilson: Why cannot we have a statement here?
Mr. Heath: It is perfectly proper in a Parliament which consists of two Houses for the right hon. Gentleman to be able

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to read the speech of the Lord Chancellor in the House of Lords. If he wants to have a long and detailed account of the Parliamentary position, in due course I have no doubt at all that he will get it. Meantime, he might like to read the full version of the Lord Chancellor's speech instead of the précis of his speech at Bristol.
The hon. Lady the Member for Blackburn asked about the question of Parliamentary democracy. I suspected from what she said that what she was really indicating was that if these negotiations are successful and we enter the Community, she would like to see a full development of Parliamentary democracy in a European context. She has expressed this view on other occasions elsewhere. There is a great deal of substance in this view. Article 138 of the Treaty of Rome requires the Assembly to draw up proposals for elections by direct universal suffrage. These proposals have been put to the Governments of the Community by the Assembly.
I would have thought that we ourselves had a considerable contribution to make to Parliamentary developments in Europe as and when they occur. I am not here committing myself to any question of direct or indirect elections. It is sometimes thought that this is the only thing which matters. I do not believe that to be the case. I believe that an assembly can have wider powers of influence and control over other bodies without necessarily having direct elections.
As I was reminded the other day in Europe, the American Senate for the first 132 years of its life established its influence on the basis of indirect elections. Therefore, I am not committing myself personally, or as a member of the Government, one way or the other on this question of these important developments in Europe.
Mrs. Castle: Does it not follow from what the right hon. Gentleman has just said that if we were to go into Europe and support the development of a European Parliament with full democratic powers the consequence of that would be pall passu the decline in the powers of the House of Commons and the strength of Parliament here?
Mr. Heath: That is not necessarily the case, and certainly not pari passu because of the structure which has developed under the Treaty of Rome. This is one of the matters to which insufficient attention has been given in the balance of power between the Council of Ministers and the Commission and the Assembly, and it is one of the elements in this situation which deserves not only more thought and consideration but a good deal more examination by the Community itself. There are many members of the Commission who are only too anxious to see that this is done.
I agree with the hon. Member for Stechford in saying that in welcoming members of E.F.T.A. into the Community none of us in E.F.T.A. should look at this from the point of view of operating together as an organised bloc in the Community, any more than new members of the Community should expect to find the Six operating as an organised bloc themselves in the context of the enlarged Community. When one studies the operation of national interest within the Community, one sees that the voting pattern changes constantly according to the interests which are involved and the matters under discussion and I am sure that that state of affairs is bound to continue.
The right hon. Member for Huyton asked some questions about the Asian arrangements. He dealt, firstly, with tariffs and said that some reductions had been made. In fact, we have not reached a settlement on the outstanding remaining ones—and there are five or six of them—including jute goods, leather, kips, carpets and coir mats. Their total value is about the same as cotton textiles and an offer was made by the Six regarding a 15 per cent. reduction across the board, but we have not reached agreement on that basis.
The right hon. Member for Huyton asked about textiles and said that we had achieved no tariff reductions and no safeguards and that all preferences had been lost. That, of course, is not the case. The initial application of the tariff will be, in absolute terms, 3·2 per cent. We shall still be applying a higher duty on Community countries and a higher duty still on textiles from third

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countries in the world. Thus the right hon. Member's statement on lost preferences, while the negotiations are going on, was not true. It was not true because a preference is still retained by India for textiles over European Community countries three months after entry, when negotiations start.
Mr. Wilson: Does it mean that if the negotiations fail the Government will be free to continue these preferences indefinitely, will there be reductions in the preference we give to India or will there be introduced a system of discrimination against India? Are they not committed whatever the results of these negotiations?
Mr. Heath: The application of the décalage will go on in the way I shall describe later. The right hon. Member for Huyton said that when the negotiations start, this will have been lost. There is bound to be a balance in the trade negotiations and if there had been a complete exemption with no application of the common tariff, then the balance of advantage to India in having no application of the tariff could outweigh the advantage of the trade agreement. In our negotiations this had to be taken into account and our endeavour has been to establish a balance between the two sides in these negotiations. The right hon. Gentleman may not accept that there is a balance, but if he examines both sides he will see that there is.
Then the right hon. Member for Huyton said that there were no safeguards for textiles. This also is not true, and both he and the right hon. Gentleman the Leader of the Opposition are constantly repeating this. The Leader of the Opposition did so in his speech in Paris the other day. The remedial action is to be taken within two months if there is damage to this trade, and remedial action can be taken in a number of ways, including reducing the tariff again, or widening the quotas—or removing them; and the same remedial action is taken for the enlarged Community as a whole and not only for the United Kingdom. It is, therefore, completely untrue to say that there are no safeguards for Indian and Pakistan textiles. These safeguards exist and I hope that the right hon. Gentleman will refrain from repeating what he said.
Mr. Hugh Gaitskell: The right hon. Gentleman knows perfectly well that this is totally inadequate, because it comes into operation only if the figures of Indian exports fall below the 1959–60 level, which amounted to about £1 million for the whole of the E.E.C., as against £13 million here; but India wants to increase her exports in +textiles so that she can develop,her country, and that is why it is totally inadequate.
Mr. Heath: The right hon. Gentleman is now confusing safeguards with the present position of trade, with which is combined a 5 per cent. increase each year under the Geneva arrangements towards achieving the expansion which India wants in order to be able to sell many more textiles. The job in these negotiations is to safeguard the interests of the Commonwealth, and that has undoubtedly been done as far as textiles are concerned.
When the right hon. Gentleman says that it is only £1 million as compared with £13 million in the United Kingdom, this is the safeguard of the exports to the United Kingdom and the enlarged Community. It therefore covers all the £14 million. I wish the right hon. Gentleman would not allow his emotional attachments to disturb his economic judgment in a matter like this.
I now wish to go through the moving question of décalage about which the right hon. Gentleman asked me. There are in the negotiations three main groups for industrial goods. For the old Commonwealth they are in three parts; 30 per cent. on accession, 30 per cent. on 1st January, 1967, and 40 per cent. on 1st January, 1970, combined with a trade examination in 1966 and 1969 with Canada, Australia and New Zealand. India and Pakistan, on cotton textiles, have 20 per cent. on accession, 20 per cent. after 18 months, 30 per cent, after a further year and 30 per cent. when member States take the final step for the common external tariff. There is a third rate for the other Asian manufacturers, 15 per cent. on accession, 15 per cent. on 1st July, 1965, 20 per cent. on 1st January, 1967, 20 per cent. on 1st July, 1968, and 30 per cent. on 1st January, 1970.
The position, therefore, is that the Asian countries have the same gentle

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décalage to begin with, and here again the objective was to retain it in that form while the trade negotiations were going on. It is true that the old Commonwealth countries are slightly better off on non-textiles from 1st July, 1968. When we discussed the whole of this matter following the point raised by the Commonwealth Prime Ministers, at that meeting the members of the Community indicated that they thought that when we got to the end of the negotiations, we should review the whole of the décalage arrangements with the intention of simplifying and improving them, and this was part of the agreement we reached with the Community.
Mr. H. Wilson: The right hon. Gentleman cannot stop it.
Mr. Heath: The right hon. Gentleman says we cannot stop it, but when we are agreeing to the application of a tariff, what we are agreeing to with the Community is to review the application of the three rates, or any other arrangement that should be made in order that they may be simplified and improved.
Mr. Wilson: If the negotiations break down—and they may well do so—the right hon. Gentleman has no power to stop this process of décalage and to stop the introduction of a common external tariff.
Mr. Heath: If the whole negotiation falls through, of course, none of this comes into operation, but the right hon. Gentleman is presumably referring to the India and Pakistan trade negotiations—
Mr. Wilson: The Indian negotiations.
Mr. Heath: I confirmed that with the right hon. Gentleman in our last debate. Neither the Indian Government, the Pakistan Government nor the Community is looking to the negotiations to break down, because it is in the interests of both those countries to see that they are carried through, and the countries of the Community are carrying out a great investment in India and Pakistan—far greater than we are. Their interests there are very great indeed, and they have every concern to see that the negotiations are carried through.
The right hon. Gentleman asked about raw materials and, in particular, about newsprint and aluminium. We are still
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negotiating here, and I cannot give specific details. In particular, on newsprint and aluminium, we have asked Ole Community and the Commission to clarify the proposals which they put forward only tentatively at the last meeting but one. It is because there was no precision about them that I am unable tonight to give the right hon. Gentleman the information for which he asks.
The right hon. Gentleman asked about the processed foodstuffs and the total volume of trade. There are 24 items left for further discussion, and the overall value of these is about £22 million. For our imports from the Commonwealth, we have not reached any further agreement since the report I made in Cmd. 1882. So far, the Community has offered the slowest rate of décalage on the foodstuffs—that is on these 24 items—but we have not reached agreement upon them. They are, of course, of very great importance, and we have explained to the Community the point which was raised by the right hon. Gentleman especially in regard to canned food and dried fruit from Australia, where the interests of many ex-Service men are involved.
There is the question of Article 234. I do not think that there are any doubts about our good faith. The questions which were rightly asked were in relation to the relationship of Article 234 to the E.F.T.A. countries as a multilateral preferential area and this country's attitude towards it. That is now absolutely clear and we have reached agreement about this.
We raised the Commonwealth Sugar Agreement at an early stage in the negotiations—last spring—and put forward our own proposals for dealing with it. The members of the Community have not yet been ready to enter into negotiations upon this particular commodity.
With regard to the E.F.T.A. countries—
Mr. Gaitskell: Will the right hon. Gentleman clear up one point about which my right hon. Friend asked? It is about the tariff-free quotas. Can he say whether in general or in specific cases the quotas are temporary or permanent? What is the intention of the Six?
Mr. Heath: It depends on the type of quota. In the case of the quotas that

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are comparable to those on the G list of the Treaty, which the existing member States have, these are quotas that are sometimes without limit. In other cases, they can be changed only by unanimous consent, which means, in effect, that they can be without limit. The arrangements we have made for wood pulp is a List G arrangement. It is already on the List G quota, and this is a case where it is an arrangement for all supplies, and where it can be changed only by unanimous agreement. Some of the other arrangements under Article 25 of the Treaty,—and under Article 25 (3) in particular—are quotas which are arranged by the Commission. They are reviewable, but can continue beyond 1970. They can be either for full requirements or less than full requirements, so it remains to be decided in each case what the form of the quota will be.
With regard to the E.F.T.A. countries, I agree with my hon. Friend the Member for Chigwell that the possibilities of trade in these countries has been under-estimated and that we should try to increase it wherever we can. One point about association which the right hon. Gentleman for Huyton raised was that there was no gain in keeping A.O.T. status open for the Commonwealth countries. But, in fact, we expressed our view about that when the Convention was being drawn up, and it was duly taken note of by the Community.
May I say a word or two about Rhodesia in answer to my hon. Friends the Members for Newbury (Sir A. Hurd) and Chigwell. There is no question of the Federation being accorded a lower priority. I hope that my hon. Friend will reassure his Rhodesian friends about that. In our negotiations we have been in the closest touch with the Government of the Federation. We have expressed their views to the members of the Community and we are waiting to make further progress.
Other parts of the Commonwealth as well as the Federation have interests in tobacco, and the situation concerning the Greek association complicates this item. We may have to deal with that in a separate way.
I turn to agriculture. My hon. Friend the Member for Newbury asked a fundamental question about the policy de-
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cisions reached on 14th January. Of course, we said right at the beginning that we wished to put forward proposals in order to adapt the policy decisions taken on 14th January for the enlarged Community, and these have been in a number of respects for the regulations on the commodities which have already been dealt with. The agricultural policy is only just developing and is bound to take time to do so. We have already put in our views about the provisions put forward by the Commission for the new regulations and the Community has undertaken to take note of them.
I now deal with the points raised by the right hon. Member for Huyton. Of course, he maintains that only the two-price system can reconcile external trade with an internal agricultural policy. I do not believe this to be the case. Nor can he really quote Mr. Freeman in support of this. What Mr. Freeman emphasised was that it is the internal price—
Mr. H. Wilson: I was not quoting him on that.
Mr. Heath: —which matters when it comes to whether or not there will be room for exports. When the right hon. Gentleman praises in this respect our own policy, which we know has many good qualities, he should know what has been happening to our production with our own system since 1951–52. Our total cereals production has risen from 6,800,000 tons to 9,300,000 tons; egg production has risen from 464,000 tons to 759,000 tons. The effect has been that we have become entirely self-supporting in eggs and we do not import eggs any longer.
I am not arguing about the merits of this in agricultural policy domestically, but it shows that with our own system there is the utmost difficulty in reconciling overseas trade with our domestic production, and the key to it lies in the internal price. It is on this that we must concentrate in the agricultural policy. During the long sittings and long discussions that we had throughout July and the early days of August on this matter we tried to achieve a reasonable price policy. On this will depend whether or not there is room for external trade.
Our position here is fully known by the Community and by the Commonwealth in the agreements which we have so far negotiated. We are now discussing the

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arrangements for the transitional period. These again are complex and technical, and that is why the Ministerial working group is studying them with great care so that we can make progress, I hope, in the January meeting.
I hope that I have been able to answer the great majority of the questions which have been put by the right hon. Member for Huyton and his hon. Friends and by my hon. Friends. In conclusion, I should like to deal with one point. The right hon. Member for Huyton and the Leader of the Opposition have said that the Government have already frequently dishonoured their Commonwealth pledges in these negotiations. There is not one scrap of truth in those remarks. I ask the right hon. Gentleman to quote the pledges which have been made in these negotiations. The pledge is that we will safeguard the special interests of the Commonwealth. We have never given a pledge to maintain free entry.
Mr. H. Wilson: You have.
Mr. Heath: We have never in these negotiations given a pledge to maintain free entry.
Mr. Wilson: You gave it in the House.
Mr. Heath: I gave no pledge of any kind—
Mr. Wilson: The Prime Minister gave it in the House.
Mr. Heath: No.
Mr. Wilson: Certainly.
Mr. Heath: I am not referring to the Free Trade Area negotiations or to that period. I am referring to pledges given in these negotiations. Only when the negotiations are concluded will the right hon. Gentleman be able to decide whether or not we have safeguarded the special interests of the Commonwealth. I assure the House that it is our determination to continue the negotiations and to bring them to success.
It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

EUROPEAN ECONOMIC COMMUNITY
  BUSINESS OF THE HOUSE
  Proceedings on the Pensions (Increase) Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Redmayne.]
ORDERS OF THE DAY

  PENSIONS (INCREASE) BILL
  Lords Amendments considered.
  10.2 p.m.
  The Under-Secretary of State for Commonwealth Relations (Mr. John Tilney): I beg to move, That this House doth agree with the Lords in the said Amendment.
  I understand that this is what is technically known as a paving Amendment for the next Amendment, in page 3, line 23, and is allied with the third Amendment to the Third Schedule, page 11, line 11.
  The Amendment is due to the discovery at a late stage that there are two small categories of pensioner, 15 in all, who otherwise would have been omitted from the benefits of the Bill. Thirteen officers never served in the Sudan but were recruited in the United Kingdom to work in the London office of the Sudan Government. They were recruited to serve on a pensionable basis under the Sudan Government London Office Pensions Scheme of 7th December, 1925, and the Sudan Government Agency in London Superannuation Scheme for Staff of 1949.
  In the second category there are two officers who served in the Sudan, but retired owing to ill-health too early to qualify for pension under the Ordinances. They have received an ex-gratia pension and if the Amendment in page 11, line 11, is passed, they will qualify for an increase. Most of the 15 officers are still under the age of 60 and the cost in the first year will be only about £500.
  Mr. E. C. Redhead: I do not wish to detain the House except to express my personal pleasure that the Government have been responsive to the representations which have been made in this matter since we parted with the Bill in this House. There is

  717
  little doubt that had we been aware when we had the Bill under consideration that as originally drawn it would have excluded the two categories, to which the Under-Secretary has referred, of pensioners of the Sudan Government, we would have recognised at once that in equity they should have extended to them the benefits of the Bill in the same way as the generality of overseas pensioners are benefiting.
  In the circumstances, we on this side certainly offer no dissent from their inclusion. Indeed, we welcome it and we are glad that the Government have been responsive to the pleas which have been made.
  Dr. Horace King: I wish to thank the Government. Although this matter concerns merely a handful of men, it is an example of the care that the Government have taken to include all public service pensioners. On Second Reading, some of us asked the Minister to ensure that any small anomalies were dealt with. These Amendments deal with two small anomalies among the Sudanese pensioners. Those who retired because they had a breakdown in health received some kind of breakdown pension or ex-gratia payment and it is morally right that they should be included within the benefits of the Bill.
  The second is a group who were serving the Sudanese Government, but in this country rather than in the Sudan, and their moral case is unanswerable. I congratulate the Government on having found these two tiny anomalies, and I express the hope that the Under-Secretary of State will look for other cases, as he has power to do under an Amendment which we shall give him later.
  Question put and agreed to. [Special Entry.]
  Subsequent Lords Amendments agreed to.

  PENSIONS (INCREASE) BILL
    Clause 3.—(SUPPLEMENTS IN RESPECT OF CERTAIN COLONIAL AND OTHER PENSIONS.)
    Lords Amendment: In page 2, line 44, after second "in", insert "or for".

  Schedule 3.— (OVERSEAS PENSIONS.)
  Lords Amendment: In page 11, line 16, at end insert:
  "3. A pension in respect of service under the Egyptian Government by a person who, in the opinion of the Secretary for Technical Co-operation, entered the service of that Govern-
  718
  ment in a pensionable capacity before 15th March 1922, and who was a British subject when he entered such service "
  Mr. Tilney: I beg to move, That this House doth agree with the Lords in the said Amendment.
  This is a new category under powers conferred by Clause 3. It will be in the recollection of the House that there are British pensioners of the Egyptian Government who entered the service of that Government before 1922. Their position has been raised in another place. Great Britain had, indeed, from 1882, a special position in Egypt, and from 18th December, 1914, after Turkey entered the war against us, Egypt became a British Protectorate.
  That Protectorate lasted until 15th March, 1922. The British citizens who worked for the Egyptian Government were, in essence, in the same position as the British officials who worked in the Sudan, and I believe that it would be only right that, as those who worked for the Sudan Government receive supplements under the Bill, so should those who worked for the Government of Egypt, although they were, of course, British citizens and were recruited before the Protectorate was ended.
  I think that the House should know that there are about 435 pensioners who will benefit from the new provision—145 officials and 290 dependants. The Egyptian Government, apart from an interval of about a year after Suez, have paid the basic pensions but no increases, and therefore the pensioners, if this Amendment is agreed to, will receive supplements based on all the increases under all the Pensions (Increase) Acts from 1944 onwards. This will cost the not unsubstantial sum of £70,000 per annum. I think that the House will be glad to waive its financial privilege in favour of these deserving people.
  Mr. Redhead: Again, I express my pleasure that the Government have been responsive to the more recent representations on this point. It is gratifying to know that, although in the last Amendment we were dealing with only a handful of people, the Government have not been deterred by the more substantial numbers concerned in this category. Had we realised that they

  719
  were not included in the Bill as originally drafted we would, at an earlier stage, have sought, in equity, to have included them. I am aware from individual representations I have had that since we parted with the Bill some of those affected have had an unhappy feeling that perhaps they have been forgotten.
  We are grateful that the opportunity has been taken, through the matter having been raised in another place, to rectify what would have been a grievous anomaly, and it is right and proper that these pensioners should be treated in common with other overseas pensioners. Although their position may be a little different technically, their case and claim is substantially the same as those the Bill was originally intended to cover.
  Dr. King: This is a larger group but the principle is exactly the same. We are bringing under the umbrella of the overseas service pensioners some people who served Egypt before Egypt became independent. If the House accepts the Amendment it will mean that every conceivable public service pensioner in Egypt and the Sudan is covered. If by chance it should happen that this is not the case, then the Secretary for Technical Cooperation will have power to include any missed out.
  Question put and agreed to. [Special Entry.]
  Lords Amendment: In line 17, leave out from "pension" to "the" in line 18 and insert:
  "for the payment of which the Crown assumed responsibility under"
  Mr. Tilney: I beg to move, That this House doth agree with the Lords in the said Amendment.
  This is rather a technical matter. The purpose of the Amendment is to remove any possible doubt, a doubt that has been expressed by the Chief Justice of Sarawak. It can be said that these pensions are not, strictly speaking, payable by Her Majesty's Government in the United Kingdom, and the proposed Amendment is designed to remove any-doubt by referring to a pension for the payment of which the Crown assumed responsibility under the Instrument of Cession of Sarawak.
  Mr. Redhead: I find myself in an extraordinary degree of agreeableness tonight in being able to concur to a greater degree than when we were discussing the Bill at an earlier stage. Certainly, if there is any dubiety in respect of this paragraph, it is right and proper that it should be clarified, and I have no hesitation at all in agreeing to the Motion.
  Question put and agreed to.

HORTICULTURAL MARKETING COUNCIL (DISSOLUTION)
10.12 p.m.
Mr. Frederick Peart: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Horticultural Marketing Council (Dissolution) Order 1962 (S.I., 1962, No. 2393), dated 29th October 1962, a copy of which was laid before this House on 5th November, be annulled.
We now come to a matter which will not be discussed with the same agreement that we have just had. I shall not make a long speech, and I am sorry that moving a Prayer is the only way in which this matter can be raised. However, we all know our Parliamentary procedure. I am sorry that we could not have had a major debate, for the advice and warnings which we gave to the Government when the Horticulture Act, 1960, was going through the House have now, unfortunately, been proved true.
We then envisaged an efficient and vigorous drive in horticultural marketing. We hoped that the Government would set up a council for horticultural marketing. Over and over again my hon. Friend the Member for Sunderland, North (Mr. Willey), my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) and others warned the Government that this council ought to be an effective body. We now have the sad occasion when the Government have produced an Order to dissolve the Horticultural Marketing Council as from 31st March, 1963.
I regard this as a serious matter for many reasons. The Common Market is now looming over us—we have just had a statement about it from the Lord Privy Seal. Although I have strong views about the Common Market, I do not wish to embarrass anyone and I will not refer to the difficulties of our negotiators. However, irrespective of whether we enter the Common Market or accept its horticultural regulations which insist on quality standards and the ending of tariffs and the moving towards a common price policy after a transitional period, we can meet the challenge on the Common Market's horticulture only if we have efficient marketing. Throughout our discussions
722
on the Act we stressed the importance of marketing, which is true of agriculture generally.
Marketing is the key to the future of horticulture and it is sad that the Government have had to dissolve the Council and admit that our criticisms were sound. Horticulture is a major industry, and although I do not wish to weary the House with figures, the figures are illuminating. The value of horticultural output in 1960–61 was an estimated £133 million at the farm gate, or about 9 per cent. of the value of total output in agriculture. When the figures are broken down, it is shown that glasshouse production alone is about £20 million a year at the farm gate.
The winding up of the Council is serious for the producer, but also for the consumer, the housewife. An efficient marketing scheme cuts down distribution costs and leads to the free flow of products from our farms and the streamlining of costs. We are anxious that there should be efficient marketing in the interests of the consumer just as much as in the interests of the producer. I hope my hon. Friends will stress that we are here dealing with a matter which affects, for example, not merely the growers of tomatoes in the Lea Valley, or the growers of lettuce in other parts of the country, but with something which affects the nation's food supply and the consumer. It is, therefore, right and proper that we should probe the reasons for the Order.
Obviously, the Government must be thinking of an alternative policy. They have the initiative and they must say what they intend to put in the place of the Council. We all know that the National Farmers' Union has promoted the idea of a development council under the Industrial Organisation and Development Act, 1947. I understand that there has been sympathy with that idea in Government circles, and I should like to know whether it has been accepted by the Government. While I do not necessarily accept this approach, it is clear that the industry has had to think of an alternative to the Council, and I should like to know whether the producers have been consulted.

723
The Runciman Committee, whose Report formed the basis of our legislation, recommended an authority for London, the London Market Authority. Only the other day the chairman of the Covent Garden Market Authority complained that he had no effective power to deal with some of the other London wholesale fruit and vegetable markets. Without proper marketing arrangements, the industry will suffer difficulties. I know that it has been suggested by some people who would have us go into the Common Market that subsidies are the only answer. That was the view of Dr. Mansholt in his famous interview with the Daily Telegraph not long ago. He said:
"The tomato grower in Holland or Belgium is finding keen competition from Italian tomatoes. The British tomato grower may have similar difficulties. The best way to adapt your tomato producers"—
he was talking to a British audience—
"and your horticulturalists generally to a free market is not to protect them by high import tariffs. They should also be given subsidies."
I should like to know how the Liberals stand on this, because some people have been critical of a support policy for agriculture.
What are the Government to do? We are anxious to know what is the alternative to this negative policy which is reflected in this dissolution Order. The Government have failed. They have been wrong. They have failed to inspire leadership in the industry, and because of this failure we are anxious to know what policy the Government propose to adopt. We have a right to ask this, because this Order is winding up a council which was created by Government legislation, and we want to know what the Government propose to put in its place.
Unless we know what the Government have in mind, we might oppose this Order. After all, it is proposed to dissolve a body which has been functioning for only a short period, a body which has been charged with a measure of leadership in the industry. The Government now say that this Council must cease to exist because it has failed, because the industry has not supported it, because the people concerned in the
724
trade have not given it their full support, and that it must be buried. We are entitled to ask whether it will receive a decent buriel, or an indecent one.
I hope that hon. Gentlemen opposite who have an interest in agriculture will press the Government on this point. I think they will agree that this is an example of the Government's negative policy. This is a case in which the Opposition have been proved right, and it is not making an unfair political point to say that we who have stressed marketing and argued that the Council had certain deficiences have been proved correct.
Are the Government going to take the initiative? I do not believe that they will, because the Minister—and I understand why he is not here—and the Parliamentary Secretary who speak for the Government have said over and over again in relation to agricultural marketing—and this applies also to horticultural marketing—that it is not for the Government to take the initiative. [An HON. MEMBER: "No."] I have here a record of the Minister's advice to the famous Oxford Farming Conference. He said that while the Government may create the right conditions, in the end it was for the industry to take the initiative.
We do not accept that. We believe that the Government must accept a measure of responsibility. The Government have taken the initiative to dissolve the Council. This is indicative of their policy of negativism. What is the purpose of this Order? Do the Government propose to introduce a positive policy for agriculture? It is vital that we should know this, because of our negotiations to enter the Common Market. It is also vital because of the state of the industry. I have argued this in Committee upstairs, and I have pointed out that experts in the industry believe that something must be done.
I have here a statement by the chairman of the Council, Mr. Bowerman, who, speaking at the Wisbech commercial fruit show luncheon on 7th November. 1962, said:
"The industry needs, above all, two things: 'parliament' representative of all engaged in the many sides of our industry and resources for research enquiry, advice, education, and

725
all forms of publicity. It could have had both, through a permanent Council."
He goes on to deal with the industry and argues that something should be put in the Council's place. He says:
"I am sure that ultimately wiser counsels will prevail, and a great majority of the industry will see that a body very similar to the Council—that is, a deliberative body armed with executive powers and adequate resources—is needed."
In other words, he proves what my hon. Friends have said over and over again, that if we are to have leadership in the industry we must have a body armed with executive powers. We warned the Government about this, but our advice was rejected, even though, here and there, the Runciman Committee supported our point of view. Here is a crisis, and we are lagging behind.
Mr. P. J. Moss, chief officer to the Horticultural Marketing Council, said:
"Our wholesale markets in general are obsolete. All credit must be given to the civic authorities, such as Coventry and Sheffield, who are such shining exceptions in this general description. … That is why the Horticultural Marketing Council has decided to approach the Government Departments concerned to review the whole range of problems involved. Are there ways in which quicker planning and decisions can be reached? Are there questions of priority which need attention? What are the national, local and industry financial problems, and where can their solutions be found?"
We have asked for this. My hon. Friends probed the Government not long ago about the need to conduct a survey. What was the response of the Government to the suggestions of the Council which they are now going to dissolve? Have they done anything? Have they agreed to some of the points that I have already mentioned? I am not making an unfair criticism. These are reasonable points of view put forward by the industry.
I would have thought that we need quicker planning and that we need to reach quicker decisions. We need to decide our priorities in the industry and to know what are the national and local industry problems, and where their solutions may be found. We need a proper survey of the position. We should be told this evening what response the Government gave the Council. If we dissolve the Council we want to know whether the Government
726
have acted on some of the Council's recommendations.
I have told hon. Members, in the House and in Committee, how a survey was conducted by a responsible delegation sent to Europe by the N.F.U. It visited Europe on 7th May, and its report has been circulated to many hon. Members. From it we can see in France, under the Monnet Plan, a great development in wholesale markets, in which the State is active. This is true not only of France but of many other Western European countries. What are the Government doing? All they ask tonight is that we should dissolve this Council. All that they did earlier was to create an organisation with insufficient powers. What they are doing now is virtually nothing. They are acting in a negative way, While on the Continent there has been a great surge forward. There the doctrine of essential central planning has been accepted, together with the need for priorities for proper markets. This is a serious matter for the consumer and for the producer, and the Government must give us some sort of answer tonight.
It would be wrong of me to keep the House much longer, because I know that many other hon. Members wish to make contributions. I think that I have made my point sharply. I have shown that the Council has got into difficulties because the Act had certain deficiencies, which we have pointed out.
Mr. J. M. L. Prior rose—
Mr. Peart: I generally give way, but it is rather late, and I want to conclude my peroration. If the hon. Member had sought to interrupt me earlier I would not have minded, but I am summing up my argument and bringing my peroration to a conclusion.
Here we are dealing with the dissolution of an important body which has been in existence for only a short time. It is an extremely serious matter. It is a decision which reflects a lack of Government policy. It is no use the Government saying that they wash their hands of the matter and are leaving it to the industry to take the initiative. The Government must take the initiative and do something, and tonight I wish to know what the Government propose to

727
do. I hope that some of the hon. Members opposite who believe in horticulture will have the courage to repeat some of the criticisms that I have made.
10.30 p.m.
Mr. J. M. L. Prior: The questions which I wished to ask the hon. Member for Workington (Mr. Peart) were fairly simple. He started by saying that he felt that the Horticultural Marketing Council should have been given executive powers. I should like to know what executive powers he felt that the Council should have had. Is he in favour of a marketing board, and, if so, that is in contradiction to the Report of the Runciman Committee which examined horticulture a few years ago. Does the hon. Gentleman realise that a marketing board and a scheme would require a two-thirds majority of the growers to support it before it could be introduced? We had an appeal recently about whether the Marketing Council should continue and only 4 per cent. voted—3 per cent. in favour and 1 per cent. against. Obviously, therefore, it would be extremely difficult to get a horticultural marketing board set up by the growers.
It is a great disappointment to many hon. Members on this side of the House that the Marketing Council has not been more successful. We ought to pay a tribute to the chairman who did his part in trying to make the Council a success. He had a very uphill struggle, and I do not think that he failed in his efforts in the work that the Council did do. The Government had no alternative but to pack up the Council, and now we have to look at the position to see what ought to be put in its place.
I wish to offer two suggestions to my hon. Friend. I think that the policy of allowing growers to vote whether they should supply money for any organisation is doomed to failure. I am a producer myself, and when I am asked to supply money I tend to look the other way. I consider that a quite natural feeling among growers and farmers. If we are to make a success of this matter, we must bring more compulsion to bear on the growers. I feel that the whole problem of wholesale markets and marketing must be looked at on a new basis, and this was one of the valuable jobs which the Council was doing. It
728
gave advice about new markets, and in the case of the Sheffield market its valuable advice resulted in the market working more efficiently and economically. This is of great importance to the consumer side, because the consumers feel that there is far too great a difference between the price at the farm gate and the cost in the shops. I hope my hon. Friend and the Government will have a thorough look at this problem and help producers to find something to fill the vacuum which has now arisen.
10.35 p.m.
Mr. A. E. Oram: The hon. Member for Lowestoft (Mr. Prior) reminded us in his concluding remarks of the great difficulty which besets the horticultural industry by the vast gap which too often exists between the price paid by the consumer and that received by the producer. That problem is well known to all who are acquainted with the industry. This was predominantly in the minds of most of us—and I see a number of hon. Members present who served on the Committee—when we set up the Horticultural Marketing Council in 1960.
I am sure that the Order we are debating tonight must be a particular disappointment to all, whatever our particular interests and points of view, who took part in setting legislation on foot by which the Council was established. We had high hopes that at long last we were setting up a body which would make sure that the industry would get going on a firm basis. We had disagreements on detail about the structure of the proposed Council, about its powers and purpose. I remember moving an Amendment seeking to give stronger and more direct representation to consumer interests. My hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) sought to get direct representation of horticultural co-operative societies and others. At the end of the Committee stage, however, we were all reasonably happy that we had devised a useful piece of machinery which was representative of the varied interests engaged in one phase or other of the industry.
I welcomed the Council when it was set up. I had been one who was critical of earlier producer-dominated marketing schemes, and I welcomed the balanced

729
nature of the representation on the Council. Having welcomed it as a new experiment, there is all the more reason for my disappointment that the industry has not been encouraged to produce the finances to maintain a permanent body of this balanced and varied kind. It is also a matter of considerable disappointment to the co-operative movement with which I am associated. That movement is entitled to speak on this matter from several points of view.
We are a vast consumer movement. Our principal concern is the consumer interest, but in addition we are a major grower and wholesaler of fruit and vegetables. On the retail side we operate more than 2,000 specialist greengrocer shops and 10,000 grocer shops through which a great deal of horticultural produce reaches the consumer. The co-operative movement, for the reasons I have indicated, welcomed this Council as a promising experiment in the marketing of horticultural produce, as a body set up under Statute but not dominated by producers as earlier organisations had been.
We are now told that there is to be another organisation. My hon. Friend the Member for Workington (Mr. Peart) referred to this. I am not sure what the constitution or purposes of the new body will be. I shall be interested to hear, either from the Government Front Bench or from hon. Members who may be knowledgeable in the matter, just what is in the minds of the organisations which propose to set up the new body. I am anxious to know whether it is to have the same balanced character which I have been praising in connection with the Council which we are now burying. I doubt whether it is intended that it should have such a balanced character. I am not sure what is the attitude of the bodies which are initiating the new organisation towards the representation of the general consumer interest. I do not know what their attitude will be to the representation of the co-operative movement on the new organisation. Indeed, I am not sure that the co-operative movement ought to be too anxious to accept an invitation, even if an invitation is forthcoming, to join the new body. To join a body with an ill-defined constitution and with doubtful rights is very different from being represented on the body we
730
have had over the last two or three years, which was established by Statute with rights and constitution clearly defined.
I very much regret that the Council is not to continue. It was in the interests of the industry that it was established. It is in the interests of the industry that it should continue. If the leading organisations in the industry had given the same helpful response to the Council as the co-operative movement was prepared to give, it could have continued and done work for the whole industry. Had there been a different lead, had there been more education and propaganda on behalf of the Council, the voting results would have been far more positive than they have been, the Council would have been a success, and there would not have been this deplorable apathy in the voting, this deplorable negative attitude from the various sections of the industry.
I echo the point made by my hon. Friend the Member for Workington, that just because the industry has been apathetic and negative it is no excuse for the Government to be negative and apathetic. We shall expect a statement either tonight or very soon about the alternative policy not only of the industry but of the Government. I hope that we shall hear something clear and positive, and that we shall not be left in the position of accepting the Order and being left in doubt and in a very negative situation.
10.43 p.m.
Mr. Denys Bullard: Like hon. Members who have spoken so far, I am sorry that we are now faced with this Order. The Horticultural Marketing Council made a promising start, and it is a very great pity that its labours should be brought to this premature end. However, I am not altogether surprised. I have tested the feeling about the Council among growers and others who are interested. I have not found any very great enthusiasm for it. Nevertheless, it was doing a good job and its early end is much to be deplored.
One of the main reasons why this Order is before us tonight is the failure of any section of the industry to agree to the charges scheme. I agree with the hon. Member for East Ham, South (Mr. Oram) that if this issue is put in terms

731
of cold blood, so to speak, without any supporting propaganda one way or the other, it is bound to result in a negative vote. I suppose that that would be the result on almost any issue. In our line of business, for example, unless we did a great deal of propaganda we should not get a very worth while vote.
This applies equally to the Horticultural Marketing Council, and some features of the polls concern me. I rather resent that, although a horticultural producer, I never took part in the growers' side of the poll. As far as I know, I did not receive a voting paper, although I believe I was entitled to register my opinion on this matter—and I would have done so had I realised that a poll was on. It was not until the poll was over that I appreciated that one had taken place; and it all goes to indicate that the poll itself cannot be said to have been very satisfactory. Whether it was better for the retailers and wholesalers I cannot say.
In any case, what was voted on? I rather think that it was the charges scheme, and I hope that we shall be given some information on this topic, for there is an essential difference here between a vote on the charges scheme and a vote on the continuation of the Horticultural Marketing Council itself.
Perhaps the most important issue remaining is that posed by the hon. Member for Workington (Mr. Peart) and my hon. Friend the Member for Lowestoft (Mr. Prior); what is to take place now? In the last day or two I have been rereading the Report of the Runciman Committee. That Report, published in 1955, recommended the setting up of the Horticultural Marketing Council and while I do not think that the findings of that Committee were ever very popular with the growers, they are certainly worth looking through.
The Runciman Committee examined every alternative form of organisation, including a marketing board, which it rejected, and came to the conclusion that the type of organisation we are discussing representing growers, retailers and wholesalers, was the only possible one to bring about technical improvements in marketing, including packaging and like matters, and the only organisation likely to succeed.
732
It will be difficult, now that the Council is to be dismantled, to set up. any other body which is likely to bring about the improved standard of marketing of horticultural produce which everyone in and out of the industry admits to be necessary. It is for this reason that action on the part of the Government is required. There is no point in putting out the work to other organisations now that this one has failed. I support the hon. Member for Lowestoft in suggesting that one of the first tasks the Government might tackle is to set about reorganising the wholesale markets.
It is a mistake to suppose that this can be left to individual local government bodies or local concerns. There must be initiative, and a real drive, because so many of our wholesale markets are fairly out of date, with no particular opportunity for handling goods mechanically, and with too limited space. Even if they cannot have a more comprehensive scheme, the Government might give definite leadership on this narrower part of the front. There may be other direct, immediate and positive steps that they might take but, at all events, I am quite convinced that they cannot leave the matter as it is, merely dissolving this Council and taking no particular action to remedy the defects in marketing which are apparent to those both inside and outside the industry.
10.50 p.m.
Mr. John Stonehouse: Like my hon. Friend the Member for Workington (Mr. Peart) and the hon. Member for King's Lynn (Mr. Bullard), I am opposed to the winding up of this Council, which could have done extremely good work. It is not without significance that the Minister of Agriculture is engaged in discussions in Brussels tonight about Britain's entry into the European Economic Community, instead of being here in his place, dealing with the immediate problems of an industry that is very important to thousands of producers and to hundreds of thousands of consumers.
I believe it has been decided that part of the price we shall pay for going into the Common Market is to forget about our horticulturists. There is hardly any likelihood that horticulture can survive the consequent onslaught of competition

733
from the French, Italian and Dutch producers who, because of the condition of our own producers, will be able to produce their horticultural goods more cheaply. I think that Her Majesty's Government must have decided rather callously that this industry can be written off.
As my hon. Friend has said, the Government may think that they can disregard the interests of this section of our agricultural industry, but they will do so at their peril and will learn the penalty at the next General Election. Not only that, but there is the question of safeguarding the interests of the millions of consumers, particularly housewives, who spend a great deal of money on horticultural produce. Much of that produce is in bad condition and is too expensive because of our chaotic marketing conditions.
Some months ago I had the opportunity of spending an hour or two, very early in the morning, at Spitalfields Market. I was appalled at the chaotic conditions I found there. The congestion there means that hundreds of transport men are kepting hanging about, with increasing expense being incurred by the distributors, wholesalers and retailers whose trucks collect the produce. The physical conditions at Spitalfields, and also at Covent Garden, and probably at all the provincial markets, are so appallingly bad that there is no opportunity to use modern equipment.
Further, though I regret having to say it, there are a great number of restrictive practices in this industry at the market end—between the producers and the markets, and from the markets into the shops—and it is undoubtedly true that they add to the cost of the produce to the consumer.
It is the duty of the Government to try to solve the problems of marketing, in the interests of the workers in the industry and of the consumers and the horticultural producers. I do not believe that there is any sign that they are prepared to do this. Certainly, it is a matter of great regret that they are winding up a Council which gave an opportunity to all sides of the industry to be represented. Both producers and retailers were co-operating in the Council, and it would have been a good example of how those engaged in various sides of the
734
industry could come together and help to sort out its problems.
We on this side are very interested to know what are the alternatives. We hope that retailers particularly, and the co-operative movement also, as a most important retailer, will have an opportunity to participate in any further arrangements that are made. We must, however, warn the Joint Parliamentary Secretary that we expect his right hon. Friend the Minister on another occasion to give the House a clear and definite account of the measures he intends to take to improve marketing for horticultural goods, so that costs to the housewife can be reduced and so that producers also can be assisted.
10.57 p.m.
Sir Peter Agnew: I regard it as nothing less than a calamity that a position has arisen in which virtually this House has no option but to attend the funeral of the Horticultural Marketing Council, as we are doing this evening. Hon. Members who have preceded me have spoken of the good work that the Council has done, admittedly in a restricted field, but nevertheless giving inspiration and encouragement as well as also furnishing some useful information and research about how the industry should be able better to present and to market its produce. Mr. David Bowerman, the chairman of the Council, deserves the good will and thanks of this House for the part he has played in the work of the Council.
Something has been said about the way in which the poll was conducted as to whether the charges scheme should be acceptable to the various sections of the industry. I do not think it profitable to anyone concerned to attempt this evening to go into the blame, if any is due, about why that policy did not have a more positive result or whether, perhaps, there were more who voted strongly against the scheme instead of, apparently, disregarding the fact that it was taking place. Instead of dwelling upon that, rather should we look forward from tonight, at a time when we are, so to speak, at rock bottom.
Nor do I think it useful in this discussion to enter into considerations about the position of horticulture whether or not we enter the Common Market. The negotiations on that issue certainly are

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not completed. I do not know to what extent they have even been begun with regard to the horticulture section of the industry; nobody can say with certainty. Whichever way that issue is settled, one thing which is sure is that the horticultural industry is faced with a situation prospectively When it is not too soon to begin now using every possible means to modernise the methods of presentation and marketing, which alone can be the true component and follow-up of the great advantages that we have in many ways in the character of our soil in the horticultural areas.
I am sure it is true to say that if there is some uncertainty, even amongst farmers or the agriculture industry's representatives, as to what is the best method of bringing these matters about, there is no uncertainty at all about one aspect of it. This is that the Government cannot simply drift on, if they were minded to do so, without taking an initiative the very moment they feel they can do so in order to decide what encouragement, if necessary involving legislation, they should give in order to fill the gap that, from 31st March, 1963, will be created. If they will do that, then indeed I believe they can play their part and take the steps open to them to enable the horticultural industry at home to battle for its survival.
11.1 p.m.
Mr. Bryant Godman Irvine: Section 10 of the Horticulture Act, 1960, set out 10 functions for the Council to perform. The fact that we are presiding at the Council's funeral means that there will be a vacuum in each of these functions.
My hon. Friend the Member for King's Lynn (Mr. Bullard) seemed to me to put his finger on perhaps the most important one when he talked of the way in which the Council had been directing its attention to dealing with the problem of marketing. Hon. Members will know that the Council set up a Wholesale Markets Committee. This strong committee has been working for two years and doing some valuable work in dealing with the specific problem most of us have in the forefront of our minds tonight.
We have had an indication of what goes on in France. We know that the
736
N.F.U. as well as the H.M.C. has looked at the markets in Europe. I have just returned from New Zealand, where I saw their marketing arrangements. Marketing in New Zealand means not only marketing in the sense we have been talking about tonight, but the setting up of processing plants and canneries and dealing with mechanical handling of the products when they reach the market. If we are to survive in the modern world at all we must urgently deal with this problem of marketing.
If the Wholesale Markets Committee is wound up, and nothing is put in its place, that will create a serious situation for the industry. Already 22 authorities in this country have indicated that they want to do something about modernising their markets. If they are allowed to decide individually where to put their markets and to work out their developments individually, then it is unlikely that we shall reach the best overall marketing arrangements for the country as a whole.
I urge my hon. Friend that this is a problem which must be tackled forthwith, whatever happens to all the other responsibilities which the Council has under the Act. There are over 50 municipal markets. Possibly only 30 are proper wholesale markets, but it might well be that if this problem is looked at overall we should find that the country could do with perhaps as few as a dozen provided that the markets we did have were in the right place and given the right equipment to do the job. I urge that this problem should not be overlooked when my hon. Friend is considering the next step.
11.5 p.m.
Mr. Stephen Hastings: Time is getting Short and I have a very few remarks to make. I add my tribute to the Horticultural Marketing Council and in particular to its chairman, Mr. David Bowerman. It was immensely valuable and it is very sad that it is coming to an end. But it is nonsense for the Opposition to suggest that the Government's attitude has been negative. Who set up the Council? Who started the marketing scheme? This is the first Government to have taken the industry seriously.

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That is not to say that I do not agree with my hon. Friend the Member for King's Lynn (Mr. Bullard) that the Government cannot leave it at that. Tragic though this is, the Government had no alternative, but something else must be done. I want to mention three functions—they have been mentioned already—which must be fulfilled.
The first is market research and by that I mean not only market research in this country, but abroad as well. It is essential to get our growers out of their defensive frame of mind. They can sell many different lines of produce abroad and this market research must be taken up. A family on the Continent spends three or four times as much as a family in this country on flowers. It is a task for market research to find out why.
Secondly, a number of hon. Members have mentioned wholesale markets and my hon. Friend the Member for Rye (Mr. Godman Irvine) mentioned a special committee. Something must take its place. If there really are 20 municipal authorities thinking of changes in marketing, it would be crazy to let that happen without a comprehensive review and some national plan.
The French take this seriously enough and regard sensible and efficient marketing as of national importance. Furthermore, they make available to marketing authorities low-interest loans, and something on those lines might also be considered by the Government.
Lastly, the third function which the Council made possible and for which room must be found its a forum, a horticultural forum, where the three sides of the industry, growers, wholesalers and retailers, can get together and discuss their problems, although many of them are difficult to sort out. The N.F.U. has put forward a possible alternative, but since it represents the growing or producing side of the industry alone, it does not follow that it can produce exactly the forum which is required if this industry is to prosper. Something must be done, particularly with the threat of competition from the Common Market, and it is up to the Government to regard this positively in spite of this disappointing failure.
11.9 p.m.
Sir Harry Legge-Bourke: Several hon. Members who have spoken
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have referred to this debate as a funeral, but I regard it as an inquest, and an inquest on a suicide. There are people outside the House who ought to be hangging their heads in shame for making Parliament have this debate tonight. Nobody ought to be more ashamed than those who could have prevented it. It has come about very largely because of lack of leadership in one place, the one place where one might have expected it to be most apparent—and I say this with many friends in the National Farmers' Union. The N.F.U. bears heavy responsibility for what we are doing this evening. If it had shown dynamic leadership over this matter, we should not be doing what we are doing tonight.
The hon. Member for Workington (Mr. Peart) castigated the Government for it, but my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) rightly defended the Government. If the efforts of Mr. Bowerman and Mr. Moss had been backed as they should have been by the people most likely to benefit from them we should have had a far rosier glance at horticulture than we have as a result of what has happened.
I deplore this deeply, and I have been trying to think what is the best way to put things right. I have only one suggestion to make, and I hope that my hon. Friend will see that it gets full consideration. I believe that we want to build now on something which has a very high reputation. The reason why the Horticultural Marketing Council has been under fire is that it is a new body, and in agriculture and horticulture very often new bodies are viewed with suspicion for far too long after they are first set up.
There is, however, scope here for widening the activities of the Agricultural Research Council which is a body with a high reputation. I notice in Appendix V, paragraph 24 (iv) of the last report of this Council, under the heading "Special Research Grants" the item:
"Research Contract with the Printing, Packaging and Allied Trades Research Association.
Investigation of horticultural packages."
That is just a glimmer of what ought to be elaborated very much further.

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I believe that marketing is just as much a scientific matter as anything else in agriculture and horticulture, and I hope that my hon. Friend will seriously consider and have his Department go into in the greatest detail with the Council the possibility of perhaps widening the activities of the Council to cover marketing too, and see that this is done on a scientific basis because the Council has such a high reputation in the industry that it would have a better chance of getting the support of the industry than the H.M.C. ever had.
11.12 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): The underlying tone and sense which has been running through this debate has been one of regret that the Horticultural Marketing Council is being dissolved. I share this regret. Many hon. Members on both sides of the House have expressed their thanks for the good work which has been done by the chairman of the Council, which has indeed been extremely useful, and I should like to associate myself with what has been said.
Perhaps it might be for the convenience of the House if I were to say a few words at this stage about some of the events which have led up to the Order, and deal with some of the points made by hon. Members on both sides of the House.
Hon. Members will recall that the decision to set up a Horticultural Marketing Council followed a recommendation of the Runciman Committee on the marketing and distribution of horticultural produce. The idea was to bring together the growing, wholesaling, and retailing sections of the industry into a Council which would carry out research and spread information about marketing, formulate standards, and promote consumption, and generally co-ordinate the three sections of the industry which has undoubtedly suffered from lack of cohesion in the past. It was never conceived as a body—never—with executive powers over any aspect of the industry.
There was agreement that the Council ought to be paid for by the industry
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itself, although, because of the difficulties of arranging for its finance, the Runciman Committee recommended, and the Government agreed, that the Exchequer should find the money for an initial period. So in the Horticulture Act, 1960, the Government took power to provide funds up to a maximum of £250,000 to be available over three years from May, 1960, when the Council was set up. It was clearly understood and accepted by all concerned that, during the three years, the Council would come forward with a charges scheme, and that if it proved impossible to agree on such a scheme there would be no more Government money forthcoming.
I should remind the House of the actual words used by my right hon. Friend at the time in dealing with this in Standing Committee. He said:
"I have, I think, made it clear that the Government intend that the Council shall produce a charges scheme during the initial period. … Clearly, if the Council does not produce a charges scheme within the initial period, it will have failed and there will be no more Government money forthcoming."—[OFFICIAL REPORT, Standing Committee A, 28th January, 1960; c. 307.]
When the Council was set up the national organisations representing all sections of the industry had undertaken to co-operate in trying to get an acceptable charge scheme. In the spring of this year the Council published proposals for raising a revenue of £300,000 a year by charges on all three sections of the industry. Growers would have had to pay, at most, £2 a year, a retailer would have paid £1 or £2 for each shop, and wholesalers would have paid on a scale related to turnover, starting at £3. The national organisations decided to consult their members before finally committing themselves to these proposals.
Each of the three main sections took a poll. The growers' poll resulted in 3 per cent. voting in favour and 1 per cent. against, with 96 per cent. of the eligible growers not voting at all. The results for the National Federation of Fruit and Potato Trades—representing wholesalers and importers—were 9 per cent. in favour and 22 per cent. against, with 69 per cent. not voting. The Retail Fruit Trade Federation was 2 per cent. in favour and 13 per cent. against, with 85 per cent. not voting.
My hon. Friend the Member for King's Lynn (Mr. Bullard) has referred

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to the methods by which these polls were taken. He will surely agree that my right hon. Friends could deal with the results of these polls only as expressions of the views of the respective sections of the industry.
My hon. Friend further asked me on what basis these polls were conducted, and what questions were asked. The first question asked by the National Farmers' Union was:
"Are you in favour of the continuation of the H.M.C. financed by the whole industry?"
That was the main purport of the questions asked in the polls. Surely the House will agree that these results could be interpreted only as a rejection of the charges scheme and, by implication, a rejection of a Horticultural Marketing Council financed by the industry. My right hon. Friends are satisfied that the industry realised what was at stake when its members voted. That is clear from the speeches made by the chairman of the Council.
Following these polls my right hon. Friend consulted the leaders of the three national organisations, who confirmed that they were unable to recommend acceptance of the charges scheme; nor could they advise that a charges scheme on a different basis would hold out any hope of success. My right hon. Friends therefore consulted the Council itself, as they were required to do under Section 17 of the Act, on a proposal to dissolve the Council, and the Council accepted this as inevitable.
Regrettable as hon. Members may feel it to have been—and we all share that point of view—the industry had shown that it was not prepared to pay for a Council, and there would have been no point in imposing it on an unwilling industry. Nor could we ask the taxpayer to continue to pay for a Council that the industry had shown it did not want, particularly in view of the firm assurances given when the Act was passed, which I have already quoted.
What I wish to urge on the House is that horticulture must be given all the help it needs. There is a sphere in which help must come from the Government. I entirely reject the charge made by the hon. Member for Wednesbury (Mr. Stonehouse) that the Government are not prepared to continue to help and have written off the horticultural indus-
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try. That is completely and utterly untrue. But there is a sphere in which only the industry can operate. I wish for a moment to deal with what the Government can and will do.
First, I take the question of grading. If we go into the Common Market the Government will be responsible for applying the appropriate grades and standards to fruit and vegetables. Under these conditions there would be no scope for activity by the Council. But whether we go into the Common Market or not, my right hon. Friend fully recognises the problems of grading, and realises that the extent to which the Government should help must be looked at afresh as a matter of urgency.
Mr. Peart: Is the Minister saying that if we accepted the regulations dealing with horticulture at Brussels, inevitably the Council would have gone—that it would have had no function to perform?
Mr. Scott-Hopkins: I was referring particularly to the grading side. I said that if we joined the Common Market, the Government would be responsible for applying the appropriate grades. What those grades would be I do not know, and neither does the hon. Gentleman. The grades would be applied to fruit and vegetables.
Turning to the next function for which the Government are responsible, that of research—
Mr. Peart: I may be wrong, and if so I apologise, but I got the impression that the Minister said that the Council would be unnecessary if we went into the Common Market. If that is so, I begin to suspect that the Government are acquiescing.
Mr. Scott-Hopkins: I can only repeat that I said that, so far as grading was concerned, if we went into the Common Market, the Government would be responsible for applying the appropriate grades and standards to fruit and vegetables. Under those conditions, there would be no scope for the Council in respect of that activity.
Regarding research, there are already in being the horticultural research institutions, which are financed, apart from endowments, from public funds. Their discoveries involve further experiment in the field of applied research. This is

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promoted in the horticultural experimental stations for which my Department is responsible. It is one of the first duties of the N.A.A.S. to see that all the results of the research institutions are disseminated and made available to growers throughout the country.
Finally, there is the £1½ million market development scheme presided over by my right hon. Friend the Member for Guildford (Sir R. Nugent) under which the industry is eligible to put forward proposals for grant aid. It is a matter for the industry to decide the lines along which new and improved marketing techniques should be developed. The Government have offered this measure of financial encouragement to explore new marketing methods alike in agriculture and horticulture and help the industry to make use of the considerable sum of money which is available. Hon. Members will realise that research is well provided for, and that the Government are fulfilling their part and providing finance and institutions where research can be pushed ahead.
Marketing and distribution have been mentioned and by far the most important element in this is the provision of efficient wholesale markets. This point was raised by several hon. Members opposite. It is necessary to recognise that in this country, as in others, the prime responsibility for wholesale horticultural markets rests with the local authorities. A number of local authorities have plans for redevelopment, but progress towards implementing these plans has been slow, though that is no fault of the local authorities. My right hon. Friend considers it vital that real progress should be made as quickly as possible. In conjunction with my right hon. Friend the Secretary of State for Scotland, he intends to institute immediately a fact-finding survey covering all the existing wholesale horticultural markets in the United Kingdom and places where markets may be required.
Mr. Jeremy Thorpe: May we know who will be carrying out the survey, when they will start work, and whether a report will be made to this House or the Minister?
Mr. Scott-Hopkins: It will be a fact-finding survey of officials, which will be conducted with the utmost expedition.
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As time is running short, I turn to the sphere where only the industry itself can operate as opposed to that in which the Government can and does help. The Council would undoubtedly have brought together the three main sections of the industry. Now other means must be found by the industry. Since the decision to dissolve the Council, it has proposed to set up a joint consultative council. This meets the point made by the hon. Member for East Ham, South (Mr. Oram) and perhaps his co-operators may look at this side of the matter. If the three sections, growers, wholesalers and retailers, can get such a body firmly established it may be the best way of tackling the problem in this sphere of co-operation. My right hon. Friend has welcomed this announcement and sees no reason why it should not be effective. The industry knows what it needs and should be the best judge of how to secure it.
My right hon. Friend has also noted with considerable interest the N.F.U.'s intention to examine the possibility of setting up
"A Development Council to obtain funds for publicity for horticultural produce and to undertake any other functions the growers find desirable."
The N.F.U. is examining this under the Industrial Organisation and Development Act, 1947. My right hon. Friends welcome this move, although the N.F.U., I am sure, will not underrate the importance of securing substantial support from growers if this proposal is to be fruitful.
I hope that I have convinced the House that, despite the regrettable decision of the industry to reject the H.M.C., the Government are taking steps to see that the essential needs of horticulture will be met. As far as the H.M.C. and this Prayer are concerned, I must make two points perfectly clear. When Parliament set up the H.M.C., financing it with £250,000 as an earnest of the Government's desire to help the marketing side of the industry, it was on the clear understanding that Government finance would be provided only for three years. It was for the industry to decide during that period whether or not it wished the H.M.C. to continue. If it did it would have to be paid for by the industry itself.
My right hon. Friend has been informed in unequivocal terms by

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leaders of all three parts of the industry that, although there is undoubtedly a body of opinion in the industry which will regret very much the passing of the Council, they see no prospect of the industry being willing to provide money for the Council to be able to continue. The industry has given its verdict and the Government feel that in these circumstances there is only one proper course, which is to wind up the Council. To support this Prayer would be to keep in being a body which could be paid for only by forcing a charges scheme on an unwilling industry, or alternatively, by putting a charge on public funds for the continuation of a body the industry did not show that it was willing to support. We do not believe that either course would be right and the Council must therefore be dissolved.
In agreeing to this the House may rest assured that it is not sanctioning any slackening or lessening of the Government's readiness to help the industry in future, whatever that may hold. In the circumstances, I ask the House to reject the Prayer and support the winding up of the Horticultural Marketing Council.
Mr. Peart: I hope that every hon. Member on the Government side of the House will carefully examine the Parliamentary Secretary's speech. The speech showed no leadership and no hope. The Minister for Science has been saying that we must beat the drum for Britain, but here we have had a tin whistle blowing. I am not blaming the Parliamentary Secretary personally, but he has given no leadership. When hon. Members carefully read his speech they will see that leadership can be achieved only when we remove this Government.
Question put and negatived.

ROYAL AIR FORCE (RECRUITMENT)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]
11.30 p.m.
Mr. Bruce Millan: I am very glad, even at this late hour, to raise a question about the recruitment of young men into the Royal Air Force which arises out of a constituency case of mine about which I have been in correspondence with the Under-Secretary of State for Air. I should like to deal briefly with my constituent's case, although the point that I really want to make at the end concerns the whole procedure for local recruitment of airmen into the Air Force.
This boy joined the Royal Air Force in August, 1960. He was then 17½ He joined straight from school and he joined after having listened to one of these pep talks, as I suppose one might call them, which are given by Royal Air Force officers at schools near the end of the summer term. He had not at that time taken his leaving certificate, so his joining the Air Force meant an interruption of his school career. At the time both his parents and his headmaster advised him that he would have been very much wiser to continue at school and complete his school career before joining the Services.
I emphasise that for one reason. It ought not to be suggested that the boy's parents were strongly against him joining the Air Force, because that is not so. They were certainly against him joining the Air Force at the time, but they have not carried that opposition through and did not carry it through once the boy had definitely decided that he wanted to join. I mention it because at the time the boy was joining there was a great deal of investigation. The boy himself, his parents and his headmaster were all extremely interested in the kind of training which he might expect once he had joined the Service. This was the great question at that time. The fact that there was this opposition simply adds emphasis to the fact that they made a very close examination of this aspect of the boy's joining the Royal Air Force.

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He joined in August, 1960. As far as I aim aware, he is a perfectly competent airman. He became a leading aircraft-man in February, 1961, and a senior aircraftman in August, 1961. He is not in any way a disgruntled member of the Service, except on this issue of training. Prior to joining the Air Force he had the Duke of Edinburgh's Gold Award and the Queen's Badge, so one would imagine that in every way he was a perfectly admirable recruit for the Service.
The complaint put to me by his parents is that the promise made at the time at which he joined the Air Force about the prospects for him, and in particular with regard to the training he might expect to receive, had not been discharged in the event. Briefly, there had been an assurance at the local recruiting office at the time he joined up that, with the kind of educational background he had, with his undoubted intelligence and other abilities, as soon as he became a senior aircraft-man he would become eligible for advanced training, and there would be very little doubt that he would get that advanced training and would eventually become what he wanted to be, a qualified physiotherapist.
This promise with regard to training had not been fulfilled, and this was the complaint put to me. When I had the letter about six or seven months ago the position then was that the boy had been warned that he would be posted to Men. That position has been maintained right up to the present time, because for one reason or another that posting has been delayed, but he is still to be posted to Aden.
I wrote to the Under-Secretary, the present Under-Secretary's predecessor, about this and the reply I received on 7th June contained two main points. The first was that the boy himself, at the place where he was stationed, had shown no interest at all in the educational facilities, which were many and varied, available there. The second was that, in any case, since he had signed on for five years, complaints about not getting advance training were not valid because he might still—even if he were posted to Aden—get advance training on his return after his two-year term
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overseas; for he had signed on for five years and the training could be received during that time.
When I made further inquiries about this letter I found that that communication from the Under-Secretary's predecessor was misleading on both of those counts. It was inaccurate to say that the boy had not made inquiries about the educational facilities and had not taken advantage of the facilities available to him. He had, in fact, taken what educational courses he could, and one must consider the circumstances and the duties on which he was engaged. It was also not true to say that he would be able to get advance training in the five years, for it was a condition of the advance training that he should sign on for at least nine years.
At the time I was very cross and I wrote to the Under-Secretary saying that I had been deliberately misled. However, I was assured that I had not been so misled, and I accept that. It was, nevertheless, a rather unfortunate letter, because it gave the impression that this young man, having joined the Service, had not bothered to exert himself and had not shown proper conscientiousness. It also gave the impression that if he was not getting the advance training it was his own fault. However, subsequent details show that, whatever the circumstances, those are not the facts of this case.
Thus the question became this. What kind of promises were made to this young man when he signed on as a Regular airman? There are two considerations. Firstly, what happened at the local recruiting office? On this question I am absolutely convinced, despite what the Minister has said in correspondence, that the circumstances presented to me are accurate and that at the local recruiting centre he was told that there would be no difficulty at all, once he had joined the Service and had become a senior aircraftman, about his obtaining advance training.
That is confirmed by the interviewers' notes at Cardington when this young man signed on. One of these notes—and I am grateful that a copy of them has been sent to me—drew out clearly that the boy was under a misapprehension

749
about the training he might expect to get. One interviewer's notes state:
"A young man who was at first under the impression he would be able to get physiotherapy training after one year's service."
I suggest that he was not under a misapprehension. It cannot be suggested that he could have been so lacking intelligence not to have understood what he was told at the local recruiting office. If he was under a misapprehension it was because the local recruiting people in Glasgow had put him under that misapprehension.
The Minister said in correspondence that whatever the misapprehension may have been, things were put to him clearly at the Cardington office and that, in any case, no boy is recruited into the Service until he has signed the papers at the particular station at which he signs on, whether Cardington or elsewhere, and that, at any time up to that point, he is absolutely free to withdraw. That is perfectly true in theory, but I suggest that it is not really, from the practical point of view, a very sensible proposition.
Any young man who has gone to the lengths of going to Cardington with the express intention of signing on, saying goodbye to his family and friends, giving up school and giving up another career is almost absolutely committed—in practice if not in theory—to joining the Service.
I suggest that it would be only, on the one hand, an extremely irresponsible young man or, on the other hand, an extremely strong-willed young man who would then actually withdraw from signing on. The vast majority of ordinary, decent, responsible, intelligent young men would, in those circumstances, feel that they were already committed, and would sign on. The moral seems to be that far more care should be taken at local recruiting offices to see that young men who are intending to sign on are made fully and accurately aware of the circumstances in which they are signing on. That is the point that I want to make tonight.
The Minister said in one letter that it would only be fair to assume that the boy would not be under a misapprehension, because a particular recruiting leaflet would have been issued to him, but what are the regulations governing the issue of recruiting pamphlets? What
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are the rules and regulations, and other things, that the ordinary recruiting corporals at these places must observe in dealing with young men interested in joining the Service? This does not seem to be something that can be left to, as it were, the particular attitudes and procedures, adopted by individuals at local recruiting offices. Something should be laid down to guarantee that young men joining the Service get every possible bit of accurate information before taking the step of going on to the recruiting station proper.
In this case, the young man is now so disillusioned about the Service that he intends to purchase his discharge as soon as he possibly can, which will be some time next year, when he has completed three years' service. In this case, I hope that he will be able to get his discharge but, from the general point of view, the question of good faith is involved. It seems to me that it is very much in the interests of the Royal Air Force that cases should not occur in which good, competent, intelligent young men who would have been of great value to the Service get disillusioned because, in the first place, they were given what turned out to be extravagant promises about their training. I hope that we can have from the Minister some satisfactory explanation of the procedures adopted at the local recruiting offices.
11.42 p.m.
The Under-Secretary of State for Air (Mr. Julian Ridsdale): The hon. Member for Glasgow, Craigton (Mr. Millan) has raised quite a number of points which would be difficult for me to answer in the time available. If I do not cover them all, I hope that he will be able to get in touch with me later about them.
I am glad to reply to some of the points raised, because it gives me the opportunity at once of assuring him—and, indeed, the House—that everything possible is done to see that men who join the Air Force know what they are taking on. It is in the interests of the Air Force that they should do so, as otherwise they could very easily become square pegs in round holes. The Force does not need to take on men who are likely to be discontented. Entry is highly selective, and there are many more applicants than vacancies. Competition will be keener in the future, because recruiting requirements have been

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reduced and, essentially, in the Royal Air Force we need quality and not quantity.
I will begin, therefore, by emphasising that one of the main objects of the Air Force recruiting organisation is to tell the potential recruit honestly and plainly what he needs to know about the Service if he is to come to a sensible decision. There is a great deal more to it than just answering the questions that a potential recruit may ask, but I shall deal with the more important question of recruiting procedure after dealing with the detailed points that have been raised tonight.
This debate arises, as the hon. Member has said, from the correspondence that I and my predecessor have had with him over the case of Senior Aircraftman Robertson. Having looked into that correspondence most carefully, I have no doubt that Robertson did know what the conditions of service were before he was attested. Although, after the passage of more than two years, the details of the preliminary interview that he had at the careers information centre in Glasgow cannot be checked with the same accuracy as if it had happened only recently, it is clear that he was not attested at Glasgow but, as was the custom then, at Cardington.
Since the time of Robertson's enlistment, the system has changed. I will touch upon the new system later. The recruiting records of Cardington show clearly that he was told that he could not do advanced training unless he signed on for nine years and that he entered the Service for five years on the understanding that he would extend the period when he was accepted for advanced training. The hon. Member will have seen from a copy of the records that I sent him that Robertson knew what was involved and what the regulations were. The hon. Member will see from the regulations that they cover some of the points about which he has asked me.
That Robertson knew what was involved is borne out by the fact that when he applied for advanced training in January, 1962, he also applied to extend his service from five to nine years. He had, however, been warned for overseas service on 1st January, 1962, so his application was rejected. He was told that he could apply again within six months of the end of his overseas ser-
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vice. Applications for training courses from airmen under orders to go overseas are turned down simply because if we accepted them this would lead to large-scale abuse by those who wished to avoid overseas service.
In May, 1962, Robertson submitted an application for discharge on compassionate grounds, mainly because of his mother's ill health and his feeling that his education was at a standstill while he remained in the Royal Air Force. His case was not considered strong enough to justify discharge on compassionate grounds and his application was refused. We can approve compassionate discharge only if there is clear evidence of acute compassionate need which demands an airman's presence. Certainly, we did all we could from the educational point of view to try to help the airman to further his educational standards.
As I have mentioned, however, the new system began in February, 1961, and the whole process is now concentrated upon a careers information centre. This change was made on grounds of economy and on the ending of National Service.
The hon. Member has suggested that nobody could withdraw from Cardington or that if people could do so, no one who had gone so far along the path would dare to withdraw. When Robertson joined the Royal Air Force, however, attestation did not take place at the careers information centre but at Cardington. He was not, therefore, irrevocably committed when he reached Cardington. It was the practice after the preliminary lectures and interviews to tell recruits that they could still change their minds and go home before they reached the stage of attestation.
I can assure the hon. Member by giving some figures. During 1960, the last year of the old system, as many as 2,600 withdrew of their own accord between the recruiting office and attestation. This was out of a total of 16,000. I do not feel, therefore, that there was anything to prevent Robertson doing the same.
Mr. Frederick Mulley: The point made by my hon. Friend the Member for Glasgow, Ctaigton (Mr. Millan), which is a good one, is borne out by the Minister's

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remarks. There must have been something wrong with the system and with the initial advice given at the information centre if such a large number of people changed their minds. I agree with my hon. Friend that when a boy has, so to speak, burned his civilian boats, although he is not technically attested, it is difficult for him to change his mind. From the figures which have been given, it seems that probably some boys were misled in the initial information.
Mr. Ridsdale: That is a matter of opinion. The figures which I have given show that we take particular care in the Royal Air Force to tell people when they come forward for attestation what the conditions of service mean.
We certainly do not want people who do not know what service in the R.A.F. means. It is for this purpose—not necessarily because of this case but because, as I haw said, of the changes made on grounds of economy and the ending of National Service—that the ordinary adult male recruit will now go first to one of the R.A.F. information centres. This, I think, will cover the point raised by the hon. Member for Sheffield, Park (Mr. Muldey).
These centres are to be found in the main towns, with an officer in charge of each. They are staffed by senior noncommissioned officers with the duty to
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interview prospective recruits. The staff are specially trained in interviewing techniques and on conditions of service. This procedure shows that the recruiting system is such that I am certain now that no potential recruit need have any concern that he will not be made aware of the conditions of service. I share the hon. Member for Glasgow, Craigton's concern that no one should be recruited under false pretences. We do not want to have a service with disgruntled personnel.
I am certain that Robertson was fully aware of the conditions of service before he was attested, and it was specifically pointed out to him that advance training depended on his extending his service to 9 years. I am sure he signed on for 5 years ready to extend the period when he felt ready for advance training. I am sure, too, that the necessary educational facilities were available to him at R.A.F. Cosford and will be available to him at Aden. I hope he will take advantage of them and return with the extra education I am sure he will find available, and I hope he wild not take the hon. Member's advice and fall out with the R.A.F., because a good career is open to him if be wishes to take it.
Question put and agreed to.
Adjourned accordingly at eight minutes to Twelve o'clock.