Commons Sitting of 19 January 1965

Preamble
The House—after the Adjournment on 23rd December, 1964, for the Christmas Recess—,net at half-past Two o'clock.
PRAYERS
[Mr. SPEAKER in the Chair]

WRITS ISSUED DURING THE ADJOURNMENT
Mr. SPEAKER acquainted the House, that he had issued, during the Adjournment, Warrants for new Writs, viz.:

For Nuneaton, in the room of Francis George Bowles, esquire, called up to the House of Peers.

For Leyton, in the room of Reginald William Sorensen, esquire, called up to the House of Peers.

For East Grinstead, in the room of Evelyn Violet Elizabeth Emmet (commonly called the honourable Evelyn Violet Elizabeth Emmet), called up to the House of Peers;

For Salisbury, in the room of John Granville Morrison, esquire, called up to the House of Peers.

For Altrincham and Sale, in the room of the right hon. Frederick James Erroll, called up to the House of Peers.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Stamp Duty (Property Transactions)
    Mr. Grantasked the Chancellor of the Exchequer what would be the cost to the Exchequer of raising the level of stamp duty on property transactions to £5,000.
    The Chief Secretary to the Treasury (Mr. John Diamond): The cost of raising the stamp duty exemption limit on conveyances of land and houses to £5,000 would be about £1¼ million in a full year.
    Mr. Grant: Will the Chancellor bear in mind when framing his Budget that, in view of the rise in property values since the last concession on stamp duty, here is a very real way in which he can help home ownership, and will he follow the excellent precedent of the previous Administration in easing this burden?
    Mr. Diamond: The Chancellor has carefully listened to what the hon. Gentleman has had to say.

    Income Tax (Age Relief)
    Mr. Wingfield Digbyasked the Chancellor of the Exchequer what would be the cost, in a full year, of increasing the age exemption from £325 to £400 for a single person and from £520 to £670 for a married couple, and age relief from £900 to £1,100.
    The Chancellor of the Exchequer (Mr. James Callaghan): To increase the income limits for age exemption from the present figures of £360 for single persons and £575 for married couples to £400 and £670 respectively would cost about £15 million; and to increase the income limit for age relief from £900 to £1,100 would cost about £4 million.
    Mr. Digby: At a time when other old people are to receive, albeit after some delay, increased pensions, will the right hon. Gentleman bear in mind the claims of these people, particularly in view of the increase in the cost of living?
    Mr. Callaghan: Yes, Sir, certainly, but I should not like it to be thought that I was anticipating any decision for the Budget.

    Capital Gains Tax
    Mr. Gresham Cookeasked the Chancellor of the Exchequer, in view of the proposal that the added value of a chattel over £1,000 which may be increased by a fall in the value of money is to be subject to the capital gains tax, why fortuitous earnings such as football pool dividends over £1,000 are to be exempt from taxation in the hands of the recipient.
    Mr. Callaghan: I would refer the hon. Gentleman to what I said on 22nd December in answer to a supplementary question from the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond).
    Mr. Gresham Cooke: If football pool dividends are not to be taxed, is not the position rather immoral? Is not this class legislation? Working people's sport is mainly football pools. The middle-class person buys a picture which may go up in value to over £1,000. Is it not very discriminatory legislation that the middle-class man should be taxed and the pools winner should not pay anything?
    Mr. Callaghan: There is a definition of what is a chargeable asset, and at the moment this does not fall within it.
    Mr. Fisher: Can the right hon. Gentleman explain—I think that many people are genuinely concerned about this—how he justifies the moral judgment that he has made which penalises a man who invests money in, for example, an important work of art but which seems to
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    encourage a man who probably wastes his money on football pools and tax-free gambling?
    Mr. Callaghan: I think that we get into difficult waters if we start making moral judgments about whether people waste their money when they enter football pools. We had better keep all this until we come to debate it.

    Import Surcharge
    Sir Knox Cunninghamasked the Chancellor of the Exchequer whether he will now remove the 15 per cent. import duty from acrylonitrile (chapter 29), niax polyol (within 39·19) and polyadipate esters (within 39·01 being material of the description specified in schedule 2 to the Import Duties (Temporary Exemptions) (No. 8) Order 1964) in order to assist employment in the man-made fibre industry in Northern Ireland.
    Mr. Chichester-Clarkasked the Chancellor of the Exchequer whether he will now remove the 15 per cent. import duty from 1:6 hexolactam (within 29·37) and nylon 6 polymer (within 39·01 being material of the description specified in schedule 2 to the Import Duties (Temporary Exemptions) (No. 8) Order 1964) in order to assist employment in the manmade fibre industry in Northern Ireland.
    Mr. Diamond: The Answer is "No, Sir". I will consider the representations which have been made along with representations concerning other industries when the scope of the charge is reviewed, but I cannot make any commitment at present.
    Sir Knox Cunningham: Would not the hon. Gentleman agree that it would be right to take the first opportunity to remove the 15 per cent. duty from these raw materials before any general removal from all materials?
    Mr. Diamond: I would certainly agree that it would be right to pay full attention to the representations made by the hon. and learned Gentleman together with other similar representations.
    Mr. Chichester-Clark: In view of the importance of these new industries to Northern Ireland, will the hon. Gentleman undertake to discuss the question of early or immediate exemption with the Home Secretary, who is well apprised of the facts?
    Mr. Diamond: Of course, I shall be only too delighted to discuss the matter with my right hon. and learned Friend the Home Secretary.
    Mr. John Hall: When is the review of the surcharge likely to take place?
    Mr. Diamond: In the spring.
    Mr. Chichester-Clarkasked the Chancellor of the Exchequer by how much he estimates the balance of payments will benefit from the import charge on chemical raw materials used in the man-made fibre industry.
    Mr. Diamond: No estimate can be made of effect of the temporary charge on the level of imports of particular items.
    Mr. Chichester-Clark: Is the hon. Gentleman satisfied that the surcharge on these raw materials is doing any good? Is he absolutely sure that it is not having the effect only of increasing the import bill for raw cotton and raw wool?
    Mr. Diamond: As was fully explained during the debates on the Finance Bill, the charge has to apply over a very wide range in order to be effective, so that any item within plays its full part.
    Sir Knox Cunningham: Does this mean that any improvement in the balance of payment will have to be by a decrease in the production of the firm concerned?
    Mr. Diamond: No. The firm might absorb any additional item into its costs.
    Mr. Norwoodasked the Chancellor of the Exchequer if he will exempt from the 15 per cent. import surcharge the paper on which books are printed in this country.
    Mr. Diamond: Printing paper in general will be among the items considered when the scope of the charge comes under review. It would, however, be impracticable to base an exemption on the use to which the paper is put.
    Mr. Norwood: Is my hon. Friend aware that this surcharge creates a very substantial anomaly? Because of the arrangement under the U.N.E.S.C.O. agreement whereby books can be imported into this country, British printers are handicapped in printing comparable books, and this surcharge will divert books abroad.
    Mr. Diamond: My information is that most of the paper used by United Kingdom publishers is manufactured in this country. Therefore, my hon. Friend's anxiety does not arise.
    Mr. Prior: Would the hon. Gentleman point out to his hon. Friend that we on this side moved an Amendment on this matter which was thrown out by the Chief Secretary himself?
    Mr. Speaker: It is not the Minister's duty to do that.
    Mr. Ridley: Does not the hon. Gentleman agree that it is time to abolish this miserable surcharge across the whole field? Will he do away with it straight away?
    Mr. Diamond: I said earlier today—I do not know whether the hon. Gentleman was in the House—that the matter would be subject to review, we hope, in the spring.

    Royal Shakespeare Theatre (Grant)
    Sir Knox Cunninghamasked the Chancellor of the Exchequer if he will state the present annual amount paid out of public funds to the Royal Shakespeare Theatre; and whether this annual grant has been increased or decreased since the practice of playing the National Anthem at each performance has been stopped.
    Mr. Diamond: The Arts Council grant to the Royal Shakespeare Theatre during the present financial year is £80,000. This is higher than it was two years ago when the practice of playing the National Anthem at each performance was stopped; but the two facts are not related.
    Sir Knox Cunningham: Is the hon. Gentleman aware that the National Anthem is played at the National Theatre at every performance? Will he approach Sir Fordham Flower, Chairman of the Governors of the Royal Shakespeare Theatre, and ask him whether his refusal to play the National Anthem after his company has added the title "Royal" to its name is meant as a sign of respect or disrespect to the Crown?
    Mr. Diamond: I would not propose to make representations of that kind. It is perfectly obvious that no disrespect is meant either in this case or in the very

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    many similar cases where the National Anthem is not played regularly at the beginning and end of each performance.
    Sir Knox Cunningham: Why, then, should two subsidised theatres—the National Theatre and the Royal Shakespeare Theatre—adopt a different procedure? Is it not disrespect to the Crown?
    Mr. Diamond: There is no different procedure. This procedure is widely adopted by many West End theatres and by many others as well.

    Cabinet Ministers and Staff (Travel and Subsistence Costs)
    Sir Richard Glynasked the Chancellor of the Exchequer what was the cost, over the present session of Parliament to the last convenient date, of travel and subsistence for members of the Cabinet and their staffs; and how much of this was on account of home and overseas travel.
    Mr. Diamond: Up to 31st December, for Cabinet Ministers and their Private Office staffs, £700 at home and £15,000 abroad.
    Sir Richard Glyn: Will the hon. Gentleman bear in mind this very substantial sum of money, especially with regard to the expenses overseas? In view of the somewhat meagre results obtained, it is at least doubtful whether the nation is getting full value for the taxpayers' money so expended. Will the hon. Gentleman say what proportion of these journeys is taken in military aircraft at a low price rather than in non-military aircraft at much greater expenditure? Will the Chancellor of the Exchequer use all his influence with his Cabinet colleagues to see that, in future, they use military aircraft wherever possible?
    Mr. Diamond: My right hon. Friend has heard the hon. Gentleman's remarks. With regard to the first part of the hon. Gentleman's supplementary question, of course I am particularly interested, in my present responsibility, in seeing that there is no waste of public money. As the House has expressed an interest in this matter, I have ascertained comparable figures which show that, for the present Session, there has been incurred approximately,
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    both at home and abroad, 17 per cent. of the similar expenditure incurred during the financial year 1963–64 by the last Administration. [HON. MEMBERS: "Oh."] I make it clear that I am talking about a proportion of the year compared with the full year. That proportion is approximately 17 per cent. of the full year 1963–64.
    Mr. Sydney Silverman: Has my hon. Friend made any assessment of the cost to the Exchequer of answering this Question?
    Mr. Diamond: I have not been able to do that.

    Capital Investment
    Mr. Wingfield Digbyasked the Chancellor of the Exchequer what increased provision for capital investment in the public sector he will authorise for 1965–66.
    Mr. Callaghan: Expenditure on civil public investment in 1965–66 is at present expected in real terms to be some £195 million higher than the total for 1964–65.
    Mr. Digby: Will the right hon. Gentleman allow for provision for the authorisation of the second nuclear power programme which is under consideration by the Government and which must be a very expensive item?
    Mr. Callaghan: So many items are involved—including roads, housing, education, universities and the Atomic Energy Authority's programme—that I could not undertake to give the hon. Gentleman a definite answer now. If he will put down a Question, I will see that he gets a definite answer.
    Sir C. Osborne: if capital expenditure exceeds national savings, will not inflation result?
    Mr. Callaghan: I think that it will depend on the level of taxation.

    Income Tax (Rail Season Tickets)
    Mr. Ridsdaleasked the Chancellor of the Exchequer whether he will allow the cost of rail season tickets to be counted as a legitimate expense for tax purposes.
    Mr. Diamond: No, Sir.
    Mr. Ridsdale: What are the Government doing to stop the new round of extremely severe price increases by the nationalised industries? Have letters been sent to the heads of these industries? Cannot the hon. Gentleman do something to alleviate the position of season ticket holders in face of these very severe price increases?
    Mr. Diamond: The hon. Gentleman put down a Question relating to an allowance for tax purposes and not one related to price increases generally.

    Capital Gains and Corporation Taxes
    Mr. Ridsdaleasked the Chancellor of the Exchequer whether he will give further information on the proposed capital gains tax as it applies to gilt-edged investments.
    Mr. Charles Morrisonasked the Chancellor of the Exchequer (1) whether transactions in agricultural land will be subject to the proposed capital gains tax;
    (2) what provision he intends to make for the avoidance of tax liability on apparent capital gains on agricultural land arising from a fall in the purchasing value of the £ sterling.
    Mr. Geoffrey Lloydasked the Chancellor of the Exchequer whether he will give further guidance to those companies which, by reason of the date of their financial year, have already begun to incur liability to the proposed corporation tax.
    Mr. Ian Gilmourasked the Chancellor of the Exchequer if he will exclude from the scope of his proposed capital gains tax owner-occupied retail shop property.
    Mr. Channonasked the Chancellor of the Exchequer if he will, in order to allay doubts, lay a White Paper to explain in detail his proposals for a corporation tax and a capital gains tax.
    Sir J. Rodgersasked the Chancellor of the Exchequer if forestry undertakings will be exempted from the proposed capital gains tax.
    Sir J. Barlowasked the Chancellor of the Exchequer to what extent overseas trade corporations and their shareholders
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    are affected by his recent announcement on the proposed corporation tax.
    Mr. John Hallasked the Chancellor of the Exchequer if he is aware that an increasing number of companies are postponing their plans for industrial expansion because of the uncertainty about the effect of the proposed corporation and capital gains taxes; and if he will make a further statement clarifying the issues still in doubt.
    Sir C. Taylorasked the Chancellor of the Exchequer whether the provisions requiring companies to deduct income tax at the standard rate from dividends and other distributions of profits after 5th April, 1966, will apply to such distributions from capital sources.
    Mr. Callaghan: I must ask hon. and right hon. Gentleman to await my legislative proposals which will be introduced in due course.
    Mr. Ridsdale: Will the right hon. Gentleman state his reasons for extending the capital gains tax to gilt-edged investment? Surely there is a case for exempting from this tax elderly people with small fixed incomes, particularly as some of these people may have to sell in order to pay for the rising price of Socialism?
    Mr. Callaghan: There will be a number of opportunities to debate this matter in due course.
    Mr. Ian Gilmour: May I remind the right hon. Gentleman that, in view of the great new development programmes in property at the moment, unless he exempts owner-occupied retail shops he will cause grave and unnecessary hardship to a very deserving class of people?
    Mr. Callaghan: One of the advantages of the hon. Gentleman's Question is that I am now able to consider this matter.
    Mr. Charles Morrison: Is the Chancellor aware that many farms change hands because of compulsory purchase? When considering his capital gains tax, will he bear that in mind so that farmers will not suffer tax disadvantage as the result of being dispossessed compulsorily?
    Mr. Callaghan: I will certainly consider that point.
    Sir J. Rodgers: Has the right hon. Gentleman invited representations, in considering his tax proposals, from those responsible for reafforestation? Will he bear in mind that timber and wood pulp are amongst our largest imports but that experts believe that, by the year 2,000, such material will be unavailable from North America, which will need it for its own industrial purposes? Should not tax relief be given for reafforestation in this country? Are not people engaged in this occupation as valuable to our community as exporters?
    Mr. Callaghan: The hon. Gentleman will remember that I invited all interests to make representations. I cannot recall any from forestry interests but I will certainly take note of what he has said.
    Mr. William Clark: Is the right hon. Gentleman aware that the uncertainty caused by his proposals is creating havoc not only in the City but among savers generally? If we want to modernise Britain, does the Chancellor think there would be any sense in taxing a notional profit on the sale of a factory on moving to a new factory? Would that lead to modernisation or would it militate against it? Surely it would mean that industrialists would prefer to stay in factories which should be modernized.
    Mr. Callaghan: It is ridiculous of the hon. Gentleman to talk about havoc being created, except on the benches opposite. Business is going on perfectly well and investment is keeping up at a high level. Such panic as there was existed only in the imagination of certain people. The hon. Gentleman would be well advised to await the legislation and see what proposals we put forward. He gets no further by putting down this sort of Question, to which I cannot yet give an answer, but I will do so when the legislation is introduced.
    Sir H. Legge-Bourke: Even if the right hon. Gentleman cannot give an answer over the whole field, would he not agree that it is extremely important that the National Savings Movement should not be adversely affected by uncertainty? Is he aware that the 5 per cent. Development Bonds have a built-in gain of 2 per cent. over five years and that there are other savings exercises of a similar nature? Will he agree that it is important
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    that the potential saver should know whether his capital gain will be taxed?
    Mr. Callaghan: The hon. Gentleman will remember that in my statement of 8th December I made certain exemptions for National Savings. Of course it is important that people should know what their liabilities are, and they will know.
    Sir R. Thompson: Does not the right hon. Gentleman agree that if he levies a capital gains tax on Government securities held to redemption, he will be defaulting on a statutory obligation?
    Mr. Callaghan: That seems to be a matter of opinion which, no doubt, will
    be debated.
    Mr. Maudling: Arising out of an earlier answer, will the right hon. Gentleman not underestimate the effects of his announcements upon investment, both domestic and external?
    Mr. Callaghan: I was very interested to see a recent survey which showed that private manufacturing investment this year was expected to be as high as it was last year.

    International Credits
    Mr. Geoffrey Lloydasked the Chancellor of the Exchequer what steps he is taking to replace the international credits totalling $3,000 million on their expiry.
    Mr. Callaghan: It is not yet time to decide this.

    Charities (Taxation)
    Mr. Kershawasked the Chancellor of the Exchequer what proposals he has after the introduction of the corporation tax to restore to charities the possibility of recovering the tax already paid on sums covenanted to them.
    Mr. Callaghan: As I stated on 8th December, charities will continue to be entitled to exemption from Income Tax, and will therefore be able to claim repayment of Income Tax suffered by deduction.
    Mr. Kershaw: Does not the right hon. Gentleman appreciate that if companies which make donations to charity have to forward to him the tax relative to their donations at the time, they will

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    have to be almost twice as generous as now in order to give the charity the same benefit? Are not charities likely to be very hard hit by the right hon. Gentleman's proposals?
    Mr. Callaghan: I wonder about this. Is it really the case that charity will flow from bountiful breasts only provided that the Exchequer pays part of the cost?
    Mr. William Clark: Is not the right hon. Gentleman aware that if a company covenants to give a charity £100 net a year, the company's income to pay that £100 at the moment is £216, whereas, with the introduction of the corporation tax envisaged for the next Budget, that gross income will have to be about £280? Must not that militate against industry making covenanted payments to charity?
    Mr. Callaghan: We will be able to debate this subject. To start with, I do not accept the hon. Gentleman's figures. Nor will all companies be worse off; many will be better off.
    Mr. William Clark: Will the right hon. Gentleman take it from me that, deducting 15 per cent. Profits Tax and Income Tax at 7s. 9d. in the £ on the decreased balance, a covenanted £100 net to a charity is derived from a gross income of £216, whereas, with a 35 per cent. corporation tax—if it is 35 per cent.— and then Income Tax at 8s. 3d. in the £, the gross income will have to be £280 in order to give £100 net to the charity and that the charity will be able to reclaim only £78?

    Public Service Pensioners
    Mr. Palmerasked the Chancellor of the Exchequer if he proposes to bring in a new Pensions (Increase) Bill to improve the pensions of public service pensioners during the present Parliamentary session.
    Mr. Diamond: I have nothing to add to the reply given by my hon. Friend the Financial Secretary to the Treasury to the hon. and gallant Member for Lewes (Sir T. Beamish) on 1st December.
    Mr. Palmer: Will my hon. Friend bear in mind that the need for a regular review of public service pensions is now a matter of some concern to the trade unions involved?
    Mr. Diamond: Yes, indeed. The Government are bearing that in mind, which is why the matter is now under review.
    Sir Rolf Dudley Williams: Does not the hon. Gentleman know that many sections of the public service are absolutely seething at the way their pensions are being eroded by the inflation taking place under the present Government? Will he give immediate attention to rectifying this scandalous state of affairs?
    Mr. Diamond: The Government have been in power a very short time. I cannot accept the implication of the hon. Gentleman's question. I am aware that he has been interested in this matter for a very long time and, quite properly, has been pursuing it for at least 13 years.

    Board of Inland Revenue (Staff)
    Mr. Peter Walkerasked the Chancellor of the Exchequer what steps he is taking to recruit the staff required to administer and to collect the proposed capital gains tax and corporation tax.
    Mr. Channonasked the Chancellor of the Exchequer what arrangements he is making to increase the staff of the Board of Inland Revenue.
    Mr. Callaghan: The staff needs of the Department in relation to the amount of work are kept under constant scrutiny.
    Mr. Walker: Is the right hon. Gentleman aware of the very high regard of hon. Members on both sides of the House for the tremendous work done by the Inland Revenue? Can he say whether for the purposes of the capital gains tax he intends to take on his own valuation staff, or to use existing firms which are available?
    Mr. Callaghan: I am much obliged, as I am sure everyone is, for what the hon. Gentleman has said about the Board of Inland Revenue, and I will see that what he has said is conveyed to the Board. It is a very hard-working. Department. I must ask the hon. Gentleman to await a decision on the basis of staff needs which is still under consideration.
    Sir H. Butcher: In view of the widespread dissatisfaction among clerical and typing staffs in his Department, does the

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    right hon. Gentleman have the slightest chance of increasing the number employed therein?
    Mr. Callaghan: Negotiations about an increase in pay are going on and I am sure that the hon. Gentleman would not want to depart from the normal practice of the House of not intervening in those negotiations.

    Stamp Duty (Temporary Life Assurance Policies)
    Mr. Peter Walkerasked the Chancellor of the Exchequer whether he will reduce the stamp duty imposed on temporary life assurance policies.
    Mr. Diamond: I have noted the hon. Member's suggestion.
    Mr. Walker: Would the hon. Gentleman take into account the fact that the stamp duty on some of these temporary life policies is more than the premium, which results in the loss of income from overseas, and that no other country imposes a stamp duty of this nature? Will this be taken into account from the balance of payments point of view?
    Mr. Diamond: I am aware of the point which the hon. Gentleman is making.

    Newly-Married Couples (Income Tax)
    Mr. Ian Gilmourasked the Chancellor of the Exchequer if he will give consideration to the proposal to give a tax allowance to newly-married couples as outlined in the pamphlet "Ownership, Opportunity and Obligation", a copy of which has been sent to him.
    Mr. Diamond: I have noted the hon. Member's suggestion.
    Mr. Gilmour: Is the hon. Gentleman aware that, in view of the hardship now being caused to newly-married couples by the greatly increased mortgage rates and other very regrettable Government measures, tax relief of this sort is urgently necessary?
    Mr. Diamond: I have been made aware of the need which the hon. Gentleman is pursuing in the excellent pamphlet which he puts forward. To quote for the benefit of the House, referring to Conservative proposals its says:
    "… if these' "—
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    Conservative proposals—
    " 'are the right things to do now they were the right things to do before. Why did you not do them long ago instead of wasting 13 vital years?' ".
    Mr. Gilmour: That is not a quotation at all. That quotation does not exist in the pamphlet.
    Mr. Diamond: The hon. Gentleman asked me a question relating to the pamphlet,
    "Ownership, Opportunity and Obligation by Ian Gilmour, M.P. and Peter Walker M.P."
    and I have read the first paragraph of it.

    Assets (Valuation)
    Mr. Hawkinsasked the Chancellor of the Exchequer whether he will instruct district valuers at next Budget Day to make surveys and valuations of all farms and landed estates in the United Kingdom, together with a record of their condition and capital equipment, and agree the same with the owners.
    Mr. Goodhewasked the Chancellor of the Exchequer what arrangements he is making for the valuation of assets held by companies and individuals on 5th April, 1965.
    Mr. Callaghan: I must ask hon. Members to await my proposals which will be introduced in due course.
    Mr. Hawkins: Can the right hon. Gentleman explain how the valuers will be able to arrive at the value of properties if a record of condition and of the equipment on the holdings is not made at Budget Day?
    Mr. Callaghan: I hope to do so later.
    Mr. Goodhew: Does not the right hon. Gentleman think that his friends, Castor and Pollux, might be very well occupied by introducing a new Domesday Book?
    Mr. Woodburn: To save labour, would my right hon. Friend ask everybody to value his own farm and property and reserve the right to tax it according to his choice?

    Overseas Assets and Liabilities
    Mr. Shepherdasked the Chancellor of the Exchequer if he will give an estimate of the amount of British assets overseas and British liabilities overseas, respectively.
    Mr. Callaghan: The information available and relating to the end of 1962 was set out in the March, 1964, issue of the Bank of England Quarterly Bulletin. Taking short- and long-term items together, total assets were estimated at about £12,800 million and liabilities at about £11,200 million. These are significant figures, even taking into account that many of the assets and liabilities are not liquid.
    Mr. Shepherd: Would the right hon. Gentleman ensure that these figures have wide publicity, since it is still the view of many people overseas that we are a debtor nation whereas we are a creditor nation?
    Mr. Callaghan: I am much obliged to the hon. Gentleman. I will certainly ensure that more publicity is given to these statistics, even taking into account the reservations which must be made about them.

    International Reserve Currency
    Mr. Shepherdasked the Chancellor of the Exchequer what steps he is taking to expedite the setting up of an international reserve currency, with a view to taking the strain off both sterling and dollars.
    Mr. Callaghan: I hope to play a full part in discussions within the International Monetary Fund, and in the Group of Ten, to find ways and means of strengthening the international monetary system. Meantime our primary objective is to strengthen our balance of payments position.
    Mr. Shepherd: While admitting that, is it not a fact that for nearly 17 or 18 years we have not been making the sort of substantial progress which should have been made in the interests of the rest of the world in addition to ourselves? Is it not time that we had a real drive to achieve something definite?
    Mr. Callaghan: As I think is well known, international agreement is needed on these issues, and it is very difficult, as the right hon. Member for Barnet (Mr. Maudling) discovered two years ago, to take a public initiative in them. But I agree with the sentiments of the hon. Gentleman, and I hope that events may argue more loudly than academic discussion has done in the past.
    Mr. Gresham Cooke: Would the right hon. Gentleman take encouragement from the view expressed by many members of the Council of Europe that it would be very helpful to sterling if there were another international reserve currency? Will he obtain the views of the Foreign Secretary as to what recommendations are being made in the Council of Europe on the subject of another reserve currency?
    Mr. Callaghan: I do not think that in answer to a Question I should like to declare policy on whether we should have an additional reserve currency to that of sterling and the dollar.

    British Forces, Germany (Offset Payments)
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer what progress has been made to date in the negotiation of contracts with the Federal German Government under the terms of the 1964 agreement for offsetting the cost across the exchanges of British troops in Germany.
    Mr. Callaghan: The position on individual contracts is confidential to the firms concerned, but, as my right hon. Friend the Prime Minister said in his speech in the House on 16th December, we can at present see no firm prospect of receiving more from Germany, by way of offset payments, than perhaps £25 million to £30 million.
    Mr. Bruce-Gardyne: In the absence of any clear assurance from the Germans that the position regarding the cost of the Rhine Army can be improved, would the right hon. Gentleman consider with his right hon. Friends the possibility of reducing these costs by stationing some of these troops in this country at the end of an airlift and returning them to Germany as early as possible in the event of an emergency?
    Mr. Callaghan: That opens up another question. On the finances of the matter I very much regret that the agreement entered into has made the position on the balance of payments so much inferior this year compared with what it was. This year, the net cost to us is likely to be £50 million. Before the last agreement was signed the net cost to us was only of the order of £17 million a year. Therefore,

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    we are having to pay another £30 or £40 million across the exchanges.
    Mr. Shinwell: As it has been found impossible to effect a satisfactory financial agreement to reduce the deficit in the balance of payments arising from the presence of large numbers of troops in Germany, would it not be advisable to begin to withdraw many of them instead of imposing a heavy burden on the British taxpayer?
    Mr. Callaghan: I am sure that the presence of our troops in Germany has been of value to the German people and to the peace of the world. I hope that that factor will be taken into account in considering the cost which this burden imposes on our balance of payments and on the British people.
    Mr. Boyd-Carpenter: Is not the right hon. Gentleman aware that the source of the trouble is not the agreement signed last summer, which contemplated a very large measure of offset of our foreign exchange costs, but the German performance?
    Mr. Callaghan: I do not think that that is quite true. The original agreement provided for specific figures. Unfortunately, the last agreement stated that the Germans would do their best. I am sure that they are doing their best, but, alas, it does not match up to the figures in the original agreement.
    Mr. Boyd-Carpenter: Would the right hon. Gentleman reconsider what he has just said about the Germans doing their best? Will he contrast the achievement of the Germans in the last few months in the implementation of the agreement with ourselves with their much more successful efforts under their agreement with the Americans?
    Mr. Callaghan: I think that there is a lot to be said for the way in which that worked out, but I am operating within the limits of the agreement which the right hon. Gentleman signed, and he must take his responsibility for it.
    Mr. Michael Foot: Would my right hon. Friend tell us which potential Leader of the Opposition signed this disadvantageous agreement?
    Mr. Boyd-Carpenter: As the Chancellor of the Exchequer has referred to the
    20
    limits of the agreement within which he is operating, may I ask him whether he is aware that the limits of that agreement are a full offset of our foreign exchange costs?
    Mr. Callaghan: That really is not true as an interpretation of events. The right hon. Gentleman knows that he found it very difficult to get a figure written into the agreement in continuation of the old figure—this has been made public—and he therefore signed an agreement which put in no figures but which said that the Germans would do their best. When people are doing their best, there can be different constructions on how much their best amounts to.

    Exchange Control Investigations, Glenrothes
    Mr. William Hamiltonasked the Chancellor of the Exchequer what were the findings of his investigations into the suspected exchange control offences at Glenrothes in Fife; and what further action is intended.
    Mr. Diamond: The findings are being referred to the Lord Advocate.
    Mr. Hamilton: Has my hon. Friend recommended what action the Lord Advocate should take and whether there is a prima facie case or an infringement of the exchange control regulations?
    Mr. Diamond: I think that my hon. Friend would agree that as the findings are being referred to the Lord Advocate, it would not be right for me to say more at this stage.

    Housing (Interest Rates)
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer what progress he has made in his examination of ways of mitigating the effect of the 7 per cent. Bank Rate on the housing programme.
    Mr. Callaghan: I have decided for the time being to leave the interest rates charged on the quota of loans which local authorities are entitled to draw from the Public Works Loan Board at the levels ruling before the Bank Rate was increased. Local authorities will also be able to get from the Board the first £100,000 instead of the first £50,000 of their long-term borrowing for the current

    21
    financial year. These measures will be of real help, especially to the smaller local authorities.
    Mr. Bruce-Gardyne: While thanking the right hon. Gentleman for that measure of comfort to local authorities, may I ask him if he is aware that a great many local authorities, including some in my constituency, are bitterly resentful of the way in which the promises of lower interest rates offered by some of his right hon. Friends before and during the election have been disregarded since the election?
    Mr. Callaghan: The hon. Gentleman should not be premature about this. The Government still have four years and nine months to run. Despite the regrettable increase in the Bank Rate, within three weeks of our coming to office, there is plenty of time for us to overcome the deficiences of the last Administration.
    Mr. Maudling: Will the right hon. Gentleman take this opportunity to make it clear which policy the Government are intending to pursue about this important question of interest rates for housing purposes?
    Mr. Callaghan: Yes, Sir. That is the purpose of my answering this Question. We are hoping to help local authorities by the measures we are following.
    Mr. Box: Will the Chancellor consider giving some assistance to council house tenants who must pay greatly increased rents as a result of the 7 per cent. Bank Rate? Is he aware, for example, that people in his own constituency are faced with a rise of 33⅓ per cent. in their council house rents from 1st April? When is the right hon. Gentleman going to implement some of the advantages to house owners and house occupiers indicated in his election address?
    Mr. Callaghan: There is, of course, no link between the temporary increase to 7 per cent. in the Bank Rate and increases of the order referred to by the hon. Gentleman—[HON. MEMBERS: "Oh"]— absolutely none, and if he reads the report to which he is referring he will see that the increases in rents were attributed to far different causes.
    Sir A. V. Harvey: Would the right hon. Gentleman say how he squares his remarks about the Bank Rate with what
    22
    the Foreign Secretary said in Washington on 27th October about there being no question of the Bank Rate being increased?
    Mr. Callaghan: At the time he said it, it was true.
    Mr. Fisher: Can the Chancellor tell us whether he really seriously intends to help would-be home owners, because how can the present 6¾ per cent. mortgage interest rate, which is no fault of the building societies, be reconciled with the promises given by the First Secretary?
    Mr. Callaghan: I differ from the hon Gentleman. I have made it clear to the Chairman of the Building Societies Association that, in my view, there was no case at this moment to increase the rates. I made this clear on three grounds. The first was that they said that this was to be a long-term increase, yet it is apparently based on a temporary increase in the Bank Rate.
    Mr. Fisher: How temporary?
    Mr. Callaghan: The second was that certainly most of the societies—I think all of the larger ones—are well above the reserve ratio necessary to qualify for trustee status. I believe that, in these circumstances, it was a most unfortunate step for them to increase building society rates. I think that the increase could well have been suspended for the time being, certainly until they had seen how the long-term interest rate turned out. There is a third consideration which I put to them. Under the corporation tax—
    Hon. Members: Speech.
    Mr. Callaghan: This may be a speech, but it is a matter of considerable importance to a lot of young people—building societies will benefit very substantially and will be able to add substantially to their working margins and reserves which they will be able to put away. I hope that now that they have put up mortgage rates when the Bank Rate is temporarily high, they will seriously consider their position when the Bank Rate is reduced again.
    Mr. Maudling: Is not the Chancellor aware that the rate which building societies must charge is solely determined by the rate they must pay to get adequate resources to lend? Is he not aware that

    23
    the rate they must pay to acquire these resources has been definitely affected by the actions of the Government?
    Mr. Callaghan: I understand that the building societies said last August that they intended to consider putting up their rates, so this is not, as it were, particularly a matter which has arisen since the General Election. [HON. MEMBERS: "Oh."] I am stating the facts. I believe that many of the building societies are being unduly pessimistic about their capacity to raise money in present circumstances. In view of the efforts that are being made to secure an incomes policy, and since they would not be taking a risk in this matter and endangering their trustee status, I very much regret that they took the decision which they did.

  UNITED NATIONS EXPERT COMMITTEE ON SANCTIONS
  Mr. Freesonasked the Prime Minister when he expects the United Nations Expert Committee on Sanctions to make its report; and what proposals have been put before it by Her Majesty's Government.
  The Prime Minister (Mr. Harold Wilson): We expect the United Nations Expert Committee on Sanctions to make its Report towards the end of February. As for the second part of the Question, I would refer my hon. Friend to the reply given by my hon. Friend, the Minister of State for Foreign Affairs, to the hon. Gentleman the Member for Hertfordshire, South-West (Mr. Longden) on 7th December, 1964.
  Mr. Freeson: Would not my right hon. Friend agree that the time is coming when an initiative in this matter must be taken by the Government if we are to avoid a serious blood bath in Southern Africa?
  The Prime Minister: We have made it plain that we are waiting till we see the Report of the Expert Committee. My hon. Friend's Question asks me what views we have put before that Committee. As has been previously stated in the House, it is not the practice to publish in advance of such a committee's report being received the proposals put to it by individual Governments.

  HOUSING (FINANCE)
  Mr. Fletcher-Cookeasked the Prime Minister whether he will make special arrangements to co-ordinate the work of the Ministries concerned with a view to alleviating the effects of the 7 per cent. Bank Rate on mortgage rates for home ownership and local authority house-building.
  The Prime Minister: No special arrangements are needed to co-ordinate the work of the Departments concerned.
  Mr. Fletcher-Cooke: Since the Chancellor has attacked the building societies for following the Bank Rate in putting up mortgage rates, is not the Prime Minister taking urgent steps to follow up the promises made in October that mortgage rates would be lowered, not merely below the Bank Rate as it then was but even more so as it now is?
  The Prime Minister: My right hon. Friend the Chancellor of the Exchequer answered that point a few minutes ago. Of course, if it is going to be said that mortgage rates have gone up because the Bank Rate has gone up, then the whole country will expect them to come down when the Bank Rate comes down.
  Mr. Maudling: Is there not now a good case for co-ordination, because the First Secretary has told us in the past that something will be done to help house ownership through mortgage rates while the Chancellor has made it clear that the Government are thinking only in terms of local authority housing?
  The Prime Minister: I should have thought that of all the people who felt that they had anything to contribute to this, the right hon. Gentleman would be the last person to do so.
  Mr. Peter Emery: Would the Prime Minister tell the House of the large number of local authorities which have had to stop giving mortgages to applicants because of the financial position? Can he give that figure and would he, secondly, consider consulting Socialist councils such as Reading, which are condemning the present position because they are not able to get money to lend to young borrowers?
  The Prime Minister: The hon. Gentleman will, no doubt, wish to put a Question to my right hon. Friend the Minister of Housing and Local Government as to the number of local authorities concerned.
  Mr. Peter Emery: No, to you.
  The Prime Minister: I am certain that local authorities throughout the country realise the situation with which my right hon. Friend has had to deal in this matter of interest rates.
  Mr. Gower: Cannot the Prime Minister say what has happened to the two-tier system and the specially low interest rates held out as baits to the electorate?
  The Prime Minister: My right hon. Friend has already indicated the special help being given to local authorities, help which has never been given before and help which is being given at a time when the Bank Rate has been raised to 7 per cent.
  Mr. J. E. B. Hillasked the Prime Minister what recent correspondence he has had with the Chairman of the Association of Building Societies about finance for house building.
  The Prime Minister: None, Sir.
  Mr. Hill: Is not the Prime Minister aware that his election pledge, which followed his letter to the President of the Building Societies Association on 7th April last, aroused great expectations, which have subsequently been disappointed by the Government's economic policy? Ought he not, therefore, either to take further steps to implement the pledge or to make it quite clear how far he is bound to disappoint the building societies?
  The Prime Minister: My letter to the building societies of a year ago, which I very well remember, was a pledge that we would not introduce differential interest rates so that local authorities would be able to offer at rates lower than the building societies could offer. Nothing has been done in contravention of that pledge—I have the letter here. With regard to our general policy, which was stated before and during the election, of providing special help in the matter of mortgage rates, this is still our policy.
  Hon. Members: When?
  Mr. Peter Walker: Is the Prime Minister aware that before the election he boasted that the Socialist council of Birmingham gave 100 per cent. mortgages at low rates of interest, but that since he has been returned it has stopped giving 100 per cent. mortgages, and has put on higher rates?
  The Prime Minister: Those mortgages were given against a national financial position in which the country was keeping going by borrowing £3 million a day.

  POWER TRANSMISSION LINES
  Sir H. Lucas-Toothasked the Prime Minister if he will introduce legislation to make the Parliamentary Secretary to the Ministry of Public Building and Works specifically responsible for the amenity considerations involved in the siting, routeing and nature of power transmission lines.
  The Prime Minister: No, Sir.
  Sir H. Lucas-Tooth: In view of the very great public interest, not only in the areas concerned but in all areas to which people go to visit beauty spots, and as the Prime Minister himself has said that these matters should not be decided by the electricity boards but that there should be consideration by an independent body and that he would consider an amendment of the law, does he not think that it is now necessary to take some action?
  The Prime Minister: I think that the whole House and the whole country share the hon. Baronet's concern in the matter of the spoiling of amenities in the countryside by any kind of construction of this kind, but the fact is that before anything of this kind can be done, my right hon. Friend the Minister of Power has the right—indeed, the duty—to hold public inquiries at which amenity considerations can be fully dealt with; and, of course, my right hon. Friend the Minister of Housing and Local Government has to be consulted on all planning aspects of the routes, including amenity considerations.
  Mr. Woodburn: Would my right hon. Friend the Prime Minister consider the importance of setting up some kind of watchdog organisation to see that very

  27
  important amenities are not destroyed before the planning authorities are able properly to consider the matter? There is a great danger of beauty spots being permanently lost to the country unless it is the duty of such bodies as the Historic Buildings Councils or the National Trust to tell the Government when these beauty spots are in danger.
  The Prime Minister: I may be wrong, but I think that in this matter the interest of the House stems particularly from the decision taken by the previous Government about the power transmission lines in Sussex, but I think that my Answer made it clear that the Ministers concerned have the fullest responsibility for dealing with amenity considerations. The main problem, and I think that it must be recognised, as the previous Government recognised it, is that there will be cases when, on sheer grounds of cost, it is not possible to do what we would all like to do, and estimates have been given suggesting that the cost of burying these lines underground might be as much as £1 million a mile.

  PRIME MINISTER (VISIT TO UNITED STATES AND CANADA)
  Sir Richard Glynasked the Prime Minister how often, and when, he met heads of British Commonwealth missions during his recent visit to the United States of America; and whether he informed them of his meetings with the President of the United States and of the proposals made then that affected the British Commonwealth of Nations.
  The Prime Minister: I met the Commonwealth representatives once, on 8th December. In addition, on 9th December, I met Commonwealth High Commissioners in Ottawa. It is not usual to disclose particulars of the discussions which take place at such meetings.
  Sir Richard Glyn: Will the Prime Minister bear in mind that the Commonwealth is an association of sovereign States entitled to be kept fully informed of any proposals that might affect their future? Is he aware of the dissatisfaction among members at the lack of information passed through to them during his recent visit to America, and can he undertake that, in future, he will adopt a more
  28
  helpful and acceptable procedure in this matter?
  The Prime Minister: I was, in fact, in North America for exactly three days—two days in Washington and one day in Ottawa—during which period, naturally, a great deal of time was taken up with talks with President Johnson. During those three days, I had one meeting with all the Commonwealth representatives in Washington and another meeting with all the Commonwealth representatives in Ottawa, which enabled me to discus with them not only what I was talking about in Ottawa, but what I was talking about in Washington. I fail to see how I could have done much more, unless I had just cancelled the meetings with President Johnson.

  INSTITUTIONS OF HIGHER EDUCATION (FINANCE)
  Mr Ridleyasked the Prime Minister what are the responsibilities of the Secretary of State for Education and Science in regard to the financing of institutions of higher education.
  The Prime Minister: My right hon. Friend the Secretary of State for Education and Science is responsible for the Exchequer grants to universities in Great Britain for capital and recurrent expenditure. These are allocated to universities by the University Grants Committee. He is responsible, through the research councils, for grants to universities for scientific research projects. Directly through his Department he makes grants to a number of institutions of further education and the voluntary colleges of education in England and Wales.
  The remainder of the institutions of higher education in England and Wales are maintained by the local education authorities who receive assistance from the Exchequer through the general grant and the rate deficiency grant.
  Mr. Ridley: I am grateful to the Prime Minister for that reply, but may I ask whether he remembers saying on 29th May, 1963, that a Labour Government would abolish fee-paying throughout the universities? Is he aware that I have had a letter from the Department saying that this is not to be done? Can he tell us whether this is another broken pledge on the part of the Government?
  The Prime Minister: The Hon. Gentleman's supplementary question does not seem to arise very much from the Question, but I will say to him that whatever was in our election manifesto or in our election programme is still the policy of the Government. I never suggested— [Interruption.]—nor did any of my colleagues suggest that we would carry through a five-year programme in three months, particularly in the conditions we inherited.

  DOCKS (DELAYS)
  Mr. Eldon Griffithsasked the Prime Minister which Minister has overall responsibility for tackling the current delays in the docks, which are holding up British exports.
  The Prime Minister: My right hon. Friend the Minister of Transport has general responsibility for port matters; my right hon. Friend the Minister of Labour is responsible for labour questions in the docks as elsewhere. They, and my right hon. Friend the President of the Board of Trade, are working together on the problems highlighted by the current dock congestion.
  Mr. Eldon Griffiths: Will the Prime Minister urge on those three of his colleagues who are responsible for the situation in the ports that there is a feeling of humiliation in this great shipping country that we should be reduced to a situation in which our exports are held up in this disgraceful fashion? Will he further urge upon them the possibility that some of the congestion in London might be eased if Midlands industrialists were more frequently to use the East Coast ports?
  The Prime Minister: I think that the whole House is sufficiently well aware of the gravity of this problem without any hon. Gentleman seeking to make it worse by some of the adjectives that the hon. Member himself thought fit to use. My right hon. Friends and I myself have spent a lot of time on the problem, and were it not for reasons which I think the House appreciates, in a statement that I still hope to make soon about exports I would have been dealing very fully with this question. I would, however, advise the hon. Gentleman and all hon. Members to recognise that the problems in the docks are very deep-seated—very deep-
  30
  seated indeed. They go back partly to the whole problem of the organisation of the docks, which really needs bringing up to date, quite apart from the appeals we have all made to men already working ten hours a week overtime to work at weekends as well.
  Mr. Grimond: Can the Prime Minister say how far these consultations between his colleagues that are going on about the situation in the docks are taking into account the need to modernise the whole docks system to which he refers? Can he say how much truth there is in the allegation that goods are sent unnecessarily not only from the Midlands but from the north of England and Scotland on over-congested roads to the south of England, that could be accepted by other ports? What steps are being taken, if this allegation is true, to induce industrialists to use ports nearer to their industries?
  The Prime Minister: The question of mechanisation and road access—a very important point made by the right hon. Gentleman—the organisation of the ports, that part of the congestion which is due to bad planning or to people holding back consignments so as to be last on the ship, as well as all the labour aspects, are being thoroughly gone into and, as I have said, I would have hoped by this time to have been able to make a statement to the House about it.
  Mr. Snow: While my right hon. Friend's remarks about the seriousness of the situation are acceptable to all sides of the House, is it not the fact that in the light of increasing world export trade there has been insufficient capital investment in our docks? May not the fact that there have been serious dock difficulties both in Western Germany and in America put the present situation into its proper light?
  The Prime Minister: There are a lot of problems, many of them going back a long way. There are still in this industry—and I probably represent in this House as many dock workers as any hon. Member—the scars left from the old days of casual labour, with fears of unemployment. There is certainly the problem of mechanisation, the need for modernization—including the greater use of computers—and many other things. And there is the problem that we all

  31
  have to face up to, shown by the fact that, in the very week when we made the very highest appeal to men to work a high degree of overtime, within a day of that appeal 400 men were out of work in the docks.
  Mr. Godber: While recognising the difficulties of the situation, may I ask if the Prime Minister will tell us when we may expect to receive the full Report of the Devlin Committee?
  The Prime Minister: I agree with the right hon. Member that the further Report by Lord Devlin's Committee will be of great importance in dealing with one broad part of the problem. As the right hon. Member knows, Lord Devlin's Committee is dealing with the whole question of labour relations and labour organisation in the docks. I felt, however, that hon. Members are also interested in these other problems associated with the docks which are not part of Lord Devlin's terms of reference. I am not sure how soon we shall be able to get the Report, but we are taking steps to see that by the time it is received our ideas will be a great deal clearer on all the other things which need to be done in the docks.

DEFENCE (AIRCRAFT ORDERS)
Mr. Thorneycroft (by Private Notice)asked the Secretary of State for Defence whether he will make available to the House of Commons the information which he gave at a briefing of journalists during the Recess on the future of defence policy and the prospect of orders for the aircraft industry.
The Secretary of State for Defence (Mr. Denis Healey): No, Sir.
Mr. Thorneycroft: Does the right hon. Gentleman recognise that to attempt to deal with the future of a great industry by a series of inspired leaks is a deplorable way for any Government to act? May I ask him to clear up these points? Is it the Government's intention to keep or to break the pledge given to the aircraft workers that Labour will not cancel the TSR2? Is the right hon. Gentleman aware of the concern felt by all who work in the industry at the phrase "wet nursing mentally retarded children"? Will he withdraw that phrase and apologise for
32
it, as it reflects on the whole integrity of the Government's approach to this problem?
Instead of unofficial and semi-official leaks, could we have a White Paper dealing specifically with the various projects and the cost of purchasing the American TFX, the cost of purchasing the additional Phantoms, the cost of buying the American C.130 and the effect on the balance of payments, so that we can see what the problem is in that way?
Lastly, is the right hon. Gentleman aware that the Americans are already making full use of the right hon. Gentleman's activities? They are doing their level best to knock our exports of the BAC.111 on the ground that the damage the right hon. Gentleman is doing to the British industry will make it impossible satisfactorily to produce that and other planes?
Mr. Healey: The right hon. Gentleman should know that no information has been given, either in public or in private, to the Press, or to anybody else not directly concerned with aircraft, on decisions about some of the possible changes in the aircraft procurement programme which are now under review. If there are leaks in the newspapers they are certainly not inspired. Indeed, I think that anyone who has read the various newspapers will recognise that the stories appearing in them, sometimes under the name of the same correspondent, are totally self-contradictory.
I am, of course, aware that there is deep concern in the aircraft industry about its future. The Government are taking that fully into account in the review of aircraft projects they are now undertaking and which was announced to the House as far back as last November and repeated in a debate in December. No statement was made by me or anyone else describing the aircraft industry in the terms that the right hon. Member has used. [HON. MEMBERS: "Oh."] Right hon. Members opposite, if they are interested in the facts, should be prepared to listen to what I have to say.
The words were used, but not for publication, at a confidential briefing of the kind which right hon. Members opposite frequently made use of when they were in power. They were not applied to the aircraft industry. They were used in the

33
context of discussion of the whole problem of trying to stem the rise in defence expenditure by getting better value for money. I should hope that hon. and right hon. Members on both sides of the House would agree that this should be a major responsibility of the Minister of Defence, to whatever party he belongs.
Mr. Marten: Now that he has admitted he used the words, will the right hon. Gentleman say to whom he was referring?
Mr. Healey: The words were used in reference to a whole series of projects, many of which were cancelled at a cost to the nation of £300 million by right hon. Members opposite when they were in power.
Mr. Monslow: Will my right hon. Friend say what steps he proposes to take in relation to this grave violation by breach of faith?
Mr. Healey: This is a serious question which my hon. Friend has raised. I am, of course, not responsible for the conduct of journalists, but, naturally, I deplore any breach of the confidence which must be the basis for discussions of this kind; and there have been a good many cases of this type of breach of confidence recently. These breaches of confidence must call into question the possibility of continuing this form of background briefing, which I believe the Press values as much as Ministers of all parties.
Sir A. V. Harvey: Is the right hon. Gentleman aware that representatives of large American aircraft companies are going round the world undermining the British position by saying, "Do not buy British aircraft now, because in 10 years' time you will not get spares"? Will he do what my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) has suggested, publish a White Paper to allay all fears so that people and Parliament can have facts and we can debate the matter as soon as possible?
Mr. Healey: On the question of behaviour of American industry representatives, there has been much of what the hon. Member has said and it has been going on for many years, but on the question of aircraft decisions—this also answers the right hon. Member for Monmouth (Mr. Thorneycroft)—when the Government have made those decisions they will communicate them to the House
34
eat the earliest possible moment and will give sufficient background of costs to enable the House to judge the wisdom of their decision.
Mr. Paget: Will my right hon. Friend make it clear that the Armed Forces will obtain the equipment, of which they are woefully short, from the most efficient and cheapest sources regardless of where they are and that the Armed Forces shall no longer be regarded as a convenient field for exploitation by the aircraft interests?
Mr. Healey: With respect to my hon. and learned Friend, there are many considerations to be taken into account when taking decisions of this nature. For example, although it is important both to the House and the country to ensure that the country gets value for every £1,000 spent on defence, there are considerations from the defence point of view which must be borne in mind other than the actual cost of a given aircraft. There is, for example, the need for the country to maintain the capacity for bargaining and the capacity for evaluating foreign aircraft and many considerations which must affect such a decision quite apart from the unit cost of one aircraft compared with another.
Sir W. Robson Brown: The Minister will be aware that a decision to buy American aircraft will have a terrible impact on my constituents and may well drive my constituency into being a distressed area. I would like one assurance, and one only. I know that this is a complicated problem, and I do not want to make it more complicated. I would like an assurance that this matter will be debated openly in the House before a decision is made to buy American aircraft as opposed to the TSR2.
Mr. Healey: I cannot give such an assurance, but I can assure the House that it will have an opportunity of debating the decisions when they are taken. I would remind the hon. Gentleman that the right hon. Member for Monmouth created a precedent here when he decided to buy American Phantoms for the Royal Navy before communicating his intention to the House.
Mr. Emrys Hughes: In view of the need, and the urgent need, for reducing defence expenditure, will the Minister take into consideration the statement by

35
President Johnson which appears in The Guardian today, which means, if true, that the whole question of the Polaris submarine is to be reconsidered? Will he assure us that we shall not spend enormous sums of money on what may turn out to be an obsolete weapon?
Mr. Speaker: Order. Everything that the Minister has said in answer is quite apart from Polaris developments. It has all related to other matters.
Mr. Healey: If I may answer the last point made by my hon. Friend, Mr. Speaker, it is my firm intention that we shall not spend money on obsolete weapons.
Mr. Hogg: Among the criteria which the right hon. Gentleman bears in mind, will he remember all the time the vital part which defence orders still play in the advance of technology and science in this country and the fact that we simply cannot afford to allow the Americans to have all the advanced technologies, as they are, even if the criteria referred to by the hon. and learned Member for Northampton (Mr. Paget) are relevant?
Mr. Healey: This is another factor to be borne in mind.
Mr. Speaker: Mr. Bowden. Statement.
Mr. Thorneycroft: On a point of order, Mr. Speaker. May I ask leave to move the Adjournment of the House under Standing Order No. 9?
Mr. Speaker: Yes, at the appropriate moment.
Later—
Mr. Thorneycroft: Mr. Speaker, I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
to call attention to the widespread concern in the aircraft industry arising from the danger of cancellation of military projects and negotiations now proceeding and about to be concluded on the purchase terms of alternative aircraft from the United States.
Mr. Speaker: The right hon. Gentleman asks leave to move the Adjournment of the House pursuant to Standing Order No. 9 for the purpose of discussing a
36
definite matter of urgent public importance, namely,
to call attention to the widespread concern in the aircraft industry arising from the danger of cancellation of military projects and negotiations now proceeding and about to be concluded on the purchase terms of alternative aircraft from the United States.
First, I should like to express my personal gratitude to the right hon. Gentleman for giving me warning that he might wish to do this, so that I have had an opportunity to consider what the position is. It is that I cannot accede to his application. It does not in the circumstances come under the Standing Order, in my view.
Sir J. Eden: Further to that point of order. Is it not a fact that considerable comings and goings have been taking place during the Recess, all concerning the future of the British aircraft industry, and that, had the House been sitting at this time, the Ministers concerned with this would have been pressed for fuller information than we have been vouchsafed by the Ministry of Defence this afternoon? Is it not also a fact that decisions are pending which may well alter the whole shape of the British aircraft industry, if not altogether cripple it? In these circumstances, is there not a great element of urgency here which it behoves the House to debate immediately, if possible? In these circumtances, may I ask you to reconsider your Ruling, Mr. Speaker?
Mr. Speaker: No. I should have explained what is really fatal to the application. There are two principles. One is that a debate under this Standing Order cannot be asked for when the facts are not available or are in dispute. That covers most of the ground, because nobody has got any of the facts out of the Minister, to put it bluntly. The other principle is that a refusal by a Minister to give information is not a ground for a successful application under this Standing Order. I am quite sure about this, and I do not propose to argue about it.
Sir Harmar Nicholls: Further to that point of order. One fact has emerged from the exchanges we have had over the last five minutes. It was when the Minister of Defence said that he was not prepared to give an assurance that he would allow the debate to take place

37
before orders for American aircraft were placed. As that has been stated from the Treasury Bench, I should have thought that the House ought to take every step and make use of this Standing Order, if you, Mr. Speaker, could be prevailed upon to give it further consideration, to ensure that the aircraft industry is discussed in the House before such orders are placed.
Mr. Speaker: There are two objections to that point. First, it is not in the Motion submitted to me. Secondly, if it were, it would not be a ground for granting the application.
Sir W. Robson Brown: Further to that point of order. The House will be aware that on Thursday of last week over 10,000 workers from the Weybridge factory marched through London streets in an orderly fashion and also held a mass meeting in Hyde Park. [HON. MEMBERS: "Oh."] Hon. Members opposite may jeer, but the House is not being allowed —neither is the hon. Member for Esher being allowed—to debate this particular decision, which may go against the whole of the interests not only of Esher but of the whole of the aircraft industry in this country. I feel that it is a matter of urgent public importance, otherwise there is contempt of this House.
Mr. Speaker: I can assure the hon. Gentleman that no Ruling of mine is made in contempt of the House. It follows our practice. If the hon. Gentleman looks in the seventeenth edition of Erskine May, at the appropriate pages, one of which I think is 351 and the other of which is 364, he will find justification for my Ruling.
Hon. Members: Withdraw.
Sir W. Robson Brown: I withdraw any reference to contempt on your part, Mr. Speaker. My reference was to the Government side. I do not withdraw on that point.
Several Hon. Members rose—
Mr. Speaker: We cannot debate a Ruling about this now.
Sir H. Butcher: Further to your Ruling, Mr. Speaker. Is not the House likely shortly to resolve itself into a Committee of Supply? As there will be no specific Votes before the Committee, would it not be appropriate for a discussion on this question then to take place?
Mr. Speaker: I am not in a position to say what could happen in a Committee of Supply, because if ever we get there I shall not be in the Chair. My expectation is—of course, I must not put it higher than that—that we shall not get there because it will take the House so long to decide whether or no I should leave the Chair.

BUSINESS OF THE HOUSE
The Lord President of the Council (Mr. Herbert Bowden): With permission, Mr. Speaker, I should like to mention two business matters.
First, the business proposed for Monday, 25th January is the Second Readings of the Control of Office and Industrial Development Bill, and of the Kenya Republic Bill.
Secondly, in addition to the business already announced for Friday, 22nd January, it is proposed to take, if time allows, the remaining stages of the Nuclear Installations (Amendment) Bill.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[The Prime Minister.]

ORDERS OF THE DAY

  SUPPLY
  [3RD ALLOTTED DAY]
  Order for Committee read.
  Motion made, and Question proposed, That Mr. Speaker do now leave the Chair.—[Mr. Ifor Davies.]

  MILITARY EXPENDITURE OVERSEAS (ESTIMATES COMMITTEE'S REPORTS)
  3.50 p.m.
  Mr. William Hamilton: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House takes note of the Ninth Report from the Estimates Committee in the last Session of the last Parliament and of the Second Special Report from the Estimates Committee relating to Military Expenditure Overseas."
  The Ninth Report of the Estimates Committee was printed and published in July last year, since when much has happened. First, we have had a General Election, which brought a change of Government. Therefore, the new Labour Government had to reply to a Report made to their predecessor. It is probably true that a reply was in draft by the time of the election in October and it will be interesting to know from my hon. Friend the Under-Secretary of State, when he replies from the Government Bench, whether any changes were made in that draft by the new Ministry.
  The second point which I wish to make, which is of rather less importance, is that since then there have been a number of changes in the composition of the Estimates Committee. In the first place, although the hon. Member for Farnham (Sir G. Nicholson) is, I am glad to know, very much still with us, he has relinquished the chairmanship and his membership of the Estimates Committee. I think that it would be the wish of the House that I should pay tribute to the hon. Member for his services on that Committee. His disinterested, hard and largely unpublicised labour in the interest of the House and of the Estimates Committee and the nation was much appreciated by all of us who understood what was entailed and we shall greatly miss his services.
  Hon. Members: Hear, hear.
  Mr. Hamilton: The second change to which I wish to refer in connection with the Estimates Committee is that the Chairman of the Sub-Committee which made the Report retired at the election and is, therefore, not in the House today. I refer, of course, to Sir Frank Markham. Had he been present, he would have been opening this debate with, no doubt, a powerful speech attacking the wasteful expenditure of untold sums of public money.
  I am sure that Sir Frank would have hit out regardless of which party happened to have won the election. In his day, Sir Frank had been a member of both major parties—not both at the same time, but one after the other—and his approach to his Estimates Committee work underlined the fact that the Estimates Committee works on a nonparty basis, in so far as party politicians can so work.
  In the absence of the hon. Member for Farnham and Sir Frank Markham, plus the fact of a new Government, it falls to me, as the new Chairman of the full Estimates Committee, to open this debate. My difficulty at the outset is that except for a very brief period at the end of its deliberations I was not a member of the Sub-Committee which produced the Report. I did not do any of the travelling round the world which the Sub-Committee engaged in and, therefore, I cannot speak on the basis of up-to-date first-hand information.
  I do not, therefore, propose to make any detailed comment on certain aspects of the Report. I must, however, say at this point that I took part in the discussions with the former Leader of the House, the right hon. Member for Enfield, West (Mr. Iain Macleod), on how to regularise overseas visits by members of the Estimates Committee. In my view—and I think that I speak for the whole membership of the Estimates Committee —the present position is most unsatisfactory and wasteful.
  One of the prime functions of the House of Commons, and certainly of the Estimates Committee, is to seek to control or, at least, to scrutinise the spending of public money. Increasingly large sums of public money are being spent in other parts of the world. No one knows the exact sums involved in military expenditure by this country overseas. They

  41
  certainly run into many hundreds of millions of pounds.
  The Sub-Committee's Report estimates that the figure for military expenditure is over £350 million, excluding provision for weapons, equipment, supplies and stores. That is a fairly substantial sum by any standards. Despite that, devious subterfuges have to be resorted to to facilitate investigation on the spot by the Estimates Committee. For example, on this occasion, personal invitations had to be issued by the Minister to each member of the Sub-Committee to go to A, B or C; and when they got there, no evidence could be taken overseas on the spot when the facts were fresh in their minds. They had to come back here and, after an interval of time, take evidence which very often conflicted with what they thought they had seen on the spot. This is a quite absurd situation for this House to be placed in.
  The Report refers to the difficulties inherent in this system in paragraphs 2 and 3. This is not, of course, the first time that the matter has been raised in the House of Commons, but the Government—it certainly was not a recommendation of he Sub-Committee—have made no reference to the statements made in the paragraphs to which I have referred. I hope that the Government might refer to it when they choose to reply to the debate.
  The charge might be made, perhaps inside this House and certainly outside it, that this is a plea to facilitate junketing abroad by Members of the House. I am certain that that charge is baseless. The visits can be arranged anyway; they were arranged in this instance. Secondly, no one who has been on such visits to military establishments overseas can regard them as pleasure jaunts. Indeed, my experience is that the Services take great delight in working Members of Parliament round the clock—and we should not complain too much if they do that when we get there. I hope that the Government will take it upon themselves to try to regularise this position and to facilitate these visits and the taking of evidence overseas by members of the Committee when they get there.
  I want now to refer to the recommendations of the Committee and to deal fairly briefly with one or two of them. By far the most important recommenda-
  42
  tion was that a complete review of the cost of meeting British military commitments overseas should be undertaken. It would, I think, have been the intention of the present Government in any event and, I hope, the intention of any Government, whatever their political colour, to review these commitments and to see whether we could meet them by alternative and cheaper methods. I very much welcome the Government's observations on this recommendation where they very properly point out that our military strength depends upon our economic and financial strength here at home. Clearly, we must cut our military coat according to our economic national cloth without running away from any of our overseas commitments.
  This leads me directly to what, in my view, is a great weakness in the functioning of the Estimates Committee, namely, that we are precluded from questioning policy matters; yet it has long been obvious that the really big savings can be made only by the reorientation of policies. The Estimates Committee concerned itself with very great diligence and assiduity with the meticulous examination of the odd halfpennies and odd pennies without being able to challenge and to criticise the policy decisions which may result in the squandering of hundreds of millions of pounds.
  To give just one or two examples of this state of affairs, this Sub-Committee discovers that it costs £1,000 a year to keep a R.A.F. dog in Singapore. So a dog in Singapore costs about four or five times what we are giving to the old-age pensioners. We can discover that, but we cannot question the Minister on why we are in Singapore in the first place. There may be very good reasons why we are there, but the Estimates Committee cannot find out.
  Then again, the Estimates Committee can reveal the very important information that according to a quartermaster in Benghazi the loss of a 2s. spanner involves the completion of 18 forms of entry at unit level; 18 forms have to be filled in at the unit if a man loses a 2s. spanner, and 30 forms in all have to be completed, but we cannot question the Minister why we are in Benghazi. We can find out how many forms have to be filled in when a fellow loses a

  43
  spanner but not why we are there in the first instance.
  In parenthesis, I may say that I was fascinated to read the Ministerial reply on Recommendation 7 apropos the simplification and elimination of unnecessary forms. Apparently 1,200 forms have been abolished during the last three years. Well, this is fair progress, but one wonders how many thousands more still remain in use and how many of them are, in fact, useless. We are deluged in paper. I do not know whether this is our secret weapon or not, but, by heavens, not many countries can learn much from us in that field.
  The third instance I would like to give of the kind of situation the Estimates Committee found is that the Sub-Committee unearthed the vital information that the Air Force and the Army are engaged in animated discussion and negotiation on the problem of securing agreements on the use of a standardised drinking mug.
  The Committee can ascertain with great exactitude that a billiards room for an Army sergeants' mess of 10 or more shall be 520 sq. ft. in area and that an Army workshop in Seremban spends a great deal of time repairing lawn mowers. All delightful little scandals, all very amusing, but trifling and largely irrelevant, for, as the Committee points out in paragraph 4:
  "While the present estimating system remains, it is impossible to say without a special exercise what a particular base costs the British taxpayer."
  We cannot find out with any exactitude from the Estimates as at present constituted what is the exact cost of a base.
  I was interested in what the Deputy Secretary of State and Minister of Defence for the Army said in the House on 14th December:
  "Many hon. Members, I know, believe that these"—
  he was referring to the Estimates—
  "are designed to conceal rather than to convey information about expenditure; indeed, on more than one occasion I have myself expressed this view."—[OFFICIAL REPORT, 14th December, 1964; Vol. 704, c. 41.]
  So we are in the situation that the Estimates Committee cannot impinge on policy in any way, and that it has great difficulty in getting the facts simply by
  44
  examining the Estimates, witness the conflict between the Estimates Committee's comments in paragraph 177 on the high cost of naval officers' flats in Gibraltar and the flat contradiction of those alleged facts by the Department in its observations on Recommendation 19.
  I should like to say a few words about accommodation in Gibraltar, though I understand that my hon. Friend who will wind up the debate will refer to it in a little more detail than I propose to do. Since the Report was publicised, letters were received by the then Chairman, Sir Frank Markham, from some of the wives of Service men in Gibraltar describing their plight. One of these letters is signed by 26 people; I presume that they are wives of Service men. I want to quote from it because I think the House and the country ought to know what is being done in our name. It gives examples of some of the living conditions for British men and women:
  "1. Nearly all buildings smell foul. 2. Rats or mice, fleas, cockroaches and maggots can be found in any of them. (Some just have one particular breed of vermin and others have two or three breeds.) 3. All are below the standards we are used to. We wish to emphasise this.
  Some examples of rents and amenities are: £7 per week for three rooms, no bathroom, shared toilet; £5 per week for kitchen, bed-sitting room, no running water, bath once a week; £5 per week for bedroom, living room, very small kitchen, outside toilet, no bathroom; £5 per week for three rooms and bathroom, but no natural light—have to use electricity all day. …
  One of the worst examples is a two-roomed flat (extremely small rooms) which are the bedroom and kitchen; no bathroom; a toilet shared with 13 other people; rent £4 10s.; occupied by a young couple with two sons, ages 2 years and 4 months. This girl is feeling desperate. There are no bed clothes, crockery, cutlery in these flats. The majority are without curtains or floor coverings unless supplied by tenants. Landlords do not decorate or do repairs."
  I could go on a very long time about these conditions in which our Service wives are expected to live in Gibraltar.
  In September, 1964, a letter was addressed to all Service wives in private accommodation from the commanding officer—I think he is—Group Captain P. Norton Smith, R.A.F. North Front. I shall quote parts of it:
  "It has come to my notice that certain wives have been writing to national newspapers complaining of the standard of accommodation

  45
  in Gibraltar. In some instances the newspapers have been requested to notify Members of Parliament of this situation."
  He goes on with a very fair comment:
  "The provision of married quarters is a slow process because of the limited amount of money which Parliament makes available for this purpose."
  He goes on to say:
  "The decision as to whether you came to Gibraltar rested with your husband and yourself. Your husband knew what the accommodation situation was like before that decision was made. If you find the accommodation situation completely unacceptable, there is an obvious solution … I cannot forbid you to write to newspapers or to Members of Parliament and I have no intention of trying to impose my will on to you. I do, however, earnestly ask you to give very serious consideration to the subject before you do write letters. We have a certain position to maintain in Gibraltar and airing domestic grievances to newspapers will neither help you nor will it make our position here any easier."
  He then says:
  … it is quite ridiculous to go round complaining and generally lowering your own and everybody else's morale when there are perfectly adequate channels of redress wide open to you."
  I do not want to attack that officer too much for the terms of that letter. I think that it was probably well-intentioned, though it was also very ill-advised to couch it in terms of that kind, as a reply to that letter makes clear. When the group captain referred to reasonable accommodation being available if a man and his wife were prepared to pay for it, one wife wrote to say:
  "Reasonable' accommodation anywhere near one's own standards can cost £12 10s. a week, which is far above what most airmen could afford to pay. I will give my flat as an example of a 'reasonable' one: Rent £8 10s. a week, electricity, gas, water £1 10s. a week, mainly damp, badly decorated, furniture mostly old and in bad repair, no curtains, floor coverings, bedding, crockery, cutlery, or wallpaper on any walls. 100 dirty stairs to climb to flat and ours is a palace compared to lots I have seen (and we consider ourselves very fortunate to have it).
  Those are the conditions under which we expect our Service men and their wives to serve overseas. I do not believe that we nave a right to expect them to serve in those conditions. If we want them to serve there, the House must decide whether we are to provide the wherewithal to supply them with decent housing accommodation. The Govern-
  46
  ment are pushing ahead with the provision of married accommodation, and I hope that they will pay much greater attention to it than has been the case hitherto.
  I leave that point and refer to another disadvantage under which the Estimates Committee labours, and which has been stressed on more than one occasion in this House. We are hampered and hindered by a lack of expert full-time clerical assistance of one kind or another. This is in no way a criticism of the Clerks who now assist us. Indeed, they perform wonders, and no one on the Estimates Committee has anything but the greatest admiration for them. Nevertheless they, like us—or at least I hope like us—are part-time, intelligent laymen pitting their wits against the full-time skilled professionals in the Civil Service. The wonder is that the Estimates Committee has any impact at all in view of all the handicaps under which it labours, but that must be left to another debate.
  In the context of what I have just said, I hope that it will be relevant to refer briefly to our expenditure and commitments in the Middle East and the Far East. The defence of our interests in the Middle East hinges on the base at Aden. I do not think that many hon. Members would deny that the interest to be defended there is the oil interest. That is the main reason why we spend a net £20 million a year there, but Japan takes far more oil from the Middle East than we do, and France, West Germany, Italy, and the Netherlands between them take several times more oil than we do. The British share of Middle East oil production in 1964 was just over 35 per cent.—that is, just over one-third. The United States share was just under 53 per cent., and that of the others between 11 and 12 per cent.
  Thus, it is clear that in terms of taking oil from the Middle East, or having a share in the production of it there, ours is a much smaller rôle than that of Japan, America, and many Western European countries. Why should we alone bear the military burden of the area's security? If there be a burden to be borne, why should not it be shared by all the beneficiaries? The Estimates Committee cannot even begin to think about or to examine these facets of the problem. All we know is that we are

  47
  spending £x million in the Middle East, and that we have to fiddle around to see whether we can save £1,000 here and £1,000 there. We cannot discuss the implications of the policy involved.
  Similar considerations apply in the Far East, where we are in some danger of being bogged down in an endless and costly war in the jungles of Borneo. Is this to protect Malaysia from the incursions of Communism? Is it to protect our commercial interests in Malaya? Is it being done in defence of wider Commonwealth interests? The Estimates Committee, in paragraph 16 of its Report, estimates the total statistical operating costs at about £100 million a year in Malaysia, plus indirect defence aid to the Malaysian Government of about £50 million between 1957 and 1965—and more to come no doubt.
  If the purpose is to protect our commercial interests in Malaysia, perhaps I might point out that I am reliably informed that our commercial interests are valued at about £150 million. Expressed in these terms, it seems ludicrous to spend £100 million year after year to defend total commercial assets of £150 million. Moreover, this expenditure would be of doubtful protective value if there were a hostile native Government determined to take over British interests. We have seen that happen in Indonesia, which is next door. In a country just across a narrow stretch of water from Malaysia, British companies were taken over, and this £100 million expenditure was not able to save them. The same would no doubt apply in Malaysia.
  If Commonwealth interests are concerned to defend this area, which I believe they are, the Commonwealth countries concerned should shoulder a much greater part of the burden. According to my information, last summer Australia's commitment to the defence of Malaya was as follows: one battalion of infantry in the Strategic Reserve, two destroyers or frigates, two Sabre jet fighter squadrons, one Canberra bomber squadron, one control and reporting unit, plus certain miscellaneous personnel, including engineers, in Borneo, medical units, and half a helicopter unit stationed at Butterworth—not a very significant
  48
  contribution, in view of the very great importance, from the Australian point of view, of defending this area.
  New Zealand's contribution consists of one "Leander" class frigate, one battalion of infantry, one Canberra bomber squadron and part of a squadron of Bristol freighters. In addition, a £550,000 aid commitment to Malaysia for equipment was announced in April, 1964, by the New Zealand Prime Minister—but that is to be spread over several years. Can my hon. Friend tell us what representations are being made, or have been made, to those Commonwealth countries to persuade them to contribute more to this effort, since their interests are at least as vitally affected as ours?
  A further example worth quoting is that of Hong Kong. As will be seen from paragraphs 19 and 20 of the Report, the estimated gross cost of military expenditure there is £15 million a year, but the Hong Kong Government contribute only £11 million. Only 13 per cent. of Hong Kong's Budget is spent on defence, compared with about 30 per cent. in our case. That is referred to in paragraph 22 of the Report.
  Income Tax in Hong Kong, however, is levied at the rate of only 1 s. 3d. in the £. It seems to me that there is a good case for asking the Hong Kong Government for a bigger contribution towards the cost of their own defence, and the Estimates Committee so recommended in its Report. The Ministerial reply indicated that a review of this problem was under way, and I hope that we shall be given a progress report in the course of the debate.
  The Report as a whole is valuable on several counts. First, it gives the public many revealing glimpses of where the money goes. Secondly, it shows that with diligence and hard work on the part of the Clerks and M.P.s concerned, Departments of State may be jolted into action by adverse publicity resulting from their activities. Most important, however, the Report shows by what it says and by what it does not say what an imperfect and puny instrument of financial control the Committee really is.
  After several years of listening to bromides about the Estimates Committee I have become rather tired. It is time the charade was either ended or mended. What I want to do is to probe widely and

  49
  deeply into expenditure and the policies from which that expenditure flows.
  Speaking personally, I want the Estimates Committee to be able to cross-examine Ministers, not their civil servants—a procedure for which formal debates and Questions in the House are no substitute. Further, I want to see a full-time technical staff attached to the Committee, perhaps on an ad hoc basis—a staff of accountants, statisticians and scientists and a full-time official with the status of Comptroller and Auditor General. I want to see a full-time administrative staff attached to the Committee.
  In short, my wish is to see the Estimates Committee made into an effective instrument òf good government by presenting a real, terrifying, but salutary challenge to the Executive. At present, it is little more than a paper tiger, which Governments are too often tempted to treat with the contempt which it may well deserve.
  I am conscious that I have ranged fairly widely. Nevertheless, I have omitted to mention many important points which will be raised in the debate. I gave my reasons for that earlier: my colleagues—especially the hon. Member for Dorset, North (Sir Richard Glyn), and my hon. Friend who is to speak later in the debate—will fill in some of the details, which they are better qualified to do than I am. I hope that they will catch the eye of the Chair, because I am certain that they will have some forthright comments to make.
  4.26 p.m.
  Sir Godfrey Nicholson: I desire to thank the hon. Member for Fife, West (Mr. William Hamilton) for the kind remarks that he made about me and my long association with the Estimates Committee. I have served on the Committee for longer than any other hon. or right hon. Member at present in the House. I first became a member of the Committee in 1951, and finished up as Chairman in 1961. I regard my membership of the Committee as a valuable contribution in the service of this House, perhaps my only one.
  Having thanked the hon. Member for what he said about me, I hope that he will not think me churlish if I speak rather critically of the rest of his speech. I hope that he will forgive me. His speech fell into two parts. First, he referred to the general role of the Com-
  50
  mittee. He drew a picture of the sort of committee he would like it to be, and the sort of work he would like to see it do. Secondly, he ranged widely over domestic accommodation in Gibraltar and high politics in the Far East and the Middle East, and so on.
  Before the debate ranges wider, I want to comment upon the first group of thoughts which the hon. Member presented. I believe that the Estimates Committee faces two dangers: first, that it may be despised; and, secondly, that it may be blown up too high. As for its being despised, in my view it is the most valuable weapon at the disposal of the House for the control of public expenditure. Thanks particularly to the efforts of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), a certain number of days are now allocated for debates on the Estimates Committee's Reports. Before that procedure was adopted the publicity given to the Reports and to Departmental replies constituted its only strength. Now we have these debates.
  As the hon. Member said, the Committee has to face various problems. First, there is the business of going abroad. I agree completely with the hon. Member about the technical difficulties and obstacles in the way of taking abroad staff of the House and also reporters, and allowing a Select Committee to take evidence in countries where the writ of this House does not run. This is not an imaginary difficulty; it is a real one, as any lawyer would confirm, and as any commonsense individual would recognise.
  But this difficulty was satisfactorily overcome by instituting the practice whereby Ministers or Departments issued personal invitations to Members of Estimates Sub-Committees, as individuals, so that they could go abroad and see Ministry installations and examine items of expenditure. I regard that as a satisfactory compromise, and I hope that the present Estimates Committee will not try to press the matter any further at the moment.
  The hon. Member then spoke of the difficulty which the Committee faces in not being allowed to debate policy. The word "policy" is used very loosely in this context, and is never defined. We all have our personal definitions of it. I

  51
  have heard witnesses claim that any decision of a Department, from however junior a source, was a policy decision.
  Personally, I define policy as any question which involves party politics and party political differences. The strength of the Estimates Committee is based entirely on the fact that it is a non-party Committee. I have always maintained that if an outsider—a man from Mars—came to listen to someone speaking during a discussion in a Sub-Committee of the Estimates Committee, or, indeed, in the Estimates Committee itself, he would never be able to tell from what was said to what political party the speaker belonged.
  As soon as the question of party politics rears its ugly head the Estimates Committee will be done for, possibly for ever. I consider that a sound and sage definition of policy is that the Estimates Committee should investigate, inquire into and make recommendations concerning all matters which do not arouse direct party political conflict.
  I have never found myself hampered by this rule about policy. Sub-Committees of which I have been the chairman have made recommendations impinging considerably on policy and have never been hauled up for doing so; nor has there been a degeneration into party political strife. This bugbear of policy, this policy bogy, is, I think, just a bogy. By tactful handling on the part of the chairman it is possible to get round it and to avoid any awkwardness.
  I wish to get back to what I said at the start of my speech, that becoming a member of the Estimates Committee is the only real way in which an hon. Member of the House may exercise control over expenditure. We are frequently told by Ministers, and by the newspapers, that the chief rôle of the House of Commons is to control expenditure, but we all know that to some extent it is farcical to say that an ordinary backbench Member of Parliament can control Government expenditure from his seat in the House. The only way in which he may effectively be able to do so is by becoming a member of the Estimates Committee. If it is properly handled, that Committee has an enormous strength.
  52
  I therefore beg hon. Members of this House—and the Press, and the public—not to despise the Estimates Committee. If its business is properly handled, if tact is used, and there is courage and vigilance, it is possible for members of the Estimates Committee to go almost anywhere in the world under present arrangements—not as a Committee, but as individuals—and they may investigate almost all objects of Government expenditure— not grants in aid and things like that but, all Supply expenditure. It is possible for very valuable recommendations to be made.
  I do not desire to blow my own trumpet or to claim too much for any committee with which I have been associated, but I am proud that I presided over a Sub-Committee which inquired into the whole question of Treasury control and expenditure. Its work resulted in the setting up of the Plowden Committee which produced the Plowden Report, and a reshaping of the whole system of Treasury control. That is but one example of many which all chairmen of Sub-Committees could call in aid.
  There are dangers. One danger is that by running down the Estimates Committee in this House and elsewhere one may add to the general hostility which the Estimates Committee has to face from Government Departments, from Ministers, in fact from the whole of the "Establishment". Departments resent inquiries being made into their work by "amateurs". That is a quite natural feeling and I do not blame members of a Department for it. They maintain that they have spent their whole lives dealing with certain questions and they resent six or seven more or less ignorant Members of Parliament—certainly inexpert Members of Parliament—examining what has been their life work and pulling it to pieces.
  Of course, members of a Department resent this and they inspire their Ministerial heads to reflect the same point of view in this House. The Treasury used to take that line, but I believe I am right in saying—in fact, I know that I am right—that the Treasury has been converted to a realisation of the usefulness of the Estimates Committee. Personally, I never had anything but the utmost cooperation and help from the Treasury. Indeed, "welcome" would be the right word.

  53
  It is very important that this House should see to it that neither Government Departments nor Ministers nor what I have broadly described as the "Establishment" should despise the Estimates Committee or run it down. At the risk of being called a bore I repeat that membership of the Estimates Committee is almost the only effective way in which hon. Members can exercise control over Supply expenditure.
  There is another danger which is just as bad and I am afraid that the hon. Member for Fife, West went headlong with it, horse, foot, and guns. It arises from trying to blow up the importance of the Estimates Committee. It is not the purpose or the duty or the rô;le of that Committee to say whether we are right to fight in Malaysia, or in Borneo, or whether we are not; or to weigh the respective merits of investments in Timbuctoo against the cost of an expedition to Timbuctoo. It is not the job of the Estimates Committee to act as a substitute for this House in respect of those great policy decisions.
  It is the job of the Estimates Committee to investigate Supply expenditure on anything which does not involve direct clashes of party opinion, but not to act as a committee of the sort that foreign Parliaments call commissions. The House may set up an ad hoc Foreign Affairs Committee, or a Home Affairs Committee, a Health Committee, and so on, with the sort of standing such committees might have, including the right to compel Ministers to submit to cross-examination, but heaven save the Estimates Committee if it is enabled to cross-examine Ministers. It would make a farce of the whole procedure.
  I have opposed the setting up of specialist committees on the ground that to do so would merely be to reproduce the party divisions which exist already in this Chamber. That point of view is open to argument, but if this sort of committees are to be set up, let them be ad hoc committees and not masquerade under the guise of an Estimates Committee.
  There is also the danger of blowing up the Estimates Committee too much, by asking for expert assistance. That is not what is wanted. Sub-Committees of the Estimates Committee, or the Estimates Committee itself, are like a jury. A certain amount of ordinary common sense
  54
  is called for. Hon. Members who serve on the Estimates Committee pass verdicts of amateurs on Supply expenditure and the motives behind it, which are based on common sense. As soon as it is claimed that they must have expert staff and assistance the whole point of the functions of the Estimates Committee is missed, and the Committee is driven into a position where it will attract hostility and opposition from Government Departments and from the Treasury, when all should be allies. It would follow as certainly as the sun will rise tomorrow that the spirit of party politics would rear its ugly head.
  The Estimates Committee and its Sub-Committees are exceedingly well aided by the Clerks of this House. Over the past 14 years I have been associated with many Clerks and I say that without exception they are men of the highest ability and unimpeachable integrity. They have great common sense and wisdom. A good Clerk is much more than the right-hand man of the chairman of a Sub-Committee. He is the guiding hand and the inspiring genius of the Committee although he may never open his mouth during its proceedings.
  I do not think it possible to better the service which is rendered to the Estimates Committee by the Clerks. They represent a remarkable branch of the Civil Service. They are almost unhonoured and certainly unsung, and I like to think that occasionally the House takes the opportunity to pay the sort of tribute to them which I am trying to pay today.
  The Estimates Committee is a delicate thing. It is like many other British institutions in that it is quite illogical. Can we picture any other foreign legislature setting up a committee to deal with really important matters in which party politics do not enter at all? That is the strength of it. If the hon. Member for Fife West and others who share his views think about it they will realise that they will bring party politics in at the front door and that it will be there for ever.
  In conclusion, I say value the Estimates Committee, respect the Estimates Committee and help the Estimates Committee. I appeal to the leaders of both sides of this House. They should do their best for the Estimates Committee, they should not let it be just a compliment to be appointed to the Estimates Committee.

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  They should appoint the best men at their disposal. They should cherish it as much as they can, give it as many opportunities for debates as they can, but for goodness' sake, whatever measures, good or bad, are proposed, they should not try to make the Estimates Committee procedure do more than it can. They should not try to blow it up as being something more important and significant than the House of which it is only a part. They should remember this: the day party politics enter into the work of the Estimates Committee the usefulness of the Estimates Committee is finished, once and for all.
  4.46 p.m.
  The Minister of Defence for the Royal Navy (Mr. Christopher Mayhew): As a former member of the Estimates Committee myself—though a very long time ago and for a very short period—I am tempted to embark in the lively debate which has been started on the general rô;le and powers of the Estimates Committee by my hon. Friend the Member for Fife, West (Mr. William Hamilton) and the hon. Member for Farnham (Sir G. Nicholson). I think, however, that that would take me a little way from the main purpose of this debate and I doubt whether I am qualified to make a very useful contribution.
  Therefore, may I pick up the one aspect of the work of the Estimates Committee which is very relevant to our debate and which both hon. Members who have already spoken have mentioned. I refer to the difficulty which the Committee is under in taking evidence abroad. It is mentioned a great deal in the Report and may be responsible for some of what we regard as the shortcomings of the Report. The problem arises from the view of former Law Officers of the Crown and a former Clerk of this House that for a Committee to act formally, as such, overseas would be an excess of jurisdiction and, therefore, unconstitutional.
  I am not competent to express a view on the constitutional point, but I understand that a memorandum is being prepared in due course for the Select Committee on Procedure. Certainly, as far as the Government and the Ministry of Defence are concerned, we should welcome some change in the procedure. I agree with
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  what my hon. Friend the Member for Fife, West said on this point.
  It seems absurd that we should spend over £2,000 million a year on defence—a great part of it abroad—and yet no Committee from this House can go out there and find out, in a proper, formal, efficient way how the money is being spent. It must be wrong. They should be able to take formal evidence from serving officers and officials and have it recorded verbatim in the normal way.
  This memorandum is, as I say, on its way to the Select Committee. We must hope that it will have a happy fate.
  In the meantime, I understand that there is an ingenious idea which might get over the difficulty on a temporary or even a permanent basis. Without transgressing the constitutional principle which I have described, it overcomes the problem which this Committee has been suffering from. It is not for me to set out this idea; it is not mine. But I can say, from the point of view of the Government and from what we have heard of this idea, that we think it is attractive, and we hope for a change in the present procedure. It is not only embarrassing for the Committee or Sub-Committee. As the Report says, the Sub-Committee had to spend a great deal of time and effort reconciling information which they obtained overseas with information that had to be specially obtained in this country.
  From our point of view too, we feel strongly that the Service Departments were, as the Report said, clearly at a disadvantage in being unable to ascertain precisely where members of the Sub-Committee had collected particular items of information and in seeking to correct the misconceptions which inevitably arise in an investigation of this magnitude. I think that there were a number of factual mistakes in this Report, and on several points the Sub-Committee seemed to be under a misapprehension. We therefore warmly welcome any change which would make this impossible in the future.
  Turning to the Report itself, we are already well accustomed to these wide-ranging inquests on overseas defence expenditure. I cannot agree that the Committee is a paper tiger. This is certainly not the view which we take in

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  the Ministry of Defence. Again, I appreciated very much what the hon. Member for Farnham said. We welcome these inquiries. I hope that he will say that we gave every possible assistance to the Sub-Committee. After all, the Armed Forces are a vast and complicated organisation, and it is difficult to get a clear aid detached view of the whole machine and to remedy weaknesses which must inevitably arise.
  In one sense, this is particularly difficult for Ministers, civil servants and officials who are themselves deeply involved in the work. It requires a strong effort of will to detach ourselves and look at the Services from the outside. In this field, sometimes the spectator gets the best view of the game. Therefore, these critical surveys of fresh and detached minds are of great value. That is not to say that fresh and detached minds never make mistakes. As I shall try to show, mistakes were made in this Report. On a number of points, some of the Sub-Committee's guns, including the one which made the loudest bang, were pointing in entirely the wrong direction. Most of them, however, were on target.
  The Report received a great deal of publicity and so, to some extent, did our observations upon it. As usual, the publicity concentrated mainly on the shortcoming which the Report revealed or purported to reveal. I should like, if I may, to put this unfavourable publicity into proportion, by drawing attention to some of the things which the Committee said in favour of the Services and on which we are agreed.
  The members of the Committee commended the spirit and efficiency of all ranks and spoke of the difficult tasks which they were tackling patiently and efficiently, often in very trying circumstances. I believe that the House shares this opinion and I thank the Committee for expressing it.
  The Committee described its list of recommendations as "formidable" and there are certainly a lot of them—21 in all. Some of them make more than one point, they have multiple warheads, so to speak. To put the matter in proportion, however, only a minority of them raised big issues. The great majority of the recommendations are concerned with detail. Considering how large and complicated our defence Services are
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  overseas, they can perhaps congratulate themselves that the Committee did not find even more to criticise. There are a number of recommendations which we accept outright or in principle, though we sometimes disagree with the arguments leading up to them. In some cases, we shall be meeting the Committee's wishes in rather a different way from what it had in mind. I shall just briefly summarise this area of agreement, so as to put in perspective the harder things which I feel it my duty to say a little later.
  First, we have undertaken to review the establishment of Army personnel and Army Department civilians in India and Nepal in the next few months. This review will begin in April. This is Recommendation 3. Then, a moratorium has been placed on the approval of major works at Benghazi until the future of the garrison there is clearer. That was the fourth Recommendation.
  Next, the Ministry of Public Building and Works has promised to try to achieve staff economies. It points out, however, that to calculate these, one should not just count heads of staff. The proper basis is the staff costs as a percentage of the total cost of work undertaken. This is the figure which is more useful and this figure the Ministry has undertaken to try to reduce. That is Recommendation 6.
  The Ministry of Defence intends to simplify its forms and to leave out those which are unnecessary. We think that this is best done as a continuous process—in the same way, we are told, that the Forth Bridge is painted —rather than a once-for-all inter-Service review which might actually produce more forms than it got rid of. That is Recommendation 7.
  The Army and the Royal Navy will consider learning from the R.A.F. system of command costing. That is Recommendation 8(a). The Ministry of Defence is making progress with the rationalisation of engineering and repair facilities at Singapore. The Army has just reduced by 340 the numbers of staff engaged on this work. That is Recommendation 8(b). The Navy Department has embarked on a review of the naval pay system with a view to computerising it. That is Recommendation 8(d). The Army Hospital in Benghazi will do its

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  utmost to attract civilian paying patients. The coverage provided by the Forces Broadcasting Service is and will continue to be geared strictly to demand.
  Those are all recommendations which we have accepted, and they detract from the force of my hon. Friend's argument that the Committee is a paper tiger. They add up to a substantial improvement in what we all want—the efficiency and economical running of our Services. There are a number of other recommendations to which we want to give further thought, such as the problem of whether to maintain the present Army Command structure in Hong Kong, in the light of the Committee's view that two headquarters may be too many. The Navy Department will consider whether it can amalgamate a couple of small naval-manned workshops in Gibraltar. The Ministry of Defence will take another look at the case for all Service hospitals in a given area being administered by a single Service. We shall consider bringing the Treasury in directly on the most important lands transactions.
  I hope that the House will forgive me for having listed these points at some length to put into perspective the points which I shall mention on which we disagree. The first relates to Gibraltar housing, which my hon. Friend mentioned. There is the point about housing conditions for ratings, with which he dealt particularly and with which my hon. Friend may deal in winding up the debate. I cannot regard as fair criticism in any sense at all the implication to be drawn from paragraph 177 of the Report that the Admiralty, as it then was, has put the family housing needs of naval officers stationed in Gibraltar before the needs of ratings. I have referred to that matter before but I should like to make it clear. It may be that the Committee did not mean this inference to be drawn. If so, then, with all respect, the Committee should have drafted its Report quite differently. The inference reflects not only on the judgment of the Admiralty, as it then was, but actually on its motives and integrity.
  If it were true that priority had been given to officers over ratings in this way, it would be a scandal. But it is not true. It is the exact opposite of the truth. The truth is that these flats, which are not yet
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  completed, will be the first to be built in Gibraltar for naval officers since the war. There are 12 in the batch, and, for the record, they are now expected to cost £6,600 each, including site works, compared with over £9,000 quoted by the Committee.
  My hon. Friend the Under-Secretary of State returned this week from Gibraltar, where he had a look at the position. He tells me that there is a serious and urgent need for officers' housing. When officers first arrive in Gibraltar they must leave their families behind them, even though this is a highly prized accompanied billet. At the moment, they have to wait for six to nine months for a substandard house. After that they must wait for a permanent quarter which often they do not get until they have been a year or 18 months on the Rock.
  Contrast that with the position of the ratings and the industrials at Gibraltar.
  Sir Richard Glyn: I am in a difficult position, being one of the only three members of the Committee who went to Gibraltar and who are still on the Estimates Committee. This is a perfect example of the necessity to clear up misunderstandings. I want to send in writing to the Minister a copy of a document which we received from his own Ministry before we went to Gibraltar. I do not wish to quote at length, but it gives on page 5 details of the provision of dockyard officers' flats—12 flats at a total estimated cost of £97,500, which works out at £8,125 per flat. On inquiry we were told orally that this did not include site works at £900 per flat. This is how the figure of £9,000 per flat arose, and it is based on a figure from his own Ministry. I should like to send him the written document which we received, and he can then say who made the mistake.
  Mr. Mayhew: I am grateful to the hon. Member. We both want to get at the truth. Before making my statement today I took great pains to ensure that what I was saying was absolutely right. I recall that document among the evidence which I looked at. It is an estimate. If he was informed that it did not include site works, that was wrong. As I said, the figure is not £8,125 but £6,600.
  I want, however, to come to the question of ratings' dwellings, because here I think my hon. Friend was referring to

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  private hirings and private accommodation. It is very important to make it clear that he is not referring to married quarters, nor is he referring to a few caravans, I think 30, which are still there, alongside the married quarters and which are our responsibility. He is referring to private accommodation. That accommodation is bad. There is no question about that. My hon. Friend the Under-Secretary of State tells me that there is no question about that. But I should like to put it into proportion by saying that my information is that only 31 out of 380 married families are either in caravans or in private accommodation. While it does not in the least show that the facts produced by my hon. Friend which I have not had time to investigate are untrue, that puts the position in proportion.
  Certainly, compared with officers the very great majority of ratings and industrials are quite well off in their housing at Gibraltar, for 250 quarters have been built in Gibraltar since before the war or are being built now. We are confident that this will break the back of the problem. My hon. Friend tells me that in his opinion ratings' married quarters in Gibraltar were better than he had ever seen in the United Kingdom. It is true, as the Estimates Committee said, that some ratings are living in caravans, but these caravans are in fixed sites between married quarters and have amenities laid on. A great deal of publicity has been given to this matter, and I feel that as those responsible for administering naval housing in Gibraltar cannot answer for themselves, I should say that the criticism of their work in the Select Committee's Report, for whatever reason, was ill-informed and unfair.
  May I briefly turn to another criticism which the Committee made in relation to housing overseas? The Committee made the point—and it is true—that as far as welfare building is concerned, much the most important task is to see that married Service men and their families are properly housed. After looking at bases and garrisons, they drew the general conclusion that the Service had departed from that principle. They say, for instance, that such welfare buildings as a N.A.A.F.I. shop, or a swimming pool, or a gymnasium, though desirable in themselves, have been provided on too lavish a scale in relation to family housing at some stations. In our
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  observations on the Committee's Report we have explained what we feel about this and what the Services have been doing to try to strike a balance. Over the last five years about 10,000 quarters for Service men overseas have been built, but we cannot do everything at once and we cannot put all our resources into married quarters at the expense of the other amenities needed by single men, and indeed by married men and their families.
  In respect of housing, the Committee made a further criticism, again applying particularly to Gibraltar. They said that some of the housing provided was too good and too expensive and that more houses—perhaps more modest but still adequate—could have been built for the same money, more families properly housed, and fewer left in sub-standard private accommodation.
  I would point out that building scales overseas for housing are the same as those here. Admittedly, costs are higher overseas due to the climate, for example, or the need to build roads or lay on mains services, which we take for granted in this country. But standards are the same. Service quarters overseas are not luxurious. Surely it is right to provide for our Service men overeas something which is comparable with what a man may expect to find in this country? I think that that is a sound principle. Quite apart from what is a fair principle, we have our manpower problems—at any rate in the Navy—to consider, and if we are to resist the pull of civilian life for well-trained naval ratings as they near their re-engagement date, we must do everything we can to make their all-too-short period of service with their families as pleasant as we can.
  I should like to turn to the Committee's main recommendation, the one which it described as the most important and to which my hon. Friend the Member for Fife, West referred. I cannot go as wide as my hon. Friend did in discussing whether or not our forces should be in a certain area, but I had better say for the record that the Government's position is a long way away from the position which my hon. Friend took this afternoon.
  The recommendation to which I refer is that the Ministry of Defence should undertake a review, base by base and garrison by garrison, of the cost of meeting our military commitments overseas. The

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  Government willingly accept this recommendation. The composition of our Armed Forces to meet our commitments is one of the main topics being covered by our current defence review. We must keep firmly in mind, and we are doing so, what the country can afford in terms of a percentage of the gross national product and in foreign exchange. What has interested me in the Report is that the Committee was plainly moving towards a concept which is already beginning to establish itself as a regular planning instrument in the Ministry of Defence—the concept of functional costing.
  In the last defence debate, my right hon. Friend made some reference to this, and we are doing a great deal to develop and refine this new defence planning tool. Plainly, those who take decisions about defence need better information about the financial implications of an idea or a project than the traditional estimates laid before the House can provide. It makes much better sense for this purpose to deal in the costs of end-products or "outputs"—the aircraft carrier, the infantry battalion, and so on—which one cannot get easily within the Estimates as now presented.
  Sir G. Nicholson: That has been a favourite recommendation of ours since time out of mind. We are very glad to learn that at last the penny has dropped.
  Mr. Mayhew: If I have given the hon. Gentleman encouragement, perhaps when he has heard all that I have to say I shall have given him further satisfaction.
  The estimating is better done like this. We are all at one on this matter, but this type of costing exercise raises all sorts of abstruse technical problems when it comes to deciding how to allocate the costs of the various supporting facilities and services. Functional costing is not an exact science, and should not be mistaken for one. There are certain end-products or outputs which can be subjected to functional costing fairly accurately. To take the Polaris programme for example, here is an end-product with a specific rô;le and a precise and stable make-up in terms of ships, men and logistical support. There
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  have been great arguments in the past about the value of the Polaris programme and the purpose to which it should be put, but there has been little scope for argument on what it will cost.
  Bases, on the other hand, which are the subject of the Report, are a particularly difficult subject for functional costing. I had the advantage last week of visiting the Controller of the United States Defence Forces and of discussing this problem with Mr. Charles Hitch, whom hon. Members may well have heard of, and who is regarded by many people as the arch-priest or perhaps the Albert Einstein of functional costing. As a result I was confirmed in my view that the functional costing of bases, though desirable, presents peculiar difficulties.
  Unlike the Polaris programme, a base does not have a clear-cut rô;le, or a definite size or level of activity, and it is difficult to decide how much of the facilities which it provides should be regarded as the base itself and how much should be treated as an extraneous contribution to fulfil a wider commitment.
  To take Malaysia, for example, the cost of running the bases in Singapore and in the rest of Malaysia, including the capital cost of building work within them, is £35 million a year for the three Services together; but presumably we should add the dockyard, airfield constructional activities, and so on, which would raise the total to about £45 million. Presumably we should also add the married quarters, the schools and the other welfare facilities necessary for the Service men and their families. This brings the total to about £50 million, and all this is before we put any fighting troops into the Far East base. If we add the Service units and formations themselves, their pay and allowances, the cost of their equipment, and the pay of civilians they employ, the increase is considerable. The Army and the R.A.F. alone take it up to a total of about £100 million a year.
  Then comes the tricky problem of the Navy whose ships, after all, are classed as the Far East Fleet and operate from Singapore. If we count them in the figure might reach £225 million a year. Even then a case could be made for adding an element for the backing from the United Kingdom without which our forces based in Singapore could not

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  function—the cost of training units, logistic support, as well as a slice of the salaries of the staff of the Ministry of Defence, including my own salary, now that I am being paid one, and so on. We could add a great level of costs along those lines.
  Finally, there is a danger of a serious fallacy emerging from all this—the danger of arguing that because it costs so many millions to stay in Singapore we should save so many millions if we got out. To put it midly, this is a dangerous argument and I need not go into it in detail now. The drift of the Committee's argument was that we should take advantage of the advent of air trooping to cut down on fixed bases overseas and rely more on flying out troops ad hoc to cope with trouble whenever it flares up. There is a great deal in this, and in a sense the Committee is preaching to the converted.
  I have done some research and I find that during the last 13 months no fewer than 19 major Army and Royal Marine units have been flown out to various parts of the world—Cyprus, East Africa, Aden, British Guiana, and the Far East—to deal with the emergencies there. That works out at one every three weeks. It is true that 5 of the 19 were relieving units already there, but the Ministry of Defence is pretty experienced now in the art of deploying a Strategic Reserve. But although that Strategic Reserve is a very fine thing, we do not get it free of charge. When working out any savings from running down bases, we must remember that the Strategic Reserve has to be fed, paid, equipped and housed, just like the rest of the forces. Moreover it has to be transported.
  If, for example, we decided to bring 45 Commando Royal Marines back to this country to reinforce the Strategic Reserve and fly it out to Aden or elsewhere whenever the situation demanded, we would save £30,000 a year in allowances, maintenance costs, and so forth. Against this we would have to pay out £50,000 every time we sent them overseas, This is on the assumption that R.A.F. Transport Command could cope with the task with the aircraft it already has. No doubt it could in that particular instance, but if many major units were brought back on this basis, we would have to have a bigger Transport Command. That would be another expensive item on the other side of the equation.
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  There would also be the problem of accommodating the Commando once we had brought it back. We have no barracks to spare. We would have to build another one, and this we estimate would cost £l¼ million. We would probably find also that we would have to stockpile duplicate sets of heavy equipment, stores, and so forth in the theatres where the Strategic Reserve might have to operate. I do not want to get into the position of suggesting that bases are cheaper in all circumstances. They certainly are not, but there are two sides to the equation and a balance must be struck between them. The actual costing is extremely difficult, delicate and hypothetical. For some purposes it might be cheaper to use the Reserve, for others not. The mix will vary, but as far as I can see there will always be a place for both.
  Assessing the value of a base as compared with other means of meeting a commitment is also extremely difficult in economic terms. We have to assess the possible loss of local confidence as a result of our going, the possible uncertainty of the alternative means of reinforcement due to shortage of overflying rights, difficulty in protecting the point of entry, the problem of acclimatising troops, the time taken, and so on.
  We can cost our bases in any way we like, upwards, downwards and sideways, until we arrive at a figure, but even then this figure will have taken account of only a comparatively small part of the factors and evidence which we shall have to bear in mind before reaching a conclusion on whether to leave or at what level to maintain a base.
  Sir G. Nicholson: Is it clear that not only big units such as those of which the Minister has been speaking but also each component part of a base is costed? For example, I understand that a military hospital is not costed as such.
  Mr. Mayhew: I think that such a figure would be easily available, and it is certainly our intention not only to do the costing of major elements such as B.A.O.R. or the Polaris project, for instance, but costings of a much larger range of smaller things.
  Sir G. Nicholson: Is it actually being done?
  Mr. Mayhew: I cannot give an exact figure of breakdown as to how small the items will be which we intend to cost. I think that I saw somewhere in the United States—it may have been on my visit—that the Americans are now aiming to cost something like 650 different programmes or projects.
  In conclusion, I refer to the second major big issue raised in the Report. The Report criticises the Ministry for not having done more in the way of administrative integration and co-ordination in the Far East. I entirely agree that there is plenty of scope for this, and I am sure that we shall see a great deal more of it in the next few years. How far and how fast we want to go with integration can be argued about. I was in Canada last week, and I had the chance of seeing something of their experience there. No one could go further and faster towards a unified Service than Canada's courageous Minister of Defence, Mr. Paul Hellyer. After publication of his White Paper last year, the single Service Chiefs of Staff and Service Boards disappeared overnight. The Service Ministers had gone already. Functional chiefs appeared instead—a Controller-General, Chiefs of Logistics and Engineering Development, of Personnel and of Operational Readiness.
  As Mr. Hellyer put it to me, he deliberately cut the head off the body and was now retying the severed blood vessels in a different pattern. Difficulties ensued, as Mr. Hellyer freely admitted, but he claimed that this was the best way forward in the long run. He told me a joke current among harassed Ministry of Defence officials—I have his permission to say these things—"If your boss rings up, make a note of his name".
  Our own defence organisation is, of course, larger and more complicated than Canada's and, possibly, the penalties of an administrative crisis, even a temporary one, would be a more serious matter for us, especially with our immediate operational responsibilities. But it is easy to agree with the Committee, of course, that there is plenty of scope for more integration and co-ordination than we have now.
  The old Service Departments, even when they were separate, achieved a good
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  deal in the way of co-operation and co-ordination, through the introduction of joint staffs, co-ordinating committees, or local arrangements in overseas commands, one Department buying for the rest, and so on. Service personnel movements have for a long time been closely controlled by the Joint Movements Co-ordinating Committee. There were inter-Service committees on food supplies and furnishings. The Admiralty was made responsible for the provision of all marine fuels for all the Services, and the Air Ministry was made responsible for the purchase of certain aviation fuels for the other Services. The War Office was made responsible for the procurement of all mechanical transport and all food supplies for the Royal Air Force, and so on.
  Since the establishment of a unified Ministry, it has been possible to consider more radical changes. A steering committee was appointed early last year to examine the scope for further rationalisation of administration and logistics. It has just completed a series of studies of accommodation stores, food, clothing, fuel and lubricants, mechanical transport and movements. On the first of these, accommodation stores, it has been decided to concentrate responsibility in the Air Force Department. Decisions on the other studies are expected to be taken shortly, after which precise arrangements will be worked out. Other aspects of supply, including marine craft and general stores, are now listed for study. I hope that this will reassure the Committee a little.
  Where progress in all this has not been made, it would be quite wrong to assume, as often is done, that this is because of conservatism or jealousy in one or other of the Services. This is not so. The differences between the three Services in organisation and administration are not just historical or traditional hangovers. Nine times out of ten, they reflect inescapable continuing differences in the nature of the jobs which the different Services have to carry out.
  To take the Services' different supply organisations, supplying the Navy means, in effect, provisioning, maintaining and refitting ships, and this must involve static supply centres at ports covering a very wide range of goods and services and, consequently, few in number. It

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  calls for predominantly civilian staff, often highly specialised and professional. On the other hand, the Army supply organisation must be mobile. It must move with the units it serves, often right down to the front line. It must be dispersed and decentralised, and it calls for a substantial uniformed element capable of fighting if necessary. So long as the Navy mans ships, airmen fly and soldiers fight on land, differences of this kind are bound to persist. While they in no way rule out rationalisation and integration in many fields, they make these reforms more difficult and less cost-effective. Centralisation of supply Departments can create problems as well as eradicate them. Having said all that, however, I entirely agree with the view implicit in the Report, that there is scope for further rationalisation and integration, and I am sure that we shall see more.
  Paragraph 6 of the Ministry of Defence memorandum, quoted in the Report, says:
  "Integration in Singapore … could proceed further and faster when certain basic questions … have been settled centrally. These questions will be examined in the context of Defence reorganisation."
  This is precisely what is happening. The rather limited approach to the problems of rationalisation, theatre by theatre, on the basis of one Service acting as the agent for the other two in respect of some function, has now been replaced by the central approach.
  Problems are now being examined globally, and our aim is to achieve a general solution to each problem which can be applied both at home and abroad. For example, as my right hon. Friend the Deputy Secretary of State for Defence stated in the House on 14th December, in regard to barracks services a plan has been approved, and detailed arrangements are now being worked out, for centralising under the Air Force Department the administration of accommodation stores and furniture of all kinds. Other studies are being pushed ahead as quickly as possible.
  I have tried to deal with the main issues arising out of this extremely important and useful Report. My hon. Friend the Under-Secretary of State for Defence for the Army will deal with further points which are raised in the debate. Discussion of Reports of this kind always
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  tends to take the form of dialogue or, even, argument between the Committee and the Administration. I suppose that this is inevitable. Even if the Administration is on many occasions the previous Administration, one usually explains, if not defends, what has been done, where that is appropriate. But, in spite of the dialogue which goes on, we know that on both sides of the House we have the same objective, that is, the greatest possible economy in our spending and the greatest possible fighting effectiveness for our forces.
  Mr. John Rankin: Before my hon. Friend sits down, could he give us any idea of what saving he expects as a result of the changes he has just dealt with in our military expenditure?
  Mr. Mayhew: That is a piece of functional costing which we have not yet done. I could not give a figure.
  5.19 p.m.
  Mr. Philip Goodhart: I welcomed the speech by my hon. Friend the Member for Farnham (Sir G. Nicholson) at the beginning of the debate. No one knows better than he does the problems facing the Estimates Committee during the work that it has to undertake. I also welcome the constructive proposals which the Minister foreshadowed with regard to relationships with the Estimates Committee.
  During last year's debate on what might be called the first instalment of the Report that we now have before us my hon. Friend the Member for Farnham reminded us that all that an Estimates Committee can do is to provide ammunition for hon. Members to use in debates. We have certainly got some fascinating ammunition of very mixed calibre in the Report. I am interested to learn from paragraph 68, which is devoted almost entirely to mugs, that the old standard R.A.F. mug weighed nearly 1¼ lb. Presumably it could be dropped from strike aircraft if we ever ran out of bombs or missiles. The Sub-Committee, understandably enough, was worried by the fact that both the Army and the Royal Air Force were carrying out separate experiments with lightweight plastic mugs. Perhaps the Parliamentary Secretary will be able to tell us whether

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  we now have satisfactory inter-Service co-ordination over lightweight mugs.
  There is also the case of the lost spanner, which interested the hon. Member for Fife, West (Mr. William Hamilton), and it particularly interested me, because during my Service in the Army I lost more than one spanner. I do not know whether the unit had to fill in 18 separate forms as was alleged in the Sub-Committee's Report, although I note that this estimate was contested very strongly in the evidence before the Sub-Committee. I was delighted to learn from the Ministerial observations that 1,200 forms have disappeared in the last three years. I cannot help wondering whether 1,800 forms have not taken their place by the back door. Perhaps we could be told later whether the reduction in the number of forms by 1,200 is a net loss or whether they have been replaced by other forms.
  The question of billiards also interests me. I had always imagined that the last strongholds in billiards were the Beckenham and Penge Constitutional Clubs, but it seems that the game has a synoptic place in the Army and that wherever 20 or 30 officers are gathered together a billiards table and eventually a billiards room must follow. I notice that even in the new and extremely well-appointed Tengah Social Club for other ranks in Singapore more space is devoted to billiards than to reading, writing, television and even buying things. I wonder whether this extraordinarily elaborate provision for billiards is justified today.
  The single statistic in the Report which seems to me to reveal more about the state of our Services overseas is contained in the War Office Memorandum, which mentions that the Army employs 1,500 civilian teachers, the great majority of whom are serving overseas. The Army is now employing very nearly as many teachers as the new London Borough of Bromley, the largest of the new London Boroughs, with a population of close to 300,000. No other figure shows so dramatically what a domestic Army we have now got and what major domestic problems we now have to grapple with overseas. I wish that the Sub-Committee had gone into this subject a little more thoroughly and told us some of the reasons why the Army is so strikingly successful
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  in its efforts to recruit teachers for service overseas at a time when other schemes for the overseas service are not attracting sufficient recruits.
  A Report of this nature which covers in 250 pages some of the problems inherent in stationing scores of thousands of soldiers tens of thousands of miles from home must necessarily touch on points rather than settle points. There is the case of the Royal Air Force dogs, which caught my eye. The Committee states on page 32 that even an establishment of 115 dogs at Singapore, including 102 dog handlers, costs a total of £110,000 to maintain, or not far short of £1,000 per dog per year. That is an exceedingly interesting statement, but it does not tell us anything like the whole story. For instance, how many men on guard duty do the dogs replace? I believe that it is five per dog. What are the comparative costs in dog units elsewhere?
  Mr. Mayhew: The hon. Gentleman should also work out the comparative costs of all the night watchmen who might have to replace the dogs.
  Mr. Goodhart: I believe that it would be five night watchmen for each dog. I understand that allowance is made in this sum for the training not only of the dogs but of the 102 dog handlers. I wonder whether it is possible to have comparable figures for the maintenance of guard dogs for other non-Service units in the Far East. I merely touch on that point.
  The Report raises far more questions than it settles. When the Committee was discussing the problems of administering naval pay rates in the Far East, I kept wondering how the American Pacific Fleet, which presumably has much the same administrative problems, tackles its pay roll.
  The Committee has also made 21 specific recommendations ranging from the number of beds in military hospitals in Hong Kong to the strength of the Royal Air Force in Gibraltar. With some of its points I have rather more sympathy even than the Government have shown this afternoon, particularly on the question of the hospital in Hong Kong. I was in Hong Kong six years ago when the proposal for a large new Service hospital was being actively discussed. I recognise that the two Service hospitals in use there

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  at the moment leave a great deal to be desired, but I formed the opinion, for much the same reason as the Sub-Committee formed its opinion, that the scheme put forward was somewhat over-elaborate, particularly in view of the fact that if there were any really serious disturbances in Hong Kong, if there were serious fighting there, casualties would be evacuated just as quickly as they could be from the whole island. I did everything I could, therefore, to stop the plan going through. I was somewhat embarrassed after my visit to Hong Kong to receive a letter of thanks from the general principally concerned for all the help that I had been in supporting him in putting the scheme through. But the fact that the plan is still under discussion suggests that the opposition had some effect.
  But when it comes to the provision of hospitals in Singapore, I part company with the rather restrictive view of the Committee. I am sure that there are sound operational reasons for maintaining a substantial reserve of hospital capacity there, particularly during the period of "confrontation". We all have to think ahead, but it does not make much sense to think of reducing the status of the R.A.F. hospital in Singapore at a time when we are flying out thousands of Service men to face a task that will certainly be difficult and may well be dangerous.
  The hon. Member for Fife, West joined with the Committee in being critical of the contributions that the Hong Kong Government have made to the defence costs of the Colony. I naturally welcome the fact that the Hong Kong Government have agreed to make substantial contributions during the next five years towards the capital costs of the Services in Hong Kong. But we must recognise, as the Committee has not, that Hong Kong has faced a very difficult problem during recent years with the influx of one million refugees from the harsh tyranny of Communist China and that it has had very little support from this country by way of aid in dealing with the problem. Indeed, it has only had £100,000 altogether.
  Mr. Robert Woof: Would not the hon. Gentleman agree that these refugees from Communist China are economic refugees rather than political?
  Mr. Goodhart: Having spent some time in Hong Kong, I would not agree. Some refugees certainly are economic, but I believe that a considerable number are political.
  Mr. R. T. Paget: Would not the hon. Member also agree that this influx of refugees has been the most astonishing asset to Hong Kong and that money is being made there quicker than anywhere else in the world?
  Mr. Deputy-Speaker (Dr. Horace King): Order. If the hon. Member for Beckenham (Mr. Goodhart) answers that question, he will be getting outwith the scope of the debate.
  Mr. Paget: On a point of order, Mr. Deputy-Speaker. The Report of the Estimates Committee was highly critical of the contributions of the Hong Kong Government to these expenses. In his argument, the hon. Member for Beckenham (Mr. Goodhart) was saying that the Hong Kong Government had incurred great expenses because of the influx of refugees. In supporting the Estimates Committee's observations that Hong Kong ought to pay a great deal more, I pointed out that these refugees were not a charge but that the arrival of all this new labour had proved to be a most astonishing asset to the Colony. With great respect, I submit that that is in order.
  Mr. Deputy-Speaker: I am grateful to the hon. and learned Member and I withdraw what I said, but I would hope that we shall not get into a general discussion about refugees in this Estimates debate.
  Mr. Goodhart: I do not want to debate the question of the refugees in Hong Kong at this time, but certainly the Colony has had to bear a very substantial burden and the main contribution that we have made from this country has been for defence. We should recognise that in looking at the question of payment for the defence of Hong Kong.
  Apart from the large number of specific points that were raised by the Sub-Committee, the Estimates Committee made three general observations—prefaced, I am extremely glad to say, by a generous and well merited tribute to the efficiency and skill of our forces in recent

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  months. The first of these observations concerned
  "… a lack of enthusiasm for integration … noted by the Sub-Committee. … This is perhaps natural considering that the Services have a long and honourable tradition of being completely self-reliant and self-sufficient."
  To this, the Committee might well have added the long tradition whereby virtually every commander worth his salt tries to get every supporting weapon and service under his direct and personal command.
  Right hon. and hon. Members opposite have been enthusiastic supporters of integration in theory. My right hon. Friend the Member for Monmouth (Mr. Thorneycroft) not only had to deal with this theoretically but also in practice. We know that, in practice, integration is often unpopular. It means that some people will have promotion problems that they would not otherwise have. We shall watch with interest to see whether right hon. and hon. Members opposite continue their enthusiasm for integration now that they have the problems to face in practice. I thought that the speech of the Minister of Defence for the Navy was rather defensive on this point.
  The second major observation by the Committee dealt primarily with building. In paragraph 200 it said:
  "… there has been a fundamentally wrong approach to the provision of facilities for the Forces overseas. Basically, this has consisted in the attitude that expenditure is a secondary consideration in the design and execution of buildings and other items for the Services."
  I was glad to hear the Minister's forthright defence of the Services. I must say that generals are often their own worst enemies when it comes to giving this impression. I dare say the same is true of air marshals and admirals.
  During the past few years I have often sat in generals' offices at a stage when building plans have been unfolded. They have almost begun to twitch with pleasure when they have produced some scheme for a covered parade ground surfaced with polished marble. Some generals have a kind of Pharaoh complex and wish to cover almost every available space with pyramids of married quarters and workshops.
  Almost inevitably these wild schemes bear no relation at all to the harsh facts of Treasury control. The Committee said
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  that it had the impression that, in building, expense was a secondary consideration. I must say that the Sub-Committee did not try to test this impression by taking much evidence or by much cross examination, as far as I can see from the Report. In the last few years, I have had the good fortune myself to see something of Services building in the Middle East, the Far East, the Caribbean and Africa. I would not want to try to justify the size and scale, or even the existence, of every single building, but it is certainly my impression that time after time control of expenditure has been given a far higher priority than comfort.
  Finally, the Sub-Committee asked whether the present balance between overseas bases and garrisons on the one hand and the mobile central reserve on the other was correct from the point of view of economy in expenditure and in the circumstances of the mid-1960s. There is surprisingly little evidence on this point in the Sub-Committee Report itself. My hon. and gallant Friend the Member for Dorset, North (Sir Richard Glyn) drew out from an Air Ministry witness the remark that it cost as much to keep an aircraftsman in the Far East as to keep a warrant officer in the United Kingdom. However, my hon. and gallant Friend's colleagues did not show much enthusiasm for following up that assertion and almost the only other evidence on this all-important point is given by Sir Hilton Poynton, when speaking for the Colonial Office, when he suggested that the differential between the cost of being stationed overseas and at home was very much smaller and in the neighbourhood of 20 to 25 per cent.
  However, it is plain that keeping troops at home rather than overseas saves foreign currency, although it seems from the TSR2 debate, when it appears to be proposed that American planes should be bought in place of British planes, that the saving of foreign exchange is not necessarily the all-important question. It is much more questionable whether sterling is saved by making this sort of move from a base army to a central reserve army and air force.
  Sir Richard Glyn: This is most important. As has been pointed out, the whole difficulty is that the only evidence which can be printed is the official

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  evidence taken here in Britain. Estimates were given to us informally in the Far East which would go very much further than the best evidence which we could elucidate here. That is why the questioning was dropped here. Senior officers in the Far East estimated that the cost of maintaining an aircraftsman in the Far East was double or more than double the cost here, but that was based on the supposition that he was married. We came to the conclusion, on informal evidence, that it cost considerably more than double, including the cost of transport. As more men in all the Services become married, this factor will become increasingly important, but the experts in this country could not give very good answers on this point.
  Mr. Goodhart: My hon. and gallant Friend has made a most important point, and I wish that it had been pursued with greater vigour and enthusiasm in the Sub-Committee's Report itself. I am sure that if my hon. and gallant Friend had had his way, that would have happened.
  I am not so sure that the saving in sterling is always as large as the saving in foreign exchange necessarily is. For example, while it would certainly save a considerable number of Deutschmarks, I doubt whether the large-scale transfer of troops from Germany to this country would necessarily ease the cost of those troops to the taxpayer.
  There is another important factor to which the Minister himself referred. The higher the proportion of troops in the central reserve, the larger and more versatile is the fleet of aircraft needed to be maintained in Transport Command. It is ironic that we should be discussing this at a time when it appears that the Government are to scrap the plans for the HS 681, because scrapping this sort of aircraft makes nonsense of the central reserve thesis propounded in this Report, while the proposals to buy American transport planes for Transport Command make nonsense of the foreign exchange argument which is at the basis of the whole central reserve argument.
  I find the Report bordering on the fascinating. I hope that we shall have more such reports and I share the hope that in future Sub-Committees will be
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  allowed to take formal evidence overseas, which would certainly make it easier to correct some of the misapprehensions which appear to have crept into the Report. Even with those misapprehensions, it is certain that the Report should be studied with care. It gives powerful support to disproving the theory, held by so many, that it is easy to cut costs overseas and that one could maintain Britain's commitments on the cheap.
  5.47 p.m.
  Mr. Robert Woof: I am sure that the House will have noted many of the remarks and forceful points made by the hon. Member for Beckenham (Mr. Goodhart). I am also sure that he does his homework well on military matters and that we always listen to him with much interest.
  Having the honour to be a member of the Estimates Committee, may I say that I have always found it an interesting function to exercise vigilance over expenditure? As with the many other commitments of every hon. and right hon. Gentleman, we endeavour to possess our minds with habitual good intentions and to aim our thoughts, words and actions to some laudable end. In this respect, while constituents may not be so well acquainted with duties performed outside the Chamber, the volume of work undertaken by members of the Estimates Committee illustrates the need to see that the taxpayers' money is wisely spent. As a member of the Sub-Committee which conducted the inquiry, I found it a great experience to go with other members of the Sub-Committee to look at our bases overseas. It took a lot of trouble to ensure that the Report was as good as it could be. As is often the case with a blunt and forthright Report, this has come in for a certain amount of criticism, but I feel that that shows that the Committee has done its work well.
  Before touching on some of the aspects of the Report, I should like to take this opportunity of paying tribute to our former Chairman, Sir Frank Markham. I cannot forget the way in which he conducted many inquiries. He set his mind to work with a superior understanding and he applied his thoughts vigorously. By inducing a sense of cheerfulness he always maintained a high standard of

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  eagerness for the task allotted to us. It would also be reprehensible on my part if I did not express sincere gratitude for the faithful service rendered by the Clerks of the Committee.
  Difficulty is always a severe instructor —it may be notice of the necessity for exertion to accomplish particular objects —and our first difficult problem was to find out what to investigate since the Estimates give very little idea of how much money is being spent in any particular base, although it is common knowledge that we have reached the stage when £2,000 million a year is spent on defence.
  As a consequence, we tried very hard to find out what proportion of this sum is spent overseas. We have a picture of gross military expenditure overseas accounting for roughly £350 million a year, and the plain fact cannot be too often emphasised that such expenditure is throwing on the British people ever heavier burdens which are reflected in the balance of payments crisis, resulting in the need for desperate measures.
  I believe that some retrenchment is necessary. If part of the £2,000 million and much of the labour force being wasted on arms were switched to peaceful production, we should probably get somewhere near to solving our export problems and have resources available for improved living standards. Even Mr. McNamara, the American Secretary of Defence, shook some parts of the Pentagon some time ago when he had to face a storm of criticism for introducing what is termed "cost effectiveness" to ensure that America was getting a dollar's worth of defence for every dollar spent.
  I think that it will be appreciated that rules can never be so general as to include every possible circumstance or contingency. Obviously, it is not very welcome to have one's expenditure examined critically, but many of the people, both military and civilian, whom we met overseas said that they thought that the fact that the taxpayers, through Members of Parliament, were taking an interest in the way in which money was being spent on their behalf was not a bad thing.
  In taking into serious consideration the present aspect of expenditure, this Report is, in some ways, like an iceberg,
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  in that we put into it only matters which we felt needed looking into and not the numerous other matters about which we heard evidence but on which we had no comment to make. For this reason, the Report may appear to be very critical, but we emphasise how much we were impressed by the spirit in which forces overseas were tackling very difficult problems.
  It will be noted that we also said a word of thanks to the Ministry of Defence. I should like to add my own personal thanks for all that the Ministry did to help us with the inquiry. It may not be altogether pleased with the result —it would be surprising and perhaps suspicious if it were entirely pleased—but we cannot blame it for any lack of co-operation with the Committee.
  On the other hand, there is no doubt from what has been said in the debate that the Sub-Committee had to work under some difficulty, particularly with regard to evidence taken abroad, which was partly due to constitutional rulings about Committees not being officially entitled to sit overseas. These rulings were given to the Estimates Committee by a former Leader of the House and went against precedent since. In fact, there are several instances of Estimates Sub-Committees having sat and taken evidence overseas both in countries within the Commonwealth and even in Germany.
  I hope that the Select Committee on Procedure will eventually get round to examining this problem. In the meantime, I understand that steps are being taken to ease our difficulties, particularly as regards the recording of information overseas, which was a major bugbear last time. I am glad to learn that some improvement is planned in this respect for subsequent visits of Sub-Committees overseas.
  I propose to mention briefly some parts of the Report which seem to have escaped the glare of publicity which other parts of it received. One of these was the main recommendation in the Report, namely, that there should be a review of our bases and garrisons overseas with a view to relating our commitments more closely to costs. For example, military expenditure in Hong Kong is costing us about £15 million a year. There are six major Army units

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  in the Colony, yet their duties are limited. They are there to assist the local police in an emergency, but they are not expected to constitute a defence force. I do not want to spend time dealing with Hong Kong—it is all well set out in the Report—but I must say in passing that Hong Kong would be very difficult to defend in any case since it is dependent even on Communist China for its water supply.
  Similarly, in Nepal, we are spending £300,000 a year to recruit Gurkhas. The Committee found that this works out at over £600 for each Gurkha recruited. It seemed to us that this was another example where costs should be considered in relation to the commitment.
  It has been mentioned in the debate that in Gibraltar, also, costs are very high. There seems to be a need for ensuring that only the minimum number of personnel are stationed there. The maintenance of Service men in Gibraltar is considerably more expensive than keeping them at home. There is a £10 million works programme for the three Services, and the Committee was not satisfied that the Services were fully aware of these high costs. In spite of that, while I am also in receipt of letters such as those quoted by my hon. Friend the Member for Fife, West (Mr. William Hamilton), what I have seen in private accommodation in Gibraltar fully justifies people's complaints.
  In general, what impressed the Committee much was the very high cost of many of the activities of forces overseas and how little was known of the cost in detail. I was therefore very pleased to read in the reply of the Ministry of Defence that it has accepted the recommendations and that a review is taking place. I was also glad to learn from a recent speech of the Deputy Secretary of State for Defence that the Ministry was examining the whole question of figures for costs of Service units. This was one of the points made by the Estimates Committee in this Report and the previous one on military expenditure overseas. The details of costs which did exist confirmed our view of the expensive nature of certain operations.
  Two perhaps minor details are mentioned in the Report which have been referred to in the debate—the 115 police dogs in Singapore, which cost £1,000 each
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  per annum to maintain, and the Royal Air Force band, which costs £85,000 per annum. When I think of the money that is needed by local authorities in my constituency for all sorts of vital things, I feel that this expenditure could be put to much better use.
  Much expenditure has been undertaken at military bases overseas which would not be sanctioned even by a local council in Britain. And if, by chance, it were to be sanctioned by a local authority, it would certainly be disallowed by the appropriate Ministry. For example, Service married quarters at El Adem, in North Africa, have cost more than £9,000 each to build. I agree that costs overseas are higher, but imagine what the Ministry of Housing and Local Government would say if a local authority proposed to build council houses for people who could not build their own homes even at half the price.
  Another item of expenditure which drew the attention of the Committee was the fact that married accompanied Service men were provided with female domestic servants, whose wages were a direct charge on public funds. These servants are termed "Amahs" and were recruited and paid by the Services themselves. The number of "Amahs" engaged for the three Services in Singapore up to October, 1963, was 7,100, at a cost of £1,191,400. The number engaged in Hong Kong was 1,600, at a cost of £196,500.
  The Committee was concerned at the high proportion of personal servants employed at these bases, especially as the cost did not include administrative expenditure, amounting to more than £13,000. It was impressed upon the Committee that many Service men's wives did not always welcome the arrangement. As hon. Members will be aware, the recruitment and supply of "Amahs" in Hong Kong has now ceased, giving Service men the choice of whether or not to employ a personal servant. It seems altogether ridiculous that Service men overseas should have been forced to employ servants, whether or not they wanted them.
  In several other cases we were also pleased to learn that certain matters raised by the Committee had been taken up by the Ministry or another responsible body; for example, the existence of the

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  Airfield Construction Branch of the R.A.F., which was queried by the Committee in its Report. It seemed wasteful for both the Army and the R.A.F. each to have its own specialist personnel and expensive equipment for building airfields in Singapore. This seemed a clear case where one Service should take over the task for the three Services, and it was announced recently that this was to be done. The saving should amount to a considerable sum.
  I do not wish to rake over much of the ground which has already been well covered in the debate. However, I stress again the value which these inquiries have produced. This, I think, is so both for the House of Commons—for hon. Members have been given in the two Reports a great deal of valuable information about the day-to-day running of the Services, information which, so far as I know, is available nowhere else—and for the Departments and the Services. I sincerely hope that this supply of information will continue to be maintained and that new methods of checking and surveying military expenditure will be evolved for the benefit and health of the economy, since I consider that every new achievement smooths the way to future achievements of the same kind.
  6.15 p.m.
  Mr. Jasper More: One of the pleasures of taking part in an Estimates Committee debate is that one finds oneself in the pleasant position of being able to agree with virtually everything that has been said by the hon. Member preceding one from the benches opposite. I can certainly say that about the speech of the hon. Member for Blaydon (Mr. Woof).
  The hon. Member and I were two of the hon. Members of the sub-committee which paid these overseas visits, though he, by misfortune of illness, was unable to work with us in Singapore, and I, because I came off the Sub-Committee, was not able to go to Gibraltar. However, broadly speaking, we both saw the same picture and are in substantial agreement about it.
  By way of general introduction, I would like to point out that inevitably any report by an Estimates Committee appears to be critical. I am sure that other hon. Members who went overseas with me and
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  saw these bases at first hand will agree that our general impression was overwhelmingly favourable. Taking into account the astonishingly varied and difficult conditions in which the Services must operate in these bases, the work they do is, on the whole, astonishingly good. This is borne out when one reads the Report and recommendations.
  There are 21 recommendations. On reading them, after reading the Report, one realises the large number of subjects covered by the Report which, vitally important though many of them are, lead to no specific recommendation of a critical character. I hope that this debate will not be restricted merely to looking at the recommendations because I believe that—having been partly responsible for them, and having reread the Report—the document contains a great deal that is of value.
  We must face the fact that perfection is unattainable. The Services can rightly say that in all these matters of overseas bases, there are two problems facing them which are insoluble. One is the problem of security of tenure and the other, a modern one, is the problem of married Service men. I will make a few brief remarks about both problems.
  I was sorry to hear the emphasis placed by the hon. Member for Fife, West (Mr. William Hamilton) on the difficulties at Gibraltar. Those difficulties were parallel with difficulties we found elsewhere. We saw similar problems at, for example, El Adem, and it is distressing to see the conditions which exist. On the other hand, we saw very different conditions, too. We travelled, for example, to the Island of Gan, and it is worth recording that that island is populated by 1,200 Service men and one lady. That is its total population. We all agreed that in none of the bases we visited was morale higher than at Gan. I understand that the term of service there is 12 months.
  It should be realised that there may be strong reasons, in view of the difficulties which exist, for persuading the Services to be rather tougher on the subject of having married service men abroad. Part of the difficulty is that housing is short in Britain. It is obvious that one of the temptations to Service wives to go abroad is to solve their

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  housing difficulties at home. That is not, if one reflects, a good solution.
  Service wives do not appreciate bad conditions abroad any more than they appreciate them at home, and as was said in the commanding officer's letter in Gibraltar—which the hon. Member for File, West quoted—it does not do us any good as a nation if it is advertised that we have a great deal of discontent among Service wives and families. Whatever may be the risk of protest. I should like consideration to be given to whether we should be rather tougher about accompanied foreign tours, with a view to seeing that wives and families are not encouraged, or even permitted, to go abroad unless it is certain that they will find acceptable conditions.
  As to security of tenure, the Report, which is not very old, has already been overtaken by events. One of the theatres visited was Libya, but we know that since our visit it has been decided to abandon our bases there. That stresses the difficulty facing the Services in other theatres also in deciding the degree of permanency they are to put into buildings, and so on. One of the most difficult things to decide is whether to put up permanent, temporary or prefabricated structures. One of the disadvantages of prefabricated structures was forcibly borne in on us when we were interviewing Service wives in a building just next door to the officers' mess in Cyprus, where we knew that a beautiful luncheon had been laid on. Through a window, we saw that building go up in flames—but that was just one of those by-the-way misfortunes.
  The Report says a lot about integration. I do not know whether I missed part of the Minister's speech, but I was not certain that he had really taken up what I consider to be the important paragraphs of the Report about works organisation and the Ministry of Public Building and Works. On these visits we arrived very much at the moment when the change-over was taking place. It was obvious that there were what one might call teething problems, and I do not think that the Report over-expresses things when it refers specifically to the worsening of relations between the works organisation of the Services and their
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  customers. If what is said in the Report is true, it is regrettable. I hope that attention will be given to this aspect by the Ministry, as nothing could be worse for morale, or for commanding officers who have to deal with these things, if their jobs are made more difficult by reorganisation of this kind.
  As other hon. Members have already done, I want to express my thanks to the Clerks of the House who accompanied us, and who really did the spade work both when we were on tour and when we were back in the House taking formal evidence, and in the preparation of the Report. We certainly could not have had better helpers. We also very much appreciated the very genuine help given to us throughout by the officials of the Ministry in London. Obviously, it is not always pleasant to be investigated by an Estimates Committee—or any other Committee—but we were all conscious that we were being helped and not obstructed, and that made the whole exercise more congenial and helpful.
  I want to refer also to those whom we actually met at the foreign bases. It is plainly very uncongenial to serving officers to find themselves subjected to a sudden visitation by a lot of amateurs from the House of Commons who come to inquire into official financial affairs with the obvious implication that the intention is to cut down and economise. The fact remains that we were very well received everywhere, and I want to express my own appreciation of the very great trouble taken to entertain us and make our stays pleasant and profitable; and also of the extreme trouble taken to provide us with all the information for which we asked.
  I hope that those in the Services who follow these proceedings here will not think that the sole purpose of an Estimates Committee is to travel out to foreign bases, be entertained there, and then pick holes and make themselves a nuisance with the idea of saving candle ends and cutting down expenditure on anything with which they can find fault. If such a Committee is to serve a useful purpose, it must work with the intention of promoting efficiency, and that should be helpful rather than the reverse to the officers and forces overseas.

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  I therefore hope that those concerned accepted our visits in that spirit, and I express renewed appreciation of the very excellent treatment they gave us.
  6.25 p.m.
  Mr. Peter Shore: I want to strike a note of urgency in this debate. We are talking about expenditure overseas amounting, at a conservative estimate, to about £350 million a year, and all the information we have, particularly with the build-up going on in the Near East and the Far East, is that this expenditure will be greatly exceeded during the coming year. At the same time, this discussion is taking place against the background of a critical deficit in our balance of payments of some £700 million or £800 million.
  It may well be thought that those two figures are to some extent connected—and they certainly are. That means that those of us who are interested both in our national solvency and in the part we are to play in the world should look very critically at our military expenditure overseas in order to see whether it is at all possible to make substantial economies there. Before making what may seem to be a few rather obvious suggestions and proposals to the Treasury Bench, I should like to comment on some of the difficulties encountered by the Estimates Committee in its search for the truth.
  The first and most important point is that we still lack detailed figures of expenditure on our overseas bases. In his intervention some time ago the Minister spoke of the new concept of functional costing, and, while this is clearly a most important concept, it is also a rather difficult one to explain lucidly and briefly. Nevertheless, I should like to hear a little more about it, as it will obviously be one of the keys to the whole future of our overseas military expenditure. If we are to be able to have rational discussions about the relative values of different bases as opposed to other kinds of military expenditure based, perhaps, on strategic reserves, and so on, this kind of exercise is essential.
  The second difficulty that the Estimates Committee faced is its being shunted, as
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  it were, from any discussion of policy. I do not quite know what "policy" means in these circumstances. I am sure that it has nothing at all to do, as was suggested from the benches opposite, with matters that somehow arouse differences between the political parties. The problem is rather different from that. It struck me as I read, not only this Report of the Estimates Committee but last year's Report as well, that we do not know what the policy is. It is not a question of not being allowed, as an Estimates Committee, to question the correctness of the policy, but simply that in regard to very many of our overseas commitments there is no clear statement of policy at all.
  In the Tenth Report of the last Select Committee, published in July, 1963, there was a remarkably succinct description of our bases overseas. Malta was described as a N.A.T.O. base but goodness knows what Aden was, and each base was listed in a very brief way. If a Select Committee is in future to examine rationally our overseas expenditure and whether that expenditure is wise, it must have a much clearer idea of the role of each base. Then it can see whether the role is best performed there in that particular base, or would be better performed by some other means. I hope that there will be an elaboration of the rô;le of overseas bases provided by the Ministry of Defence for any further examination by the Select Committee.
  I turn to what seems the major recommendation in the Report, which is that all bases should in future be costed so that we may have an idea of real expenditure. There are three crucial questions which we ought to ask Ministers in relation to cost. First, in our existing bases, can we deploy our overseas forces and establishments so that we get a reduction in costs? In some geographical areas, housing costs are very much higher than in other parts of the same area.
  This is so in the Middle East and the North African area. It will be found, for instance, that costs in Malta are rather lower per unit of housing or in terms of schools, hospitals and so on compared with our smaller bases in Tripoli, Benghazi and elsewhere. This should be reviewed so that where possible base facilities can be moved to places where the costs are lower. This

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  is one of the first things to be done in a review of the cost of overseas expenditure.
  We should also ask whether we are better served in relation to particular commitments by having available in Britain in the Strategic Reserve, or in one or two very safe areas, forces which may be required to deal with situations than by relying on forces actually located in the forward areas and the bases themselves. That is a very important point.
  Although the observations of the Ministry of Defence on the Report were not by any means wholly negative, I have a feeling that the Ministry made a little too heavy weather of its objections. I remind the House of what it says in the third paragraph on page 3 of the observations:
  "Greater reliance on strategic reserves would make it necessary to increase the capacity to move them in support of operations, and thus the strength of R.A.F. Transport Command would need to be increased both in personnel and aircraft. It would also involve the retention of stockpiles of equipment abroad, the duplication of that equipment at home and the reprovision in the United Kingdom of single and married accommodation at a time when the building industry in this country is already under some strain."
  These may be perfectly valid points, but they are put rather too strongly and denote a rather conservative attitude to this very difficult and important problem. They also leave out of account the major problem of overseas deficit in our balance of payments and the fact that our base expenditure is overseas expenditure and not domestic. The hon. Member for Beckenham (Mr. Goodhart) had his bit of fun about buying aeroplanes from America, but, given our balance of payments problem, it makes sense, so far as possible, to base as much of our forces as we can in places where we do not incur foreign costs rather than in places where they will incur heavy foreign costs.
  The fact that we incur overseas costs on the whole in the sterling area is not something which should entirely allay our anxieties. The build up of sterling debt as a result of overseas military expenditure during the last 15 years must now have reached absolutely colossal proportions. We cannot dismiss the problem by saying that overseas expenditure is debt incurred in sterling. I hope that through the new costing techniques we may have
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  revealed the relative costs of home-based forces as against the cost of forces in overseas stations.
  I come to the third question, which I regard as the most important. It is whether, in this great new costings exercise, we should take the opportunity to reconsider our whole base strategy, and reconsider it in more radical terms—I am not arguing about actual commitments; this is not the occasion to do that—to look radically and freshly at all our bases. I illustrate the point by reminding the House that many of these bases where our troops are now deployed have become bases over a very long period. We acquired Gibraltar in the War of the Spanish Succession, and Malta during the Napoleonic Wars. I believe that Disraeli got Cyprus for us as a result of some deal.
  Most of our bases were acquired at different times to meet certain historical problems which had nothing to do with the modern commitments, whether they be N.A.T.O., S.E.A.T.O., CENTO and the rest with which we are now concerned. All these bases ante-dated our major modern commitments. One would have thought it worth while looking at our present bases in the light, not so much of "They are there and we have got them and must keep them", but rather to consider whether they are still the most relevant way of meeting modern commitments.
  Two points seem to arise from this. A number of these bases which we have inherited face us with a major problem of security of tenure. That is hardly surprising as we acquired them in the 18th and the 19th centuries. It would be rather odd if we could hold them unchallenged in the 20th century. In fact, we are being challenged. When we are challenged in an overseas base, we are at once faced with another type of costing which must be taken into account. How much of the cost of an overseas base, if we have to isolate it, is taken up, not with the contribution that the base makes to meeting our commitments in the area, but with safeguarding and maintaining the base itself? This is a realistic costing question. With regard to some bases the answer must be that it is a small part indeed, because we are comfortably and safetly established. However, as to other bases a realistic costing will show that

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  much of the cost is absorbed in maintaining the base itself.
  I need hardly remind the House that my right hon. Friend the Prime Minister addressed himself to this question in June of last year when he made this very true point:
  "In the long run, the security of a base depends on the willingness with which it is accepted by the local population. Surely we have learned our lesson over the years—that a base held against the wishes of the local Government and the local population is not only morally indefensible but militarily indefensible as well"—
  and, I would add to that, extremely expensive.
  I come to a connected point in relation to our present spread of bases overseas. Does not the continued existence of these bases in the 1960s reflect a fundamentally unsound world strategy which I would describe as one in which Britain is fulfilling major commitments overseas in a unilateral way?.
  Mr. Speaker: I am sorry to interrupt the hon. Gentleman, but we must bear in mind that we are here within the scope of the Estimates Committee and nothing else. That does not include policy.
  Mr. Shore: Mr. Speaker, I am sorry to have gone too far into policy matters. I will certainly try to bring myself back within bounds. The question of the policy frontier is a very difficult one. Matters I have raised very much concern the whole question of the cost of overseas bases. I will be guided by you, Sir, and try to keep within the rules of order.
  Captain Walter Elliot: On a point of order. The Estimates Committee makes a recommendation about whether a base should be reduced to the status of a forward area or staging post. That seems to raise matters of policy. It is difficult to discuss that recommendation unless one can introduce such matters. May I have your guidance, Mr. Speaker?
  Mr. Speaker: The position is that the Estimates Committee has to inquire within the range of a defined policy which it cannot alter. I appreciate the difficulty about the distinction in connection with a complaint about the inadequacy of the definition of the policy. That is the rule I have to seek to enforce. The hon.
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  and gallant Gentleman will recognise that when I hear such phrases as "world strategy" I feel that we have gone beyond any possible line.
  Mr. Shore: I will try to bring myself back within the proper framework of the debate by quoting part of paragraph 203 of the Report:
  "This leads to the second question arising from the theme of commitment and cost overseas. Where military obligations of the United Kingdom are based upon Treaties and agreements with Commonwealth and foreign countries, Your Committee consider that an approach should be made within the framework of these agreements with a view to obtaining some re-apportionment between the United Kingdom and other Governments of the cost of maintaining security in the area."
  It seems to me that the cost of our overseas commitments could be greatly reduced if all our bases were the consequence of some agreement with Commonwealth or other countries to whose defence we are pledged rather than having separate bases which are unilaterally controlled by Britain.
  Some of our bases are already held in agreement with Commonwealth countries, but I should have thought there was considerable scope for two things: first, to consider again whether our bases which are not already held in agreement with other countries could not in future be held in agreement with such countries; and, secondly, whether those countries could not bear a greater share of the cost.
  To get back to my theme, I am trying to suggest that we need to reconsider the whole of our base strategy in new and more radical terms. I have made the point that our bases are historically based and do not necessarily relate to our new commitments under treaties signed in the 1950s and 1960s. The point I am coming to now it that it may well be that we can fulfil our obligations under different treaties a good deal more cheaply and a good deal more sensibly through agreements with other countries in the areas rather than by insisting upon having separate sovereign British bases scattered round the world.
  I have the agreeable feeling, having read the observations of the Ministries, that we are pushing to some extent at an open door. A review is to take place. I want to hear a good deal more about the review. I would only hope that

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  it is a very searching review, that it is conducted with considerable speed, and that the frame of mind which is brought to bear on the whole subject will be a very radical one.
  6.37 p.m.
  Mr. Anthony Kershaw: The hon. Member for Stepney (Mr. Shore) has rehearsed in very accurate and attractive terms the arguments about bases which have been passed to and fro across the Floor of the House for some years. The balance of advantage between whether we should be there physically or whether we should fly out and other considerations must exercise the minds of the Government from time to time, and in different circumstances the British Government will come to different conclusions. But I must not go too far into that question, because of the Ruling you have given, Mr. Speaker.
  As far as I know, all our bases are in being at the moment by agreement with Commonwealth countries, except possibly N.A.T.O. I hope that to that extent the hon. Gentleman will be satisfied with the existing position. I had hoped that the hon. Gentleman would have come on to deal with the alternatives to the present bases, but doubtless he was precluded from doing so. I suppose that the alternative of a seaborne base is frightfully expensive and the alternative of flying out is not always a saving and it has tactical and strategic drawbacks.
  To return to more parochial matters, I regret to say that the Report shows that the procedure of the Estimates Committee is not today adapted to the purpose for which it was planned. The Minister very correctly said that originally the Committee's procedure was an advance towards the functional estimating and costing of defence. Certainly it was, but I think that it has, so to speak, jelled and become out of date. In my opinion, it is right that the Estimates Committee should not go into questions of policy. I say that, partly because I agree with what was said by my hon. Friend the Member for Farnham (Sir G. Nicholson) and partly because in this House we have the Ministers—at least we have some of them —whom we can question.
  Under the American system, Ministers are never seen, unless they are brought before a special committee, and so, naturally, conditions there are different
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  from ours. I do not think, therefore, that the Estimates Committee should concern itself with policy. The House of Commons is the place where policy should be considered. Here we have Ministers whom we can "go for" if we disagree.
  The Estimates Committee falls into the opposite danger in the present set-up. It is not competent to do so and cannot go so deeply into matters as to be able to describe itself as a functional cost body. Therefore, it runs the risk of appearing to tinker and to be composed of busybodies, trying to turn up a little item or default upon which they may come suddenly in the course of random questioning. Everything combines to say how useful is the Estimates Committee. I have had the honour of serving on some of its Sub-Committees and I agree that on many occasions a good job is done, but for the type of inquiry which we are now discussing I think that something a little more professional is necessary.
  For members of a Sub-Committee the situation is a sort of lucky dip. Members can go on asking questions to see what answers they get and they may, or they may not, come across something which deserves looking into. In the course of such random questioning—the questioner does not know the point of his question until he gets an answer—some silly observations may be made and, if I may say so, some silly recommendations. For example, a Sub-Committee may discuss cups for the Army or the Air Force. I cannot believe that it is the business of the House of Commons to know whether an airman's cup weighs 1½ ounces or 2 ounces. That is not a matter with which we should concern ourselves, and if we take such things seriously, we may become disturbed because an Army workshop in Singapore is used for the repair of lawn mowers. Well, why not? I suppose that there is grass in Singapore. Surely, to be concerned about the repair of lawn mowers in an Army workshop is rather petty.
  I believe that an inquiry is necessary and I fully agree that it should be carried out by professional people whose job it is, and that they should have permanent facilities. We have such bodies in the Comptroller and Auditor General's Department and there are similar bodies which could inquire into these matters with the proper expertise. A general review could be made of the course of

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  administration without any reference to policy. It is difficult to keep politicians away from policy. We say that the Estimates have nothing to do with policy. Should not we consider whether a professional body would be better qualified to carry out this type of painstaking and lengthy inquiry into difficult matters about which we are not aware that anything is wrong until we have the answers to hundreds of questions, and where we may find, by the time all the questioning is over, that nothing is wrong? I put that forward for the consideration of the House.
  The Report contains many valuable suggestions, including those about integration of the Services which, of course, is very important. I am sure that the Sub-Committee was right to go into the question of whether the Services ought to give up some of the small bodies which they have developed over the years for their own convenience. I recognise, as did the Sub-Committee, the high morale of these smaller types of military and other units which feel that they are specialists and, therefore, have a degree of morale which larger units may not have.
  I refer to the R.A.F. Regiment, a very fine body of men with whom I had a considerable personal acquaintance with great profit to myself. I understand, and the Committee states, that the R.A.F. Regiment now has its own airfield construction units. I understand, also—it is not in the Report—that men are being trained to be parachutists so as to follow up and start the construction of airfields, or guard airfields as soon as they are taken—
  Mr. Mayhew: The hon. Gentleman is a bit out of date in his remarks about airfield construction. This has now been centralised under the control of the Army.
  Mr. Kershaw: I am glad to hear that, but the Report of the Sub-Committee calls attention to this matter.
  I come to the larger question, whether there is justification for a separate R.A.F. Regiment which is carrying out tasks entirely of a military nature. It must work closely with the Royal Air Force like any other military unit, but it is entirely an Army formation in
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  nature of its work and I wonder whether that should be looked at.
  I am surprised that the Sub-Committee did not consider the position of the Royal Marines, especially in respect of Singapore where, presumably, there were units of the Royal Marines at the time of the Sub-Committee's investigation. The Royal Marines is a specialist unit and has been so tremendously successful over the centuries that it has established the norm of what a specialist unit should be, but I wonder whether the administration of the Royal Marines ought to be brought under the control of the War Office—or what used to be called the War Office. Its administration is different today when Marines are more lightly equipped, and are not equipped to fight on their own for so long with the ordinary infantry battalions with whom they have acquitted themselves with great credit, as one would expect.
  The administration is not so simple because it is different. In many respects Marines fulfil ordinary military functions. One ought to consider whether men in Army units should be trained in the way in which the Marines are trained, so that they would be able to fight on the land or go in an aircraft carrier and perform the tasks which are performed by the Marines. There is no doubt in my mind that while the morale and training of these troops is a tremendous asset, some degree of integration should be considered before long.
  We have the Army air services, and the maintenance of the machines and the flying of light aeroplanes is carried out by soldiers. I think that these machines should be flown by R.A.F. personnel who, presumably, would be better at it because that would have formed part of their basic training. It would provide opportunities for close co-operation between the R.A.F. and the Army which is necessary during operations. All the cavalry regiments have their own aeroplanes. Some units have helicopters as well. Sometimes these machines are maintained by the R.A.F. and sometimes by the Army.
  I feel that there is room for improvement in this respect. The Sub-Committee mentioned that every Service still has its own small navy. The Army has an extensive fleet of launches moored by the

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  Tower. Apparently, in Hong Kong, the R.A.F. has a fleet of launches. Surely something ought to be done about this.
  I am glad that airfield construction is now carried out by the Army, but I should like to know whether that applies to what was previously called the Airfield Construction Squadron of the R.A.F. On page 67 of the Report attention is called to the construction of airfields in base areas. I wonder whether this squadron has been amalgamated with the Army or whose responsibility it remains.
  The Sub-Committee asks, very reasonably, what contribution is made by the allies whom we are helping in certain areas and whether the amount of aid given should be increased. Particular mention is made of Malaysia. The hon. Member for Fife (Mr. William Hamilton) mentioned Australia and New Zealand. I would add India. I know that India has not a great deal of money to spare, but she has a large number of men at her disposal who might welcome the opportunity to turn from their vexed northern and western frontiers to take some part in the difficulties in Malaysia. I believe that if our allies were asked in the right spirit they would be pleased to help.
  On Hong Kong, the Sub-Committee is very strong that the Colony should give more help than it has done in the past. However, I have a sympathy with the Ministry of Defence. Looking at the recommendations I can see that the Government have a great deal on their plate. Hong Kong is small compared to this country and I do not think that we should look only at percentages. After all, 10 per cent. of a millionaire's income does not bother him too much, but if one is poor, 10 per cent. is important. I do not think that it is a matter of percentages. We ought to consider the special position of Hong Kong.
  I was very glad to hear the Minister say that he did not think the resistance to amalgamations in the Services was due to a mere carping jealousy. I believe that there are real difficulties. There is a different difficulty from the mere fact of their roles being different. Their career structure is different. By and large, Army officers are much older than their comparable ranks in the other two Services. Pilots in the R.A.F.—presumably because
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  they have to fly aeroplanes when they are young, otherwise they "prang" them—are much younger when they reach high rank.
  This creates difficulty in amalgamating Services and administrative services. I suppose it also makes a difficulty for the promotion of very many senior officers in the R.A.F. who are no longer able to fly, but who have earned it earlier in their careers. I believe that the career structure of the Services compared to each other is a matter which ought to be looked at. For all of them, integration should be improved.
  Finally, I agree very much with what the Sub-Committee says about the special financial and labour arrangements which have been made with the countries in which we have bases and which militate against the costs of the bases and the interests, very often, of our troops there. We know that in Cyprus the N.A.A.F.I. is not allowed to undersell the local traders. We have undertaken in those bases to employ a large number of people—probably far too many people. We know, and the Sub-Committee reminds us, that the younger people there, if they wish to have even a temporary job in the base, are not allowed to do so because of the treaties and the agreements which have been made.
  This is grossly unfair. In the last resort, we are not in Cyprus to ensure the economy of Cyprus. We are there for military reasons. We ought not to regard our military services as the mainstay of a Welfare State for the Cypriot Government. I hope that it may be possible in future for the Minister to look at that and see whether we cannot alter the present position.
  6.54 p.m.
  Mr. K. Zilliacus: My hon. Friend the Member for Fife, West (Mr. William Hamilton), in his excellent speech introducing the debate, drew attention to the main point in the Estimates Committee's Report, namely, the need to review—as he put it—the cost of all military commitments overseas, on the ground that we must cut our military coat according to our economic cloth, since financial and economic strength is the foundation of military power. I do not think that the urgency and importance of this aspect of the matter has yet been realised either in the House or, still less,

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  in the country, so I should like to dwell on it a little as a background to the main argument.
  The Report on the economic situation of last 26th October pointed out that the public expenditure, including defence expenditure, to which we are already committed, would barely suffice for the programme of the previous Government, even if and when the annual increase of the gross national product reached 4 per cent. Most people believe that that will not be for another two years. As the Chancellor of the Exchequer pointed out on 11th November in introducing his autumn Budget, to carry out the economic and social programme of the Government it would be necessary to spend more for social and economic purposes and to cut expenditure having less social and economic value. He mentioned, in particular, military expenditure.
  The Secretary of State for Defence, on 23rd November, elaborated this point. He said that the first basic fact of our defence problem today is that
  "… unless we are to allow our defence expenditure to rise continually not only in absolute terms but also as a percentage of our rising national wealth, we must be prepared to reduce the calls on our military resources. There may be cases—I believe there are—where we find ourselves inheriting commitments from an imperial past which have lost their relevance in the modern world. There may be others where our commitments are based on the false belief that it is still possible, or worthwhile, to use military force against foreign countries purely to protect our economic interests."—[OFFICIAL REPORT, 23rd November, 1964; Vol. 702, c. 1028.]
  There might be commitments overseas, he added, which we regarded as justifiable and even necessary, but which we could not sustain because of the rising costs and which we either had to share or abandon.
  The Prime Minister followed this up on 16th December by first referring to what the Minister of Defence for the Army had said on December 14th, when he quoted some horrifying facts and figures on the automatic increase in military expenditure. He said, for instance, that in the B.A.O.R. the cost of an infantry regiment at present prices would be eight times greater in 1968 than it is today. The cost of an artillery regiment would be three times greater, of an armoured regiment twice as great.
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  The TSR2—which I am glad to see the Government will not spend £750 million or £1,000 million on—will cost ten times as much as the Hunter. The same escalation obtains in regard to the Sea Vixen, which will cost seven times as much as its predecessor, the Sea Venom. He concluded that however successful we were in terms of eliminating waste and muddle and managing to achieve so-called cost effectiveness and getting value for money, defence costs would nevertheless continue to escalate. They would remain high and they would become still higher unless we cut our commitments.
  The Prime Minister rubbed the point home on 16th December. He said that, assuming the continuation of existing contracts and commitments and assuming no change in policy,
  "There is built into our defence system an unavoidable rate of increase … which will mean, year by year, a crippling increase in the call on money and resources … there is an inexorable law that in terms of military expenditure the rise in costs is rising far faster than any conceivable increase in the gross national product."
  In this connection he further said:
  "Nor can we ignore the direct strain on overseas expenditure. Overseas Government expenditure has been running at about £500 million a year. Gross military expenditure overseas, including defence aid, accounts for about £350 million."
  The Prime Minister said that the reason this country is spending roughly twice as great a share of its total national income on defence as our European N.A.T.O. allies is because
  "alone in the world—apart from the United States and the U.S.S.R.—we are trying to maintain three rô;les."
  There was the strategic nuclear rô;le. There was our conventional rô;le within N.A.T.O., what he called our "commitment to the defence of Europe". And there was our world rô;le—loosely called our rô;le "east of Suez."
  The Prime Minister admitted that
  "on the interpretation so far put on our three rô;les, we cannot do all that so far has been thought ideally desirable without fatally weakening our economy and, correspondingly, weakening our real defences."
  Nevertheless, he added:
  "… whatever we may do in the field of cost effectiveness, value for money and a stringent review of expenditure, we cannot afford to relinquish our world rô;le …".

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  He expressed pride and pleasure at the understanding and sympathy shown in Washington for Britain's unique world rô;le.
  Let us have a look at that world rô;le and see what it means in terms of cost and value for money. Let us take, first, the cost of B.A.O.R. The Prime Minister, in that same speech of 16th December, pointed out that under the latest agreement with the West German Government concluded by the last British Government, the foreign exchange cost of maintaining our troops in Germany will be about £85 million, and that all we could expect by way of offset payments was about £25 million to £30 million. The Prime Minister concluded:
  "This means a gap falling on our balance of payments of something of the order of £55 million to £60 million. … I am certain the House will agree that this is an impossible situation."
  I think that the House agrees that this is an impossible situation. I think that the House agrees that the situation is not only impossible, but intolerable, and I hope that the Prime Minister will say so when he goes to Bonn and will follow it up by insisting that we shall not continue to incur a balance of payments deficit of —55 million to £60 million in order to keep British troops in Germany indefinitely because the German Government are sabotaging any reasonable proposals for a settlement with the Soviet Union to obviate that necessity.
  Turning to the Middle East, not only did the Secretary of State for Defence on 23rd November—I have quoted this—point out that it was foolish and mistaken to believe that it is worth while to make war on other countries for purely national economic interests, but the Labour Party, in the policy statement which was adopted by conference in 1958 and which has been the basis of the party's foreign policy ever since, laid it down that
  "our oil supplies should be guaranteed through commercial arrangements rather than through the use or threat of force."
  My hon. Friend the Member for Fife, West drew attention to this point and stressed that many other countries, including Japan and Germany, are getting on commercial terms a great deal more oil than we are getting, and without having to try to exert any kind of control over or to undertake any military com-
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  mitments to the Governments of the oil-bearing countries in the Middle East.
  I take it for granted that our commitment does not include a commitment to interfere in the internal affairs of Middle Eastern countries contrary to the terms of the United Nations Charter, under the guise of "defence against Communist subversion"—in other words, to try to hold down popular revolts on behalf of reactionary, dictatorial, corrupt and oppressive Governments. I think that the overwhelming majority of members of the Labour Party still hold the view which Aneurin Bevan expressed in the House when he was shadow Foreign Secretary, when he said that in Labour's view it is not Britain's business to put down revolutions or fight Communism in other people's countries.
  Nevertheless, the Prime Minister told us in his speech of 16th December:
  "We have a major role in the Middle East defending interests which are not exclusively ours, at a cost of about £125 million a year."
  There is a very strong case for reviewing that situation with the idea of cutting down that £125 million very drastically.
  To take a specific case, in the same speech the Prime Minister said:
  "If we are to fulfil our overseas rô;le … we need most, if not all, of the bases we now hold, but we need to be accepted in those bases … We must satisfy local governments and the peoples of those areas that our presence is of advantage to them as well as to us".—[OFFICIAL REPORT, 16th December, 1964; Vol 703, c. 421–25.]
  In view of the fact that there is an urgent necessity to cut our overseas military commitments, under pain, if we do not do so, of failure to carry out our programme for economic expansion and to keep our social promises, could not that criterion be applied now to our existing commitments? The base in Cyprus has cost so far £20 million. There is no argument about the fact that the Greek population, the Government of Cyprus and Premier Makarios, who are 82 per cent. of the population, are strongly opposed to the continuation of the British bases and want a solution based on the neutralisation of Cyprus. Is the local population of Aden in favour of that base? I venture to doubt it. I think that apart from a small minority

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  which is benefiting materially, there is widespread opposition to it. We should draw the appropriate conclusion in order to cut our overseas military commitments.
  If our world rô;le in the Middle East and in Europe is subject to rather drastic criticism, I admit that our rô;le in the Far East is "wropt in mystery" to me. All I know is what my hon. Friend the Minister of Defence for the Navy said this afternoon, that the overall cost for Singapore alone is £225 million. I note that it says on page IX of the Estimates Committee's Ninth Report:
  " … it is clear that British Forces are making the major contribution"—
  talking about the Far East—
  "to the defence of interests many of which are the concern of others. This is particularly the case with commitments in connection with the defence of Malaysia."
  If we cut out fighting for purely national economic interests, such as propping up a government which controls the supply of rubber and tin in Malaysia, and are content to get rubber and tin on a commercial basis, whatever the Government, then the issue narrows down to helping the Government of Malaysia to defend itself against the very real danger of aggression from Indonesia. But we must make it a condition of continuing that commitment that the Government of Malaysia will go all the way with the Government of this country when it comes to seeking terms for a peaceful and honourable settlement of that conflict, even if such a settlement can be found only through the neutralisation of Malay at a conference in which the Soviet Union and China take part.
  I do not know what the cost is so far of our support of United States intervention in South Vietnam and how far we are committed to incurring further expenditure to support the attacks which are taking place on Laos and North Vietnam, or how far we shall be involved under S.E.A.T.O. if all this swells into a major war. I leave that question open.
  All this is relevant to the question of which of these military commitments should be kept in terms of cost effectiveness and value for money and which should be axed. I conclude by quoting
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  the report of the Washington correspondent of The Times on 14th January, to give an indication of how official circles in Washington compare the way in which we are tackling this very difficult problem of the balance of payments deficit in relation to military expenditure and commitments overseas with the way in which the United States did the job.
  This is what The Times correspondent reported from Washington about American opinion:
  "The answer for American difficulties over its balance of payments deficit was to review and reduce defence spending, if only marginally, to cut foreign aid, and press the Germans to buy American military equipment."
  We are all too well aware in this House how extremely successful the Americans have been on that point and by what methods they have achieved their success at our expense.
  "In far worse difficulties, Britain is seen to be proceeding with the construction of Polaris submarines and embarking upon what threatens to be a costly military operation in defence of Malaysia. Yet neither the Secretary of State nor the Secretary of Defence would have it otherwise in South-East Asia. Indeed, the Royal Navy could be called McNamara's Navy because it is doing precisely what the Secretary of Defence wants done East of Suez to avoid higher defence costs for the United States. The claim of successive Governments in London that Britain is a world power is suffered at least partly because it is in the American interest."
  That casts a rather odd light on American approval and sympathy for our alleged world rô;le.
  I do not see why we should have a balance of payments deficit on B.A.O.R. of £55 million to £60 million in order to support German intransigence and irredentism and German rejection of the policies which our Government believe to be the only possible ones for a European settlement. Nor can I see why we are spending £125 million at least—
  Sir Spencer Summers: On a point of order. Is it in order to embark on a debate on American and other aspects of foreign policy under the terms of this debate?
  Mr. Speaker: No, it is not, but I thought that the hon. Member was drawing near to the end.
  Mr. Zilliacus: I am, Sir.
  I do not see why we are spending £125 million in the Middle East. It is more

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  than we can afford, and I should like to know what it is all about. Nor do I appreciate our altruism in spending I do not know how much money in the Far East to save the United States defence costs. I should like to tell my right hon. Friends that the tougher they get about cutting defence costs the heartier their support will be not only on this side of the House, but in the country at large. There is an overwhelming feeling that the time has come to call a halt to this mad growth in armaments and military expenditure which threatens to break our economic effort unless we do something drastic to stop it in time.
  7.13 p.m.
  Captain Walter Elliot: I do not intend to follow the hon. Member for Manchester, Gorton (Mr. Zilliacus) in his arguments. I do not want to do him an injustice, but they struck me as arguments to reduce our power and to undermine our position abroad. I am more concerned with the best way to spend what is always an inadequate sum of money to increase our power.
  I should like to echo the remark of my hon. Friend the Member for Ludlow (Mr. More) when he said that he hoped that the Services would not always view with alarm and despondency, as they often do, Estimates Committees composed of Members of Parliament descending upon them. I am quite certain that waste does not help the fighting Services. If we can find where it is occurring so much the better, but in any case, from my personal experience of the Services and of industry, I do not believe that the Services waste half as much money as either the nationalised industries or private industries.
  The Estimates Committee referred to the size and nature of the forces and installations overseas and the fact that these are dictated by the tasks which the Services must be ready to perform in order to meet United Kingdom commitments. I would add to the considerations of size and nature the question of the location of the forces. There is not the slightest doubt that if we are to have these bases abroad they must be first class. Invariably when the time comes we find that there are grave shortages and that we have not spent
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  enough money on the bases. They must be first class from a military standpoint, and they need everything to protect them as well as to place them in a position to carry out their functions.
  In considering expenditure, it is illuminating to look in the Committee's Report at the small example of Gan, which is only a staging post, where I notice that among other expenditure the maintenance of the buildings alone costs between £40,000 and £50,000 a year. In successive Estimates the cost of building in Gan has gone up. In addition to the appropriate military provisions for a base, we have to provide in these days for the dependants. These facilities have to be first class, otherwise we do not get the recruits and the efficiency of the Service suffers.
  We have also to bear in mind the modern development, particularly in the Navy, of dependants following the forces. In some respects this affects the efficiency of the forces. I remember that when we debated Estimates last year there was an argument about the amount of money spent on an airstrip in Cyprus which compared very unfavourably with the amount spent on housing.
  The hon. Member for Stepney (Mr. Shore), in a most competent speech, used the words "world strategy", which of course are ruled out in this debate, but there is no doubt that the location of bases is connected with those two words. It is a question of policy, and basically policy decides the amount of money to be spent. It is difficult to get that sum right when deciding on the location of a base. It may be right for a year or two or for five years, but circumstances change and we find that the money has been spent in the wrong place. Among examples that spring to my mind are the bases in East Africa. Today it also looks as though large sums of money spent in Libya will no longer provide what we want.
  The Estimates Committee obviously appreciated this point, because it referred to greater reliance on strategic reserves and the necessity to increase capacity to move reserves into spheres of operation and the need, therefore, to strengthen Transport Command both in personnel and aircraft.

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  In paragraph 48 of its main Report, the Committee doubts whether
  "sufficient regard has been had to the changes resulting from modem means of communication and, in particular, the transport of both men and equipment by air."
  Undoubtedly the aircraft are needed, but at the receiving end modern aircraft need big airstrips and all the equipment to go with all-weather and day and night flying. Once one has all that, one then begins to build up the necessary forces to protect the bases, and so on.
  I am rather disappointed that there was no mention in the Report of the possible further development of mobile bases, and I am sorry that the Minister of Defence for the Royal Navy has just left the Chamber. My hon. Friend the Member for Stroud (Mr. Kershaw) said that these mobile bases were expensive. Of course they are—so are all bases—but they have the merit of being able to be sent to any part of the world. In my view, we should not be backward in exploiting the advantages of mobility when naval forces can provide. From past experience, we can have the fullest confidence in complete bases properly protected and with a minimum number of rear bases from which to operate.
  This is no argument against forward bases, when it is considered that they can be held and if they are useful for the proposed operation, but I hope that the development of mobile bases will be further considered with a view to avoiding the enormous expenditure undertaken in the past for the establishment of expensive land bases. Through no fault of the people making the original decisions, circumstances change and these bases sometimes become quite valueless and, perhaps, go to the countries in which they are situated. I hope very much that a policy for mobile bases will be pursued. Not only should we get much better value for our money but we should get a more effective instrument for our purposes.
  7.22 p.m.
  Mr. Cyril Bence: With this Report of the Estimates Committee on Military Expenditure Overseas before us, together with knowledge of the turn in our situation during the past five years, during which the balance of trade has changed drastically against us, it is probably true that we must make
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  a complete reassessment of the liabilities which we undertake in establishing bases throughout the world to defend what are now not purely British interests, but world interests.
  Expenditure and works in Singapore, on the North African coast, in Aden and in Cyprus have been undertaken in the interests of maintaining peace not only on our own behalf, but on behalf of many other nations besides. The rubber, oil, and tin from Malaya and all the products of the Far East which are so important for our own economy are important for other people's economies, too. I wonder what contribution other nations are making towards the maintenance of these very important bases.
  Britain is a small island with a large population and a terrific problem in earning its living. I wonder to what extent we can, individually, on our own responsibility, and out of our own resources, finance the maintenance of a chain of bases which is maintained in the interests of the United States and, indeed, of the Continent of Europe. It is time that we made perfectly clear that the burden of maintaining them in terms of foreign exchange or expenditure of gold must be shared by many other nations.
  Sir S. Summers: The hon. Gentleman is making an interesting point, but will he acknowledge that, if his proposition were accepted, we should be expected to contribute to a great many activities undertaken by the United States for world peace?
  Mr. Bence: We already do that. Our contribution to N.A.T.O. or our contribution—
  Sir S. Summers: The hon. Gentleman has not taken my point. I am thinking not of N.A.T.O., but of American expenditure for world peace, nothing to do with N.A.T.O. What about South Vietnam, for example? Does the hon. Gentleman suggest that we, for our part, should make a contribution there?.
  Mr. Bence: We make our contribution. In my view, we are making a contribution all over the world to a measure far greater than that undertaken by many people who benefit by the defensive institutions which we have established. Many nations benefit from the fact that

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  they are there as purely defensive forces and installations, but they make no contribution.
  I should be the first to admit that the United States makes a great contribution in the Far East and in the North Atlantic to the defence of the free world. Of course this is so. As an absolute quantity, the American contribution is far greater than our own, but I doubt that it constitutes such a burden on American resources as our contribution does on ours. This is my point. In relation to our resources and our capacity, Great Britain's contribution in the past 20 years for the defence of the free world has been enormous, but it has been in defence of all the other nations of the free world, not purely for ourselves. In fact, many of our defensive actions have been not purely in British interests, but in the interests of other nations towards whom we feel some obligation. Therefore, I suggest that we should look for a sharing with other nations of the responsibilities of the defence of the Far East.
  The hon. Member for Aylesbury (Sir S. Summers) posed the question: should we contribute to the defence of South Vietnam? At present, the United States is not taking an active part in the defence of South Vietnam. It has an advisory body or a mission there. I do not fully understand how it is established, but, from my reading, I believe it to be a very large mission, and I do not know that there is any need for us to add to it. If the hon. Gentleman is suggesting that we should send a military mission there parallel with the United States mission, I do not know quite what the answer would be. I am not sure that that would be a useful addition to the forces of South Vietnam, and I doubt very much that it would be an advantage.
  As I understand, there is in South Vietnam at present merely a United States military mission advising one side in a civil war. I do not suppose that there is any need or any desire on anyone's part for us to share that responsibility. However, this does not come within the ambit of the Report so perhaps I dare say that I should not pursue the point further.
  I believe that the burden on this country represented by the matters dealt with in the Report—I wonder how much it all means in terms of foreign currency
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  —is a burden which we cannot long continue to bear. I notice that one of my hon. Friends, rather to my surprise, suggested during the weekend that we were spending far too much money on these bases. He suggested that the Cyprus base was quite unnecessary, that the Aden base might be reduced, and he went on to say—I suppose that it was a Press hand-out—that no one would listen to a bankrupt nation. If we do not improve our production performance to a far better level than it has been, how much longer can we continue to maintain a vast network of defensive forces throughout the world? I doubt very much that Britain can much longer bear this huge burden which we have inherited from the Pax Britannica. We are members of the United Nations. More of this responsibility ought to be shared through the United Nations. It should be shared by all the nations which benefit from the defensive system of the free nations of the world.
  I am sure that the item about Alsatian dogs at Singapore, costing £110,000 a year, or £1,000 a year per dog, has been mentioned. I have no doubt that the figure includes the handlers, and I also have no doubt that the dogs and the training are expensive, but it is an amazing item. There is also the heavy cost of housing our troops in various parts of the world. Figures of —9,000 and —7,500 for flats have been mentioned, but I understand that the Department has repudiated them and said that they are grossly exaggerated.
  I was amazed, on reading the item about Gibraltar, to learn that flats should cost £9,500 or £7,500, and there are others at Benghazi or elsewhere on the North African coast. It is no wonder that our balance of payments is in a terrible state when we have to spend such money as this all over the world in the defence of interests which are not 100 per cent. British but those of other nations.
  I support the idea that the interests of Western Europe and the free nations of the world should be defended, but it is time Britain made clear to many of the nations which benefit from her defensive institutions that they should play a part in financing them. There is also the German problem, which costs us a great deal in foreign currency. The time

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  has come for us to consider again just how much we can do. This little island is trying to sustain a high standard of living out of very meagre natural resources. We just have our skill natural discipline and capacity. We have some coal left, but no iron ore, no tin and no lead. Indeed, we have very little raw material. We have to earn so much abroad that I feel we can no longer carry the burden that we have done for 150 years in maintaining the Pax Britannica.
  We must make clear to our friends that we can no longer bear this heavy expenditure in maintaining a chain of defensive institutions which are essentially in the interests of all the free nations of the world and not purely in the interests of Britain.
  7.34 p.m.
  Mr. Robert Edwards: We are debating £500 million of expenditure, which is one-fourth of our defence budget and one-sixteenth of our national expenditure. When we discuss such a vast expenditure, it is natural that many aspects should arise which seem out of line with the Report of the Estimates Committee. When our balance of payments is in great difficulties, it is only natural that we should examine the vast sum to see whether it is completely justified.
  But that was not the purpose of the Committee. Its purpose was to analyse the expenditure to see whether money could be saved by its making a series of recommendations. I disagree with many hon. Members who have suggested that it should be the function of the Committee to discuss policy and strategy. The problems of policy and strategy are functions of the House of Commons and most certainly not the functions of an all-party Committee. The function of the Estimates Committee is entirely different. It may well be that as the functions and role of the House of Commons develop we may agree to have an all-party Committee which will deal with military expenditure, foreign policy and world strategy, but that time has not yet arrived.
  There is a temptation for all of us to cover the whole field of whether we are getting value for money, whether the cost of our bases should be shared by other nations, whether the £125 million spent on defence in the Persian Gulf is justified
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  when only 40 per cent. of the oil of that area comes to this country, and Japan takes 30 per cent. of her oil from there and has not a single soldier there, and America takes 40 per cent., and has only a little base in Saudi Arabia, whether an expenditure of £100 million in Singapore covers our income from tin and rubber, and whether other nations ought to share the burden of this defence—all these are fascinating subjects to all of us and we have strong views about them, but they are not related to the Report of the Estimates Committee.
  The Chairman of the Sub-Committee responsible in the main for the First and Second Reports is no longer a Member of the House. Sir Frank Markham was a very worthy, dedicated and energetic Chairman, and I am greatly privileged to follow him as the Chairman of the Sub-Committee dealing with similar subjects. I do not consider for a moment that I have his ability, energy or dedication, but I am sure that the Sub-Committee over which I preside will try to continue the very excellent work done by previous Sub-Committees and by Sir Frank Markham.
  We had during the studies of the subject allocated to us by the main Committee the active co-operation of the Ministry of Defence and all the Service Ministries. We were exceptionally fortunate to have the services of three Clerks of this House. No words of mine can express how strongly I and other members of the Committee feel in our appreciation of the dedicated and unremitting service given to the Select Committees by the Clerks of this House. They are all dedicated people. They collect the figures. They draft the reports and summarise the documents. They serve us well. It is they who really make practical the reports that we debate.
  However, there was one small exception in the co-operation that we received generally. In Singapore our attention was drawn to a letter which had been circulated to Service chiefs there—it had not come from London—suggesting that officers of the three Services should not volunteer to give evidence to the Committee and that if they were questioned they should give only the minimum of evidence. This seemed to me to approach the question of Parliamentary privilege, and I was never quite satisfied with the explanation given regarding that letter which, I believe, was circulated only in Singapore and not generally throughout the bases of the areas

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  we covered. Apart from that we certainly received the most active co-operation of all three Services.
  A basic issue that has arisen quite naturally out of our consideration, and which was writ large in our Report, is the problem of how long we are likely to stay in bases in different parts of the world and the kind of tenure we have. The Foreign Office, the Service Departments and the Commonwealth and Colonial Offices have failed sufficiently to consider and discuss political changes and the need to base our expenditure on their results. It has been a failure of proper consultation.
  That failure has led to the waste of literally scores of millions of pounds of public money. For example, in Kenya we spent £5½ million on permanent buildings during the last five years of our stay. Yet everyone who took an intelligent interest in African affairs knew that Kenya would soon be independent. There was vast expenditure on the marvellous Service village at Gilgil, the Templer Barracks, the great N.A.A.F.I., the church which was built at the cost of a cathedral and the schools that cost £60,000. All this expenditure on permanent buildings went to the new Government of Kenya with very little compensation—indeed, none.
  Similarly, other permanent buildings were erected in Libya when a great wave of Arab nationalism was sweeping North Africa. We knew that was taking place yet no real consideration was given to the fact that our stay in Libya was likely to be limited. We have spent over £1 million in the last three years on permanent buildings. That is true of every base in which we are established today.
  We are living, whether we like it or not, in a world in which two revolutions are unfolding themselves simultaneously. One is the weaponry revolution which is outmoding all our weapons of today and certain of our bases. There is also the revolution of human rights. Men and women throughout the world are fighting for a place in the sun. They want to run their own countries in their own ways and are demanding that foreigners should be removed from their territories and that in the conflict of the great power blocs they should be neutral.
  These two emerging revolutions affect the whole basis of our military expendi-
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  ture. The first outmodes our bases, our whole methods of defence. The second shortens our tenure of occupation of all these bases because human freedom and human rights mean independence. These factors must be considered. There must be more consultation between the Commonwealth and Colonial Offices, the Foreign Office and the three Service Departments.
  The Committee made some very useful recommendations. I was delighted to read the reply of the Secretary of State to our recommendations. It was framed in very courteous and reasonable language. He disagreed with many of our contentions, but nevertheless it was a reasonable attempt by the Defence Department to meet legitimate criticisms by a Committee of this House.
  It is true, as has been said, that members of the Estimates Committee are not experts, but we have experts in the Service Departments. Indeed, some of the best experts on accountancy in the world are in the Service Departments. It is not the function of members of the Estimates Committee to become expert on every subject on which it dwells. Their function is to make the Services and their Departments accountable to Parliament as distinct from the Government.
  We do not need specialised experts to do the work of elected representatives in ensuring that Parliament has some control over the Government. No matter how large or small the Government's majority may be, this House must have some means of accountability. That is why the ordinary M.P. who has experience of the social, economic and human problems in his work generally and in his constituency is the best kind of person to perform the function which he is elected to carry out—to ensure on behalf of the people that there is accountability to them.
  May I take up some of the issues not yet dealt with in the debate, issues which form the basis of the Sub-Committee's Report? After all, the Committee made a series of recommendations and the Minister has replied to them, and if we are to get real value from the debate, it should have some relationship to what is actually contained in the Report. This and the debate on our first Report will then have justified the decision of the House that the Reports of the Select

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  Committee on Estimates should be debated from time to time.
  A major item of controversy in the Report is in connection with accomodation in Gibraltar. This has arisen as a major part of the Report, because when we discussed squalid conditions for Service families the newspapers and television cameras focused public interest on conditions in Gibraltar. In our first Report we mentioned the Admiral's Round House at Aden which cost £46,000 and which struck the headlines while all the constructive suggestions did not make the newspapers. Similarly, I am afraid that the Gibraltar controversy has been the main issue to be reported in the Press on this occasion. As it is an issue and as my hon. Friend the Minister of Defence for the Royal Navy has dealt with it, the Estimates Committee is justified in defending itself.
  There is no doubt that the figure which we were given about each officer's flat in Gibraltar on two separate occasions was precisely the figure which we wrote into the Report. The documents are all available. The estimate for officers' flats was £9,000 and, on another occasion, the Ministry of Public Building and Works suggested that the cost would be approximately £9,000. The Estimates Committee cannot be blamed if on two separate occasions, once formally in a document and once informally in discussion, that is the information given to us.
  It is not true to say that the Committee was misled and that this part of our Report is inaccurate. I hope that the Ministers and the Departments concerned will have a look at the letter which we received from the wives of 20 Service men stationed in Gibraltar, this very human and accurate letter which relates to the squalor in which they live, to the wretched conditions in areas which are sewers and which are overrun by rats, mice, bugs and fleas and where the families and children of Service men share a w.c. among 18 families.
  As bad as these conditions in Gibraltar were—and we inspected many of them—they were nothing as compared with some of the hirings which we inspected in the Arab quarters of Tobruk. It is not enough for a commanding officer to send a letter telling these good ladies that, while he cannot prevent them from writing to
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  Members of Parliament or the Press, they have a dignity to uphold. People have to fight for their rights. Our lives are short, and if Service families are to have any kind of normal life they should not have to wait two and a half years before the families are brought together. Is a father not to see his youngsters for two and a half years, the kind of waiting time for official decent quarters? If they have to live under these conditions in order to keep the family together, they should not be blamed for complaining or for going. It is an easy answer to say that they should stay at home, but they want to be with their husbands. Families want to be together. The strength of our nation is the family, and without the family we are nothing. The family is our community, our strength and the lifeblood of our society. These problems should not be swept away with a smile and with the comment that these people are making frivolous complaints. These complaints are very serious. If we are to spend £2,000 million a year on defence, we should spend a few extra millions to guarantee that the wives and families of Service men have decent, healthy, hygienic conditions.
  Above all, let us not try to deny the facts. No evil consequences can arise for any Service Department from the pursuit of the truth and from looking at the facts. There is nothing to he lost in searching for the truth. Nothing but evil arises from a denunciation of people who, thinking of their families, denounce and expose appalling conditions which should not be tolerated in this age. I am sorry to have dwelt on the situation in Gibraltar, but the issue has been raised. I leave it there.
  One or two other recommendations have been rejected by the Ministry of Defence. One concerns the Royal Air Force establishment at Gibraltar. The Ministry's reply on this issue is not very convincing. There are 1,200 R.A.F. personnel, and while we were visiting Gibraltar we saw only two aeroplanes, although we understood that there were three. It is true that the personnel there have other activities£rescue work, communications for N.A.T.O. and so on—but all those activities, including the three aircraft, do not justify the presence of 1,200 men and women. Gibraltar is not that kind of base, and we know

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  that it is not. If we mean to save money, the Ministry should have another look at the Royal Air Force establishment at Gibraltar.
  Another rejected recommendation concerns the Air Officer Commanding, Hong Kong. This officer lives in a palace in the hills of Hong Kong among the most beautiful houses I have ever visited. It is a very costly establishment in one of the most expensive and select districts of Hong Kong. We suggested that the Air Officer Commanding, with his staff of 23, was just not necessary in Hong Kong arid that the station commander should take over these responsibilities. If this is the protocol in the Air Force, one can promote the station commander to group captain. One could add to his responsibilities and have an air officer commanding who would do useful service, no doubt, in some other part of the world. The station commander in Libya has all the responsibilities of an air officer commanding. He even negotiates with the King of Libya. If this is so in Libya, why cannot it be so in Hong Kong where there are no such diplomatic responsibilities because we have a Governor and a department there? It is not good enough to sweep away serious recommendations of this nature without justification.
  The reply of the Ministry of Defence, which is, I admit, courteously framed, is no justification for the rejection of our proposal.
  The Under-Secretary of State for Defence for the Army (Mr. G. W. Reynolds): The argument is true in part, but is not my hon. Friend aware that the beginning of the second paragraph points out that Royal Air Force organisation in Hong Kong will be reviewed in the near future?.
  Mr. Edwards: I realise that. I am suggesting that it is not good enough to say that these matters will be reviewed in the near future. In my view, the case for action is proved if we are serious in saying that we want to deal with the expanding problem of spending the people's money on overseas bases.
  We made a sensible recommendation about Service education. We suggested that the education of the children of members of the Services should be under one control—that of the Army. This
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  recommendation, too, was rejected. In Singapore, all three Services run their own schools. All three Services have an education authority in an area not the size of the Isle of Wight. How can this be justified? I suggest that the Ministry of Defence might have another look at the duplication in respect of education in the three Services.
  Another recommendation which we made concerned land in Hong Kong. We should put this matter in its proper perspective. Hong Kong is the only place in the world where one can make £1 million out of education. There are three millionaires in Hong Kong who have made their millions out of providing education. Nowhere else in the world does this situation exist. In no other country in the world is land so valuable as it is in Hong Kong. This is not an undeveloped, depressed area. There are more millionaires in Hong Kong in proportion to the population than there are in New York, Washington or any other part of the world. They make mountains of wealth out of the labour forces which come from China. They have an income tax of Is. 3d. in the £.
  Mr. James Allason: Surely the highest level of income tax is 2s. 6d. in the £ in Hong Kong for the millionaires.
  Mr. Edwards: I accept that. But compare it with the rate of Income Tax in Britain.
  We sold the Murray barracks site to the Government of Hong Kong for £1½ million, together with a lot of equipment, sheds and buildings from which they receive income. The Government of Hong Kong sold one-twentieth of this site for £1 million to Hilton Hotels Ltd., on which has been built a large hotel. Surely this is nonsense. We developed this land, and enriched this community. We created this environment for possible development. Surely it owes the British taxpayer something. We should not pass over Crown land, which has been held by the Services for so long, to the Government of Hong Kong, with all due respect to that Government, for them to use for speculative purposes and to sell small sections of it at inflated prices.
  There is the Ordnance Depot at Kai Tak, right in the centre of Kowloon, which is the commercial centre of Hong

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  Kong. There are 42 acres of land here. One could not put a price on this land. It has been passed over to the Government of Hong Kong. It is true that they have offered us alternative land on which to build barracks in the northern suburbs of Kowloon.
  We are told that the function of our Services in Hong Kong is internal security. But the 8,000 British Service men in Hong Kong could not hold back the tidal wave of a Chinese Communist invasion if the Chinese wanted to get rid of us in Hong Kong. Practically all of the water in Hong Kong comes from China. The Chinese could get us out of Hong Kong by stopping the water supply. We are supposed to be in Hong Kong for security reasons; that is the only justification, right or wrong. If that is so, why do not we move out of the heart of Kowloon into the northern provinces? There is a lack of proper consideration of the vast sums which arise, particularly in Hong Kong, from the disposal of land which has been in the hands of the Services for such a long time.
  I repeat that we are not dealing with an undeveloped area, or a poor country. If the Communists threaten Hong Kong, the millionaires of Hong Kong will be coming not to London but to New York. After all, we are not defending patriotic people. The wealthy people of Hong Kong are exploiting labour to make them richer. They were previously the millionaires of Shanghai. They have merely moved from Shanghai to Hong Kong.
  Let us have no stupid sentiment about this fortress of Hong Kong, this spearhead in Communist China, for this is just not true and we should not be unwilling to renegotiate the whole question of land settlement and the allocation of land to the Hong Kong Government, whose proportion of their internal security costs is very small indeed relative to the responsibilities of the British taxpayer.
  We made a simple, sensible and modern recommendation in our Report relating to negotiations with local trade unions. The Defence Department rejected that, as well. Some of the letters which local trade unionists receive from the Ministry are really fantastic. A little local trade union branch leader in Singapore, for example, gets a few workers together, forms a union and starts negotiating with
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  the Admiralty. This local union leader, who does not know much about the world, applies to the Admiralty, based on a decision of a committee of his members, and puts in a demand for a wage increase of one halfpenny an hour. He receives the sort of reply which begins: "My Lords Commissioners of the Treasury reply to your increase", and probably ends, "and, Sir, we are, Your obedient servants". This belongs to the days of the Colonies. The poor chap may have to get the letter translated before he can understand what must be realised to be an outmoded system.
  In this modern world we cannot conduct negotiations, particularly wage demands, across the world from Whitehall. Every trade unionist and businessman who has had any kind of experience knows perfectly well that the major basis for trouble in industry is frustration. The way to keep a factory a harmonious unit is to get a quick settlement on the spot so that grievances do not grow into issues of great import.
  Realising that this is so, what is happening throughout the world in our bases? People are turning sour over a halfpenny wage increase demand. They are becoming anti-British because our men on the spot cannot settle simple, day-to-day trade union problems. It is not true, based on our experience—despite what the Minister may say—that the same system obtains for the Navy, Army and Air Force. When we were in Singapore the whole of the dockyard was closed down by a strike. For the first time in my life I walked through a picket line. In my youth I was on the other side. I was one of the pickets.
  The dockyard was closed for a month. The whole great base—this citadel for the defence of Malaysia—was closed down. There was no action at all. It was as dead as a cemetery. Why did this happen? It happened simply because the Admiralty could not give industrial workers an assurance about redundancy. Redundancy was the only issue involved. The Admiralty could not assure the workers that the co-ordination of the three Services would not result in their losing their jobs. There was no dispute among the civilian people working for the R.A.F. in Singapore at the same time. There was no dispute among those working for the

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  Army. The R.A.F. and the Army, because they had skilled men on the spot, were able to take the initiative and give assurances. I mention this to prove that it is not correct to say that the same responsibilities and initiative exist among the three Services.
  This is an important and vital problem now and for the future. Because it is so important I hope that I will be forgiven for dwelling on it for so long. It brings me to the fact that in Aden there are 7,000 Arabs working for the Services. They have a strong and democratic union which is affiliated to the I.C.F.T.U. They have rejected every attempt to become affiliated to the Communist international union. For four years they have been negotiating for a settlement of three simple issues—the check-off system, the question of redundancy and the question of medical services. All the big employers in Aden have acceded to these three demands, but not the British Defence Ministry.
  The Americans try to build up unions in Africa from the top down. They think that all one need do to build up a free trade union is to invite some smart young fellows to New York, give them a guaranteed salary and send them back so that they may automatically become trade union leaders. As I say, they build them up from the top down. We, on the other hand, have learned from experience that a free trade union must be built up from the very grass roots to the top so that the men who lead have some visible means of support.
  To achieve this we have accepted, wherever we have had responsibilities in Africa, the check-off system as being the only way of building up stable, free trade unions from the grass roots upwards. If this is true in East, Central and West Africa, why is it not true in Aden? Why are we denying the Arabs what we give to the Africans? Why has there not been a settlement for four years? In other cases items have been on the agenda for 18 months without settlement. This is the nth degree of industrial stupidity. It creates unnecessary trouble for us and stimulates political opposition to our bases and ourselves. It must be realised that frustrated trade unionists will look for a political programme to throw the British out.
  Mr. R. Gresham Cooke: Being extremely interested in the hon. Gentleman's speech, will he, in a word, explain what the check-off system is? It sounds like a Russian playwright.
  Mr. Edwards: It is a system by which workers who are members of a trade union sign a document stating that they agree to their union dues being deducted from their wages at source. We cannot build unions in undeveloped areas unless we have such a system, because those areas have no stability. This is the only way in which unions can be built up, and we have to build free unions in order to train people for self-government and to prevent industrial anarchy. As I say, that principle has been accepted throughout Africa; it should be accepted in Aden, and if the men on the spot had been allowed to make decisions it would have been accepted long ago.
  The point we made in our Report was that there must be a lot of new thinking about negotiations with trade unions in the localities. We have to bring local governments into trade union negotiations. We have to use independent industrial tribunals to prevent industrial disputes with our Services becoming political issues. In Singapore there is a fine system of independent tribunals, free from political blackmail or pressure, to which many disputes at the docks and in our Services could go automatically, and that would involve the local government, the elected government of the people. This is what we have to do, but what we are reluctant to do, in spite of the reply of the Ministry of Defence.
  I have spoken much longer than was my intention and there are still quite a number of points in this Report with which I should deal in order to do justice to the Committee, but I will resist that temptation. This debate and the debate we had on the first Report have amply justified the decision of this House to have debates on the Reports of the Estimates Committee as part of our Parliamentary work. I repeat that it is not the Committee's business to deal with policy or strategy. We had many debates on policy and strategy but we had them over a cup of coffee or at dinner or luncheon—they were not part of our decisions. Our job was to deal with the expenditure of the people's money, and to make recommendations on how best

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  that expenditure could be reduced without adversely affecting the services involved, and I think that we did a useful job.
  As I have said, this Report on overseas expenditure was a massive task. It was a piece of pioneering work for this kind of committee. These two Reports were made possible only because we had a great deal of co-operation from the defence Departments and from the Clerks of this House, of whose active work on behalf of the Committee one just cannot register the kind of appreciation it deserves. I hope that the work of similar inquiries will be made easier for the future. I hope that it will not be necessary for us to fight or always be obliged to travel overseas to inspect the expenditure of the people's money. I believe that the Ministry of Defence is to recommend some scheme whereby, in order to avoid conflicting evidence with the Service Departments, shorthand notes will be taken when we go abroad so that there is no doubt about the evidence given. I am sure that that procedure would be acceptable to the Committee; it is a very happy compromise.
  When Members of Parliament are given a task by this House on behalf of the people, they have the right to see how the money is spent. Indeed, 80 years ago, when Lord Randolph Churchill, Winston Churchill's father, first persuaded the House to set up a Select Committee on Estimates, he had in mind that Members of Parliament should not only debate Budgets and deal with Votes amounting to hundreds of millions of pounds—although only scores of millions of pounds were involved then—but should have the right, the duty and the privilege to see how the money was spent. That was the original function of the Estimates Committee. I hope that this function will continue to be carried out on behalf of the House of Commons—and, consequently, on behalf of the people—and that any obstacles in the way of their doing their task efficiently and well for this House will be swept away at the earliest possible moment.
  8.26 p.m.
  Mr. James Allason: I congratulate the Estimates Committee on the extraordinary diffi-
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  cult task, wonderfully performed, of producing this Report. The members of the Committee faced very great difficulties, one of which lies in the fact that the man overseas who gives the evidence is not necessarily the man to provide the best evidence. There is also the political difficulty of whether the House is entitled to take evidence overseas.
  I should have thought that where these misunderstandings occurred there would be a possibility of the Report being drafted and then, perhaps, going back to the Ministry with definite questions where the Committee felt that there was something peculiar that it would like to criticise. That would avoid the Committee being "shot down in flames" by the Ministry where there was a direct conflict of evidence and an unnecessary rejection by the Ministry.
  For example, I do not think that the recommendation on the N.A.A.F.I. has been discussed very much in this debate. The evidence was taken overseas from N.A.A.F.I. managers and various people interested in running N.A.A.F.I. The Committee then interviewed the general manager. I was not permitted to attend that hearing, as I am not a member of the Committee, but from my reading of the evidence it does not appear that the Committee taxed him closely on what it proposed to recommend. It turns out that what it proposed to recommend was not, in the view of the Ministry of Defence, very helpful. That might be understood when we look at the recommendation which is that vehicles of the N.A.A.F.I. should be repaired by the Services.
  This, perhaps, is not very helpful from the N.A.A.F.I. point of view, because the organisation would want the vehicles back again quickly. If they were put through Service channels, the N.A.A.F.I. establishment would be at the bottom of the priorities. If there were an urgent operational need to get all 3-tonners on the road as quickly as possible, N.A.A.F.I. would be at the end of the queue. It is apparently assumed that the Services are the cheapest and most efficient means for repairing vehicles, but this is not necessarily so. We do not have to think too much about the cost in this instance. We have to think

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  about effectiveness in doing the job really well and having capacity to do the job perhaps better than is commercially necessary. The N.A.A.F.I. would not have benefited from the recommendation and I am glad that the Ministry rejected it.
  I am surprised to find myself in agreement with the hon. Member for Bilston (Mr. Robert Edwards) on the subject of Hong Kong. When the highest taxation rate there is 2s. 6d. in the £ and it compares so favourably with that of this country, it seems that Hong Kong should pay its fair share for the defence services it obtains. Hong Kong is being defended by the British taxpayer. The Services are there for the purpose not only of defending Hong Kong externally, but from the point of view of internal security. It would be fair to ask the Hong Kong Government to pay a satisfactory share of the services they obtain.
  I am disappointed with the reply to the Estimates Committee, which seemed to dodge this issue altogether. On the Departmental observations printed on page 13, where the Ministry should comment on the recommendation that the Hong Kong Government should be asked to bear a substantial proportion of defence costs, there is virtually no reference to this. The observation dodges off to the issue of how much should be paid in compensation over the position of the ordnance depot, which is a minor issue compared with that of how much the Hong Kong Government should pay as a contribution to defence costs. That contribution should be considerably higher.
  On the recommendation about hospitals, I am interested that the Services should be capable of being so precise about the exact amount that hospitals should use. I visited a hospital which is not dealt with in this Report because it was opened after the Committee visited Malaysia. That was the Terendak Hospital, the latest to be opened in Malaysia. The experience there was that it did not matter how many beds there were in the hospital, they could always be filled. I should have thought that would be the general experience in hospitals whether they are civil or military. The beds can always be filled because a patient would be kept in bed for three or four days if possible,
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  but, if there is pressure, the patient would be turned out after two days.
  It may be that the Services have some special rules about exactly how long each patient should stay in bed according to the disease. I think it much more likely that the old hit-or-miss method would be employed and if there was a shortage of beds they would get patients out quickly, but if there was no rush on the accommodation the patient would stay longer. The experience at Terendak is that if another 50 beds were provided they could probably be filled. That is not to say that there is not sufficient hospital accommodation there now.
  I very much regret that the publicity on the Report gave the impression that officers' quarters were given a very high priority at the expense of other ranks' quarters, whereas exactly the opposite is the case. There is a great difference between the standard of accommodation which was offered to an officer before the war and that which is offered now. In Singapore a major-general lives in a lieutenant-colonel's quarters. I asked to visit a typical captain's quarters to compare it with a sergeant's quarters. After the visit I commented that the only difference I could see was that the captain's quarters had a garage. They looked at me in great astonishment at this comment and said, "This is the only captain's quarters with a garage in the whole of Singapore. This is quite unusual". There is now little to distinguish a captain's quarters from a sergeant's quarters. This is the way that things have moved since the war. It is unfortunate that an indication should have appeared that rather the opposite is the case.
  Quarters for the Services are vitally important. This is a most important issue in relation to recruiting. If quarters are not provided, the ranks will not be filled. It is a pity to cheesepare on quarters. It is untrue that officers are receiving priority at the expense of other ranks. If anything, it is very much the other way round. I therefore hope that too much attention will not be paid to the Press publicity which the Report received.
  In a previous Report on quarters the Estimates Committee suggested that too much money was perhaps being spent,

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  that very careful control should be exercised over quarters, and that they should never be provided if there was a danger that they might not be used to the fullest possible extent. The Treasury gladly accepted that recommendation. If anything, we should now be tipping the scales the other way. Quarters are vitally important. Our forces must continue to serve overseas, as was clearly explained from the Government Front Bench today. Our troops are entitled to have their families with them. Therefore, we should not go round seeking economies in the building of quarters.
  This is a valuable Report. It focuses attention on the problems of the Services. I appreciate that the Estimates Committee suffers under great difficulty in obtaining evidence. Nevertheless, I am sure that the right place to obtain the evidence is finally from the Service Departments, now the Ministry of Defence, rather than from officials and servicemen overseas. I do not like the idea of shorthand reporters being attached to each member of the Committee, working absolutely flat out at eleven o'clock at night on all the bits of gossip. One gets to hear the best scandal or bits of gossip at eleven o'clock at night. The member of the Committee can make copious notes and investigate matters when he returns.
  This is the way the Estimates Committee is set up. This is the way in which I hope it will continue. I recognise the difficulties under which the Estimates Committee works, and I once again congratulate it on the wonderful job that it has done.
  8.39 p.m.
  Mr. Eric S. Heller: I wish, first, to take up one or two of the points made by the hon. Member for Hemel Hempstead (Mr. Allason) and particularly his reference to conditions in the accommodation for captains being better than in accommodation for sergeants. This may indicate that we are moving, rightly, in a democratic direction in respect of the Army, but I did not get that impression after reading the Report or from the statements made by my hon. Friend the Member for Bilston (Mr. Robert Edwards). He said he hoped that the Estimates Committee would at all times have the right of inspection.
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  I hope that the Committee will always have that right because during the debate on 14th December, when I was launching into an attack on the question of accommodation of Service personnel and their families in places like Gibraltar and Tobruk, I was interrupted by an hon. Member on the benches opposite whose name I cannot mention because I have forgotten to send him a note intimating that I should refer to his speech. I was told that the allegations had been gone into in great detail and found to be completely true.
  Being a new Member I accepted this and I sat down feeling that I could hardly pursue something about which allegations had been found to be untrue. On looking at the matter more closely I found that it was the allegations about the cost of flats for officers which were untrue and not those in respect of living conditions for Service personnel and their families in private rented property and housing accommodation in Gibraltar and Tobruk.
  This has been brought out by the point which was made by my hon. Friends the Members for Fife, West (Mr. William Hamilton) and Bilston. The Second Special Report from the Estimates Committee states that the question of the cost of the flats in Gibraltar is not true and this was accepted by everyone. The Report says:
  "A comparison has been made in this paragraph between the quality of accommodation officially provided and privately rented houses in Gibraltar. To a considerable extent the private accommodation has been taken up by Service personnel and their families who are either awaiting their turn to go into official accommodation or who may not be eligible for such accommodation."
  This is the point I wish to underline.
  "Although the standard of such private accommodation is lower than that of official accommodation, this situation is accepted by many Service men as a means of reducing the period of family separation until they can be allocated an official quarter."
  Here is proof that the standard of accommodation is lower than that which would be accepted by the Services. In other words, said much more politely, what the Committee said—that these people were living in sub-standard accommodation—is in fact admitted, and is true.
  Then we go on to the question of Tobruk. The Report says that the housing has all been inspected by Service

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  health authorities and, on balance, it is considered better to allow families awaiting official accommodation to take up such housing if they wish rather than wait at home for official quarters to become available. Again, it is a question of "on balance", but it does not say in the official answer that the actual allegations which were made about the living conditions of the Service personnel and their families were untrue.
  That is the point which I am making, because I was interrupted by an hon. Member on the Opposition benches who said that the allegations were untrue. What was untrue—this was my misreading and for a new Member I must have been very gullible and sat down very easily—was the statement of the cost of the officers' flats, not the fact that our Service personnel and their families, in many cases, were living in conditions almost of squalor. This has been underlined in this chamber today by letters from the wives of Service personnel overseas.
  I said, on the last occasion that bases were discussed, that I was not happy with the idea of having bases anywhere, in any part of the world, but I made the point—and I reiterate it now—that while we have bases, our personnel who are in those bases and their families who are with them are entitled to good living conditions. They should not have to leave bad housing in Liverpool to go to housing even worse in places like Gibraltar and Tobruk. This is an important point.
  I want to know not only that there is some sort of effort being made—and I accept that there is an effort being made—to increase the numbers of dwellings available, but I should like to know tonight how is it that over the last 20 years, stage by stage, our Service personnel's conditions have deteriorated and they have reached this level where they are at present. How, over the last five years in particular, has nothing been done in order to solve this problem and to give our people better conditions? I think that this point is very important and has to be underlined.
  Mr. Allason: Would the hon. Member agree that this is rather overstating the case? I think that this is so, though I have no facts in my head. To say that nothing has been done in the building of
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  Service quarters is verging on the ludicrous.
  Mr. Heffer: I did not say that nothing had been done. I said, "How is it that this situation has developed?" I am sure that the Minister will be only too pleased to say what has been done over the past few years, and what we are intending to do in the future.
  I am sure that the hon. Member for Hemel Hempstead was not disagreeing with me about the actual conditions in which the Service personnel live at present. If he were, what I should like to do is quote not my own words, but the statements made by my hon. Friend the Member for Fife, West in opening the debate, and by my hon. Friend who should have been making the closing speech in relation to the Committee.
  Mr. Allason: When the hon. Member looks at HANSARD he will see that he said that, over the last four or five years, virtually nothing had been done about this problem. There has been a vast building programme for Service quarters, but that does not mean to say that enough has been done. Of course, there is still a great deal to be done in the building of Service quarters. In consequence, we have the problem of those who are living not in Service quarters, but in hirings. There is, therefore, unsatisfactory Service accommodation, which I grant.
  Mr. Heffer: I think that the hon. Member did not hear me correctly, but there is no point in going into the matter at great length. We can read in HANSARD what I said. I shall be interested to read whether I overstated the position.
  My hon. Friend the Member for Fife. West pointed out that it cost £1,000 to keep an Alsatian dog in the Services. I am sure that this is rather worrying to us all, but what worries me even more—and this, too, he underlined—is that Singapore costs us £100 million a year. This is far more worrying than the fact that it costs £1,000 to keep an Alsatian dog. The Singapore base is not staffed by Alsatian dogs.
  This cost is vital in our balance-of-payments crisis. Can we afford to continue these expensive overseas bases? We cannot discuss this question in isolation. We cannot divorce the question of military expenditure on our bases from

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  the political situation; we cannot divide ourselves into two and deal with these matters in separate departments.
  This expenditure of £100 million a year arises because we have our forces based in the Far East defending what I feel to be almost an impossible political situation. Certain gentleman in Indonesia have been making statements which are obviously different from those which they were making a fortnight ago. If we are to cut our military expenditure, then I appeal to the House and to the Government, as I did on the last occasion, that we must take initiatives to bring about a peaceful political solution to the confrontation between Indonesia and Malaya. If we do this, we can seriously talk in terms of cutting our military expenditure on the Singapore base. This would meet the objections of my hon. Friend the Member for Fife, West, who pointed out how restricted he was in discussing these problems of policy as Chairman of the Estimates Sub-Committee.
  We have this fantastic expenditure in Singapore. Our total expenditure in Hong Kong is £15 million a year and in Libya it is £9frac12; million a year. We cannot get the total cost for Gibraltar. For various reasons we are told that the cost of maintaining forces in Gibraltar is heavy; we are told that the cost of maintaining personnel in Gibraltar is considerably higher than in the United Kingdom. But that is far as we can go in discovering the costs.
  If we look at the situation as a whole we realise the fantastic sums of money which are being spent on our overseas bases and overseas commitments. This country is no longer the workshop of the world, although it certainly ought to be a better workshop than it is at present. To digress, I discovered when going round a rubber factory in my constituency during the Recess that the only way they could get modern automated machinery was to get it from Western Germany.
  We are no longer a country which can afford to carry this type of cost and we must, therefore, find a political solution to the problems facing us in Malaysia, Indonesia and the Far East generally. We must stage by stage withdraw our forces from these areas and give up our bases and concentrate on building up the country as a great country in a way dif-
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  ferent from that expected by the maintenance of the bases.
  Finally, I should like to comment on the check-off system which one hon. Member was concerned about and thought had something to do perhaps with Communists infiltrating into the unions in Aden. I as a trade unionist very much dislike this check-off system. I have always believed that it is important for each individual trade unionist to pay his dues individually to his organisation without having them stopped out of his wage packet. This is the basis of the trade unionist movement in this country. It is a voluntary effort and nobody is forced to pay a trade union fee. He must take it out of his own pocket and give it to his trade union secretary.
  Although I would dislike such a system and would object very strongly within my organisation if it began to negotiate such an agreement—and I know that the National Union of Mineworkers have such an agreement with the Coal Board —if it is the desire of trade unionists in these other countries that this should be done then obviously we should go out of our way to meet that desire and reach a quick settlement with them.
  The check-off system is accepted in the United States, particularly in the steel and automobile industries. Most of the C.I.O. unions have negotiated check-off systems. I want to underline the point already made in the debate that in the twentieth century if we are not to turn these workers away from us and make them adopt an anti-British attitude we should meet their just desires by recognising this simple system if they so want it.
  8.57 p.m.
  The Under-Secretary of State for Defence for the Army (Mr. G. W. Reynolds): I find myself in the unusual position, as did my colleague, the Minister of Defence for the Royal Navy earlier today, of standing at the Dispatch Box to defend some of the actions of gentlemen who sit, but who at the moment are not sitting, on the benches opposite. None of the Ministers who were responsible at that time for running the defence Services are now present.
  Before being forced to defend them to a certain extent, perhaps I had better rush to the defence of the dogs, which seem to have had much the worst of the

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  debate today, and refer to the cost of maintaining them, which has been put in the debate as £1,000 a year each. I think I am right in saying that on the first occasion the Report of the Estimates Committee gives the impression that each dog costs £1,000 a year to maintain, but a couple of pages further on, where reference again is made to the subject, the Report makes clear that the cost covers not only kennelling and meat for the dogs but the wages of the R.A.F. handler who looks after them.
  Therefore, we go from one dog at £1,000 to one dog and one handler at £1,000, and this, I am informed, in terms of watch-keeping activities that can be undertaken in these areas is equal to five men patrolling an area, and so we are providel with the security necessary in bases of this nature. We have millions of pounds worth of installations there which have to be looked after, and, as far as we can see, this seems to be the cheapest method of providing the necessary security precautions to guard the stores and other material which we have there.
  My hon. Friend the Member for Bilston (Mr. Robert Edwards) criticised the Department for the fact that discussions had been going on in Aden with representatives of the unions there for something like four years without any agreement being reached. He referred particularly to the matter of the check-off. I can only say that my right hon. Friend is well aware that these discussions have been going on for four years, although, of course, he has not been in office yet for four months. I simply say that he is well aware of the problem out there and that discussions are still going on. One hopes that the matter will be dealt with far more quickly during the next few months and that there will be more progress than there appears to have been during the past 48 months.
  I am not quite so hopeful about the suggestion which my hon. Friend made for giving much more power to the men actually on the spot to deal with wage negotiations of the kind he mentioned. He raised one instance of a claim for —frac12;d. an hour, saying that he saw no reason why it should not be settled by the man on the spot. I reiterate what is said in our reply to the Committee's recommendations and suggestions, that
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  almost exactly the same powers are delegated in these matters to the three Services, wherever they happen to be, although there may be slight differences of administration and direction. There are differences which arise from the fact that different personnel operate similar but not quite exactly the same regulations.
  I cannot accept my hon. Friend's view that matters of this kind can be left entirely to local negotiation and discussion.
  Mr. Robert Edwards: I did not say "entirely".
  Mr. Reynolds: My hon. Friend referred to an application for an increase of id. an hour, and I am thinking of that and similar smallish items. One must recognise that in these days news of a slight alteration in the conditions of industrial civil servants in a War Department, Navy or Air Force establishment in one part of the world very quickly goes round the "grape-vine" and reaches other employees almost on the other side of the world. Therefore, one has to make sure that conditions are related so far as they can be in the light of different circumstances from place to place. We try to deal with these things as quickly and as smoothly as we can. As I was saying just before by hon. Friend returned to the Chamber, we hope that the problems in Aden to which he referred, and of which my right hon. Friend is well aware, will be dealt with as promptly as possible, much more quickly than in the past 48 months to which my hon. Friend referred.
  My hon. Friends the Members for Fife, West (Mr. William Hamilton) and for Bilston referred to the letter which Group Captain Norton Smith had sent out in Gibraltar. On this, I can only say that, while it was not couched in exactly the phrases which I myself would have used—of course, no two people write a letter in exactly the same way—I cannot find that I can object, basically, to the information contained in it. Group Captain Norton Smith referred to the fact that there are fewer quarters in Gibraltar than we would wish due to the lack of money and the lack of land. This is perfectly true, and I do not think that any hon. Member would dispute such a statement.

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  The Service men concerned seem to be in private accommodation and, because they are in private accommodation, they receive higher local allowances than other Service personnel in the area. Nevertheless, it must still be a strain on many of them and their families to meet the type of rents referred to. They have, of course, found the accommodation themselves and have decided to bring their families out rather than endure the separation of leaving their families at home while awaiting official quarters to be offered to them.
  To that extent, therefore, the Group Captain's remarks were quite right in that the individuals concerned found their accommodation themselves and decided to bring their families out because they preferred to live in that way rather than be separated until such time as they could be offered official quarters on the Rock. The problem in Gibraltar, as it is elsewhere, is that there are not sufficient quarters available to allow families to come out and join Servicemen fairly soon after they are sent to the area.
  We do not go out of our way to encourage people to do this. It is left largely to their own initiative and discretion to decide whether or when they want to bring their families out in advance of official accommodation being available. I cannot accept the suggestion made by the hon. Member for Ludlow (Mr. More), who told me that he would be unable to stay for the conclusion of the debate, that we should actively discourage it. Indeed, I think that the hon. Gentleman went further and said that, in certain cases, we should almost forbid people to come out in such circumstances. We should not be prepared to go as far as that, but, as I say, we do not encourage this sort of thing.
  Mr. Charles Loughlin: Whatever one's attitude in this matter, whether one chooses to discourage or encourage Service personnel to have their wives and families with them, one has to recognise that they desire it. They are, therefore, exposing themselves to exploitation by, people who choose to charge excessive rents. Would it not be possible for the Service Department to set up an agency to keep down
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  the rents in the area, knowing full well that Service men want to take their wives and families with them, and that, after all, the Service Department has a responsibility towards them?
  Mr. Reynolds: An agency as such might in certain circumstances be a good idea. As to its being able to keep down rents in an area, we must face the fact that the Services are not the only people in most of the areas trying to obtain accommodation. An example of that is Benghazi, described by the Committee as being virtually an oil boom town. There was virtually nothing that the Defence Department could do there, in a completely independent country, which would affect the level of rents charged. There are other people competing in a limited field. I cannot accept that an agency would be able to help a great deal over rents, although it might in other respects.
  Reference is made in the Report to families living in squalor in Tobruk. I get the impression on reading the Report that Libya is a comparatively small country. Alternatives are given as between having a garrison in Tripoli as against one in Benghazi. Tobruk and El Alamein are only 200 miles apart, but those other towns are 700 miles apart. So Libya is a huge place, and having troops in one part of it is not necessarily of help to troops 700 miles away.
  With regard to property in Tobruk being in a state of squalor, my hon. Friend the Member for Bilston referred to it as being in the Arab area of the town. I believe that this is perhaps the main criticism that the Committee has. The property itself, I am informed—I saw property similar to it in Benghazi a week or a fortnight ago—has separate bathrooms in each dwelling, running water and water-borne sanitation. I understand that many of the properties are not in a particularly good state of decoration but they have those amenities in them. If the description "squalor" is to be applied, I cannot personally say whether it is correct because I have not seen the property, and hon. Members who have done so must make up their own minds about it. But those properties have amenities which are not possessed by some three million families in the United Kingdom. When families are said to be living in a

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  state of squalor, it should be remembered that they have those amenities.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked how this came about. I can only say that over the last ten years—he asked in respect of the last five years—our economic capacity under the previous Administration has not enabled us properly to carry out the commitments we had entered into. This is something which the Government are investigating at the present time.
  My hon. Friends the Members for Stepney (Mr. Shore) and Manchester. Gorton (Mr. Zilliacus) and the hon. Member for Stroud and the hon. and gallant Member for Carshalton (Mr. Elliot) referred to a number of general points which, with all due respect to the Chair, to an extent went rather outside the very strict confines of the Report. Indeed, on one or two occasions some of them were called to order.
  My hon. Friend the Member for Stepney said that we should look at the redeployment of bases and reduce costs, getting out of expensive ones if there is a cheaper area nearby. Reference was made to increasing the mobility of our forces and reducing our dependence on bases which exist, and it was suggested that we should examine all bases throughout the world and decide our attitude to them.
  The hon. Member for Stroud talked particularly about the control of air power and who should be responsible for it as the Army, Navy and the Royal Air Force all have aircraft of one kind at the moment. The hon. Member wanted a certain amount of rationalisation there. The hon. and gallant Member for Carshalton referred to mobile seaborne bases perhaps in substitution in certain circumstances for the fixed bases that we have at present.
  I am not in a position to comment today on any of these suggestions. The Government are carrying out a full review of our commitments, our general defence policy and the liabilities of overseas agreements. When that review is complete, we shall be in a better position to look at the more detailed points and to give answers to questions of this nature. The Templer Committee has been set up to look at questions of the kind mentioned by the hon. Member for Stroud.
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  I can, however, answer the hon. Member for Beckenham (Mr. Goodhart) about light-weight mugs. He will be pleased to know that light-weight mugs are being issued to the Royal Air Force. But one of the many problems left to us by right hon. Gentlemen opposite is the substantial surplus of 1¼ lb. mugs. These mugs cannot be broken up. We have still to sort out what to do with them all.
  The hon. Member for Beckenham also referred to statements about a reduction of 1,200 forms used by the Army Department in the last three years. He asked whether this was a gross or net reduction. The figure is correct—we have got rid of 1,200 forms in three years. But we have acquired 1,000 new ones. The net figure, therefore, is about 200.
  It may seem ridiculous on the face of it that so many new ones should have been acquired, but this is mainly accounted for by the transfer of work from the old Ministry of Supply to the Army Department. A number of forms that were being used by the Ministry of Supply were brought into the Army Department as a result of this transfer.
  We are proceeding gradually with the introduction of what is called automatic data processing—I prefer to say "computers". But every time one is introduced one needs a lot of new forms to go with it. Computers have been installed at two of the main ordnance depots—Chilwell and Donnington—and new forms have had to be introduced for them. But there is no computer yet at the other main depot at Bicester, with the result that we have to keep on the old forms as well. We hope to install a computer at Bicester, however, and then we can hope for a considerable reduction in forms.
  We keep a very careful check on the forms in use whenever they become due for reprinting, and on other occasions as well. The Organisation and Methods Section considers whether reorganisation is necessary in any particular direction and whether certain forms are really needed. We believe that individual checks like that have a certain amount of value but, in general, we have concluded that it is more productive to concentrate on the simplification of basic procedures rather than try to check what each form is used for and to work out whether or not it is worth keeping.

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  As I have said, we are reviewing our commitments and are pressing forward with the integration, in so far as it can be done, of the three Service Departments in the specific instances already mentioned. We are trying to improve systems already in existence, to maintain operations in several parts of the world and to reduce the number of administrative staff. I suggest to some hon. Members who have complained that it will, therefore, be quite a while before some individual matters are looked at. There is a shortage of people suitable for this kind of work, and they have to be allocated first to the most important things. We have to make the fullest possible use of these experts and that is being done.
  My hon. Friend the Member for Blaydon (Mr. Woof) referred to the recruitment of amahs. That system has come to an end. I do not think we shall gain anything now by going over it again. My hon. Friend referred to types of quarters prepared in E1 Adem at a cost of £6,000. Many figures have been trotted out about the cost of building overseas and some hon. Members seem to be comparing the cost of building in, say, Gibraltar or E1 Adem with the cost of building council houses in their own constituencies. I may be wrong and I may be doing some hon. Members an injustice, but that is the impression which I have picked up from the way in which the debate has gone on.
  I can only say that, looking at it in exactly the same way and judging by how much it costs to build in my own constituency, one could not get away with much less than £6,000 for a reasonable three-bedroomed flat in a London constituency, a flat which might be the sort of thing of which the Ministry of Housing and Local Government would approve for inner London accommodation, while it might be too much for Blaydon.
  Mr. Woof: The figure I quoted was £9,000 per house in E1 Adem.
  Mr. Reynolds: One has to look at the circumstances in the area itself. I do not believe that the standards of property built there or elsewhere are excessive. If one is building accommodation which normally does not have air conditioning in a clime far hotter than in this country, one has to have slightly bigger
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  and higher rooms so that one can put fans in the ceiling without damaging the people walking about in the room, so that the cubic capacity of the house is rather bigger than for the comparable house in this country, although the standards are those of similar property for persons of similar rank employed in this country.
  On this subject of the type of property being occupied, I spent a pleasant week in Malta only a short time ago and the major-general who was the G.O.C. there informed me that his house, which was very pleasant, was originally built for a lieutenant-colonel in about 1850, which gives an idea of what changes have taken place. What the house of the General Officer Commanding, Malta, must have been like at that time I hesitate to say.
  Mr. Loughlin: I am somewhat puzzled about what is my hon. Friend's function. There have been questions about accommodation and the figure of £9,000 has been mentioned. My hon. Friend has said that we cannot say whether that is excessive because we might be using different measuring rods. Surely it is his responsibility to inform Parliament whether the measuring rods used by the Select Committee were correct. Surely it is his task to give us some comparisons of costs of building in Gibraltar or elsewhere and in this country.
  Mr. Reynolds: I do not consider that the standard of the accommodation being provided for soldiers overseas at the present time is excessive. It follows from that that, whether one likes it or not, if one wants to see the standard of building maintained at something like the present level—and I do not want to see it cut—generally speaking these are the prices which one has to pay in the countries in which that accommodation is being built. Costs are completely different and very often the methods of erecting property are completely different, too. One has to face the fact that this is the type of cost which must be paid and in many instances it is the type of cost being borne by commercial companies building properties for letting on a speculative basis, as is reflected in the rents we have to pay for the hiring of multiple blocks of flats in countries where our tenure is not so long as one

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  would want before building permanent accommodation.
  Another issue has been the cost of recruiting. The Report mentions that it takes more than one man and £600 a year to recruit a Gurkha. This refers to the year 1963 which was the year in which the Committee made its investigation and when only 500 Gurkhas were recruited. The Government of the day had decided to slow things down a little, but when trouble blew up in Malaysia, things were speeded up again and in 1964 1,000 Gurkhas were recruited with slightly fewer men than in the previous year.
  However, that still means that about 700 men were dealing with the recruitment of 1,000 Gurkhas and on the face of it that looks excessive. However, one has to consider the other work which these men are doing at the same time. They are based in two centres in Nepal, and Nepal is completely different from this country. As the roof of the world, it has circumstances completely different from what we have here. Forty per cent. of the man hours of those 700 men are concerned with looking, after themselves—repairing roads and generating electricity and so on, and all the multifarious things which one would expect a local authority to provide in this country and which have to be provided by individual units in Nepal. They have to look after everything from refuse collection to the generation of electricity and to the repair of plant in their areas.
  I am informed that another 20 per cent. of their time is spent not on the recruitment of Gurkhas, but on the resettlement of Gurkhas who have retired and who have gone back to Nepal. They have a certain amount of family visiting and welfare work to do and they have to deal with the payment of pensions to Gurkhas. It is not a question of handing a form over a post office counter and getting it witnessed by a J.P. once a year to say that the pensioner is still alive.
  These are different circumstances. Twenty per cent. of the time of the unit is involved in that sort of work. Ten per cent. of its time is concerned with running the hospital and providing a medical service of which, I understand, considerable use is made by the civilian
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  population as well as the ex-Gurkhas and others entitled to treatment in the centre. Therefore, only roughly 30 per cent. of the time of these 700 men is concerned with the recruitment duties which they are carrying out in that area.
  Reference was made by my hon. Friends the Members for Blaydon and Bilston and other hon. Members to the size of the R.A.F. establishment in Gibraltar. There are about 1,200 members of the R.A.F. and civilians concerned with the running of the airport in Gibraltar—or there were when the Committee made its visit. That number has been reduced by about 50 as a result of a recent examination, and the number now stands at 1,150. But even if 224 Squadron, the Shackleton Squadron, were removed from Gibraltar, this airport is on a 24-hour watch and is available to aircraft of all countries, so we should still need 800 men stationed there to keep it open on a 24-hour day basis for military and other traffic to deal with air traffic control, to provide a crash fire service, to maintain and operate technical equipment and to do front-line servicing of the aircraft at the aerodrome. This aerodrome must be maintained for a wide variety of reasons.
  Reference was made in the Report to the provision made for the education of Service men's children. At present there are about 49,000 children in schools run by the three Services in all parts of the world. For the purposes of comparison, the County Borough of Coventry, which has a fairly substantial education authority, runs 134 schools, but the three Services between them run 163 schools. B.A.O.R., where the service was started, was fortunate in being able to take over a number of purpose-built schools, which it has used ever since. There is no doubt that the facilities available in B.A.O.R. are, generally speaking, better than those in most other parts of the world.
  Reference was made in the Report to the fact that in B.A.O.R. Her Majesty's Inspectors of Education have a right, in effect, to inspect schools, whereas they go as a favour simply and purely if asked to inspect schools in other parts of the world coming under the control of the three Services. The Services welcome inspection by Her Majesty's Inspectors, and,

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  although the situation is completely different and they have no right to go to these schools—the position is different in B.A.O.R.—Her Majesty's Inspectors have carried out a much greater ratio of inspections in schools other than those in B.A.O.R. over the last two years than they have in B.A.O.R. itself. On the whole, I would rather inspect a school in Malta in May than a school in Germany in December.
  Reference has been made to the science laboratory at the school in Benghazi. I should make a correction here. The laboratory is not a science laboratory. It is a general physics laboratory, so the headmaster of the school informed me when I visited it about a fortnight ago. There are only 60 secondary school pupils at the school, ranging from 11 to 17 years of age. With that number of pupils it is impossible to provide a whole range of laboratory facilities. Therefore, a decision was deliberately taken to have a general physics laboratory and to concentrate on training people to take the general physics paper in the General Certificate of Education. There are no science or chemistry facilities there. It would be impossible to provide that sort of facility for such a small number as 60 pupils.
  The Committee was informed in London that at the time that Members of the Committee saw it, there were no plans for improvement of the school. This was strictly correct, because the reference made was to schemes of major improvement. At the same time as the Committee was told this, minor improvement work, sponsored by the Commander, was going on in Benghazi. The Commander has discretion to authorise small minor improvements. The improvement of the laboratory which the Committee criticised, was completed in March. I saw it a fortnight ago. It is still in a Nissen hut, but so is a lot of accommodation in Benghazi, and we do not want to spend much more money on new capital investment in that area. I can assure hon. Members that, as a general physics laboratory, it is now well equipped and that the facilities are much better than when the Committee saw the laboratory towards the end of 1963.
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  Lavish provision in Service hospitals is commented on by the Committee and particular reference is made to Benghazi and hospitals in Cyprus and elsewhere. We must face the fact that with Service units extra provision is needed compared with that provided for a similar number of people in this country. This is so for a variety of reasons. First, if a single soldier becomes ill when overseas he must be taken into hospital, treated in hospital and remain there, while if he were a civilian he would probably be seen by his doctor at home and, as a civilian, stay in bed in his own home. Thus there is bound to be greater use of hospitals by a single soldier than by a civilian in this or in any other Western European country.
  A large proportion of the beds provided for the Services overseas in hospitals is not used by the soldiers themselves, but by members of their families. This is one reason why it is not possible to do what the Committee did; to compare the facilities in Benghazi with those in Gan. In Gan, there are only Service men and no Service families. In Benghazi, there are both Service men and their families. Thus, in Benghazi, more facilities are needed, for the reasons I have given.
  In addition, provision must be made for exceptional circumstances. As well as there being a garrison in Benghazi, in connection great deal of support must be provided in connection with the training areas, and we have arrangements with the Libyan Government concerning these training areas in the desert to the south. To give an example of what I mean, a few weeks ago a parachute battalion was exercising in the desert, as a result of which 30 men suffered injury, only one seriously. The other 29 were not hurt particularly seriously.
  As a result of these accidents occurring at the parachute drop in the exercise area the hospital in Benghazi was flooded out with patients for about 24 hours. In that case 30 casualties were brought in. This shows that we must have facilities available in the area.
  A more legitimate criticism would have been possible had these facilities not been available at Benghazi to deal with this sort of accidents. When men are undertaking training, facilities of this kind must

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  be made available and, whatever protection is given, we cannot afford to take the risk of insufficient facilities being on hand. I have taken note of the recommendation of the Committee that we should look into the question of attracting civilian use of the hospital at Benghazi.
  Criticism was also made—and this I cannot accept—of the dental services at Gibraltar. The Committee pointed out that four Service dentists were available there to deal with Service men and their families. This, it was pointed out, contrasted with there being four civilian dentists for 24,000 residents of Gibraltar and 10,000 commuters from Spain every day. I cannot accept this as a criticism. I would accept it more as a criticism of the dental services available for Gibraltarians; in having to cater for 24,000 residents and 10,000 people coming in each day. This is not the type of service we want to provide for our forces and their families when they are stationed overseas.
  The station is such in Gibraltar that four dentists are not sufficient for the island, with its garrison of troops and families—and with the substantial number, 300 United Kingdom and N.A.T.O. warships visiting and staying there from time to time—and we have occasionally had to send relief dentists there to cope with the volume of work. We would not wish to reduce the standard of the service provided, as would appear to be the suggestion of the Estimates Committee.
  My hon. Friend the Member for Fife, West, when opening the debate, said that the Government were too often tempted to treat Estimates Committees with contempt. He wanted to know who was responsible for the preparation of the replies which the Committees have been receiving. I can assure my hon. Friend that my right hon. Friend and others who were responsible for the replies had no wish—indeed, would not dare—to treat a Committee of which he was Chairman with contempt.
  The replies were prepared by my right hon. Friend. Several Ministers have spent a fair amount of time on them. We began with the intention of giving, in so far as that is possible within the realms of accepted Parliamentary practice, security, and so on, the maximum amount of information it was possible
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  to give in our replies to the points made. The Defence Department welcomes the fact that over the past two years the Committee has looked at some of the establishments for which we are responsible to Parliament for the expenditure of large sums of money.
  I am sure that hon. Members will confirm that wherever they go, overseas or in this country, they will always receive a welcome from the officers and soldiers there. I have heard rumours of tongues wagging a little more freely at eleven o'clock at night than eleven o'clock in the morning, which seems to indicate that the entertainment is very good; whether that is why they want to go to the same places again, I do not know. Nevertheless, they should know that we welcome them there and are only too pleased to give them any information it is possible to give. We in the Department, and others, will do our utmost to help—
  Sir S. Summers: Will the Minister refer to the handicap under which members of the Sub-Committee labour by reason of the rules which preclude them from taking official evidence and holding meetings abroad officially? Has he anything to say on that aspect?
  Mr. Reynolds: I have nothing to add on that matter. Presumably the hon. baronet was not present when my hon. Friend the Minister of Defence for the Royal Navy spoke, but when he reads that speech in HANSARD tomorrow he will see that my hon. Friend dealt with that point.
  As I was saying, we in the Department, and others, will do our utmost to help members of the Committee in any inquiries they may want to carry out and, within the limits I have mentioned, we will do our best to give them the maximum information in reply to any recommendations they have to make.
  9.31 p.m.
  Sir Richard Glyn: It is a great privilege to be allowed to wind up the first debate on the Report of the Estimates Committee in this present Parliament. As one of the Sub-Committee who had the opportunity of seeing the bases about which we have been talking. I would start by expressing my personal gratitude to the Ministry of Defence, which made this possible, to its officials

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  in London who helped a great deal, to the officials who came with us, and to those who made our task easy wherever we went.
  I would also thank the senior officers, the staff officers and everyone in every base we visited—they did their very best to help us. Everywhere we could count on their unfailing assistance and frankness in telling us what we wanted to know. They never showed for one moment that they knew perfectly well that it was part of our duty not only to ask extremely awkward questions, but also to advocate extremely inconvenient economies, as we had to do on our return. I also pay tribute to the Clerks of the House of Commons who came with us, and without whose very skilled and patient help these Reports could never have been produced.
  I also thank the volunteers—volunteers of all kinds in all the places we went to—who, of their own accord, came to type for us—because we were allowed no typing staff at all. Wherever we went we had to persuade all kinds of people, who came voluntarily and often in their spare time—and often at very inconvenient times to themselves—to type the voluminous notes we had to take.
  Here I would say that the procedure that we were forced to adopt—the procedure under which we were not allowed officially to take evidence outside this country, but could only take enormous unofficial notes on a very considerable number of foolscap pages at each place, and then come back here and ask officials in London questions based on notes of what we had seen ourselves—is not satisfactory.
  A number of hon. Members have properly put their fingers on discrepancies in the Report, because there were places where we, having heard and seen for ourselves, departed a little from the evidence we could screw from the officials of the Ministry of Defence in London who could not honestly say that they had seen what we had seen because they had not been there. That has led to great difficulties, and I only hope that a way will be found to overcome those difficulties in future.
  I would also pay tribute to the hon. Member for Fife, West (Mr. William Hamilton), who today made his maiden
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  speech as the new Chairman of the Estimates Committee. Those of us who have served on the Committee for some time listened with great interest to the line he took, and his clear intention to extend, if he can, the scope of the Committee. We would not complain if he succeeded. The hon. Member dealt fully with the point I have already made about the need to regularise the system by which the Estimates Committee works overseas. Its work in this country bears no relation to that other work, because here it can take official evidence wherever it goes; it is only overseas that these problems arise.
  I noticed with interest the hon. Member's objection to the fact that the Estimates Committee is to some extent precluded from examining policy. I note that he wishes it to do this, and, with interest, his suggestion that the Committee should have power to cross-examine Ministers. I detected some enthusiasm for this new development among members of the Committee, who saw this as a means of roasting Ministers upstairs in Committee rooms, but, in thinking it over, I prefer the view of my hon. Friend the Member for Farnham (Sir G. Nicholson), who has done so much for the Estimates Committee and has had such great experience of it.
  My hon. Friend took the view that if there were any question of policy being considered by the Estimates Committee, and if Ministers were to be examined, it would be extremely difficult to maintain the non-party basis of the Committee which is its true strength. It is extremely difficult to leave political prejudices outside the door when one goes in to examine and cross-examine officials of the Ministry, but it would be almost impossible to do that when one went to examine the Minister himself. I should find that too much.
  I come to the speech of the Under-Secretary of State for Defence for the Royal Navy. We were most interested in what he said and extremely encouraged when he said that a memorandum is being prepared which would have the effect of easing its task if a further Estimates Committee went abroad. This will be welcomed by the House as a whole, because it would make the Estimates Committee and thereby the House of Commons more effective. We all look forward to the result of his labours in this direction.

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  We agree entirely on the necessity to make misapprehensions impossible. There was a real and genuine misapprehension on a point of fact in regard to a document produced by the Ministry about officers' flats in Gibraltar. It was simply a question whether the figure issued—an estimated figure—which worked out at £8,125, included the whole of the site works and roadways. We understood that there would be further difficulties and that further site and road costs would amount to £900 per flat, which would have made the total over £9,000. The right hon. Gentleman told us that we were wrongly informed and we are glad find that that is so.
  If we take away £900 we have the figure of £7,000, which was given by the naval authorities in Gibraltar and that brings out the question about whether the site and road costs were or were not included. We could not ask for official evidence but several people took notes. It appears that this information was wrong and that was how the figure was published, but only as an estimate.
  If the right hon. Gentleman reads the Report he will see that we said that the cost was understood to be over £9,000. That on the information we had was a precise statement of the facts we had been given, but it appears that we were given it in a misleading way, about which I do not complain. If we had been allowed to take formal evidence in Gibraltar the mistake would never have been made.
  The whole House was extremely interested in what the Minister said about functional costing for bases. It is extremely difficult to replan any overseas centre until some such functional costing can be done. We said something on this last year in the previous debate and we shall look forward with great interest to seeing this new functional costing when the new procedure is perfected.
  My hon. Friend the Member for Beckenham (Mr. Goodhart), in an interesting speech, referred to practical difficulties in integrating the Services. These will be found as time goes on. My hon. Friend the Member for Stroud (Mr. Kershaw) mentioned difficulties arising from the age of officers of equivalent rank. These difficulties will become more and more obvious as time proceeds. I can only wish the right
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  hon. Gentleman success in his task of dealing with these rather intractable problems. It is essential to the efficiency of all the Services that they be overcome.
  The hon. Member for Blaydon (Mr. Woof), who was one of the Members who came round these distant parts with us and whose comradeship and company we very much appreciated, made the important point that we put into our Report only those matters which we thought were vital and needed looking into. It would have been wrong to put in other things. Nine-tenths of what we saw—perhaps nineteen-twentieths—was excellent. It would have been loading the Report infamously to have said so at each of the many places we went to. We referred only to what we thought could be done better. That is why the Report, like all Estimates Committee's Reports, tends to appear to be of a somewhat critical nature. I am glad that the hon. Gentleman said—he was speaking for all of us when he did so—how impressed he was with the spirit in which the forces overseas were overcoming problems, problems which many people in this country cannot imagine. They were overcoming them magnificently, and we were all impressed by what we say in that regard.
  My hon. Friend the Member for Ludlow (Mr. More), who also came with us, made it clear that our general impression was favourable, although, as he said, the Report had to be critical. He stressed one matter of great importance, to which I shall return. It is the question whether the time has not come when further consideration should be given to the question of an unaccompanied tour in some places for some units. I believe this could represent one of the most important economies we could achieve, without sacrificing efficiency but perhaps increasing it.
  As the proportion of married Service men increases, as it does every year, so there is a constant need for Service housing. I do not know how many Service married quarters we are now short of in all three Services. I do not know if anyone in the House can give us that figure. One estimate of 100,000 was given. I should have thought that this was a very low figure, on the whole.

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  Taking the number of married men in all the Services and deducting from that number the number who have adequate married quarters at present—I say adequate, because Service families should be properly housed, like anyone else—there must be a discrepancy of something over 100,000 which must be made up eventually somewhere. The real question is where the new married quarters should be. Should they be abroad where our tenure is uncertain, or should they be in Britain, where the cost is much less and where the taxpayer would have the whole value from the house?
  The hon. Member for Stepney (Mr. Shore) queried whether we could redeploy some of our forces so as to get reductions in cost. This is an important point which ties in with the functional costing mentioned by the Minister of Defence for the Royal Navy. Gibraltar was mentioned as an example. I do not think I am doing wrong by saying that Gibraltar and other places have functions over and above purely national functions for Britain. Many of these places have a N.A.T.O. function as well. It is not merely a question of us getting out. Many other considerations have to be considered carefully.
  My hon. Friend the Member for Stroud made the rather interesting point that, in his view, the procedure of the Estimates Committee is not adapted to the present-day task of the Committee. This is much more true when the Committee has to go abroad than when the Committee is in this country. We have already dealt with this matter to some extent and we are awaiting the decision on what new procedure can be found.
  My hon. Friend took up the question of the weight of cups. A number of people have noticed this, but, again, one is judging the Report on the evidence we were allowed to put into it, which was only the evidence which we could take officially in this country. This question abouts cups was originally intended to bring out facts which we discovered in our travels but which we could not find anyone in this country to confirm. It was not only the weight of the cups. It was their size and their cost.
  Some Services were having beautiful ornamented, coloured cups—I do not say which Services—whilst others had to
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  make do with very plain, unornamented kitchen-type of cups. One cost much more than the other. It was the cost that mattered, not the weight. The only answers we could extract from people in London, who were doing their best, was a mere answer on weight and had nothing to do with cost, which, rightly, was much more what we were there to discuss.
  The hon. Member for Manchester, Gorton (Mr. Zilliacus) prophesied that we may well have a very depressing increase in defence costs. I did not think it right to intervene during his speech and I am sorry that the hon. Member is not now present in the Chamber. He prophesied that they were increasing at an alarming rate, that the cost of some units would be doubled in three years and, as I understood him, the cost of others would be eight times as much.
  The hon. Gentleman quoted the Prime Minister as saying, on 16th December, that the present-day costs of defence overseas bases had reached a level of no less than £350 million. In the First Report of the Estimates Committee—not the one we are now discussing, the previous Report published in the spring of 1963 and based on evidence taken in December, 1962—it is estimated that then the total cost of overseas bases was rather more than £350 million. This, according to the hon. Member for Gorton, is the figure at which the Prime Minister estimated the cost last month.
  If those figures are correct, there has been no increase at all in the cost of overseas bases in the last two years, in which case it is hard for any hon. Member on this side of the House to see where the alarming increase in costs will come from in the next three years. No doubt this is a matter which the hon. Member for Gorton will discuss with the Prime Minister on a future occasion. The hon. Gentleman also made a formidable attack upon his own Government which I do not think it is for me to answer.
  My hon. and gallant Friend the Member for Carshalton (Capt. W. Elliot) spoke of the possibility of avoiding the present enormous cost of overseas bases—which I accept—by going on to what he described as mobile bases. I wondered whether he had in mind a form of seaborne base, in other words, ships.

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  We had no evidence of the total cost of these and some people think that they might not represent all that much economy. My hon. and gallant Friend did not develop that line of argument and so it would be inappropriate for me to deal with it more fully.
  The hon. Member for Dunbartonshire, East (Mr. Bence) spoke about the cost of bases which we maintain in Europe and elsewhere being shared with European countries and N.A.T.O. This is an attractive point. If we could persuade other European countries and N.A.T.O. to share the cost of bases, it would be something very acceptable to the British taxpayers, but I feel this to be a point more for the Government than for me.
  The hon. Member for Bilston (Mr. Robert Edwards), who was one of the party on this tour, in a speech which will he remembered by everyone who heard it —incidentally, the hon. Gentleman was making his "maiden" speech as the new Chairman of Sub-Committee D, the Sub-Committee responsible for these two Reports—agreed with my own view that policy and strategy are functions for the House of Commons and not the Estimates Committee. I was glad to hear the hon. Gentleman say this. I hope that it will not get him into trouble with his hon. Friend the Member for Fife, West, who does not seem to think the same, but I warmly support him on that point. So, indeed, does my hon. Friend the Member for Farnham, as I have already said.
  The hon. Member for Bilston referred to the letter which was circulated in Singapore asking people not to be unduly ready to volunteer information. I am sorry that the hon. Gentleman mentioned that. It is true that it happened, but I found no difficulty in getting information volunteered to me while in Singapore and I do not think that the hon. Gentleman did either. The letter was circulated, but I cannot think that it had any great deadening effect—certainly not after the first day.
  Mr. Robert Edwards: The intention was to prevent hon. Members from getting all the information to which they were entitled as a Committee, and it was that intention I was condemning.
  Sir Richard Glyn: I am much obliged. We cannot say that there was not an
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  intention. I am simply saying that it did not have much effect. I found Singapore one of the places where people were most particularly friendly.
  The hon. Member raised what I think one of the crucial points regarding the whole future planning of bases and policy, the question of tenure. How long is our tenure to be in any one place? On this must depend whether we build traditional housing of a permanent nature, or transportable houses which may be moved—and there are many efficient examples of such housing—or whether we build at all. This is a key question for all these important decisions, which can make a difference of hundreds of millions of pounds to British taxpayers.
  The hon. Member referred to trade union negotiations and to the ½d. an hour. In this field he is an expert and I am not. He gave some extremely cogent and, indeed, acceptable advice to some of the senior officers and officials in the areas to which we went, where there had been industrial unrest.
  I think that everyone was extremely impressed with the suggestions which he put forward. But it is right to say that the British taxpayer is often the biggest employer in these areas, not everywhere but in many places, and is very often thought to be the best employer in those areas. We rather set the style and standard of pay and conditions for everyone concerned. In these cases we are sometimes subject to political pressures not to give way too easily to wage demands. This is only to be expected.
  My hon. Friend the Member for Hemel Hempstead (Mr. Allason) again put his finger on a point where one of our recommendations with regard to the N.A.A.F.I. was not based wholly on the evidence in the Report. This is just another example of what I have referred to. We were not allowed, for technical reasons, to publish the whole of the evidence on which that recommendation was based. To that extent, this document does not contain the whole of the facts and information on which some of the recommendations are based.
  The hon. Member for Liverpool, Walton (Mr. Heller) spoke about Gibraltar. Perhaps, not having been there, he did not fully realise that these extremely squalid flats are private

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  dwellings and not official at all. They are nothing to do with any Service at all. They are inspected by a doctor on health grounds, although they are not all of a desirable nature. They are occupied simply because they are the best there. Many Gibraltarians, until the last war, were accustomed to living in almost Spanish conditions, in other words, very much on the lines of a family in one or two rooms. They have only recently begun to expect more accommodation than that. They let us have what they would consider adequate. There is no real discrimination here, but this accommodation is entirely inadequate by modern British standards.
  I would pass on now to what the Under-Secretary of State for Defence for the Army said of Tobruk. He said that the accommodation in Tobruk has flush closets and bathrooms. This is absolutely true. He hit the nail on the head when he said that the objection was that this accommodation is in the Arab quarter. Does he realise what it means to have a single flat occupied in this way by a European married woman and child in an Arab quarter?
  We had a case while we were there in which the electric light failed. A young married woman whose husband was away on training had to carry her baby three-quarters of a mile to the nearest telephone, in the dark, through the Arab quarter, to ring for help. Next day, an electrician put the light right. This was a terrible experience for her. Luckily, she had been out for six months and knew the form, but she could quite easily have arrived in the area the previous week. Many Service wives had.
  This is not criticism at all of the Arabs; it is just that such a thing is a terrible shock to a British married woman who has taken her baby out to join her husband in the forces. When we say that the house has the accommodation which we expect, that is not quite everything. I have to mention that there are such things as vermin. Many of these houses have to be fumigated at regular intervals. This is not a thing that everybody is accustomed to, mercifully.
  I agree with the Under-Secretary that one cannot decrease the cost of building abroad. The cost of building a movable house is about the same as build-
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  ing a traditional house. The only thing is that one can take a movable house away when one leaves. We have done that successfully at one or two places. As these houses cost no more than traditional houses, they should be seriously considered for future use in certain places.
  We must consider tenure. This must govern our actions every year. The British taxpayer spent millions of pounds on military building in Kenya. The project had only just finished when we had to "up sticks" and leave, and the whole of the benefit of that building went to the present people in Kenya. I do not entirely grudge it to them, but plainly, that was not the intention when millions of pounds of taxpayers' money was poured into this rather lavish accommodation, which we all went to see.
  The cost of building overseas cannot be reduced if the standard is to be maintained—and I think that the House agrees that it must be maintained. We have, therefore, seriously to consider again the question where these new married quarters should be built. We have been building very few in this country—almost none. We have built a tremendous number abroad and still have not enough. Is this policy right? This is where I think we could find the biggest economy that the Government could possibly institute, and I think that it is one which would be welcomed certainly by the fighting units, although the staff are perhaps in a different position. I was greatly impressed by the efficiency and the spirit at Gan. One can see the tradition which they have established there, where they do a regular 12-month unaccompanied tour. Everybody knows that it will be unaccompanied, but people volunteer for it and there is a waiting list of people waiting to go. It is a wonderful experience in their lives to go to such a place.
  But the other side of the coin is that Service men would accept this only if they knew that the families they had left behind for 12 months had somewhere decent to live in this country, with security of tenure. I should like to see regimental villages built in this country, where the wives and children could stay while their men's units were overseas for 12 months. The children could go regularly to a school. I have spoken to many mothers who have said, "If only

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  the child could have continued at one school". I have spoken to children under 10 years of age who have been to nearly as many schools as they are years old. Consequently, it is highly unlikely that they will ever attain any high educational standard, however bright and intelligent they are.
  If it were possible to have something on these lines for just a part of the Armed Forces, it would make a great difference. This in itself would ease pressure on the existing decent married quarters which we have abroad. I saw so many families living in private accommodation much below standard and much of it scattered—one here, two there, scattered all through large native areas where, quite frankly, they presented a serious security risk in the event of any local unrest. I believe that there were plans to concentrate them, and in some places there were plans, if anything happened, to evacuate them. But I do not think that we could contemplate evacuating all the women and children at the time when the balloon was going up in an operational sense. It would be an almost impossible task. This is the position we might be in if things went seriously wrong in certain areas.
  I am sure that the place for those women and children is back in this country where the cost of building is no more than half, and sometimes less than half, of the cost abroad. We should then be sure of keeping the house throughout the whole useful life of the bricks and mortar, our tenure would be secure, and if the Armed Forces could be reduced one day, perhaps in the distant future, the house would be available for ordinary civilian occupation. There are great numbers of aerodromes
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  and airfields available, and there is no lack of land.
  The Government should consider how many married quarters are required—the number will be very large—and where they should be built. I, for one, think that there is a strong case for putting an increasing proportion here in Great Britain.
  Question, That the words proposed to be left out stand part of the Question, put and negatived.
  Proposed words there added.
  Main Question, as amended, put and agreed to.
  Resolved,
  That this House takes note of the Ninth Report from the Estimates Committee in the last Session of the last Parliament and of the Second Special Report from the Estimates Committee relating to Military Expenditure Overseas.
  Committee Tomorrow.

  CEREALS MARKETING [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to provide for the establishment of a Home-Grown Cereals Authority, and to make provision as to the functions and finances of the Authority, it is expedient to authorise—

  (a) the payment out of moneys provided by Parliament of any contribution made, in pursuance of any provision of that Act, by the Minister of Agriculture, Fisheries and Food towards expenditure, incurred or to be incurred by the Authority, and

  (b) the payment into the Exchequer of any sums recovered by that Minister from the Authority in pursuance of any such provision.

  Resolution agreed to.

  EMPLOYMENT, HOUGHTON-LE-SPRING
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lawson.]
  10.1 p.m.
  Mr. T. W. Urwin: It is with a good deal of trepidation that I rise at this hour to discuss the employment situation in my constituency, which is the subject of this Adjournment Motion. I am quite sure that the friendliness which has permeated this Chamber in the last few minutes will also be evident when I sit down and that the traditional courtesy and tolerance extended to a maiden speaker will be shown to me.
  As this is my maiden speech in this historic building, I take this first opportunity of paying tribute to my predecessor, the noble Lord, Lord Blyton, for the 19 years of excellent service which he rendered as Member for the constituency between 1945 and 1964. I am sure that hon. Members on both sides of the House will join me not only in congratulating him on his elevation but also in wishing him well in his new sphere of activity.
  Nineteen years is a long time, but there is a greater and longer link between my constituency and the Palace of Westminster inasmuch as the tongue of Big Ben was forged in a long since defunct engineering works in Houghton-le-Spring. We in the town are proud of that fact and we proclaim it on occasion almost as loudly as Big Ben itself. It must not be supposed, however, that because of this distinction Houghton-le-Spring lays any claim to be an engineering constituency. Since the days of the Industrial Revolution we have been almost entirely dependent on coalmining for our livelihood and economic wellbeing. This of course applies equally to many other constituencies in the northern region.
  Coal production and the ancillary operations attached to it account for the fact that the Coal Board now is and for many years has been the largest employer in the constituency. Unfortunately, the trend of recent years towards greater mechanisation and the use of modern techniques has led to a drastic rundown in manpower in the constituency. The situation has been further complicated by
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  the closure of certain uneconomic pits, and the labour force has been substantially reduced.
  Here I would quote figures provided by the National Coal Board and for this purpose two of the collieries which I shall include are outside my constituency. They are more or less on the perimeter. I refer to the Lambton "D" and Lumley Sixth Pit in the constituency of my hon. Friend the Member for Chester-le-Street (Mr. Pentland). I include them only because a fairly large number of people from Houghton-le-Spring work in those pits. Adding those to the others within my constituency, the situation in 1951 was that we had 15,036 men employed in the mining industry. Thirteen years later, in 1964, the figure was reduced to 10,493, the minus figure of 4,843 representing approximately a 30 per cent. rundown in manpower in the industry. This has meant that, to a very large extent, the men displaced have had to migrate, because of the exigencies of their employment, to coalfields in other parts of the country. If this kind of situation is allowed to continue and to develop further, we shall inevitably run the risk not only of losing able-bodied men but of being faced with the need to maintain an increasingly ageing population.
  Growing competition from other fuels and the exploration of the North Sea bed, recently begun, for deposits of oil and gas are further factors causing miners not only to look back to the past with a great deal of anxiety but to look forward to the future and the possibility of even further inroads being made into their means of employment. It can truly be said of a large area of my constituency that the economic future of a whole community is at stake.
  In the urban district of Houghton two collieries have closed during the past few years, and we had news over the weekend of the imminent closure of the Lambton "D" Pit. I should make clear that this news came from the miners' lodge and it is not yet official from the point of view of the National Coal Board, although I understand that talks are taking place between the Coal Board and representatives of the miners about the closure of the colliery. Apparently, this decision has been taken—this is the claim made by the the fact that there are large coal deposits National Union of Mineworkers—despite

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  remaining in the colliery. The union claims, further, that the mechanisation of the colliery could have been handled more efficiently than it has been and that this would have helped the miners not only to be more productive but to be more economic in their daily working.
  My right hon. Friend the Minister of Power is not in the Chamber, but he has done me the courtesy of apologising for his absence this evening. In view of the statements which have been made by the miners' lodge and the fact that my hon. Friend the Member for Chester-le-Street and I are making joint representations to the Chairman of the National Coal Board on the matter, I ask my right hon. Friend to be good enough to use his good offices to intervene and, at least, delay the closure of the colliery until further investigations have been made. Naturally, my hon. Friend the Member for Chester-le-Street shares my concern at the decision which we understand has been taken.
  I suggest to my right hon. Friend also that economic planning in this area would be rendered much easier if he were to announced a declared and jointly agreed production target for the coal industry as a whole, the resulting information being conveyed at divisional level so that the miners would be fully acquainted with the facts and would know the target at which they were aiming. I am sure that everyone would be much happier with that knowledge behind them. I am sure that my right hon. Friend will be bound to remember, at the same time, the absolute necessity for a co-ordinated policy for the fuel and power industries.
  During this period of progressive and drastic rundown in manpower to which I referred, we had the closure of the Lambton brickworks which used to offer a fair amount of employment in the constituency and, more recently, there have been the Sunderland-Durham railway closures which also are the subject of correspondence between the Minister of Transport and myself.
  The background already existing was one of persistently high unemployment in Houghton-le-Spring. In the Houghton employment exchange area alone, the consistently high level of 4 per cent, has been recorded for quite a long time, being made up at present of 529 men, 62 boys, 126 women and 40 girls.
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  What are the alternatives for these people? I know something of the frustration and misery involved, having been unemployed on one or two occasions, particularly as a boy leaving school. I ask the House to think for a moment of the frustration and misery which people feel on being unable to find work, especially the school-leaver who faces the heartbreaking business of looking for his first job in an increasingly intensive labour market. The alternative, obviously, is to diversify and introduce more industry into a constituency of this sort.
  An opportunity has existed during the last 13 years. It ought to be made very clear that in the urban district of Houghton there is an industrial site within the ownership of the Board of Trade comprising 27 acres, and in 1948 my predecessor had a letter from the Minister of Labour and National Service indicating that the area of Houghton-le-Spring was too heavily committed to heavy industry, that it was necessary to introduce lighter industries and that the estate would he used for that purpose. It is true that for two or three years up to 1951 new factories were established but, unfortunately, since 1951 only one entirely new factory has been provided on the estate, although I admit that there have been extensions to the buildings which were in existence.
  The situation now is that the five firms established there provide employment for 261 men only and 740 women. I am very pleased to learn, as my constituents are, of what appears to be a new note of urgency introduced by the Board of Trade by designating an advance factory for this site, but it is not enough. There still remain 11½ acres of undeveloped land on the same site and the urban district council assures me that, if necessary, it would be relatively easy to acquire additional land for the purpose of extending the site if industry is available to go there. In these circumstances, I sincerely trust that my right hon. Friend at the Board of Trade will do everything possible to divert more new industry to the area, with emphasis on the employment of men. While it is obviously necessary to provide jobs for women, it is much more important to take the men, or as many of

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  them as possible, from the unemployment register.
  I turn to that part of my constituency which comprises the urban district of Seaham. Briefly, but nevertheless proudly, I would refer to the last three Parliamentary representatives who served the old Seaham Division prior to its incorporation into the Houghton-le-Spring constituency. The were, in order of seniority, Sidney Webb, Ramsay Macdonald and my right hon. Friend the Member for Easington (Mr. Shinwell), who took the Easington constituency after the Seaham one was merged. I am sure it will be agreed that this is a most distinguished line of succession.
  In Seaham the situation in the mining industry is a good deal better than elsewhere in the constituency. Despite this greater stability, there has been a diminution of the labour force at the three collieries of 779 in the period 1951 to 1964. Those collieries are Dawdon, Seaham and Vane Tempest. But for the absorption of men from redundant collieries, the situation would have been considerably worse than it is at present. In Seaham there is a steady unemployment rate of over 3 per cent., embracing 311 men and boys of the gross total of 501 on the register. Virtually no new industry has been introduced into the Seaham area for several years, although 30½ acres of land are included in the town map for industrial development. This total comprises five sites within the area, including one of eight acres owned by the Board of Trade.
  More diversification of industry is required in Seaham. The town is on the North East Coast and it is therefore not surprising that, many years ago, a dock was established primarily for shipping coal from collieries in the vicinity. The shipment of coal continues to be the main function of the Seaham Harbour Dock Company but, from the employment point of view, it is regrettable that its capacity to handle 3 million tons of coal a year is grossly under-used.
  Before 1939 it was carrying traffic averaging 2 million to 2½ million tons per annum. The post-war peak for coal freight was in 1951 when just under 2 million tons was transported, including 104 million tons for export, but less than 1½ million tons was handled in 1964 and
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  of this total only 11,262 tons was for the export market. Two of the three local collieries to which I have referred stand literally on the seashore. Last week they were responsible for 63,381 tons, giving an estimated output of more than 3 million tons a year. Based on the same output statistics, the added production of the Hawthorn group of mines, which is in close proximity to the dock, and which I understand was to be serviced, when built a few years ago, by the dock, would give approximately 5½ million tons per annum gross.
  Potentially, this dock could and should be carrying more coal freight. A good deal of the local production is, however, transported by rail for shipment at Sunderland, about four or five miles along the coast. This adds considerably to the cost of the product. Perhaps the Minister of Power will be good enough to take up this matter with the N.C.B. and, if necessary, the Minister of Transport.
  The Sunderland rural district, which is the third local government area within my constituency, is again most heavily dependent economically on coal mining but, because of overlapping Ministry of Labour exchange areas, I regret that I am not able to quote unemployment figures. However, as the majority of the people in this area are served by the Sunderland exchange—where there is also a persistently high rate of well over 4 per cent. unemployed—it is safe to assume that the rate in the Sunderland rural district area is at least equivalent.
  This, when coupled with the fact that, during the last thirteen years, 1,717 fewer men have been employed at the three collieries in the area—equivalent to a wastage of 32 per cent. in man-power and despite outside recruitment from other collieries—gives rise to further considerable concern. Under the county development plan, 35½ acres of land at Offerton, adjacent to the Sunderland Borough boundary—I understand that Sunderland Corporation has a further area of land which could be added to make one large parcel—have been allocated for industrial development without any apparent attempt being made to provide urgently needed new industries.
  I have endeavoured, in the short time at my disposal, to convey to the House

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  employment problems facing the constituency of Houghton-le-Spring. I am deeply conscious of the manifold difficulties facing the Government in their attempt to find a reasonable solution. Yet I feel sure that they have listened to me with a sympathetic and understanding ear and I look forward optimistically to success attending any efforts they may be able to make on behalf of my constituents.
  10.20 p.m.
  The Minister of State, Board of Trade
  (Mr. George Darling): I am sure that those hon. Members who are present will join with me in congratulating my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) on his maiden speech. I did not know that I was to have the pleasure of listening to a maiden speech. It was in the best traditions of the House. It is a tradition that hon. Members should refer to their constituencies in their maiden speeches and my hon. Friend has given us a very cogent survey of the employment problems in his constituency in a manner which was both eloquent and reasonable and which has made us look forward to hearing him again on many other occasions.
  I am sure that I can also say, on behalf of the House, that we join with him in congratulating his predecessor, Lord Blyton, whom we all know so well and admire, on his elevation to another place.
  My hon. Friend has drawn attention to the extremely difficult problem of reviving industry not only in his constituency, but in North-East Durham generally. He has referred to the responsibilities of the Minister of Power in this matter and I can assure him that the Board of Trade works closely with other Ministries on problems such as these, and with the new Ministry of Economic Affairs. This short debate will be examined by all the Ministries concerned and will be taken into account in the collective consideration which is being given to the problems of the development districts and this district in particular.
  My hon. Friend has raised two issues. The first is the problem of steering industrial expansion to North-East Durham to find work for the present unem-
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  ployed and the second is to plan ahead for future developments in order to meet a falling off in the employment which may come along in the Durham coalfields. My hon. Friend has referred to discussions about the latter issue which are now going on between the National Coal Board and the National Union of Mineworkers and which, of course, have been noted by the Ministry of Power.
  I am pleased to tell my hon. Friend that the future in the area of his constituency does not look so serious as it may have done a little while ago. My right hon. Friend the Minister of Power has asked me to say that employment in the coal industry here has fallen very little in the last two years. I understand from him that there are no grounds for concern that the labour force employed by the Coal Board in this area will be substantially reduced. As I think my hon. Friend will agree, such reduction as has taken place recently has resulted in relatively little actual redundancy.
  The present employment situation in my hon. Friend's constituency, which is our immediate concern, is not quite so bad as in other parts of the North-East, but it is grim enough and there is not much consolation, as he suggested, for a man or woman or youngster who is out of a job to know that in other areas there is a bigger percentage of unemployment; so I do not propose to argue about the numbers out of work.
  What we have to do is to try to get going projects which will reduce the numbers at present unemployed. Such projects as there are at the moment will provide some jobs, but not enough to take up all the unemployment. My hon. Friend has referred to one of these projects—the advance factory which is to be built at Houghton-le-Spring and which my right hon. Friend announced a few weeks ago. The site for this was chosen not only because it is in an area of unemployment, but because it is one of the few sites available in this part of Durham.
  My hon. Friend has mentioned the sites which are available. This is one of the difficulties that we had to face in this area because we can carry through the almost nation-wide dispersal of industry, which is the exercise on which we are

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  engaged to wipe out these pockets of unemployment, only if we have suitable industrial sites in the areas which have to be developed. This, I am advised, is the present situation in regard to the available sites in my hon. Friend's constituency.
  When the advance factory is completed, there will be room on the Houghton-le-Spring Estate for another 100,000 sq. ft. of factory space. I have noted my hon. Friend's remark that, in the local authority's view, further land can be obtained adjacent to the site. We will certainly go into this. In addition, as my hon. Friend said, the Board of Trade has about 7½ acres available for development at Seaham and there are 14 acres on the Vane Tempest colliery site. I assure my hon. Friend that we shall do our utmost to get these sites developed for factories, but before long we shall have to go beyond the boundaries of his constituency for further developments which we hope will be within reasonable travelling distance of some of the people in need of jobs in his constituency.
  The finding of new sites for industrial development is primarily a matter for the local authorities. We work very closely with the local authorities on this problem. Now it is also a matter for the new regional planning boards working in association with the local authorities. I hope that suitable sites for further development of industry and, perhaps, for commercial development can be found throughout this area of North-East Durham.
  I am sure that my hon. Friend would agree that the problems in his constituency cannot be considered in isolation. We must have planned development also in the neighbouring areas, and this planned development, as it goes ahead, will have an impact on Houghton-le-Spring and Seaham and other parts of my hon. Friend's constituency where there are people out of work. One development which may help quite a lot is the building of the new town of Washington, and there is a likelihood that as we press ahead with expanding some of the existing factories and developments going on in other parts of Durham there will be an overflow of industry from some of these earlier projects into my hon. Friend's
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  constituency—or at least there is a likelihood of providing jobs within easy travelling distance for my hon. Friend's constituents. But this does not mean that we shall not do our utmost to fill whatever sites are available for new factories in the constituency.
  The big question which we have to face is how to get the factories there and to get the firms to occupy them. This is the other side of the problem with which we are concerned. It can be solved only by planning and promoting general and continuous industrial expansion and then to steer some of this expansion to the development districts. This calls for a very tough industrial development certificate policy in the overcrowded South-East and Midlands. I can promise that my right hon. Friend the President of the Board of Trade will pursue a pretty ruthless policy in refusing industrial development certificates in the Midlands and the South-East.
  This is not an easy operation. We have to face complaints from firms that we are refusing the possibility of development in the Midlands and South-East. But we shall continue with this resolute policy of stopping expansion in the South-East and the Midlands whenever we can sensibly do so and of inducing firms to expand in development districts, including North-East Durham. This means that the sites available for factories must be as attractive as possible. Here the Board of Trade has some responsibility, together with local authorities and other Ministries. As I say, I can promise my hon. Friend that we will do our utmost to make these new sites attractive so that we can get new firms and factories going.
  We are working together in this matter. I assure my hon. Friend that the policies which we are pursuing are designed to meet the problems which he has very clearly described, and we shall push ahead with them with a sense of urgency.
  Question put and agreed to.
  Adjourned accordingly at half-past Ten o'clock.