Commons Sitting of 9 November 1965

Preamble
The House met at half-past Eleven o'clock

PRAYERS
[MR. SPEAKER in the Chair]
Message to attend Her Majesty:
The House went:—and, having returned:
The Sitting was suspended until half-past Two o'clock, and then resumed.

SESSIONAL ORDERS

  ELECTIONS
  Ordered,
  That all Members who are returned for two or more places in any part of the United Kingdom do make their Election for which of the places they will serve, within one week after it shall appear that there is no question upon the Return for that place; and if any thing shall come in question touching the Return or Election of any Member, he is to withdraw during the time the matter is in debate; and that all Members returned upon double Returns do withdraw till their Returns are determined.
  Resolved,
  That no Peer of the Realm, except a Peer of Ireland, hath any right to give his vote in the Election of any Member to serve in Parliament.
  Resolved,
  That if it shall appear that any person hath been elected or returned a Member of this House, or endeavoured so to be by Bribery, or any other corrupt practices this House will proceed with the utmost severity against all such persons as shall have been wilfully concerned in such Bribery or other corrupt practices.

  WITNESSES
  Resolved,
  That if it shall appear that any person hath been tampering with any Witness, in respect of his evidence to be given to this House, or any Committee thereof, or directly or indirectly hath endeavoured to deter or hinder any person from appearing or giving evidence, the same is declared to be a high crime and misdemeanour; and this House will proceed with the utmost severity against such offender.
  Resolved,
  That if it shall appear that any person hath given false evidence in any case before this House, or any Committee thereof, this House will proceed with the utmost severity against such offender.

  METROPOLITAN POLICE
  Ordered,
  That the Commissioner of the Police of the Metropolis do take care that during the Session of Parliament the passages through the streets leading to this House be kept free and open, and that no obstruction be permitted to hinder the passage of Members to and from this House, and that no disorder be allowed in Westminster Hall, or in the passages leading to this House, during the Sitting of Parliament, and that there be no annoyance therein or thereabouts; and that the Serjeant at Arms attending this House do communicate this Order to the Commissioner aforesaid.

  VOTES AND PROCEEDINGS
  Ordered,
  That the Votes and Proceedings of this House be printed, being first perused by Mr. Speaker; and that he do appoint the printing thereof; and that no person but such as he shall appoint do presume to print the same.

  Ordered,
  That a Committee of Privileges be appointed.

  Bill for the more effectual preventing Clandestine Outlawries, read the First time; to be read a Second time.

  JOURNAL
  Ordered,
  That the Journal of this House, from the end of the last Session to the end of the present Session, with an Index thereto, be printed.
  Ordered,
  That the said Journal and Index be printed by the appointment and under the direction of Sir Thomas George Barnett Cocks, K.C.B., O.B.E., the Clerk of this House.
  Ordered,
  That the said Journal and Index be printed by such person as shall be licensed by Mr. Speaker, and that no other person do presume to print the same.

QUEEN'S SPEECH
Mr. Speaker: I have to acquaint the House that this House has this day attended Her Majesty in the House of Peers, and Her Majesty was pleased to make a Most Gracious Speech from the Throne to both Houses of Parliament, of which I have, for greater accuracy, obtained a copy, which is as follows:
My Lords and Members of the House of Commons:
My Husband and I look forward to our forthcoming Caribbean tour and to our visit to Belgium.
My Government will seek to promote peace and security throughout the world, to increase international confidence and Co-operation and to strengthen the United Nations. They will promote disarmament, and in particular will seek the conclusion of a treaty to prevent the further spread of nuclear weapons. They will persevere in efforts to secure peace in Vietnam and to promote the stability of South-East Asia.
They will continue to support Britain's alliances for collective defence and will work for a generally satisfactory organisation of the nuclear resources of the allies.
My Government will continue to work for the greater unity of Europe. They will seek to strengthen the European Free Trade Association and to promote co-operation between the Association and the European Economic Community, and the establishment of a wider European market.
They will play a full part in promoting the success of the negotiations for tariff reductions under the General Agreement on Tariffs and Trade. They will seek a successful conclusion to their discussions with the Government of the Repubic of Ireland on the establishment of a Free Trade Area between the two countries. They will continue to encourage Commonwealth trade.
My Ministers will continue to assist, in concert with other industrialised nations and the international institutions, the social and economic advance of the developing countries.
My Government will maintain their unremitting efforts to bring about

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through negotiation a peaceful and honourable solution in Rhodesia on a basis acceptable to the people of the country as a whole.
A measure will be laid before you to reorganise the Army Reserve and Auxiliary Forces.
Members of the House of Commons:
Estimates for the public services will be laid before you.
My Lords and Members of the House of Commons:
My Government's aim is to develop a soundly based economy. They will give priority to ensuring that balance in external payments is restored next year and that the strength of sterling is maintained. They will continue their efforts to increase exports. They will also further the international discussions of means of strengthening the world payments system.
In implementing the National Plan My Government will extend the range of the Economic Development Committees and encourage British industry to achieve greater competitive efficiency by reorganisation, the more general use of advanced technology, and better use of manpower. They will give special attention to ensuring balanced economic growth in all regions.
Steps will be taken to improve the arrangements for providing incentives for industrial investment with due regard to the development of the economy and the special needs of particular areas.
My Government will strengthen and develop the policy for productivity, prices and incomes which they have agreed with management and unions. They will introduce a Bill for this purpose, and will continue to develop the policy in co-operation with all concerned.
My Government consider the more efficient working of the ports, including a radical improvement in industrial relations and more efficient use of labour in the docks, to be of the highest importance and will introduce legislation and take other necessary action to further this objective.
My Ministers will pursue their policy for the selective expansion of agriculture, based on increasing productivity.
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They will introduce legislation for the longer term development of agriculture through better farm structure, cooperation, and improved hill farming and to establish a Meat and Livestock Commission. They will promote the economic development of the fishing industry.
For the protection of consumers, a Bill will be introduced to strengthen the law on misleading trade descriptions.
Legislation will be introduced to remove statutory limitations impeding the proper use of the manufacturing resources of the nationalised industries.
A Bill will be introduced to assist the financing of the coal industry and the redeployment of its manpower.
A Bill will be introduced to establish a Land Commission with power to acquire land for the community and to recover a part of the development value realised in land transactions. My Ministers will introduce legislation to reform the leasehold system for residential property in England and Wales, including provision for leasehold enfranchisement.
Legislation will be introduced to establish a new system of Exchequer subsidies for local authority housing.
A Bill will be introduced to regulate priorities in privately sponsored construction.
Legislation will be introduced to lessen the injustices of the rating system and to limit the burden of rates.
My Ministers will continue to develop higher education. A Bill will be introduced to facilitate revision of the constitution of the older Scottish universities and to provide for separate universities at St. Andrews and Dundee.
My Government will take steps to provide more teachers and promote further advances in secondary education on comprehensive lines. A Public Schools Commission will be set up to advise on the best way of integrating the public schools with the State system.
Measures will be laid before you to provide supplementary national insurance benefits, related to earnings, in the early stages of sickness, unemployment and widowhood; to extend the

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supplementation of workmen's compensation; and to empower agricultural wages boards to fix minimum rates of sick pay for agricultural workers.
Other measures will increase the pensions of retired members of the public services and their dependants and provide a pensions scheme for teachers' widows in England and Wales.
My Government are studying with the medical profession ways of improving the family doctor service and will introduce the necessary legislation.
Measures will be introduced to improve the administration of justice and to reform and modernise the law.
My Government will promote the provision of improved services for the family, the development of new means of dealing with young persons who now come before the courts and the advancement of penal reform.
Further steps will be directed to the effective integration of immigrants into the community and to strengthening the control of Commonwealth immigration.
A measure will be introduced to provide for fuller disclosure of information by companies, including the disclosure of political contributions.
A Bill will be introduced for the appointment of a Parliamentary Commissioner for Administration with powers to investigate individual grievances.
My Ministers will bring forward proposals for the more effective coordination of inland transport. You will be invited to approve a measure designed to promote greater safety on the roads.
Provision for meeting the special needs of Scotland will be made in the various measures proposed by My Government.
Other measures will be laid before you.
My Lords and Members of the House of Commons:
I pray that the blessing of Almighty God may rest upon your counsels.

DEBATE ON THE ADDRESS [FIRST DAY]
2.46 p.m.
Mr. Harold Lever: I beg to move, That an humble Address be presented to Her Majesty, as follows:
Most Gracious Sovereign,
We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
I know that hon. Members in all parts of the House will join me in expressing the wish that the travels of Her Majesty and His Royal Highness Prince Philip as outlined in the Gracious Speech will be safely and successfully accomplished.
I have always been conscious in the 20 years I have been in this House that I have been treated in all quarters with greater kindness and indulgence than anything I deserved. I am more than ever under that feeling because of the great honour which has fallen to me today and the great privilege this House has accorded me, for which I am deeply grateful. Of course, ugly rumours have been heard which suggested that the Government were seeking to preserve their fragile majority from the winds of controversy by introducing a skilled procrastinator who would talk out the entire Parliamentary programme. Although I know that it is as disagreeable and disappointing when someone fails to live up to at bad opinion as to a good one, I have to tell the House that, in my duty to it, I shall observe the traditional habits of this speech, which include a degree of brevity.
I must also say on behalf of my constituents how honoured they must feel that their Member has been selected for this task. I am the Member for the Cheetham division, a typical industrial working-class division in the City of Manchester. It lies in the centre of Manchester, somewhat to the northwest, and includes the area that was represented by Sir Winston Churchill just after the beginning of the century.
It is the constituency of "Magnolia Street", made famous by Louis Golding in the novel of the same name, in which was depicted with accuracy, emotion and

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great feeling the lives and work and habits of a mixed population—some immigrant Jews and Irish, Protestants and Catholics, all living together in the kind of harmony which is an example to many other parts of the country.
Indeed, quite without knowing, the first committee rooms I took in 1945 in that constituency I later found were the first business premises occupied by my grandfather when, in the latter part of the 19th century, he emigrated to Manchester. He could little have thought when entering this established Manchester community that two of his grandchildren would have the great honour of representing Manchester constituencies in this House. Whether foreknowledge of that would have added to or subtracted from the vast admiration he felt for the city of his adoption is a matter which I must leave to unresolvable speculation.
When I gazed upon my constituency first in 1945 I would not have changed it for any other constituency in the land, nor would I today, for when I looked out I saw the great old building of my old school in the heart of the constituency, Manchester Grammar School, which I attended as a boy and which is now about to celebrate its 450th anniversary, looking back with immense pride on its great past—[HON. MEMBERS: "Comprehensive?"]—and, as some hon. Members have indicated, perhaps with a tinge of apprehension to its future.
The constituency for me is filled with memories of my own boyhood, and I have no difficulty in reconciling and bringing together the memories of the past—the buoyant eagerness, for example, of my hon. Friend the Member for Salford, East (Mr. Frank Allaun), who was at this school in my time. Indeed, he has not changed at all. I have no difficulty at all there—he is the same man today.
When I look at the figure of my hon. Friend the Member for Manchester, Ardwick (Mr. L. M. Lever), in its firm aldermanic maturity, I find the greatest difficulty in identifying it with the lissom schoolboy I used to know, who from time to time would pop out of the coal hole of the Manchester Grammar School, having belatedly and illegally made an underground entrance. I hope the House will not think it wrong of me to add that I have no difficulty at all in identifying the kind and generous brother of those days
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with the great public servant, the unfailing good Samaritan, who was later to become one of the best loved lord mayors Manchester has ever had.
A stone's throw from the school is Manchester Cathedral, where the gentle Dr. Temple used to preach his doctrines of Christian Socialism and where also Dean Hewlett Johnson, in a somewhat less philosophical note, lent his magnificent voice and presence to the doctrines of social credit which in those days enjoyed the allegiance which he was later to transfer to a somewhat different area.
A few hundred yards away the smoky building of the Manchester Guardian looks at the massive grime of the Royal Exchange. The great days of the Royal Exchange, its days of fame and power, are in the past; but the courage, honour and integrity of The Guardian are still recognised throughout the world.
These four great institutions—the School, the Cathedral, The Guardian, and the Royal Exchange—for me at any rate symbolise the fundamental basis on which Manchester's great renown stands, and their juxtapositon perhaps account for the fact that in Manchester there are few idealists who have not got a touch of the shrewdnes of commerce and, on the other hand, there are very few successful businessmen who have not got a vein of progressive thought and scholarship.
I cannot pass altogether from the constituency without mentioning one grim silhouette that still remains there, namely, Strangeways Gaol. I am not of course criticising anybody who works in that institution in an administrative capacity. I am expressing my sympathy for those who in another capacity occupy its premises. Anybody who goes inside those grim walls must see the gap which exists between the acknowledgment of humane ideas and the putting into practice of those ideas. I do not think it would be right for me not to mention that one of my hopes is to see this great gaol demolished and some sort of building more in accord with modern and humane ideas replace it.
I leave the main principles of the Gracious Speech to the controversialists who can deal with it in detail, and I have no doubt they will. I must say that in outlining so ambitious, constructive and timely a programme my right hon. Friend the Prime Minister is obviously relying

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greatly on the devotion of his Members and the commanding presence of the Chief Whip. If the programme falls short of what some hon. Members would have wished—I notice that some hon. Members opposite appeared to be disappointed at what has been left out of the Gracious Speech—this is inevitable, because with any evangelical political movement nothing fails like success. No accomplishment, however worth while, can quite assuage the recollections of the fervour, exaltation, and hope that went into the campaign.
Nevertheless, I venture to submit to the House, without being controversial or provocative, that there are two great matters which emerge the general principles of which at any rate ought to command approval throughout the House. Two great matters are suggested, among other things, in this very comprehensive and constructive programme. The first is that we hope to legislate wage-related unemployment and sickness benefit. This in principle is a great stride forward in human conception. The second matter, the details of which will be intensely controversial, is the question of the Land Bill. Here again we shall break new ground and, although it is only a beginning, it is a beginning from which I hope something very useful, permanent and creative will develop.
Lenin said that the government of the State was a management committee on behalf of the ruling class. If this be true, I must say that they were singularly un-appreciative of the efforts of my right hon. Friend the Chancellor of the Exchequer at Budget time. I would rather say that the truer interpretation is that a Government in a modern democratic State is a management committee on behalf of the ruling ideas of a society in which it rules.
I am very glad to think that time will show us that the ruling ideas behind the programme outlined are of great and constructive value. After all, I think we can recognise that we are all engaged in creating a modern commercial and social ethic. So were the Labour Government of 1945 to 1950. So, according to their lights, were the Tory Government who succeeded them. Now we look back with nostalgic admiration upon the remarkable performances of the 1945–50 Labour
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Government. It must not be thought that they were carried out to a chorus of continuous approval from back-bench Members. Far from it.
I assure my right hon. Friend the Prime Minister that, whatever grumbles or criticisms he is faced with today, by 1990 at the latest I expect that this programme and his achievement will be seen in successful perspective and will be applauded accordingly.
I again thank the House for its great indulgence and once again renew my deep sense of appreciation of the great honour that has been conferred on me.
3.0 p.m.
Mr. William Hamling: I beg to second the Motion.
It is a great trial to follow such a witty and able speech as that which my hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) has just given to the House. I should like to say at once how much I am conscious of the honour done to me personally as a new Member in being asked to second the Loyal Address. Perhaps it was thought advisable that a Liverpudlian should be asked to follow a Mancunian just to keep things in balance, but my connection with Liverpool these days is rather tenuous, as I represent part of the Borough of Woolwich, which, of course, is now Greenwich, as it was before 1885 and therefore has perhaps come back home.
I am very conscious of the honour done to my constituency and to my borough in being invited by the House to second the Loyal Address. I hope that the House will forgive me if I speak about Woolwich and not about Greenwich, because my constituency is Woolwich, West and the traditions of my constituency are associated with Woolwich. It is not the first time that Woolwich has been honoured in this way. One hundred years ago this year Harry Snell was born and he was honoured by this House in 1929 in being asked to move the Loyal Address. I suppose that this, Mr. Speaker, has been a Parliament of firsts. Snell was, I think, the first agricultural labourer ever to move the Loyal Address and, as everyone knows, he was honoured later when he went to the other place and when he became Chairman of London County Council.

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There are very firm associations in my borough with the old L.C.C. I suppose that many people think of Woolwich as the home of the Arsenal, the passing of which I regret, but I look forward to the day when we shall have a new town born on the marshes of Woolwich. At one time Woolwich had a Royal Marine Barracks, and perhaps it is appropriate that it should have been founded on an old converted brewery. It is also the home of the Royal Artillery, the Royal Regiment in which my father served in the First World War in a humble capacity as a driver. He drove mules, perhaps rather like our Chief Whip does now. The other Chief Whip, of course, drives donkeys.
Woolwich is famous also as being the home of the Royal Arsenal Co-operative Society. I am a member and my wife is a member, and my children become members as soon as they reach the age of 16. The Society was founded by an Arsenal man, William Rose, and I live 50 yards from Will Rose Crescent which was named after him. He was driven later by unemployment to emigrate to the United States. Another happy association of the Royal Arsenal Cooperative Society was with General Maurice, the G.O.C. of the Woolwich Garrison and the son of a famous Socialist parson, the Reverend Frederick Maurice. We have had many famous men in the history of Woolwich, among them Herbert Morrison, whom I am sure many hon. Members here knew. I am sure that we all think of him with great affection and respect. There was Ernest Bevin, who was my Member for a while and who sat on the Government Front Bench, and, I suppose, was as typical an Englishman as we shall ever see walk through the doors of this Chamber.
We had Harry Snell, whom I have already mentioned, and we had the Grand Old Man himself, who from 1868 to 1878 represented the Borough of Greenwich. When he came to make his farewell speech he spoke to the working men of Plumstead who were not only stewards at his meetings but founded the Plumstead Radical Club which today, naturally, as is the case with all progressive associations, is associated with the Woolwich Labour Party. I am a member of the Plumstead Radical Club and I am proud
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also to be a member of the Woolwich Labour Party. We have over 10,000 members, and if anyone wants to say anything about that he can do so. We have the largest Labour Party in the country and I would say the best. As a Liverpudlian I can speak of my borough in this way. I am sure that Woolwich men would speak with much more modesty about their part of the world.
We have had many famous parsons in Woolwich. One of them was Canon Horsley, who came to Holy Trinity. He was an opponent of landlordism, many of whose representatives were on the borough council or the old board of works and it was said of him by some of them that they wished the reverend gentleman would stick to his spiritual duties. I have heard that before, and not only before but since. The old knights of the shires murdered one archbishop. I do not know what they would like to do to the present one. We have a couple of famous parsons in Woolwich in these days. There is our present rector, and everyone has heard of the Bishop of Woolwich. If ever there was a "troublesome priest", no doubt he is one.
I have said that I am proud to be a member of the Woolwich Labour Party, and it seems to me that the history of my party is embodied in many of the proposals in the Gracious Speech. The party was born out of agitation over public health, over housing, over the erection of public baths, over the provision of public libraries and over the preservation of common land. There are proposals in the Gracious Speech today to deal with public health problems and to improve education.
In 1903 Woolwich Borough Council became a Labour council for the first time, and one of the first things that it did was to open a clinic to provide milk for babies. Without being controversial, I am sure that the House will guess who it was who opposed most of these things. Woolwich was the first council in London to obtain a Provisional Order granting compulsory powers to purchase land. It was the first council in London to appoint a part-time woman health visitor. Infantile mortality has fallen in correspondence with the imaginative work of the government of this part of south-east London. In 1900 it was 146 per 1,000. In 1960 it was 16·9 per 1,000.

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This is an index of the improvements which have been made in Woolwich in public health matters during those years.
In many other ways Woolwich is an outstanding borough and an outstanding part of south-east London. It is appropriate that the Gracious Speech should follow in the Socialist tradition of Woolwich. Exchequer subsidies for housing, based upon a stable rate of interest, will produce a quite dramatic effect in Woolwich. This is something that the council there will be delighted about, and people who are waiting for houses will be delighted about it, too. Rating relief for local authorities also is something which my constituents will be very happy about, as also is leasehold reform. Half of my constituents are leaseholders, and leasehold reform is the one subject on which I have received, perhaps, as many letters as I have on anything else since I became a candidate way back in 1954.
Next, education. Woolwich teachers have always been very much to the fore. Four of our last ten mayors have been schoolmasters or schoolmistresses. This is an indication not only of the interest which Woolwich teachers take in public life but of the devotion which the electors of my constituency give to our profession. As everyone in the House knows, we have in the constituency two of the finest comprehensive schools in England, and it is appropriate, therefore, that the Gracious Speech should refer to them.
This is a very fine Queen's Speech. I am very proud to have the honour of seconding the Loyal Address in reply to such an outstanding Queen's Speech. As my hon. Friend the Member for Cheetham said, it may well disappoint some, but the measures which I have outlined are the things for which our movement has been fighting for 100 years. The men of Plumstead Radical Club, when they set out in 1878 to sponsor housing reform and, later, to sponsor the Woolwich Labour Party, would have been delighted if they could have sat in the Gallery today and heard the words of this Gracious Speech. This is in keeping with all the finest traditions of our movement.
3.13 p.m.
Mr. Edward Heath: The House will agree that it is always a delight to listen to the hon. Member for Manchester, Cheetham (Mr. Harold Lever), and we have this afternoon listened to one of the wittiest speeches ever made in moving the Loyal Address. We understand the difficulty which the hon. Member for Woolwich, West (Mr. Hamling) had in following him, but we listened with interest to what the hon. Gentleman had to say, in particular, about his constituency. It is the happy privilege of the Leader of the Opposition to congratulate the two hon. Gentlemen upon the speeches which they have made, and I do so not only because of their speeches but because of their personal qualities and the position which they hold in the House.
The hon. Member for Cheetham is particularly well known to those of us who followed the long debates on the Finance Bill this year. He set out his philosophy on one occasion very clearly:
"I am aware that there are two sins one can commit as a member of the Government party; one is to talk at length and the other is to oppose the Government's action. I shall try to be brief."—[OFFICIAL REPORT, 24th May, 1965; Vol. 713, c. 99.]
If ever sin was rewarded, this was the occasion this afternoon, and it was done greatly to our benefit. Night after night, we watched the hon. Gentleman as he stuck the dagger in the Chancellor's back, twisted it in the two Secretaries, or put in his little pocket knife and twisted it in the Solicitor-General and the Minister without Portfolio, neither of whom ever seems to have appeared on the Front Bench since. We were delighted with the hon. Gentleman's speech, and we thank him for it.
I am particularly pleased to be able to congratulate the hon. Member for Woolwich, West because, of course, his constituency is adjacent to mine. I do not suggest that this was his reward today. Perhaps it was, rather, a consolation. We recall that he fought the last election on keeping Woolwich Arsenal open—a very noble effort—and it was, therefore, a great blow when, on his return to the House, his own Government promptly closed it, thus making his position somewhat more precarious than it had been. Nevertheless, I am sure that,

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when he looks back on his Parliamentary life, after the next election, he will look back with pleasure on his speech today which did such justice to the occasion.
Not all the eloquence of the two hon. Members, however, could convince the House that this is a Queen's Speech which is likely to change the face of Britain. To be fair to the hon. Member for Cheetham, he did not even attempt to do so. He described it as an ambitious and timely Queen's Speech. This was his happy euphemistic way of saying that it is ambitious in the sense that the Government are most unlikely to get it through this Session, and timely in the sense that this is a year in which there is likely to be a General Election. The hon. Gentleman is quite right. The Queen's Speech is an election pamphlet produced to fill the shop window ready for the contest in the country when it comes.
I do not wish to comment on the two hon. Members separately. They are together a splendid pair, and they were rightly chosen by the Patronage Secretary as such. On one occasion, the hon. Member for Cheetham said:
"It is right to begin by saying that I am not in favour of any Capital Gains Tax, short or long."—[OFFICIAL REPORT, 24th May, 1965; Vol. 713, c. 48.]
I know that he still adheres to that view. On a similar occasion, the hon. Member for Woolwich, West said:
"I would congratulate the Chancellor, particularly, on introducing into the Bill the Capital Gains Tax…"—[OFFICIAL REPORT, 10th May, 1965; Vol. 712, c. 121.]
All I say to the Prime Minister is that these two statements qualify both hon. Gentlemen for immediate inclusion in the Cabinet. Moreover, they are still in their early fifties. They are, therefore, well below the average age and would bring it down considerably. This could readily be done, of course, if there were to be changes in the Cabinet, but I must frankly tell the two hon. Gentlemen to look around them. There they all sit as they have sat for a year, over-age, overweight, over-numerous, and, on any basis of payment by results, thoroughly overpaid.
Before the election, we were promised a small streamlined body. We did not get it. Directly after the election, the Prime Minister encouraged his troops at
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a meeting of the Labour Party by saying that the members of the Government whom he had appointed were on trial; they would have much work to do and anyone who did not make the grade would soon find himself back in the ranks. Yet there they all are. Does the Prime Minister suggest that they have all made the grade? The Minister of Transport threw over private enterprise and competition in Geddes and he has not been able to integrate and now in the Queen's Speech he is fobbed off with co-ordination. What about the Minister of Technology? Last year we heard in the Queen's Speech:
"Our industries will be helped to gain the full benefits of advances in… applied technology."
This year
"the more general use of advanced technology"
is urged. The same flabby words from the same Minister. The Department costs £6½ million, money which would have been better spent on more computers.
As for the Postmaster-General, never have the services of the Post Office been so inadequate as they are today. What about the Minister of Public Building and Works? He encouraged the industry to produce more and more bricks at the same time as his right hon. Friend was discouraging the building of houses, so we now have too many bricks and too few houses. Does the Prime Minister really think that they have made the grade, or is it that he finds that he just cannot get rid of them?
One cannot expect that dormant body to produce a dynamic Queen's Speech. Like the Cabinet, the programme set out in the Gracious Speech consists of a number of old faces. There is leasehold enfranchisement again, and the political contributions. The only thing to get a cheer when the subject was raised was the phrase "a squalid little political manoeuvre." There is the ombudsman and the Land Commission. Here they all come along. The drill seems to be now that in the Queen's Speech one puts everything in the window, one fails to get the programme through and then puts it all back again next year rather shopsoiled.
There are also a number of old faces missing. Some have never even appeared

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at all. These include half-pay on retirement, the minimum income guarantee which the Prime Minister himself promised "without delay", the abolition of the remaining Health Service charges, which right hon. Gentlemen opposite promised once, and differential mortgage rates promised by the Prime Minister and the First Secretary. The technique here seems to be that one trots them out at election time and then puts them out to grass ready to parade again when the next election comes along.
There is one omission from the Queen's Speech which is the biggest omission of all. [Interruption.] There is no reference at all to steel. [Interruption] There is nothing on nationalisation. There is not even the mention which the First Secretary had in the National Plan of "fundamental changes", not even a nod about steel. As one hon. Member opposite below the Gangway was heard to say eloquently in the Lobby about the Queen's Speech: "And where the hell are the commanding heights now is what I should like to know." He is likely to go on wanting to know.
The Prime Minister will remember his own words in May of this year, after the debate on the White Paper:
"And another Bill that is going ahead is the Bill to transfer the steel private monopoly to public ownership…And let me make this clear beyond all doubt, we are going ahead, we are not deviating. Your Government—I have made this plain—is not going to be pushed around by anyone."
Is the Prime Minister not now going to tackle a problem which he described at the time as
"basic to our industrial effort, to exports, to our industrial efficiency"?
On 29th July, only three months ago, asked on television whether steel was still in the programme for the next Session, he replied:
"Yes, it is."
Three months later it has disappeared without trace. What does one make of a Prime Minister who has apparently got so little influence over the contents of the Queen's Speech or whose word in public means so little?
What is the hon. Member for Ebbw Vale (Mr. Michael Foot) going to make of it. He issued his instructions on 10th September in Tribune:
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"The programme…should include a series of measures headed by the major steel and land Bills to which the whole party is absolutely committed."
The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) today, the very morning of the event, wrote in The Guardian under the heading:
"My Queen's Speech.
What does she have to say?
"In the view of My Government, the economic problems of My Country cannot be solved, nor the steel industry enabled to make its full contribution either to exports or to efficiency, except on the basis of public ownership. Supervisory control over the industry cannot achieve what is required. …"
The Prime Minister uttered those memorable words:
"Your Government is not going to be pushed around by anyone."
But, of course, they have been pushed around. In fact, they have been pushed right under by the hon. Members for Bosworth (Mr. Wyatt) and Pembroke (Mr. Donnelly). Of course, we welcome the Prime Minister's conversion. It looks like the biggest conversion since Bessemer invented his converter.
But I challenge the Prime Minister to declare this afternoon that the nationalisation of the steel industry is no longer the policy of the Labour Party or the Labour Government? [Interruption.] If the right hon. Gentleman wants to answer the question now, I will give way. If he does not answer it, then the whole country knows that the omission of steel from the Queen's Speech is just a squalid act of political expediency by a Prime Minister who puts political power before his principles and beliefs. [Interruption.] I should like to say some words about some of the items which have been referred to by the hon. Gentlemen who have just spoken and about some of the other items in the Queen's Speech. [Interruption]
Mr. Speaker: Order. A little heckling may be a good thing, but one or two hon. Members are persistently shouting. I do not want to have to take notice of an individual hon. Member.
Mr. Heath: We shall examine the various proposals concerned with housing to see whether they satisfy the fundamental criteria, which are to enable more houses to be built, to catch up with the

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target which we had fixed and to enable more people to buy their own homes. We do not believe that the establishment of the Land Commission will help towards this.
We shall, of course, examine with care the proposal to deal with rates. I should like to ask the Prime Minister a question about the speech of the First Secretary on 16th October when he said that it remained the Government's view that £350 million of the £892 million spent on educational services should be transferred from local rates to national taxation. Is this a firm Government commitment by the First Secretary, or is it another of his 3 per cent. mortgage touches? [Interruption.] That was reported in The Times Educational Supplement, and as far as I know it has never been challenged.
There is a rather strange phrase in the Gracious Speech about higher education. It says that the Government
"will continue to develop higher education."
Apparently, they have failed to realise that as a result of the Chancellor's efforts they have been cutting back on higher education, that their policy has been regressive for the last six months. We do not want any more "progress" of that sort.
We welcome the statement about pensions for those in the public services who retire. We shall examine the proposal to see if it comes up to our own proposals. [An HON. MEMBER: "Never."] If the hon. Gentleman reads our policy document he will find the answer.
Mr. E. Shinwell: I interrupt because the right hon. Gentleman has made a statement which is not in accordance with the facts. Will he state when in the last 12 or 13 years a Tory Government has made such a proposal?
Mr. Heath: There is no need for the right hon. Gentleman to become so angry about it. The Conservative Government increased the pension in the same way as the Labour Government from 1945 to 1950 through Pensions Increase Acts, and in the proposals published by our party on 8th October there are put forward these specific proposals for bringing pensions up to the level of 1956 with the addition of increases since then. [Interrup-
22
tion] Let the Government do as well as that and they will be congratulated. We welcome the fact that in regard to wage-related benefits the Government have now decided to include widows as well as other beneficiaries.
But the item that we shall examine with most care is one which has no title in the Queen's Speech—the policy concerned with incomes and prices. It is difficult to think of woollier wording than that which appears in the Queen's Speech. There is a statement on development policy
"in co-operation with all concerned"
but apparently it has to be done by a Bill which also, we are told, is to contain the element of compulsion. This seems to be a strange way of pursuing a policy of co-operation with all concerned. Of course, we know the differences which exist in the Cabinet—we can see them on their faces at the moment—between the First Secretary and the Chancellor. Some believe a Bill of this kind is right, is necessary, and will be effective. Others believe it is unnecessary, will not be effective and is wrong.
The plain fact is, of course, that a Bill of this kind is the price which has to be paid for all the overseas borrowing this Government have indulged in for so long. This is the real fact of the situation, but what we shall have to look at most carefully is what the element of compulsion is in the Bill, because we believe that in the difficulties which this Government are facing they will be forced more and more into compulsion. That is the danger, and it is that compulsion which we oppose, and which, in fairness to hon. Gentlemen opposite, I believe many of them are opposed to also.
But the plain fact is that this attempt to get an incomes policy has been one of the failures of this Government so far. We have had the First Secretary rushing up and down the country, rather like a successor to Prince Monolulu, shouting "I have got an incomes policy", and it has not been much more successful than Prince Monolulu's horses. The truth is, as the Chancellor has pointed out, that earnings are up 8 per cent.; production now is lower than in January; the cost of living is up 4·7 per cent. in 11 months—and we all know more is to come—and it has gone up faster than in any period in the last 10 years.

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The Chancellor has complained about the rise in earnings. The question I put to the Chancellor is what he proposes to do about it. What action is he proposing to put before the House? Because there is nothing in the Queen's Speech which deals with this situation of which he himself has complained. Indeed, in the strange sort of euphoria which has existed over the past two months in this situation, sterling is stronger, because of the billion dollar standby, which was absolutely right, and because of the liquidation of futures and the squeezing of the bears. But the fundamental problems of the Government still remain, and in many ways they are more serious because of the £1,000 million addition to the sterling debt which this country now carries. There is the 10 per cent. surcharge still in existence and more protection to industry which in itself is undesirable. So I would ask the Chancellor what his plans are for dealing with this situation.
As for the omissions from the Queen's Speech, these are numerous. There is nothing in the speech to suggest new measures to encourage people to earn or to save at a time when savings are falling drastically. So far as investment allowances are concerned, these are reduced in the Queen's Speech to arrangements for investment allowances and not actual inducements. These are the things to be considered. There is no proposal for firm action to cut out harmful restrictive agreements, to raise the quality of management, or to help small businesses to start and grow. There is no mention of pensions rights which would help people to change jobs. There are no ideas put forward for making shopping easier for the consumer through changes in shop hours. There is no comprehensive attempt to reshape the whole social security system to suit modern needs. We always understood that the right hon. Gentleman was working on this. But there is no mention I find in the Queen's Speech to encourage home ownership, or to provide modernisation in the nationalised industries. So there are great and serious omissions in a Speech which covers a wide field, and, indeed, as the hon. Gentleman has said, is very largely concerned with social matters.
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I should like to say one word here about the overseas matters mentioned in the Queen's Speech. First of all, on the question of Rhodesia. Our views have been frequently and clearly stated, and we welcome the statement in the Queen's Speech because this is a statement on which both sides of the House can agree. The whole House is united against any movement for U.D.I. I hope that the Prime Minister will be able to inform the House this afternoon on developments since his last statement.
I would make only one comment on this matter. The right hon. Gentleman is now concentrating, I believe rightly, on the Royal Commission. What I think is difficult to understand is why on a matter of such importance there was no joint statement setting out in detail what had been agreed on in Salisbury about the Royal Commission. This I find, and many of my hon. Friends find, very difficult to understand, and it has now turned out to be the crux of the matter.
Secondly, I again put the point to the right hon. Gentleman as to whether a senior Minister ought not to be permanently in Salisbury in order to carry on these difficult and delicate negotiations, rather than try to continue through exchanges of letters. So I hope that the Prime Minister will be able to deal with this point today, if he is going to report on the latest developments in Rhodesia.
I do not propose to deal in detail with the other overseas matters. We would like to have a debate on these on a day during the debate on the Address if possible, as well as to put down about the home items certain Amendments to the Motion for an Address.
I do not believe that the Government's record during this past year is such as to give us very much confidence in the opening parts of the Queen's Speech. What, for instance, about the initiative for an A.N.F.? Perhaps the Foreign Secretary will have something more to say about it. The Foreign Secretary said in New York, apparently, that he was prepared to drop it altogether and that the whole matter must be reconsidered. The Commonwealth Mission to South-East Asia never got off the ground and possibly inhibited any attempt to take further action in the dispute between India and Pakistan. The disarmament plan failed to get support from our allies

25
in its essential details. So far as Europe is concerned, I believe the initiatives which were agreed at the meeting of E.F.T.A. and W.E.U. are only the same as were put forward in 1963 on particular items of patents, standards, and so on, and no further progress has been made. Therefore, it is very difficult to see grounds for confidence in that part of the Queen's Speech dealing with overseas affairs.
Summing up, I think that the record of this Government over the past year is a dreary record which can give us no cause for confidence in the new, complacent generalities which we have seen today. There is really no cause for confidence that this Government will set out to deal with the country's problems.
I do not believe the Prime Minister is really concerned about administration in this way. What he is concerned with above all—in fact, obsessed with—is appearances, and that is his danger to this country. In his election address the Prime Minister said he
"would tackle the housing problem like a wartime operation".
As a result he took an expert in psychological warfare to do it, the Minister of Housing and Local Government. The result is that we do not get the houses, but we do get the psychological warfare.
The Minister of Housing and Local Government spelt it out plainly in his lecture to the Royal United Service Institution in 1952. He has been at great pains to translate it into civil terms in his present occupation to which he was appointed by the Prime Minister. I should like to take the House into his confidence in this. What he said was:
"The art of the propagandist is never to be thought a propagandist, but to seem to be a bluff, simple, honourable enemy, who would never dream of descending to the level of propaganda."
Now, of course, without much difficulty he has persuaded the Prime Minister as to the first lesson. This has been operated. He then went on to say that one of the problems in psychological warfare intelligence was
"to remind our leading generals and politicians not to believe their own propaganda."
He has obviously had considerable difficulty with his Front Bench colleagues to persuade them of that one. Then he moved on to the third lesson which he
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set out, with which he has had more success. He summed it up by saying:
"All this raised a great problem, because it meant that what we said to the enemy sounded totally different from what was said at home."
This is what has been happening to this Government. They have always said one thing abroad, and another thing at home. They have always said one thing to the electorate, but done another in their Departments.
So we have to contrast the Government's words with the reality of the situation on every occasion. When we read the last Queen's Speech, who would have thought that we were to drag through a Session in which Government policies would increase mortgages to the highest level ever, increase rates by 15 per cent., increase the cost of living by the greatest amount since 1955, increase Income Tax, petrol tax, car licences, T.V. licences, beer and tobacco taxes and postal charges? Who would have thought from the last Queen's Speech that the Government would cut back the building programme, the hospital building programme, the road programme and the technical school and university building programme? All of that is the reality of what has happened in this past year. As we look at this present Queen's Speech, we ask ourselves what is to be the reality during this coming Session.
Today, the Prime Minister has an even more tenuous majority than he has ever had. He may be looking to the Liberal Bench for support. There in its Leader we see the last surviving Old Etonian leader of a political party, the residual legatee of power and privilege in British politics today. The right hon. Member for Orkney and Shetland (Mr. Grimond) must have noticed that in the Queen's Speech there is not a single mention of electoral reform. What has happened to the bait dangled so invitingly by the Patronage Secretary before the Liberal Party? Is it possible that the Patronage Secretary has been so skilful that he has acquired the assent of the Liberal Party which at the same time is not to be paid the price? Yes, that is what is in the minds of right hon. Gentlement opposite.
Mr. Shinwell: What would the right hon. Gentleman pay?
Mr. Heath: I would not pay the right hon. Gentleman any price whatever, because his dwindling support in the country shows what happens to his party when it sells out to another.
So the Prime Minister must realise that decisions about the future are becoming less and less in his own hands and that when he is forced to go the country, the country will recognise the difference between the image and the reality of what his Government have been doing. When it does so, it will reject him and his colleagues decisively. It will reject them as superficial, as irrelevant and as inadequate, and neither this Queen's Speech nor the Minister of psychological warfare will save them.
3.43 p.m.
The Prime Minister (Mr. Harold Wilson): The part of the speech of the right hon. Gentleman the Leader of the Opposition with which I found myself in most agreement was his courteous and agreeable congratulations to my two hon. Friends who moved and seconded the Address in reply to the Gracious Speech. My hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) spoke with his accustomed wit and with unaccustomed brevity. I well remember the occasion—I think that it was at this time of the year—when he kept the House going, with fascinated interest, for three hours on the Film Finance Corporation Bill—November, 1953. I remember that I missed a train in consequence, because I was in charge of the Opposition Front Bench at the time. My hon. Friend the Member for Woolwich, West (Mr. Hamling), who has settled down in the routine and work of the House as few others have, certainly in our time, made a speech entirely worthy of the new approach which he is bringing to the work of the House.
I do not intend to spend a very long time on the right hon. Gentleman's speech. The one point at which he felt really confident in what he was saying was his certainty that there was to be an election this year. I remember that when he flew on that wild trip to Scotland between Christmas last year and the New Year he said at the airport that there would be an election "this January"—that is to say, last January. What is more,
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he had an election policy all ready. No one was more certain that there would be an election in March. Later on, it was to be June, but still we never saw that policy. Finally, when we had it in October—well, I will deal with that later.
He had a certain amount of fun with some of my hon. Friends. I hope that he enjoyed it; we did. He was trying to suggest that there were differences among some of my hon. Friends on the back benches. When I come to a later part of my speech, I shall concentrate not on his back benches, but on his Front Benches. The last thing I want to do is to interfere in his little private feud with the Leader of the Liberal Party, remembering that the right hon. Gentleman relied on the Liberal Party to support him in the Lobbies in more than two-thirds of the Divisions on the Finance Bill this year.
I thought that I heard him lecturing the right hon. Gentleman the Leader of the Liberal Party on what he called the dwindling support which the Liberals were getting in the country. The significant thing about the right hon. Gentleman's speech is that he has quite obviously convinced himself and at any rate some of his colleagues, while the only people he has failed to convince are the people of the country with whom he is losing support day by day and week by week. All I would say to the right hon. Gentleman is that this formidable army of "Whiz Kids" who spend their time grubbing through speeches written in 1952—all vastly entertaining—might be better directed to trying to produce a policy for the right hon. Gentleman so that he might then begin to put himself on the road to where he wants to go, although I doubt it.
Although I intend to devote the greater part of what I have to say to the legislative programme foreshadowed in the Gracious Speech, I will follow the right hon. Gentleman in one sense by referring immediately to the Rhodesian situation. Hon. Members will have seen the message which I received from Mr. Smith on Saturday amounting to a flat rejection of the proposal for a Royal Commission. They will have seen also the terms of my reply on Sunday when I repeated what I believe to be the views of the whole House—that we cannot here and

29
now in advance of the Commission prejudice the rights and, indeed, the duties of Parliament at the end of the day.
The House will have noticed, too, the deep concern which I expressed in the Sunday message—and I am sure that that concern is shared by the whole House—about the declaration of the state of emergency last Friday and its possible effects on the ability of the Commission to obtain a free expression of the views of the people of Rhodesia as a whole It is for that reason that I suggested to Mr. Smith that Sir Hugh Beadle, whom both of us agreed to recommend as Chairman of the Royal Commission, should come and discuss these matters in London preparatory to a further meeting which I would propose to have with Mr. Smith.
I think that the House is aware that Sir Hugh Beadle made his wise advice available to both Governments during my stay in Salisbury and that he has been in regular consultation with the Rhodesian Prime Minister since I left Salisbury. All of us welcome Sir Hugh to this country not only for his sagacity, judgment and humanity, but also as a man with the courage of a lion—and it will be needed in this situation. I have already seen him for a brief discussion this morning and I intend to have full discussions with him later today and tomorrow. I hope that it will then be possible for Mr. Smith to agree to a further meeting. I do not think that the House will expect me to say more at this critical stage, and I assure the House that we have reached an extremely critical stage.
I agree that it would have been agreeable to have had the agreed Minute to which the right hon. Gentleman referred, but the meeting which my right hon. Friend and I had with the Rhodesian Cabinet was very difficult. The right hon. Gentleman under-rates the difficulties of a meeting with a Cabinet already set for U.D.I. within a matter of hours if we had not put these proposals. We had the greatest difficulty getting discussions on the new plan. There is a lot the right hon. Gentleman does know and a lot more I can tell him. I do not want to prejudice the position further by going into this, but when I say that we still have not got agreement about the
30
Minutes of the discussions of the right hon. Gentleman the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) with Mr. Smith in September, 1964—and we are most anxious to publish these discussions, to which the right hon. Gentleman has generously and very fairly agreed—the right hon. Gentleman will appreciate our difficulties in the very difficult situation a week last Friday. It is understandable that not only the Government but this House have been concerned with this very grave situation.
The House will realise that this has not been at the expense of the very full consideration that the Government have been giving, day in and day out, to other serious international developments, particularly the situation in the Indian subcontinent. Here I think that the right hon. Gentleman's reference to this was a very irresponsible statement. I think that when he comes to consider it he will feel that it was not a very helpful remark, neither helpful nor true. Then there was the development in the situation affecting Malaya and Singapore, a disturbing situation in Cyprus, and of course the grave situation which was developing in Aden.
I would have liked to have dealt with all of these at some length this afternoon, and I hope that the House will have the opportunity of going into these questions, and indeed of going into other perhaps more constructive questions, on overseas affairs, including the initiative Her Majesty's Government have taken in disarmament and in measures to stop nuclear proliferation. I hope that there will be the opportunity during the debate on the Address for this to happen.
I think that the House will agree on one thing—that pressing and grave though these issues have been, pressing and grave though the Rhodesian situation has been—I do not think that anyone in this House is prepared to see us getting into a situation, indeed it would be undesirable, when we were to allow the Rhodesian situation, and all the difficulties arising from it, to monopolise our attention, to the exclusion of the vital economic and social questions which figure so largely in the Gracious Speech. Certainly, whatever attention we pay to Rhodesia, the political life, and political controversy in this country goes on, and

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it is right that it should. It is, therefore, to the Parliamentary programme that I now wish to turn.
I should perhaps first make the usual comment on private Members' time. My right hon. Friend the Lord President of the Council will on Thursday move a Motion proposing that the House set aside the usual 20 Fridays, and in addition the four half-days, for which provision has been made in recent years. The House will not expect me to go through all the Bills foreshadowed in the Gracious Speech, though I always felt, in my 20 years here, that the most useful speeches we have listened to at this stage are those which have dealt more fully than the Gracious Speech does with the main proposals of some of the principal legislative proposals. It would perhaps be helpful to the House if I dealt with this in relation to some of the main themes with which the Government have been concerned over the past year and will be concerned in the coming Session.
Economic policy, industrial policy, housing, social services and questions affecting freedom and the legal rights of the individual—these are the main points. Starting with economic policy, the Gracious Speech gives pride of place to the priority Her Majesty's Government are giving, and will give, to ensuring that balance in our external payments is restored next year and that the strength of sterling is maintained.
I think that the whole House will agree, and will take satisfaction in agreeing, with the improvement recorded since the Gracious Speech of November, 1964. Exports this year have been running at a rate of 6 per cent. above the figures for the same months of 1964, imports at about the same level as last year. The balance of payments deficit in the first six months of this year was £102 million, against £312 million in a similar period of 1964. Of this improvement of over £200 million, half is on current account and half is on capital account. While we have not yet got the figures for the third quarter, there is reason to think that the improvement, compared with last year, has continued. Sterling is strong, employment is strong, and the economy is becoming stronger.
Not every hon. Member, I think, thought that by this time we should be
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able to record a strong £, and a strong employment situation at the same time. Last winter we were warned time and time again that the measures which had to be taken to strengthen the balance of payments, to strengthen sterling, would mean depression and unemployment in the spring. When it did not happen then, it was going to happen in the summer, and when it did not happen in the summer, it was going to happen in the autumn. I do not believe that this combination of a strong £ and a strong employment situation would have been possible but for the actions that we have taken over the past year, and which have been criticised for the most part by right hon. Gentlemen and hon. Gentlemen opposite. I want to particularise these measures.
First, there were our measures to redeploy the economy by cutting out defence projects which were irrelevant to our defence needs, and too costly for the economy to bear, and the Opposition voted against them. Secondly, there were the sustained measures of disinflation in the November and April Budgets, which they would have had to do, combined with the tightest grip over Government expenditure that we have seen for many years. Action was taken regardless of political popularity and in the face of continuing opposition by the very men who were responsible for the situation we face. They knew that the improvements were necessary, but for political reasons they refused to face up to their responsibilities, in no way more than by their long postponement of an election. Yet the right hon. Gentleman is talking about an election after we have been one year in power.
The third point was the two Measures designed to take the overloading off the construction industries by controls over less essential building, and some highly desirable projects I agree, in both the private and the public sectors. The fourth factor that has led to this is the Finance Bill, bitterly fought and bitterly contested, especially the Corporation Tax. This, and the Finance Bill, together with other financial measures introduced in April and July, to deal with overseas investment, and the investment currency market, have resulted in a reduction in the net capital outflow by more than £150 million a year. Fifthly, I do not

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believe, in the wider sense, that the confidence in sterling would have been restored had we not presented to Britain and the world, not so much the image but the fact of a Government determined to take whatever measures were necessary, irrespective of political popularity, to strengthen the £ from the attacks of those who, for whatever motive at home and abroad, sought to manoeuvre us into devaluation.
I have to remind the House, and I think it is fair that I make this point, that in the fight for sterling it was not merely the inherited deficit with which we were dealing. There were also two new factors to contend with last year. The first was that whereas in 1964 the overseas sterling area balance of payments was strong, and the sterling balances were rising, this year, because of the fall in sterling area commodity prices, combined with a sharp rise in imports in other sterling area countries, these other sterling area countries have been drawing very heavily on their balances.
The House will have seen estimates, in the financial Press—I am not going to confirm or deny them—running into very large figures indeed, of an additional strain on our gold reserves because of the accumulated difficulties of other sterling area countries.
The second factor was the effect on sterling, indeed on the whole non-dollar world, of the measures taken by the United States to get their dollar balance of payments right. It was always clear, I remember warning about it some time before the election, that at any moment the United States would take vigorous action, for example about the Euro-dollar situation, and that this might produce very serious results, damaging for us and for others. In the event, when the Euro-dollar squeeze began, when the President urged American companies here and elsewhere in Europe to remit to America as much as possible of their working balances and to borrow on this side of the Atlantic, it was quite clear that this had quite a serious effect on Britain, because, creating, as it did, a shortage of dollars in Europe, it led some countries to draw on their holdings of the world's only other reserve currency, namely sterling.
So we have had these two additional strains to face, and I think that economic
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comments, or still more, political controversy which has sought to explain our payments problem purely in terms of domestic economic policies or internal politics, have failed to recognise the weight of these two additional external factors, which neither we nor any other British Government could have done anything to control, because they were external events.
I think that the House will agree that all of these developments have served to underline the need, repeatedly stressed by all of us on both sides of the House, for action to deal with the problem of world liquidity. This has been a very strong illustration of the need for action there. I have referred to the improvement in sterling and to our balance of payments. The House will agree, certainly we say this, that we have still a long way to go. All our problems, particularly the problem of industrial competitiveness abroad, are not solved. I think that the House would agree that it is irresponsible to talk of vote-catching increases in public expenditure, or of reductions in taxation, until a sound economic basis for such measures has been earned and is seen to have been earned.
In the development of the economic situation, two problems, in particular, demand the attention of the House and have dominated the work of the Government for many months. The right hon. Gentleman referred to both of them. The first is prices and incomes policy, and the second is the need for increased investment and investment incentives, particularly investment in the most modern type of equipment in British manufacturing industry. The central rôle of both of these was stressed by my right hon. Friend the First Secretary of State in his speech last week commending the National Plan to the House. In that very remarkable debate, right hon. Gentlemen opposite succeeded in reconciling then-great and admitted differences in one formula—a vote to welcome Labour's Plan.
One thing which we have all said, including many right hon. Members opposite, although not so loudly so recently—we said it in government after the war, we have said it in opposition and we say it in government again—is that we cannot for long pay more in incomes, be they wages, salaries, profits, dividends

35
or rents, than is earned by the national dividend represented by the growth in productivity. We have always insisted that a policy for incomes must be a policy for all incomes, not just those accruing to labour. We have insisted that we cannot appeal for restraint in one area of the economic process unless we first take action by our general incomes policy and by a taxation policy which attacks the arrogant citadels of fiscal privilege in order to create a climate of equity and justice. [HON. MEMBERS: ".Oh."] I can understand the sensitiveness of right hon. and hon. Members opposite. They have always voted against this.
We have also insisted that we cannot appeal, still less legislate, for restraint in incomes if the purveyors of goods are free arbitrarily and irresponsibly to raise prices when there is no case, save the pursuit of profit, for price increases. We have insisted that to stress only the negative aspects of a prices and incomes policy without making an all-out effort to obtain maximum productivity is economically frustrating and socially unjust. This is why we have repeatedly called for an attack on every nationally manifested restrictive practice we have been able to identify. Right hon. Members opposite talked a lot but did nothing about restrictive industrial practices.
We have tackled the problem of opposition to liner trains, problems in shipbuilding, problems in the docks—[HON. MEMBERS: "Oh."] When did right hon. Members opposite ever deal with the problem of liner trains? We have given authority for the liner trains to go through and have made the Government's position completely clear to the trade unions. As I say, we have tackled problems in shipbuilding, in the docks, printing, newspapers, and in the manning of commuter line trains. We have not only called for action on these things. At every point we have taken action and identified the process of government with the attack on these practices, just as my right hon. Friend the Minister of Labour has taken action in the motor car industry and, more widely, for dealing with unofficial disputes and has been attacked by right hon. Members opposite for doing it.
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But, as the House knows, there is the other side of this. My right hon. Friends and I have been engaged for many months past on the urgent examination of measures to deal with the other side of this productivity medal—the problem of incentives for new capital investment and modernisation in British manufacturing industry. That is why, side by side with the legislation which we are introducing on prices and incomes—I do not underrate the difficulties which this legislation raises for the House and both sides of industry, but for all that it is necessary—we intend to introduce two important Bills designed to assist modernisation in industry.
The need for this will have been shown to any hon. Member who has studied the comparative international figures of the proportion of the gross national product devoted to investment in industry. We are lagging far behind most other countries, and have been doing so for several years. In fact, this year it has increased but not enough. Fixed investment by manufacturing industry in the first six months of this year was 7 per cent. above the level of the second half of 1964 and 12 per cent. above the comparable figures for the early months of 1964. The most recent survey of manufacturers' intentions by the Board of Trade confirms earlier indications that in 1965 as a whole investment should be 10 per cent. up on 1964 and that in 1966 it will be a little higher still.
We have said on a number of occasions that we are holding a review of the present methods of giving incentives for investment. My right hon. Friend the Chancellor of the Exchequer mentioned this in his Budget speech last April. Last week my right hon. Friend the First Secretary of State said that we wanted to ensure that the system would provide the most effective inducement for the investment which British industry needed. The existing system of investment allowances was first introduced over ten years ago. They were suspended for a time in the financial crisis of 1956 for a couple of years or more and the rates have been varied from time to time. There have been suggestions from various quarters that for one reason or another they may not be operating as effectively as we all hoped they would.

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The Government's review of incentives and of the means of creating other selective policy weapons to encourage investment and modernisation has made good progress. I cannot, for obvious reasons, announce today the line of our conclusions, but we intend to publish a White Paper in the near future indicating what they are In the meantime, we shall be discussing with the C.B.I. the results of the inquiries which that body has been making among its members, and when our plans are ready for announcement I think the House and country will then agree that we have worked out a system giving full effect to our pledges to stimulate the modernisation of British industry—and in this the accent is on modernisation.
Certain of the powers in the Local Employment Acts are due to expire in March, 1967, and when we put forward the legislation, as we are going to do, required to extend these Acts we shall at the same time take the opportunity to provide new and dynamic special incentives for bringing work to these areas.
Other action is needed apart from financial measures in industrial policy. I have referred to an all-out attack on outmoded practices and methods of working. The Gracious Speech outlines a comprehensive series of measures designed to promote modernisation in industry and agriculture. My right hon. Friend the Minister of Agriculture will introduce legislation to give effect to the proposals in his two White Papers of last August.
A Bill is to be introduced to assist in modernising both the financial and industrial structure of the coal industry, and the manufacturing establishments of our publicly-owned industries will be freed from the vexatious, not to say ideological, restrictions on their ability to make a full contribution to our national production drive, including exports.
Hon. Members will have read the devastating Report on the docks submitted by Lord Devlin and his colleagues. They may have wondered, when they read it, why this Committee was not set up years ago. But they will, in any case, have been impressed, I think, by the speed and energy with which my right hon. Friend ensured that the momentum created by this Report was not lost but has been directed under the leadership of my noble Friend, Lord Brown, towards urgent comprehensive action to settle
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these problems in the docks. They will have been no less impressed by the statesmanlike co-operation of the leaders of the unions concerned with the dock industry and the employers and the dock authorities.
To carry out the Report will require legislation. This will include the introduction of a licensing system for port employers designed to ensure the required reduction in the number of employers so that only those able to meet the responsibilities of management in a modernised port service will remain in business. There is another aspect of the Devlin recommendations—the provision of proper welfare amenities for dock workers. It will probably require legislation to ensure that these amenities are provided.
This is not mentioned in the Gracious Speech, but we have not yet had the report of the Plowden Committee and I cannot rule out the possibility of legislation on the aircraft industry when we have their Report.
The right hon. Gentleman the Leader of the Opposition asked about steel.
Sir Cyril Osborne Sir Cyril Osborne (Louth) rose—
The Prime Minister: I think that the right hon. Gentleman wants the answer. I am not leaving the question of steel; I am coming to it.
We regard the proposals set out in the White Paper of last April as the right policy for the future of this industry. Public ownership of steel on the basis set out in that White Paper is and remains our policy, and we shall legislate to give effect to it. [HON. MEMBERS: "When?"] As my right hon. Friend the Chancellor of the Exchequer has said elsewhere, the issue is no longer whether—that has been decided; the issue is when, and that is the question of priorities. [Laughter.] We have had to judge this issue, and with the formidable list of essential legislation announced today—[HON. MEMBERS: "Ah."]—the time of the House is fully mortgaged for the coming Session.
The Steel Bill will be a major Measure and might well take a considerable amount of Parliamentary time. It might even be controversial—I did not gather that from the right hon. Gentleman's

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speech. It is for any hon. Member, opposite or on this side, who feels that it should be brought forward this Session to say what other major Bills should be sacrificed, because they would be major Bills. [Interruption.] Recognising how the right hon. Gentleman is capable, for reasons that have more relationship to his own interests than to the welfare of the nation, of holding up major legislation for month after month, I am quite prepared to discuss this with him. If he will give us reasonable facilities for getting the Bill through quickly, he can have the Steel Bill.
Until then, let the right hon. Gentleman realise that this remains our policy and that while, at present, we cannot see how it can be fitted into this Session of Parliament without the response for which I have asked him, we shall introduce it as soon as possible thereafter. In this we shall, of course, have to take account of any major changes in the meantime. The Bill will include the safeguarding provisions set out in the White Paper, but in the event of serious dissipation of the assets of the companies to be nationalised or the adoption of other devices to frustrate the manifest objectives of nationalisation, we reserve the right to strengthen those provisions and to reconsider the other provisions of the White Paper, including, of course, the terms of compensation.
Sir Knox Cunningham Sir Knox Cunningham (Antrim, South) rose—
Hon. Members: Sit down.
The Prime Minister: It really has nothing to do with the hon. and learned Member, because under the White Paper all legislation on steel in Northern Ireland is a matter for the Northern Ireland Parliament.
Sir Knox Cunningham Sir Knox Cunningham rose—
Mr. Speaker: Order. The Prime Minister has not given way. The hon. and learned Member should therefore resume his seat.
Mr. William Hamilton: Send him back to Ireland.
The Prime Minister: I want to make this position clear to hon. Members. Actions taken in good faith within the
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industry and in the normal course of business are unlikely to be challenged. The safeguarding provisions will not apply to transactions approved by my right hon. Friend the Minister of Power, who is very willing to discuss with the directors concerned any transactions which appear to attract those provisions or are in other ways of an unusual character.
While I am dealing with legislation affecting industry, I should like to refer to the Bill to which the Leader of the Opposition drew attention. This is a Bill which will be the first step in amending company law in the light of the Jenkins Report. This Bill will deal with the recommendations of that Report about the disclosure of information in company accounts, but it will also provide, as the right hon. Gentleman was quick to perceive, for the disclosure of details of contributions by companies to the funds of political parties and to other bodies which carry on political activities. I am sure the whole House will agree that it is right that shareholders should know of such expenditures of their money committed by directors in their name. I am sure that the House will agree also that this Bill will have the necessary detergent effect, cleaning up one of the seamier sides of British public life and improving the standards of our democracy. I think that the House will also give a warm welcome to our intention to introduce a major Bill on consumer protection, long delayed but very necessary.
Perhaps I should briefly refer, while on the question of industry and trade, to the reference in the Gracious Speech to the negotiations with the Irish Government for a free trade area between our two countries. These originated from discussions which I had with Mr. Lemass in November last year, when it was agreed that our officials should jointly examine improved trading relations between our two countries. We had a meeting in July to consider a report from our officials and I am hoping to have a further meeting with Mr. Lemass and his colleagues in the near future. I should say that the prospects of reaching agreement now look pretty bright.
Sir C. Osborne: Before the Prime Minister leaves the question of industrial affairs, may I ask him this simple

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and respectable question? During the 12 months of the present Government, over half a million more working days have been lost through strikes than in the previous year, 480,000 of them in nationalised industries. What steps does the right hon. Gentleman propose to take to stop this in future?
The Prime Minister: I am sorry that the hon. Member has missed all that has happened on this front, particularly during the Recess. Of course, we are all disturbed about this, although it is important not to get these figures out of perspective compared with other countries. Our losses are much smaller than in other countries, although, nevertheless, they are still far too high. Two of the industries in which this has been the biggest problem over the years have been the docks and the motor car industry. The hon. Member will have noticed that, for the first time, action was taken about the docks as a result of the Devlin Report. He will also have noticed the very spirited action taken by my right hon. Friend in connection with the motor car industry.
I should like now to turn to the eight Bills foreshadowed in the Gracious Speech relating to housing, local authority finance, rating and the land question. The Leader of the Opposition made housing one of the main points of his speech, and there will be no complaint about that. Indeed, the speeches which he makes regularly in the country, apart from his insistence on repeatedly drawing attention to his party's failure to hand over a healthy balance of payments to us, rightly stress the importance of housing. The right hon. Gentleman keeps on stressing this, and quite rightly, because we all agree that for millions of families housing represents the kind of social evil in the 1960s that unemployment represented in the 1930s.
Yesterday, the Rent Act, 1965, received the Royal Assent after all the long delay and the debates in both Houses and the last-ditch fights for landlords' rights and the equivocation of right hon. Gentlemen opposite, not least in their recent policy statement. However all that may have been, the House today can take satisfaction from the fact that 800,000 tenants of decontrolled houses will now gain full security, that creeping decontrol will stop and that new and effective machinery will be set up to fix fair rents. This Measure,
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making permanent and widening the basis of the urgent Bill introduced a year ago to stop eviction, had to be undertaken as the first legislative priority in housing.
As the Leader of the Opposition said, however, what really matters is the number of houses built. This is true, although it is a question not only of numbers, but of types, location and proportion which are built to let. The urgency of the situation is shown by the latest figures which I have seen. Three million families still live either in slums, in near-slums or in grossly overcrowded conditions. We need about 1 million houses to replace 1 million already identified as slums; up to 2 million more to replace old houses which are not yet slums but are not worth improvement, and 70,000 houses to overcome shortages and to provide a margin for mobility. In addition, we will require each year 30,000 to replace the loss caused by demolition for one reason or another, and 150,000 a year to keep up with new households being formed as a result of rising population.
The Leader of the Opposition has been working hard to suggest that due to our administration, fewer houses have been completed. This is part of a wider exercise in self-delusion which seems to affect right hon. Members opposite in that in every sector of public expenditure, whether education, hospitals, housing or the rest, they compare our advance in this difficult year not with what they did but with what they said on the eve of the election that they would do. Hon. Gentlemen opposite set the targets and, to the extent that we have not honoured them in the first year, we have failed compared with their record, whereas we have been doing better than they did in 13 years, regardless of the fact that their promises on the eve of the election added up to a total which in financial terms would have involved far more sweeping increases in taxation than my right hon. Friend has introduced, and regardless of the fact that the sum total of their promises within the building and constructional field alone would have led and was leading to such an overloading of the building industries that while more was being started, far less would have been finished. We had that at the time. We have it now. It reached its peak last October in the General Election, but it still persists, and it was best expressed more than

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a year ago in the Freudian remark by the then Leader of the Conservative Party in his election broadcast, when he said:
"we are now building 400,000 houses next year."
We would suggest that the one comparison is between what they did, what we are doing and what we shall be doing. [An. HON. MEMBER: "And what you promised."] Whilst we never promised 500,000 houses a year we are going to do it.
I am going to deal with the question of 400,000 houses. Their argument on housing is that because of financial difficulties earlier this year leading to a drying up of finance for home loans, far fewer are started and fewer are being finished. Quite apart from the fact that houses started this year are hardly likely to be finished by the end of 1965, the whole of that myth is exploded by one charge of fact. That fact is that at the end of September, which is the latest date available, there were more than 23,000 more houses under construction in Britain than there were at the same time last year on the eve of the General Election. There are 16,000 on public authority account and 7,000 on private account. Throughout the summer, the number of houses under construction was even higher than in the corresponding months of their administration, after 13 years of trying. If the right hon. Gentleman is concerned not with the number of houses but the number completed, his cause becomes even weaker. He assumes that all the houses that they began would have been completed in due time, regardless of the building material situation and regardless of the labour situation.
When we came to office, there was a crippling shortage of essential building materials. Does he feel that, with the shortage of materials and the still more serious shortage of labour, cutting down on office building has no effect? Does he think that they could have built more houses than are being built with, at the same time, an uncontrolled programme for office and luxury building generally? We have not gone as far as Mr. Macmillan in 1952, who instituted a building moratorium on all building, except housing, including schools and industrial building. We have exempted houses, factories, schools and hospitals. But, if we
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had not taken steps to regulate the load, the number of houses built this year—and it would have been much more serious next year—would have fallen sharply. What we are achieving has to be compared not with the paper targets of the Conservatives, but with the much smaller figures that they would have realised in fact.
To get the houses that we need, a rising programme over the next three or four years, half a million houses a year in 1970 and a growing programme after that—and to achieve within this a rising proportion of houses to let—will obviously require three things. One, it means land, available in the right amount, in the right place, at the right time and at the right price. Two, it means an effective system of priorities to ensure that enough building resources, traditional and non-traditional, are deployed on the housing programme. Three, it means a housing plan, including financial provision to enable local authorities to build the houses that they need to build, and a guarantee that building societies and others concerned with financing private development will be able to work on a steady programme assured of the necessary finance.
The House will realise the relevance of the measures proposed in the Gracious Speech for fulfilling those three requirements. Firstly, we propose to introduce legislation to establish the Land Commission on the lines set out in the White Paper. No doubt, that will be the subject of searching debates in the House, and I do not seek to go over the ground now or to anticipate those debates. But I am very encouraged to see that the party opposite which, month after month, year after year, censure debate after censure debate, said that nothing could or should be done about land policy, and which in the last election was prepared to die in the last ditch in defence of a free market in land, is now beginning to move slowly towards an appreciation of the realities of the situation.
Secondly, to ensure that enough resources are deployed on house building and on other priority programmes, we have the measure announced by my right hon. Friend in July to hold back less essential projects costing more than £100,000, though we are exempting from

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that control developments within the housing field itself, such as blocks of flats, as well as factories and other essentially industrial buildings. I hope that we will have the full support of right hon. and hon. Gentlemen opposite on that Measure, because, by their attitude to it, we can test the sincerity of the interest that they are taking in our housing programme.
The third requirement relates to housing finance and local government finance generally. The local authorities cannot carry out the housing programmes that are required on the basis of existing subsidies, present costs and interest rates. My right hon. Friend will shortly be announcing the details of the new and more streamlined subsidy scheme which will replace and renew those in force today, a subsidy scheme related directly to the special needs of housing authorities, to the high cost of particular forms of building and to the interest rates that local authorities have to pay. I do not think that the House will expect me to go further in anticipating the other details of the Housing Plan.
Associated with housing finance will be two further Bills to implement the decision that we have taken as a result of our first examination of the local government finance position. First, there will be a Rating Bill applying to the whole of Great Britain, followed later in the Session by separate Bills dealing with a wider field of local government finance in relation to England and Wales and Scotland respectively.
We propose to introduce the Rating Bill almost immediately. In addition to giving householders the right, if they wish, to pay their rates by monthly instalments, the Bill will provide for rate reductions for domestic ratepayers with small incomes so as to meet the very real problem highlighted by the Allen Report and also to counter the severely regressive effects of the rating system.
Many of us have said at various times that the rating system as we know it was tolerable, with all its inequities and its regressive character, as long as rate expenditure was kept to a fairly low figure. But, with the continuing increases in rate expenditure which inevitably follow improved social services and par-
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ticularly increased expenditure on education, the rating system unamended is carrying too heavy a load. Our first Bill will deal with that regressive aspect.
The second Bill, to be introduced early next year, will be designed to increase Exchequer grants to local authorities and, at the same time, reshape the system of grants. It may be that more intensive examination of problems of local government finance will throw up alternative methods to rates as the main local source of revenue. We all hope that someone will stumble on the secret some day, but I cannot say that a satisfactory alternative source has yet been discovered. We must reduce the growing burden of rates which increases every year as the services for which local authorities are responsible extend and develop. We intend that they shall extend and develop, but we cannot leave the ratepayers to carry so high a proportion of the rising cost.
These measures will give effect to the pledges that we gave in the General Election for action to assist local authority housing and to assist the ratepayer. I have been deeply touched by the concern which hon. Members opposite have shown for our fellow citizens in these matters, espectially the sense of shock which they have expressed at the fact that we were not able in our first year, with other legislative priorities, to say nothing of the economic situation, to carry out at once our pledges to millions of people for whom right hon. Gentlemen opposite had done nothing over a period of 13 years. I am glad that they have discovered their existence, even if only to provide a stick to brandish at us from the Opposition Benches.
But there is more rejoicing in the House over one sinner that repenteth than over ninety and nine just men who put these proposals in their election addresses, and I know with what pleasure hon. Gentlemen opposite will suport us in the Division Lobbies during the passage of this legislation.
Again, because the right hon. Gentleman referred to it, may I say that no one as sensitive as I am can fail to be moved at the feeling which hon. Members opposite are showing at last on the subject of mortgage rates. They never showed this interest in 13 years. We are going to deal with them. We have told the

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House that early action was precluded by the economic situation, but hon. Gentlemen—they have this to look forward to—can expect our plans in this matter to be laid before the House in this Session and we shall legislate on them at the earliest possible date. But I cannot repeat too often that we have to get this country's accounts into balance first, and then we shall do all the things right hon. Gentlemen failed to do during the easy years in which they presided over our economic fortunes.
We are going to carry out this pledge, and when we do, yet another paragraph will disappear from their rapidly diminishing list of unfulfilled pledges. I ought to remind the House that owner-occupiers, no less than any other section of the community, will obviously benefit from our proposals on rating, and they will benefit from the action we have initiated especially when they first become owner-occupiers or change homes. Urgent discussions are going on with the professional interests concerned to try to reduce the actual cost of buying a house, which I am sure the House will feel is necessary.
Hon. Members, not least those from Welsh constituencies, though there are many others from the Midlands, London and elsewhere who are equally concerned, will welcome the pledge in the Gracious Speech that the Government
"will introduce legislation to reform the leasehold system for residential property in England and Wales, including provision for leasehold enfranchisement."
Right hon. Gentlemen opposite talked for 13 years. We are taking action, and we are able to take action because on this question, as on the issues which arose on the Rent Bill, which is now the law of the land, our tune is called not by wealthy property interests, but by the interests of ordinary families in their homes.
I shall pass briefly over some of the other legislation. I thought that hon. Members would like to know what Measures they would be debating over the next year. They will spend a lot of time debating them, so they might as well hear what they are.
I come now to the question of the social priorities, which began last year with our decision to raise retirement pensions,
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widows' pensions, war pensions, and to abolish the earnings rule for widows, and in this Session we are carrying forward this work on a wide front. We are introducing a Bill to increase the pensions of retired public servants, a Bill broadly following the lines of previous Pensions Acts. It applies to all the civil public services, including the Civil Service, the National Health Service, teaching, local government service, the police service, and the fire service, and it extends also to former members of the India, Pakistan, Burma and Overseas Services. Corresponding provisions will be made for pensioners of the Armed Forces by Royal Warrants under the Prerogative, and, provided this Bill makes sufficiently quick progress, we intend that the increases should be payable with effect from 1st January, 1966.
In addition, the House will be glad to know that my right hon. Friend the Secretary of State for Education and Science intends to introduce a Teachers' Superannuation Bill. The first aim of this Bill is to put the greater part of the Teachers' Superannuation Scheme which is now spread over about 10 Statutes and 100 Statutory Instruments into a single Measure. The second aim is to enable an agreed pensions scheme for the widows and dependants of teachers to be introduced by regulation as soon as possible.
Turning from public service pensions, we are going, in this Session, to introduce a Bill to provide a new system of earnings-related supplements to unemployment and sickness benefit. This Measure will ensure that during the early months of unemployment and sickness those who are off work for more than a short period will receive benefits more closely related to their previous earnings. The Bill will also provide an earnings-related supplement to the weekly allowance payable to widows for the initial period following their husband's death. This will provide them with extra help at a time when it is particularly needed.
We also propose to introduce in the near future a Bill to extend and reorganise the supplements paid to men entitled to workmen's compensation. This will provide increased help for those injured at work before the present Industrial Injuries Scheme came into effect in 1948.

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As I have said, all these Measures are to be introduced without prejudice to the proposals which will follow next year as a result of the searching review that we are conducting of the social services. I have no doubt that the House will scrutinise our proposals with great care. I hope that the Opposition will be able to give us their support. If they cannot, they will no doubt take the opportunity to explain in more detail the proposals which, when they were outlined in their policy statement, caused considerable alarm and despondency in the country among those who believe in a social security system based on social justice.
I am prepared to believe that the first impression gleaned from reading the right hon. Gentleman's proposals, the impression that right hon. Gentlemen opposite are out to wreck the social services as we know them today, may be unfair, but it will be for them to explain how they can provide adequate social services while at the same time securing those massive reductions in expenditure which are going to lead to massive reductions in taxation to which they are pledged, unless it is their intention, as some students of their speeches have surmised, to add such an enormous burden to our industrial costs that we shall cease to be competitive in export markets, whether we are in Europe or anywhere else. We are told that all these proposals have been costed. We have heard that one before, and had the opportunity to examine their costings, but at least the debates on this year's social security measures will give the right hon. Gentleman the chance to come clean with the House and with the country.
I shall pass over some parts of the Gracious Speech with which I would have liked to have dealt. There will be other opportunities for debating the appointment of a Parliamentary Commissioner, the legislation about children and the family, juvenile delinquency, and also the question of law reform, but I am sure the House would want me to say a few words about the position with regard to immigration.
The House has now had time to study the White Paper published on 2nd August, and the statement made by my right hon. Friend the Lord President at the same time. This remains our policy, and we
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are implementing it. Certain measures, certain vital measures, announced in that White Paper, principally the reduction in the number of vouchers issued to Commonwealth citizens coming here for employment, were put into effect immediately.
The White Paper also foreshadowed legislation to deal with evasion and the efficiency of the immigration control. We have continued to study this very carefully, and in particular to have regard to a view which has been expressed in this House year after year that fresh safeguards should be introduced as regards both Commonwealth citizens and aliens, for those refused admission to this country, and for those subsequently required to leave it.
We accept the view repeatedly expressed in debates on successive Expiring Laws Bills—my hon. and learned Friend the Member for Northampton (Mr. Paget) has said this over many years—that the time is long overdue for placing on a permanent footing the law relating to the control of alien immigration, a control which still rests on an Act first introduced during the First World War as an emergency Measure, and which has been renewed from year to year ever since.
Both these problems raise very thorny questions, not least the problem of securing the right balance of treatment as between Commonwealth citizens and aliens, and again the broader problem—the need for the Home Secretary to keep a balance in his responsibility to Parliament and the nation for the proper administration of the system of control, and on the other hand the need to ensure that the individual concerned has a due and fair opportunity to state his case. We want to get this legislation right, and the Government have decided to appoint a small independent committee which can consider the whole problem and make recommendations, with these terms of reference: "To consider whether any, and if so what, rights of appeal or other remedies should be available to aliens and to Commonwealth citizens who are refused admission to, or required to leave, the country" and in the light of this we shall prepare the legislation as soon as possible thereafter.
Finally, I would like to sum up what I am sure the House will feel, and, with

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the exception of right hon. Gentlemen opposite, felt when they heard the Gracious Speech read, is a constructive and comprehensive programme of vitally urgent economic and social reform. Taken in conjunction with the massive legislative programme summarised in the Prorogation Speech yesterday—and it was quite a record of achievement—these two speeches together will represent in two years by far the greater part of the programme that we put before the nation in October, 1964. When that programme was presented, there were some who doubted whether we could get it through a normal four- or five-year Parliament, and with a normal majority at that, and I believe there were few hon. Members a year ago—still fewer after last January—who thought that we would be meeting today looking back on a first Session programme, looking forward to a second Session programme which would so substantially honour our compact with the British people. Even when this year's programme is through there will still be the two or three Measures I have mentioned to complete the programme in full.
As month succeeds month, and as more and more legislation gets on to the Statute Book, hon. Gentlemen opposite who thought that they were going to impress the British people with complaints that we had not carried out our whole programme in a year will find their oratorical stock in trade diminishing to vanishing point. Let us in humanity consider what this means for right hon. Gentlemen opposite, because their stock in trade is based on two dying assets. As the economic deficit moves gradually but surely to economic surplus, and equally as we put into effect Measure after Measure in fulfilment of the mandate for which we asked in our election manifesto, so the party opposite will be reduced to a querulous and impotent if not silent irrelevance. I have thought it right to spend my time this afternoon dealing as fully as I could with the legislation which is going to come before the House, rather than replying to all that the right hon. Gentleman said. I agree that he is working very hard and that it is not going to be his fault if the British people are taking so little notice of what he says. It is not his fault; he has said it
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very often. But, however shrill and strident his tone, his words, eloquent though they are, are drowned by 13 years of history. It is what they did and not what they say which impresses the people.
Opposition for opposition's sake is not enough, especially when so much of his opposition, as he has been going round the country, is defensive in character. I thought that he was going to attack us, but he spends all his time going round the country defending his policy against the criticisms that are being made of it. This is not the way, I assure him. I feel that he under-rates the mood and spirit of this country. It is really interested in government and alternative government—not opposition for opposition's sake.
It may be—I am prepared to accept this from him if he tells me that it is the fact—that he and his right hon. Friends do not like the Government we have. It must come as a shock to them after these last two years to have any government at all. What we are certainly not getting—whatever they think about the Government—is an alternative Government with alternative policies.
They have had a year's hard work. The right hon. Gentleman and his hon. Friends have been mulling through the drafts of their Central Office committees, but at the end of it they have raised more questions about Conservative policy than they have answered. At least we knew where they stood at the end of 13 years, but where do they stand now? This debate on the Address and a year's hard labour on this massive legislative programme that we have put before the House today will give them their chance to tell us where they stand.
They might be able to tell us whether they believe in planning any more, as one might gather from the past speeches of the right hon. Member for Barnet (Mr. Maudling) and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—for some of them believed in planning in the past—or whether they totally reject planning, as does the right hon. Member for Wolverhampton, South-West (Mr. Powell), or are they in the extraordinary posture of the right hon. Gentleman who spoke in the planning debate last week, or is it that, with the Leader of the Opposition, they believe in planning provided that it is not effective? They really

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ought to tell us where they stand on an incomes policy. Some of the best of them urged that there should be an incomes policy when they have had responsibility in these matters. They could not get anybody to agree to an incomes policy when they were there, but that did not dim their unquenchable faith in the need for one.
They might also tell us where they stand on prices. The right hon. Gentleman's speeches are getting a little outworn. He could have told us today that the retail price index has risen just one point since last April, but he did not. Let them tell us how much they think prices would rise when they saddle industry with the cost of the nation's social services and when they embark on doctrinaire agricultural policies reversing the whole record of the past 18 years, destroying agricultural security and raising domestic food prices at the same time.
In the new Session they will find opportunities to to tell us where they really stand on industrial relations, and on their policy towards the trade unions. Obviously, they all agree that there are votes to be got in appearing to be beastly to the trade unions. But that is only a posture and not a policy. The public are entitled to know what their policy is. Do they support the speech by the right hon. Member for Wolverhampton, South-West at Weston-super-Mare, when he was reported as referring to recent actions by the Minister of Labour in connection with the motor car industry as presenting a picture similar to that of Fascist Italy and as saying that the measures which had been suggested to prevent unofficial strikes in the industry were
"inconsistent with all that the Conservative Party has ever said about the right of a man to belong to any union"?
That was a fortnight ago. Bringing the situation more up to date, can we be told where the truth lies now, as between the two speeches made last Friday night? Does it lie with the right hon. Member for Enfield, West (Mr. Iain Macleod)—the shadow Chancellor—who said:
"If it were right to legislate on trade unions in the docks, it was right to extend this through industry"
or with the right hon. Member for Leeds, North-East (Sir K. Joseph)—the shadow Minister of Labour—who said that the
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Conservative Party had introduced a code of industrial practice, not legally enforceable but laying down standards, and that
"I don't see how in a free country you can legislate against unofficial strikes. Some may be spontaneous reaction to local blunders. You can't in a free society put people in prison for this kind of thing"
Can we have that sorted out?
Again, where do they stand on the Rent Act? Would they repeal ours and go back to theirs, or have they learned the hard way? After their vote last week, would they seek to exclude middle-class tenants from the benefits of the Act?
There will be ample opportunity in the next year for them to tell us exactly what their defence policy really is. We all welcome the conversion of the shadow Defence Minister to the idea that defence expenditure should not constitute a burden beyond the economic capacity of the country to carry. We welcome this. We know that it is consistent with the views which the right hon. Gentleman has held from time to time when he has been in and out of the Government—or at least, when he has been out of the Government. This is a welcome change and a timely rebuke to his whole party, including himself, who voted against the defence economies that we announced last spring, especially the prestige aircraft items, which will be the last costly memorial to the now departed but unmourned ex-Minister of Aviation.
But the right hon. Gentleman's speech—and this was the serious part of it—went far beyond economics. It has raised the gravest doubts in the minds of our allies. It has called in question commitments of honour into which this country has entered under successive Governments. It shows a total lack of reality of the kind of world we are living in and the threats that we are facing, however much the Leader of the Opposition bravely seeks to repudiate his right hon. Friend's speech.
Where do they think the threat to world civilisation lies in all this talk about China and the West? In Brussels? In the words of the hon. Member for Berwick-upon-Tweed (Viscount Lambton)—and I commend this to the right hon. Gentleman—
"It is not much good putting an extra bolt upon the front door if at the same time you leave the back door open."

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These are some of the questions—and I can assure the right hon. Gentleman that there are plenty more—to which the country will want answers. So far its message has been, "Back to the drawing board, Ted". I can assure him that he will have plenty of time to answer these points while the rest of us are carrying through one of the most massive programmes of social and economic reform in all our long Parliamentary history.
4.50 p.m.
Mr. J. Grimond: I want to join in the congratulations to the mover and seconder of the Address. When we heard their names our expectations were high. Their speeches exceeded our highest hopes. I thought that the choice of the hon. Member for Manchester, Cheetham (Mr. Harold Lever) was another example of the remarkable political prescience of the Prime Minister. Nothing could do more to reassure not only the City of London but even the gnomes of Zurich about the changing complexion of the Labour Government, their abandonment of Socialism, and their determination to come to terms with the free enterprise system than the selection of the hon. Gentleman.
We are discussing this Queen's Speech under the heavy shadow of events in Rhodesia. I am sure that the whole House shares the Prime Minister's regret at the state of emergency declared in Rhodesia at the end of last week and also over the rejection of the latest proposals for a Commission. If there is to be a U.D.I. in Rhodesia, it will be one of the most unnecessary tragedies which the world has ever seen. Everybody will agree, I think, that the British Government have gone as far as they can to find some acceptable basis on which all can agree and there are clearly points beyond which we cannot go.
We cannot compromise on the principle of majority rule in the foreseeable future and, while we have to be sensitive to all the difficulties of a multi-racial country, we have to remember that we are the centre of a multi-racial Commonwealth and that, if the Commonwealth means anything, it means that all races will be treated with justice within it. Furthermore, we take pride in the fact that Britain has left in Africa, Asia and other
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parts of the world a respect for the rule of law. We cannot have one law for the white and one for the black. We cannot have different standards in the Commonwealth or within the legal system of which we are proud.
I still believe and hope that a way can be found out of this crisis but I think we should make it plain that, while all reasonable compromises have to be made, we must keep stressing that there are certain fundamental, basic issues on which we cannot compromise. The Archbishop was right in saying that, ultimately, this is a moral question.
Turning to the Speech, I could have wished that there was a more definite theme running through it. The Prime Minister asked where the Conservative Party stand and what they stand for. This is a rhetorical question. The Conservative Party, of course, stand where they have always stood—on whatever is agreeable to their interests and generally accepted by the establishment. They have no need to have any new stance: they are the Conservative Party.
However, it is necessary for a progressive party to have a theme and to make it clear what they stand for.
I think that it is recognised in the Speech that the Government no longer stand for Socialism. They have dropped it as a theme running through their policies and I welcome that but, of course, it is not enough. A radical movement must have some new theme and a series of ad hoc measures, however defensible individually, are not enough. Such a movement must come forward sooner or later with a clear and definite view of the kind of society it wants. It was clear from the speech of the hon. Member for Woolwich, West (Mr. Hamling) that he wants—I sympathise with him—to go back to the main radical tradition of British politics.
There was no mention in his speech of nationalisation. On the contrary, there was emphasis on social measures and on those radical clubs of which he is so proud to be a member. In Liberal eyes, the theme must be of a more expansive and radical Britain, shaking itself loose from the old industrial and social attitudes and moving towards a greater equality of opportunity above the guaranteed minimum which a rich society like

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our own should now be able to guarantee every one of its citizens. It should be a theme of a Britain in which power, responsibility and wealth are widely spread throughout the community with a greater variety of choice.
Coupled with this theme at home, we should have liked to see a clearer statement of the Government's view of the future of Britain's rôle as it affects defence and foreign affairs. It was notable in the Prime Minister's speech—which was not notably short—that only in the closing sentences and only as an additional stick with which to beat the Conservative Party did he touch on defence or foreign affairs at all. Where he did so, he demanded an explanation of one of the more sensible remarks made by a shadow Minister from the Conservative Front Bench in the last two or three weeks.
We welcome the priority given to making Britain economically strong. That should be doubly underlined, because, clearly, we cannot supply community services or give wider variety of choice unless we have a strong economy. We note with satisfaction the inclusion in the Speech of several Measures pioneered and promoted by Liberals.
I come now to what has been described by the Leader of the Opposition as a squalid act of political expediency. This is the omission of any mention in this Speech of steel nationalisation. I do not see it in the same light as the Leader of the Opposition. On the contrary, I believe that the Government are certainly entitled, and are right and correct, to take notice of the fact that they have no mandate for this Measure. As they say that it has a very low priority—[HON. MEMBERS: "Rubbish."] The Prime Minister himself said so. He said that it has a very low priority. I do not want to go on rubbing in this point. I think that the Conservative Party should welcome this. We take some credit for having achieved it—
Mr. Stanley Orme Mr. Stanley Orme (Salford, West) rose—
Mr. Grimond: I shall not give way: we have a long debate before us.
What I am concerned with are the remarks this afternoon of the Prime Minister. He keeps assuring us that this
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Measure will come some day. Is this shadow boxing? If it is, it is a pretty poor way to treat the industry. The industry wants some end to this sword continually held over its head. We now have a chance to agree on measures which will meet the real needs of this industry and I think that most people agree that its situation is not satisfactory. We could also agree on measures which would be acceptable to the industry itself.
I believe that we can claim that the radical vote of this country at the last election has had its undoubted successes in weaning the Government away from the more outdated and irrelevant doctrines of Socialism. The task which we have in my party is to ensure that it does not slip into Conservatism as an alternative. We should have liked to have seen in the Speech a reassessment of our rôle in foreign affairs. We should have liked to see in that reassessment a shifted emphasis from the stress upon the importance of a rather vague rôle in the Indian Ocean to a clearer commitment to the need, if and when the opportunity arises, for joining Europe.
Nuclear weapons have hardly been mentioned in this debate, but they used to be a matter of considerable importance to the party opposite. Many options are left open. The option which we should like to see chosen is that the Government should drop the attitudes which stem from the idea of the independent deterrent, and, now that the M.L.F. and the A.N.F. seem to be on the way out, we hope they will have some other proposals for international control of weapons.
I was taken to task by the Leader of the Opposition for having been educated at Eton. I am not ashamed of my school. There are many agreeable and not a few eccentric people who have been educated at Eton. I wish—[Interruption.]—some possibly come under both heads. It is a school with some drawbacks, but it has some virtues. I do not suffer from that curious inverted snobbery which from time to time affects the Conservative Party. The Leader of the Opposition is in danger of being pushed forward in the manner of the single trade unionist whom the Conservative Party trot round their conferences from time to time to

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show that they know what a cloth cap looks like.
Because I believe that there are certain advantages in a boarding school education and because I think that, in some ways, the public school system has much to offer, I should like to see far more people share it. Therefore, I should have preferred not that the Government should appoint a commission to see how the public school system could be integrated into the general system of education but that they should come forward with agreed proposals on this matter. We should make a start, and this is one of the ways in which we should impress on the country that there is a new wind abroad and a new sense of values. It is one of the ways in which we should give a wider opportunity to all sorts of people, whether they have the money to go to these schools or not.
We note with dismay that the Government intend to strengthen the control of Commonwealth immigration. The Prime Minister said that inquiries would be made into the ways in which these controls were exercised, but the phrasing in the Gracious Speech causes some of us some concern. I must emphasise that the Government should steal Liberal clothes—that is the tradition in this country—and should not go about stealing the clothes of the Conservatives.
Let us turn to some of the better points in the Speech and look at some of the clothes which they have stolen from us and which we are delighted to see worn. We approve of the reform of the rating system. The Prime Minister did not say that any part of the education service would be taken off the rates; but that can be dealt with later in the debate. Nor did he indicate that the Government have any idea of a new source of income for local authorities.
We welcome the proposal that National Insurance benefits should be related to earnings. We particularly welcome the statement about public service pensions. For the Conservatives to say that this does not measure up to their proposals is pretty stiff after they have been in office for 13 years. We hope, however, that the position of those who retired long since from public service will be kept very
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much in mind. We welcome the reform of leasehold.
We must wait to see the Bills. But these are Measures which in principle we welcome. There are others foreshadowed in the Gracious Speech, too, which I think we can support.
I turn to those Measures which of necessity are given only in outline in the Gracious Speech. These are probably the Measures on which the Government's future may depend, and our reception of them must depend on their detail. As I have said, we welcome the placing of economic measures almost at the head of the Government's programme. We agree with some of the policies which the Government say they will pursue—much greater competitive efficiency, the more general use of advanced technology, the better use of land, higher industrial investment and the promotion of exports. These are unexceptionable. We should have liked to see more emphasis placed on competition, on incentives and on a further attack on restrictive practices on both sides of industry. The Prime Minister mentioned this, and perhaps concrete proposals will yet be put forward. These seem to me essential parts of any incomes policy, because an incomes policy should not be a policy simply of holding people down to a certain level but should be a policy including incentives to reward those people who make a greater contribution.
We should like to see more drastic attention paid to regional development. We believe that the people of the regions should be associated with this development. We believe that new centres of power must be created in Britain. The Prime Minister spoke of certain additional measures with regard to regionalism, and perhaps these will come forward. I hope that these will include a tax differential to encourage industry in the regions. Above all, we do not believe it possible to manage the economy sensibly when steps to restrict expansion lead to un-acceptably high unemployment in some places while they do little to reduce the pressure on resources in others.
Another facet of this is that even if further purchasing power is pumped into some under-developed regions, too often it flows back to London, and it is therefore essential to broaden the base of the economy and to create centres of attraction well away from south-east England.

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We accept the Government's aim to increase productivity in agriculture, but we wonder how much further they can go in holding down agricultural prices while agricultural costs continually rise.
I come to the Land Commission and the related proposals concerning housing and land. Here we certainly will have to see the Measures which the Government produce. We agree that land is not a commodity which can be regarded as a normal commodity of trade. It is a limited commodity, requiring special measures. We regret the absence of site value rating and we have serious reservations about the Land Commission as at present proposed. However, we shall wait to se: the actual proposals. These must be judged by the simple criterion—will they put land to better use, will they make land for housing cheaper and will they make housing more readily available?
We certainly agree that companies should disclose their political contributions, not only these but all their contributions. That is not because we think it necessarily wrong for contributions to be made. On the contrary, many companies may be right to contribute to the arts and, on occasion, to politics. But their shareholders have a right to know, because this is money which, if not spent in this way, might be used either to lower prices or to increase dividends. I hope that the Government will go further and will bring into force many of the recommendations of the Jenkins Committee, which are there for all to see and about which nothing has been done.
I turn to transport and roads, which are relegated to the last but one paragraph in the Gracious Speech. I do not know whether that is symptomatic, but I hope that it is not. These get only three lines. But a better road system and cheaper transport are among the most crying needs of this country and two very important matters—exports and regional development—depend very much on them. We hope that in the course of the debate on the Gracious Speech the Government will pay rather more attention to these subjects than they have done so far and will tell us what their proposals are.
We note that the provision for the special needs of Scotland appears in the last paragraph of all. Again, this is per-
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haps not significant, but I do not believe that it will have given much assurance to Scotland either that their claim for a better say in their own affairs or that any real understanding of their problem has yet taken root in Whitehall.
One omission from the Gracious Speech is that of any proposals to meet the growing increase in crime. This is a matter of great public concern. I hope that the Government will appreciate that this is a matter of concern and that before steel reappears in their programme they ought to deal with crime.
At the start of my speech I said that we regretted the absence of any clear radical theme running through the Speech but that we were at least grateful for the abandonment of Socialism. There are many proposals in this Speech which, if they are properly worked out in detail, would have the wholehearted support of Liberals because they have been Liberal policy. Generally I believe that the public at large will want to see what the implementation of this Speech means. I believe that some of the proposals will be popular and that they will find that many are unexceptionable in intention. I therefore doubt whether the public will welcome a wholehearted attack on them from a purely partisan point of view. In those circumstances, we shall certainly reserve our right to criticise, amend and oppose the Bills as they come forward when we feel that that is in the national interest. But our first reaction to the Speech is that the Government should at least be given some chance to put forward the details of their proposals. Let us see what they look like.
I for my part do not either seek to exert great influence on the Conservative Party or expect great concessions from them. What would we influence? What policies are there proposed by the Conservative Party upon which anyone can have any influncee at all? Admittedly they have an enormous research staff. But what does it do? It spends its time comparing what people said this year with what they said 10 years ago and thinking up jokes about individual Ministers. So far there has been a painful absence of any policy from the Conservatives which anyone could influence.
I am in politics not simply to criticise but, I hope, to have some effect upon the

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actual measures of government and upon the creation of public opinion in this country. I think that we may claim, at any rate on the showing of this Speech, that my party have not been wholly ineffective in this direction so far. We intend to continue this. When this Speech is studied it may well appear that this can be a turning point away from the dead, dusty and wholly out-of-date doctrines which have hung around the Labour Party's neck like albatrosses in the past and that, with a little reasonable Liberal encouragement, they may become a radical party yet.
5.10 p.m.
Mr. Robert Woof: As we are being courteous on this occasion, may I say that I have particular pleasure in following the right hon. Member for Orkney and Shetland (Mr. Grimond), who expressed sincere views on a number of subjects, which I am sure the House observed with great interest. I noted that towards the end of his remarks he pointed out that he was in politics. That goes for us all. I would only ask him to agree that the atmosphere created in the venerated opening of Parliament makes us appreciate what governmental authority means to us every day and every moment of our political lives—how it underlies and conditions the things we do or can hope to do and why it may influence the course of events, either for good or for ill.
I always think that one of the advantages of speaking on an occasion such as this is the wide range of subjects to which reference may be made. Before I endeavour to make some remarks related to the Gracious Speech, I would like to point out that it is about 24 centuries ago that Aristotle founded a system of political thought upon the axiom that man is naturally a political animal, even though everyone born into this world is profoundly affected by the Government under which he lives. In other words, reduced to its lowest terms, human life is a struggle for the means of subsistence. In fact, the fundamental needs of humanity resolve themselves into a ceaseless struggle for material satisfaction.
We can always find convincing proof of the truth that the stages of economic development reflect the thoughts and
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actions of human beings engaged in the different forms of production, although it might be laborious to read oneself fully into a past system of society and try to comprehend the different stages of development of industrial and social relationships.
Having said that, it should be pointed out that there are some people of learning, admirable though they are in their exposition of history, who hold the view that the whole social and political system of modern life is the outgrowth of the economic struggle. But I would frankly admit that to attempt to elaborate analysis of many of the stormy clashes of today would be a task hopelessly beyond my competence.
However, I welcome much of the legislation foreshadowed in the Gracious Speech, particularly the reference:
"Steps will be taken to improve the arrangements for providing incentives for industrial investment with due regard to the development of the economy and the special needs of particular areas."
I realise that the House is always very watchful when it comes to a question of Government assistance, through the provision of aid, investment, loans or grants. But the main reason for my concern in this management of affairs is confined to the fact that for a long time now the North-East has been searching for ways to generate real industrial readjustment as a consequence of the decline of the older basic industries.
Time after time, we are brought face to face with upheavals caused by economic pressure—its friction takes a predominant place in overturning the habits of life and diverting attention into totally different channels. We are aware of evidence that is sufficient to prove that great cities and cultures have risen and fallen since the beginning of time, but as the wheel of time changes there is no question which touches us more profoundly than that of what we want in the way of a struggle for a living.
This is no truer anywhere than in my constituency. Even the previous Administration—without casting any doubts on a considerable range of qualified studies and evidence—recognised the substantial adverse economic position with the great need to attract industry by scheduling the greater part of the constituency as a development district.

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In this train of strategy, I would not try to make things look different from what they are, but on the basis of actual observation, there seems to be a sharp contrast between social development and the lack of industrial development. Out of this regard, I am bound to say that there has been a weakness in making substantial headway—but we are hoping that this will be remedied with the new machinery of regional planning by working in conjunction with the local authorities.
While it may at times be necessary to struggle through the wrong path in order to attain knowledge of the right one, if we are to have sound planning I would imagine that it ought to be the result of joint effort, necessitating action to be directed over a period of years in making favourable conditions to determine the capacity for industrial activity.
I think that it will be generally accepted throughout the House that planning applied for the convenience of administration is a word with many definitions. Its application to particular activities vary greatly, but the value of planning can be determined only on the basis of knowledge of needs for an area, with the creative ability to devise improvements and get them carried out.
I feel compelled to relate events in my area as an example of the kind of situation that is being created today. The local authorities there are working exceedingly well and with a real understanding of the problems which are confronting them and they have made commendable progress. I will not go into all the details, except to say that they have a good planning record and that much internal development has been achieved through effective planning.
Considerable effort has been made by these local authorities and private builders. The redeeming feature of the joint process is the redevelopment and transformation of places where practically nothing existed before. These places have been turned into an environment of pleasant habitation. This undoubtedly has completely changed the physical character of the area out of all recognition.
Having said that in the overall framework of planning, I must say that nothing is more crucial than the selective concentration of land for industrial develop-
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ment. As we are sincerely anxious to have industry of any kind to replace industry that has sadly declined and is inevitably contracting,, the authorities are placing great emphasis on land which should prove attractive to industrialists.
I appreciate that there are all kinds of conditions and circumstances which industrialists must consider for new manufacturing location. When a firm has to choose a suitable place for a new factory there are many factors which must be taken into account. Some are directly related to available production and to available employment, some to the organisation of production and distribution, transport facilities and transport costs. Unfortunately, the desire to acquire land and economically release it to private enterprise for industrial development, like many more things these days, is proving to be a very costly business.
Perhaps I may here give an example. The Blaydon Urban District Council, in my constituency, has been making overtures to the owners of land for the purpose of purchasing about 51 acres for industrial development. Incidentally, the land is adjacent to the new Scotswood Bridge which is in the process of construction. The bridge will not only stand as a memorial to engineering genius but will be an important link of communication for industry, trade, and good transport in the economic life in the area. But the value of the land to which I have just referred is estimated to be in the region of £3,000 an acre and, added to this, would be the cost of providing sewerage and surface drainage, which would be in the region of £75,000.
I think that all of us realise that there is no harder task in the whole process of local government than to raise money to meet financial obligations, and in this respect the Blaydon Urban District Council is not a wealthy authority that can demand large revenue. After all, the manoeuvres of a spider are only limited by the size of its web.
Therefore, in order that positive steps can be taken to persuade industrialists to establish their factories on such land as is available in the way which is required, I would sincerely hope, and I would sincerely appeal to the Government, that when the proposed legislation is brought forward to the House, provision will be made for financial assistance

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to local authorities to enable them to make land really worth-while and attractive for industry to stimulate expansion and economic growth.
I want to say a word or two about the wider aspect of economic activity. Just as zoologists invariably assume that ants fight for economic ends, it is not extraordinary to find in these times, with much material progress to encourage us and with greater advance to our credit in many of our social relations, that we still have a mass of unsolved economic problems on our hands. As we seem to be swept along by the torrent of events, hopelessness is perhaps of all things the most destructive of energy and imagination on which progress so greatly depends, but with eyes fixed on the future it is essential to give coherence to the mass of labour for the construction of a stable and prosperous industrial society.
The capacity to learn the real nature of many problems that face us at present brings me to the reference in the Gracious Speech, where it is stated:
"A Bill will be introduced to assist the financing of the coal industry and the redeployment of its manpower."
This also seems to be linked with the Government's intentions outlined in the White Paper on the finance of the coal industry. This was published last week and, as I understand it, the Government propose
"..to provide special funds to accelerate the provision of alternative industrial development in the areas mainly affected by the acceleration of the closure of uneconomic pits and to help in meeting the social and human costs arising."
The White Paper also states:
"The Government will encourage the development of new industries in the areas affected."
I will not take up the time of the House supporting the backbone implied in those provisions. I would purposely refrain from enlarging on the major issues associated with that initiative, but force of circumstances necessitates me to remind the Government that coal mine closures in my constituency have been far too numerous. Coal mining was once the basic industry, supporting heterogenous communities there. I am tempted to say that many places resemble an industrial coffin in a repellent form—now with a blacker night approaching. With
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the threat of closing down more mines, this has created a very cruel dilemma.
I do not ignore the fact that profound economic changes have thrown an immense strain on the Government—it places a task on the difficulty to establish an environment favourable to the development of economic equality. I have always believed that it is only when people stand upon the level of equal opportunity that the differences in human endowments are manifest. But many people in my constituency are not even given the equal opportunity because of the lack of alternative employment there.
Recognising the conditions which surround them, and to display serious intention to give a lead in reconstruction of employment would serve to lift them to the level of opportunity more than otherwise would be possible in the present state of affairs. While I am always ready to give support to anything that is a step in advance, there can be no stronger or more pressing motive for the Government to make proper provision for those displaced in such employment, and those communities that would be adversely affected in the cohesive elements of common economic and social interests.
All this may sound what John Bunyan called
"Doleful voices and rushing to and fro"
but I am bound to say that in my time and deliberations in the years I have been on these benches, I have made speech after speech advocating—begging for—new industry to replace the industry that has been swept away. I did that because I have often thought that not enough has been done about the distribution of industries. I am pleased to see present here the hon. Member for Eastleigh (Mr. David Price), who held office in the Board of Trade in the last Administration. It would be unfair on my part if I did not pay tribute to the welcome and unrestricted co-operation exercised by the Board of Trade and the Ministry of Labour under the last Administration. Vision was shown to meet the need for new industry, but while some success was achieved as the first step towards industrial readjustment in my constituency, I must repeat that nothing has yet measured up to the colossal need. That would prove in the long run a foundation of employment

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opportunity on which to build in the years to come.
To conclude, I would mention briefly foreign affairs and defence which, quite rightly, feature in the Gracious Speech. Having a rare opportunity to watch television, I must say that the right hon. Member for Wolverhampton, South-West (Mr. Powell), who is the official spokesman on defence matters for the Opposition, lifted my eyebrows on the occasion of his erudite and intelligent performance which was televised during his party's annual conference. It was very interesting to note that the Opposition are at last beginning to take serious countenance of views which have been expressed, not only by myself, but by other hon. Members on the Floor of the House, and are querying the value of our military presence in the Middle East and the Far East.
It now seems that even the party opposite are dubious about supporting the Federation of South Arabia and Malaysia, sponsored by them during their tenure of office. Now that their enthusiasm seems to have waned and now that it is clear that the people of these territories are not keen, is it not about time that we, too, began to ask ourselves if it is really worth while spending £300 million a year in this way? This is the sort of sum it is costing us to keep up our military presence in Singapore and Aden.
I note also, while appreciating planning to reduce military expenditure of this type, that it is now proposed that we should spend upwards of £3 million in buying yet another island base near to Mauritius. Incidentally, this is a lot more than we paid for the Island of Gan not far away in the Indian Ocean which is used as an R.A.F. staging post. I have had the honour and the pleasure of visiting this beautiful coral island more than once in the last few years, but from experience and from very careful observation, through having the authority of the House to investigate military expenditure, I must say that islands, like everything else in the defence field, are soaring in price. I feel that money like this and, even more, these resources of manpower and technical skill, would be much better used in helping to solve some of the problems from which my constituency is suffering and which I have outlined and
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in giving adequate and appropriate financial help to this end.
5.33 p.m.
Brigadier Sir John Smyth: I am glad that the hon. Member for Blaydon (Mr. Woof) has said something about foreign affairs and defence, because I think that there is all too little of it in the Gracious Speech and I hope that a good deal will be said about it during the next few days. The British Commonwealth has suffered perhaps its greatest disaster ever during the last few months in the open hostilities which broke out between India and Pakistan. At the moment, although we have achieved a cease-fire, neither of the main contestants, nor, indeed, world opinion, nor any of the national Press, admits for a moment that the quarrel between them has been finalised or indeed can be finalised, unless there is a new and much more dynamic approach to the whole of this question. If that does not take place, this most regrettable war which we have seen during the last few months will undoubtedly break out again in a much more severe form.
I therefore welcome the opening paragraph in the Gracious Speech:
"My Government will seek to promote peace and security throughout the world, to increase international confidence and co-operation and to strengthen the United Nations."
I would only hope that more urgency and leadership from Great Britain will be brought to bear on this very vital matter. I may be pardoned for feeling very strongly about this matter, but I have spent a great many years of my life in Pakistan and India and I have a very great affection for both countries. It was therefore a very sad occasion for me and for a number of hon. Members on both sides of the House to see such a disaster occur.
The loss of life I have seen quoted is only about 10,000. That may be an exaggeration or it may be an understatement. It is nothing like the ghastly casualties that occurred in 1947 on the transfer of power. We had then the massacre of half a million civilians and that terrible trek of some 10 million refugees, a great number of whom died of starvation and disease.. The total casualties suffered then were generally reckoned

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to be greater than the whole of the casualties suffered by the Commonwealth in the Second World War.
But at that time the British Government and the Governments of India and Pakistan were doing their best to prevent and stop what was going on. In the recent disaster two of the largest nations of the Commonwealth went to war with one another after 18 years of increasing bickering which neither they nor Great Britain nor the United Nations made a very great effort to deal with.
At the last conference of Commonwealth Prime Ministers this subject, which was obviously the most pressing in our world, was not even mentioned. The whole idea was to get a report at the end saying that everything was well with the Commonwealth. I do not want to give the impression for a moment that this happened only at the last Commonwealth Prime Ministers' Conference, because it has happened at several.
As I have said, a great many people were killed in these hostilities. A great deal of destruction was done which can be repaired only at the expense of the standard of living of the peoples of India and Pakistan. Goodness knows, it is low enough as it is. Millions of their peoples are below the starvation line. Peace between these two nations can be restored only when the root cause of the trouble, which is the vexed question of Kashmir, has been settled. That has been the bone of contention ever since we left India.
As I said in the House recently, this subject has been brought before the United Nations 134 times in the last 18 years. A festering sore like this cannot be left alone. Either it must be treated, or it will get worse. The tension between India and Pakistan as a result of Kashmir is not a new eventuality. I quote from an article in the Observer which was written eight years ago as the result of intensive investigations into the whole Kashmir question. What was said then is just as true today as it was then. The article says:
"The quarrel over Kashmir between India and Pakistan—about to be raised in the Security Council once more—is a running sore which is rapidly bringing both countries to ruin. The future of democracy in Asia, and the hopes of good relations between the West
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and Asia, are bound up in this tangled struggle. …
Looked at dispassionately, the main problem for India and Pakistan since 1947 has clearly been that of obtaining the resources in capital equipment, foreign exchange and skilled manpower which are necessary for their industrial revolution. Yet in fact both countries have diverted their scarce resources into defence programmes. Since 1950 almost half the total revenue in each country has been devoted to arming against the other. This is a burden proportionately almost twice as heavy as that which we in Britain are now desperately trying to reduce, yet it is borne by countries far less able to carry it."
I should like to trace for a moment how this lamentable state of affairs arose. When Britain transferred power to India and Pakistan in 1947 there were 565 princely States whose rulers had treaties with the British Crown, recognising Britain as the paramount Power. They were informed by the British Government that paramountcy would lapse with the transfer of power and therefore they should make their own arrangements to accede either to Pakistan or to India or indeed, if they wished, to remain independent.
When Independence Day came on 15th August, 1947, there were only three States which had not already made the arrangements with either India or Pakistan. These were Junagadh, Hyderabad and Kashmir. Junagadh was a small State just north of Bombay. It was not contiguous with Pakistan but the Nawab was a Muslim and, although his people were mainly Hindus, he opted for Pakistan. Naturally there was a good deal of discontent among his people and Indian troops at once arrived to keep order. That was the end of Junagadh. It had no great case for deciding to opt for Pakistan.
Hyderabad was the largest of all the Indian States, a country much bigger than Britain with a population of only 16 million. It was a State which had always had close and loyal relations with the British Government. In 1941 I raised the 19th Dagger Division in Secunderabad and I had great assistance from the State which also gave assistance to many other people. But the Nawab of Hyderabad was a Muslim and his people were 80 per cent. Hindus. Hyderabad was completely landlocked within the State of India and therefore the Nawab could not very well align himself with Pakistan and he declared for independence.

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Kashmir, on the other hand, borders both India and Pakistan and it is one of the most lovely countries in the world. It is nearly as large as Britain, with a small population of 6 million, and it contains the catchment areas of the Indus and the Jhelum rivers and all the main communications are with Pakistan. The Maharajah was a Hindu, Sir Hari Singh. The population of Kashmir was 80 per cent. Muslim. After a certain amount of hesitation Sir Hari Singh opted for India against the wishes of his own people. The Pakistani irregulars invaded Kashmir from the north and the Indians from the south and Kashmir became a battleground, which it has remained ever since.
Mr. Nehru broadcast after this invasion on 3rd November, 1947, and said:
"We have declared that the fate of Kashmir is ultimately to be decided by the people and that pledge we have given not only to the people of Kashmir but to the world. We will not and cannot back out of it."
We have had all too few debates in the House on this subject, but there was an important debate on it on the Adjournment on 30th July, 1948. Mr. Attlee the then Prime Minister, for whom I have a high personal regard, asked the Speaker's Ruling at the beginning of the debate whether it was in order to talk about what I am talking about now, since India and Pakistan were both then independent nations of the Commonwealth. Mr. Churchill, as he then was, as Leader of the Opposition said that it would raise the very largest issues with regard to the whole future of Parliamentary procedure if the House of Commons were not allowed to debate an issue of that sort.
Mr. Churchill went on to say, and he was always prophetic in these matters:
"If, for instance, grave catastrophes arise there or in any other Dominion, or a clash occurs between two Dominions, is the House of Commons to be the only place in the whole world where this matter may not be discussed?"
I am glad therefore that I have the opportunity of bringing this matter forward today, and I hope that it will now be discussed in the House quite frequently.
The debate then was opened by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who made a balanced, factual, fair and objective speech as everyone acknowledged. He said that the situation at that time was that Hyderabad had been declared
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by its Ruler to be a sovereign independent State, but it was almost completely blockaded by Indian troops at that time. Rail traffic had been completely stopped, there was a rigid postal censorship, exports and imports had been stopped and Indian troops were stationed all round Hyderabad. Six weeks later Hyderabad was invaded. I regret to say that the Sikh Regiment in which I had served was the advance guard in that invasion. The Sikhs are among the finest soldiers in the world and the Hyderabad State troops were no match for troops of that calibre. The whole thing was over in a few days and Hyderabad became part of India. And in Kashmir, as my right hon. and learned Friend the Member for Wirral said, at that time there were four divisions of Indian troops holding one part of the country and the irregular Pakistanis were holding the other, and the case had already gone before the United Nations.
Mr. Attlee in that debate made a short but important speech. Speaking about Kashmir he said,
"As a matter of fact, there was an accession by the Ruler of Kashmir."—
That is to India—
"…juridically there was this accession, but the Government of the Union of India put forward their proposals and said, 'But we do propose that there should be a plebiscite.' "
Mr. Attlee went on to say,
"I hope they will. I would like to hear it said with more fervour. I hope this Commission will be able to deal with the matter and get exactly what the right hon. Gentleman"—
that is Mr. Churchill—
"wants—a fair plebiscite."—[OFFICIAL REPORT, 30th July, 1948; Vol. 454, c. 1720–36.]
This was almost the same thing as what the Minister of State and the Secretary of State for Commonwealth Relations said in answer to Questions put to him by my hon. Friend the Member for Haltem-price (Mr. Wall), my hon. Friend the Member for Surbiton (Mr. Fisher) and myself last week about the Kashmir question, when he replied in effect "Don't worry. Everything will be well. The whole thing is in front of the United Nations.", as it has been on 134 previous occasions.
Mr. Nehru's pledge was repeated by the Indian spokesman at the United Nations for six years, and in 1953 a joint

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India-Pakistan communiqué was issued which said:
"The most feasible method of ascertaining the wishes of the people is a fair and impartial plebiscite."
Since then, however, India has steadily refused to consider a plebiscite and has strengthened her hold on Kashmir. For her part, Pakistan—I am not trying to make out that she has not done the same—has increased her hold on the other part of Kashmir. For several years now, it has been quite obvious that this festering sore would break into something very much worse, and, as we all know, it did so last August. A great deal of material damage was done. Just the other day, I read a report on the situation in the Sialkot area of the Punjab. This strikes a chord with me because it was my first station in India when I joined the Green Howards there 53 years ago preparatory to joining the Indian Army. The inhabitants were not very prosperous then, but at least they had freedom from fear.
What do we learn now? A reliable observer on the spot—it was an article published in The Times of 6th November, 1965—tells us that in the area of Sialkot there are 500 villages all now totally deserted. The inhabitants have fled. Only a few very old people have been left behind. The Times observer went on to report:
"The villages and the fields are empty. The dogs left in the villages lie without barking as though they knew there was no one left to warn, nothing left to guard. ….Some of the villages are badly knocked about. There are some broken and burned out hulks of tanks still lying where they were destroyed. …. There must be nearly half a million people in camps after being dispossessed of their smallholdings."
A few years ago, I again visited the Indian Army war memorial at Neuve Chapelle in France. Although no one goes there now, it is beautifully kept and, in the absolute silence, save for the sighing of the wind in the trees—I was the only person there—I absorbed again that very moving memorial which commemorates the tremendous contribution made in the early part of the First World War by the Indian Corps in France when Indians and Pakistanis, fighting shoulder to shoulder with their British officers, fought for freedom with us. Their sacrifice was repeated in the Second World War. It is a tragedy that the situation
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which I have described should exist today.
On the credit side, one must say that both India and Pakistan stopped short of bombing one another's cities and there were no communal massacres, neither of Hindus living in Pakistan nor vice versa. But I give this warning, knowing something of these two countries, that, if hostilities are allowed to break out again, with greater bitterness, the consequences in loss of life will be quite appalling.
The only bright spots in this regrettable affair concerned the two great nations, the United States and Russia, which both brought pressure to bear, individually and through the United Nations, to effect a cease-fire and to prevent China's intervention and an escalation of the war. China's intervention was not prevented by fear of anything that India could do to her. It was our old friend the nuclear deterrent which prevented China from doing anything effective.
A few weeks ago, the Financial Times had a brilliant article on this whole subject called, "Now the Search for Peace". It said:
"From a British point of view, the real casualty in the war has been the Commonwealth…. When the crunch actually came, the Commonwealth as a group was incapable of taking action. Many of the illusions which were still current about the Commonwealth have now been destroyed."
My hon. Friend the Member for Surbiton who had just come back from India, said in the House the other day that Britain's relations with India were worse now than they had been for over 20 years, and the American Press says exactly the same. The New York Herald-Tribune of last week said:
"As for Britain, its stock has never been lower in India."
The Financial Times went on to say:
"The key, after all, to the cease-fire was that the two super-powers, the United States and Russia, both wanted the fighting to stop. … It was almost certainly because Peking realised that neither the United States nor the Soviet Union would stand aside in the face of armed intervention from outside that China's intervention has so far been confined to ineffective gestures."
The article went on to discuss whether the donor nations, which have been giving large grants to India and Pakistan—which, goodness knows, they need—will continue to sustain their aid effort in

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the knowledge that they are thereby helping, albeit indirectly, to pay for bigger defence programmes in India and Pakistan.
The Financial Times ended its article with these wise words, which were repeated in many other national newspapers all over the world:
"Unless and until both countries agree to a settlement in Kashmir, no improvement in their relations is possible. There is no other way of ensuring political stability and economic progress in the sub-continent."
The Christian Science Monitor, only a few days ago, said:
"Unless we consider the problem of Kashmir as one of the world's most urgent, there is going to be explosion in Asia which could assume fantastic proportions."
My complaint is that we seem to take all this in the House of Commons much too casually.
At the moment, the United Nations is concerning itself much more with the appointment of observers along the ceasefire line than with tackling the root cause of the problem, that is, the future of Kashmir. Of course, observers must be sent—that we all acknowledge—but, speaking for Britain on 28th October, Lord Caradon said:
"The Security Council should concentrate all its attention on making the cease-fire line effective and the withdrawal of all armed forces."
He said nothing actually about Kashmir, but, if the Kashmir problem is not solved, we can be certain that hostilities will break out again. The Pakistani and Indian troops have withdrawn in places only with the greatest reluctance. We should give instructions to our representatives at the United Nations that they must try a new approach to the problem of Kashmir.
Mr. Robert Maxwell: Will the hon. and gallant Gentleman tell the House how he justifies his defence of Pakistan in this matter? The State of Pakistan is a military dictatorship, really a quite artificial State based on religion. India is a country where democracy is practised. Pakistan is nominally a democracy and, being a member of S.E.A.T.O. considers herself, presumably, theoretically our ally, but she has allied herself with the most militaristic and most dangerous Power on the globe, China. Does Pakistan really
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deserve the kind of backing which the right hon. and gallant Gentleman is now giving it?
Sir J. Smyth: I have been giving the actual facts. I have quoted the words which Mr. Nehru broadcast. I have referred to the number of times the question has been before the United Nations, and what the developments have been. I will give my suggestions as to what we should do about it in a moment. I spent 30 years of my life in these two countries, and I served with the troops of Pakistan and India, and my only anxiety is that we should have peace and should not go on in the way of the last 18 years. It is because the hon. Member takes that sort of line that we never achieve a solution to the problem, because we are always afraid to face it.
I read a report about Srinagar, the capital of Kashmir, in The Times of 25th October. It read:
"Srinagar (principal city of Kashmir), the eye of the storm that is racking the subcontinent, is threaded with anxiety—leaders of all opposition parties are imprisoned, schools and colleges closed, all opposition journals suppressed."
Surely we should be concerned about that sort of happening in the Commonwealth. On the Pakistan side it is just as bad.
What are we in Britain and the Commonwealth going to do about this beautiful country of Kashmir for which we were responsible for nearly 100 years? It has in Gulmarg, 6,000 ft. up from the plains of Srinagar, a holiday resort bearing comparison with any that I have ever seen in the world. It has almost everything—a fine golf course, climbing, ski-ing, fishing, wonderful scenery, everything one could want in a holiday resort. Poets have waxed lyrical about the beauty of Srinagar with its houseboats, its bathing and its famous Dal Lake:
"Pale hands I loved,
Beside the Shalimar,
Where are you now? Where are you now?"
Where indeed? To talk about one man, one vote to a Kashmiri would be farcical indeed. No man has any vote at all in Kashmir or any say whatever as to how his country should be run.
What are the alternative solutions to the problem on which the peace of a large part of the world depends? I think that everyone would rule out a continuance of the present position with India holding

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down half the country, Pakistan holding down the other half, and the Kashmiris having no say in their own country at all. The second alternative is one which was promised years ago by Mr. Nehru and Mr. Attlee—a plebiscite. As everyone knows, religion is the strongest influence in that part of the world—far stronger than politics. If we had a plebiscite, Kashmir would undoubtedly go to Pakistan. India would fight to the death rather than that should happen, and she has some justice on her side in that Maharajah Hari Singh opted for India originally. But even if we had a plebiscite and India were forced to take out her troops, leaving Pakistan in control, I do not believe that we should ever get lasting peace as a result of such a plebiscite after all these years. I know that many Pakistanis would not agree with me, but that is my opinion.
There is a third alternative which I have put to a number of British, Indians, Pakistanis and Kashmiris, and most of them have agreed with me. There is this third alternative, particularly as Russia and the United States have shown such a strong interest in the problem and have both worked together to bring about a peaceable solution. It is that the independence of Kashmir should be guaranteed by the United States, Russia, Britain, India and Pakistan, and, I would hope, possibly China, if we could only bring China into the United Nations. I think that is long overdue and that we in this country should make far greater efforts to bring it about than we are making.
If we could do that we should immensely strengthen the prospects of peace in the whole of this potentially dangerous part of the world. Once the great powers have been brought together over Kashmir on this project, I see no reason why they should not direct their combined energies to a solution of the problems of Malaysia and Vietnam. If we could only get the United States, Britain, Russia and China all around the table over these problems, we might reach a solution. In any event, I urge the Government and the Prime Minister to give this suggestion some thought. It is a new approach. It is no good slogging away at the old proposals which have been made a hundred times before.
But two preliminaries would be essential—first, the withdrawal of Indian and
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Pakistan troops right out of Kashmir altogether; and, secondly, Britain must come out of her shell and function much more as a leader of the Commonwealth than she has yet done over this problem. We decided to leave it to the United Nations, and there is no sign of the problem being solved.
One point of criticism may be made of my plan. I have been asked whether the Kashmiris would be able to run their own country if the troops of Pakistan and India were removed. I think that they certainly would. It is an easy country to run. They would have to have United Nations people to help them at the beginning, but I have stayed at the Residency both in Srinagar and Gulmarg and the administration is not difficult. There used to be a good tourist trade there, and in these days of improved air communications there is no reason why Kashmir should not become a popular holiday resort. I hope that this will happen and will bring some prosperity to the unfortunate Kashmiris who have been suffering these oppressions for the last 18 years.
6.8 p.m.
Mr. John Parker: I welcome the proposals in the Gracious Speech. Unlike the right hon. Member for Orkney and Shetland (Mr. Grimond), I welcome them as a step forward in building up the Socialist Britain in which I believe.
But I have to criticise the Gracious Speech for one omission. I regret that there is no proposal in it for setting up an inquiry into the future of the motor car industry, which I believe to be very desirable and necessary, because all is not right in the motor car industry of this country. Among the issues which such an inquiry should consider is that of labour relations in the industry.
All of us welcome the efforts made by the Minister of Labour to set up machinery for a trouble shooter to go into the question of unofficial strikes and to try to eliminate them, but that is not relevant to the situation in the Dagenham Ford factory. We have not had that sort of trouble at Fords for three years. In fact, the Ford Company takes credit for the good labour relations which exist at present. But not only in the Ford factory but in the industry generally we have a

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great problem through the lack of consultation between the management and the workers in the industry. Ministers of Labour have pressed upon managers and employees the need for consultation in industry, but this consultation does not take place in the motor car industry and its absence leads to a great deal of trouble and feeling in the industry.
This came to a head quite recently over the short-time working in Fords. Surprisingly, labour was being brought from the North, Tyneside and Ulster to work in Fords and recruiting was going on steadily right up to the day before short-time working was announced. It is extraordinary that one part of management should be recruiting labour while another part of management must have known that there would be short-time working.
When the management announced the short-time working this year, they placed blame upon the Government's steps to control and deal with the sterling crisis. There have been recessions in previous years through the stop-go policy pursued by the Tory Government, and we then had the blame placed by management upon natural forces inherent in the industry, but in fact short-time working in the motor car industry has happened over a very long time and there is a strong feeling among the workers in the industry that this is the sort of problem which ought to be dealt with.
Why did not the management of Fords stop recruiting labour six weeks, say, at least before they announced short-time working? The turnover of labour is very high in the motor car industry. If they had stopped recruiting a little time beforehand there would not have been the need for anything like the short-time working there was on this occasion, but no thought at all seems to have been given to that. The problem of trying to deal with it is the problem of employing people in the industry permanently, or as permanently as possible.
There is not the slightest reason, as far as I can see, why the industry, big firms in particular, should not store cars and build storage spaces at suitable places in the country to suit the needs both of the domestic market and export markets. I know from experience that quite a number of motor car dealers do
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store cars. They buy up storage space and put cars there in the early part of the autumn so that they are available for the rush when it comes round in the spring, but that is only on a small scale and among motor agents, and if it is to be done on a big scale it has to be done by the industry, and particularly the big firms. There seems not the slightest reason why this should not be done.
The Devlin Report, quite rightly, pointed out the problem of casual labour in the docks, and made suggestions for dealing with the problem. It is also desired to get rid of irregular working in the motor car industry, and this is one of the fundamental questions to be gone into by a committee of inquiry—about the way to do it, about how to finance it, and so on—by steps of the kind I have suggested.
There is a feeling that all is not well between management and labour in the industry and these are problems which ought to be dealt with. This problem of short-time working is not only a problem which affects Fords. It affects the industry as a whole, but in Fords in particular there is a very real problem over the whole attitude of management through the complete Americanisation of the way they handle labour. The whole problem of hiring and firing overnight has led to a lot of feeling among the people employed in the industry. Despite the fact that we have had no serious trouble for three years at Fords there is among the workers a feeling which is now almost more bitter than at any time in the last ten years.
The second point I think the Committee of inquiry ought to go into is the future of the industry as a whole. Looking at the National Plan I myself feel that the estimates of the likely production by 1970 are exaggerated. I do not myself believe that the industry will expand at the rate suggested in the National Plan. I know the Plan has been drawn up after consultation between the Government and employers in the industry and that the estimates are based on what the industry thinks it can do, but it is based upon an analogy between this country and the United States of America, and it is assumed that because, as prosperity rises, in the United States the number of cars goes up, so it will here.

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Conditions, however, are quite different in this country. First of all, the population of the United States of America is spread out over a large continent, spread out far more than it is here, where we have the population concentrated very much in certain areas, the Midlands and the South-East. Secondly, the ordinary American city is very largely a subtopia. Los Angeles is of a size equal to that of two or three counties in this country, and there is ample room there for the storing of cars in garages or on the streets. Moreover, distances there are so great that people need cars.
Conditions are very different here. For instance, Dagenham, my own constituency, consists largely of council house estates, and the houses were built in the 'twenties and 'thirties when no one imagined that the working people there would all have cars. Now there is almost a car for every house, but there is very little room to put up any garages in the area. There are a few places, open spaces, where it might be possible for the local authority to put up garages, but in the main people park their cars in the streets, and, if there is an increase in the number of cars, on the assumption that there will be two or three cars per family, we just could not have two or three cars per family in Dagenham, there is no room to put them. This is true, not only of Dagenham, but of the greater part of the suburbs in this country.
Then there is the question of new roads. I welcome the Government's road programme, and that they propose that construction should go ahead in the years immediately ahead. I think it very important that we should go ahead with the roads, from the safety point of view as well as the point of view of the convenience of people in being able to go about. However, I would say that there are limits to what we can spend on new roads. One has only to read the speeches of people like Sir Patrick Hennessy, and the Chairman of the A.A., and one would imagine that the greatest demand of the people of this country is to spend their time sitting on a seat above moving wheels and not doing anything else.
Of course, one can have great pleasure in motoring if there is not a great deal of traffic about, but there is not a great deal of pleasure in motoring if the roads are
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crowded, which seems only too likely in the years immediately ahead, but this demand to spend an enormous sum of money on the roads ignores the fact that people have other desires, apart from the desire to go about. They desire decent houses; they also desire hospitals, schools, open spaces. They want homes with gardens, and they do not want all their garden space taken up with garages. Old people want houses and want gardens which they can enjoy and they do not want them expropriated for garages to be put on them. There is a demand not only for open spaces where people can play games, and the greater open spaces where they can climb, hike and go on holiday. People also want television, cinemas, a number of other things. In other words, people want to be able to enjoy themselves in all these other various ways, and going about is not for most people an end in itself but a means of getting somewhere to enjoy oneself. Therefore, the Government are quite right to try to ration expenditure between these various things, among which roads are very important but not the only important ones.
I welcome the sentence in the Gracious Speech:
"My Ministers will bring forward proposals for the more effective co-ordination of inland transport."
I would very much hope that schemes to this end will be carried out reasonably early, particularly for transferring more of the heavy traffic from the roads to the rail. That would not only ease the pressure on our roads and make them much safer, but incidentally that would make much more room for the motorists, and therefore I would very much hope to see active work done by the Government in pressing forward with steps for the co-ordination of transport.
So I would say that I think that the Government are quite right to put forward the kind of road programme they have put forward, and, knowing all the other needs of the community, quite right not to spend as much on the roads as is suggested by some of the motoring organisations.
If we do have such a committee as I have suggested, I hope it will go further into the future of the industry. Obviously, if we are to have a prosperous

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motor car industry, there must be a considerable home market and a considerable export market. But if we are to produce cars for the home market and for export they must not be too expensive, and we must have a fairly steady run for producing them. I understand that 500,000 car units a year is an economic minimum in order to produce good cars at a reasonable price both for the home market and for abroad. In 1964, the British Motor Corporation produced 703,000 car units and Fords produced 532,000. Of the other big manufacturers, Vauxhall and Rootes each produced about 228,000 and Triumph 127,000.
It is doubtful how long these five groups are likely to remain in competition. I should have thought that, given the need for a fairly large production of cars for sale overseas and in this country, some of these units were unlikely to survive. In other words, there will be mergers.
Mr. Raymond Gower: I appreciate the form which the hon. Gentleman's argument is taking, but would not he agree that it could be dangerous to go too far in that direction? For example, the relatively small Triumph company, although it is now associated with Leylands, has done extraordinarily well in recent years in export markets with its TR4 and TR3—relatively better than some of the large companies.
Mr. Parker: I agree. There is a limited demand for smaller companies' specialised products, but for the mass product there must be a fairly large concern.
It is unlikely that the five large groups will remain without some kind of merger among them taking place in the near future. If there are to be mergers in the motor car industry, as is likely, a great deal of power will be put in very few hands. The question which we need to ask ourselves is how far the power in the industry is British.
At present, 41 per cent. of the cars produced in this country are produced by Fords and Vauxhall—in other words, by American companies. What will be the position in future? There is already quite a bit of American money in some of the
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other concerns. Following mergers, more than half the industry could be American controlled. That is a very unhealthy position for any industry in this country.
When the American Ford Company took over 100 per cent. ownership of the shares in the British Company, I raised the matter in the House on 21st November, 1960. I raised it again on 9th April, 1964. At the time of the take-over, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who was then Chancellor of the Exchequer, went into the matter very fully and received deputations. He finally allowed the take-over to take place. Promises were made that there would be continuity in management and employment policies, that the personnel would remain British and that the control would be in British hands.
The precise promises did not amount to very much, but the spirit of them was quite definite. In my view, those promises have been broken. First, take the tractor plant, which has moved from Dagenham to Basildon. That is 100 per cent. controlled by Detroit—and very badly controlled, as far as I can gather. Of the present directors of the Ford Company in this country, six are American and seven are British. There have been enormous changes among the directors in recent years. An American managing director, Mr. Stanley Gillen, has been brought in to take charge of the firm. It appears that many of the more prominent and successful British directors have left to go elsewhere because of dissatisfaotion with control by Detroit over-ruling the company in this country. The feeling of anyone connected with Fords is that policy is controlled very rigidly by the United States Company. That is not in the British interest.
On the question of exports to the United States, The Times, on 31st August, made the following statement:
"The other key is to persuade the two American owned companies, British Ford and Vauxhall, to institute a sales drive in the United States of America. In 1959 together they sold 65,000 cars there. But last year British Ford sold only a total of 4,200 and Vauxhall had no significant car exports to the U.S.A. (53 to be precise). In both cases these companies are the instruments of international production and marketing policies."
In 1964, Volkswagen sales to the United States totalled 300,000. All British sales

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to the United States totalled 72,000, of which 33,400 were from B.M.C. In other words, a drive should be made by British Ford and Vauxhall to sell cars in the United States. There has been a drop in the sales of Ford cars to Germany, where a Ford company also operates.
In addition to this effect on exports of the American control, there is the question of components. There is an increasing purchase from abroad by the Ford Company of car components—not only from Germany and the United States, but Spain and Italy. If it is cheaper to buy a component abroad, that is being done.
An article by Mr. M. H. Fisher on page 2 of the Financial Times motor car supplement made the following statement:
"Even more though is the question to what extent General Motors and Ford are planning to rationalise their European production. Both are strongly established in Britain and the Common Market countries. General Motors has up till now tended to keep its manufacturing operations in different countries in separate compartments. Ford has gone much further along the road to greater integration but so far mainly in tractors…There are signs that Ford intend to move along similar lines in cars, though inevitably more slowly and less completely—with co-ordination between its British and German plants becoming closer…It is obvious that the surcharge is an obstacle to a greater exchange of components between continental and British plants".
The Financial Times on 13th August, quoted the following statement by a spokesman for the Machine Tool Trades Association:
"We know that in some instances in the past Ford in particular has imported dollar machines, whether new—or so-called second hand—from Detroit simply because Detroit says so. This (the setting up of a special supply team by Fords) could be a smokescreen from British Fords to obscure domination from outside".
The West German Government have introduced a tax policy to encourage the German motor car industry to buy its components in Germany and not to import them. The tax is arranged for that purpose. I should have thought that Her Majesty's Government should consider something similar to ensure that components for British made cars were bought here.
We should ask ourselves how far the British Ford Company is a British asset. It has a large export trade, but only in
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limited markets. The profits are taxed in this country, but the dividends are distributed in the United States. They are therefore an invisible export. Dollar earnings have to be made by other firms to enable them to be paid. There is no real United States market to set off the sales of British Ford cars against dollar earnings which have to be made by other firms elsewhere to pay for these dividends paid to the United States. In addition, there is the question of foreign exchange for components. Despite all the publicity to the contrary, Ford is not particularly an asset in our foreign exchange, certainly not to the extent that one would imagine from all the talk that one hears about its export position. A committee of inquiry should go into these various suggestions which have been made concerning tax changes and so on.
In the long run, especially if mergers take place in the industry and power rests in fewer—and largely foreign—hands, we shall have to take up the question of whether nationalisation is necessary. It might take the form of certain large firms being taken over. I would favour that to the taking over of all the smaller sections of the industry. We cannot allow such an important industry to be in foreign hands and not run in the national interest.
There would, of course, be a number of problems, particularly of setting up sales points overseas, if part of the industry were taken into public hands, in the way that the French have done with Renault. One of the places where we might have suffered initially would have been America, but as large sales from Fords are not now made to America the problem does not seriously arise there at the moment.
The whole position of the car industry should be investigated. I regret that the Queen's Speech does not contain a proposal to set up a committee of inquiry. I hope that such a committee of inquiry will be set up in the reasonably near future and will examine these important points, which affect not only people in my constituency, but those who work in the motor car industry in many parts of the country.
6.31 p.m.
Sir Alexander Spearman: An hour or two ago, the

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Leader of the Liberal Party was boasting that his party had succeeded in dissuading the Government from Socialist measures of nationalisation. It is, perhaps, fortunate that the right hon. Gentleman has left the Chamber, otherwise he might have had his blood pressure unduly raised in listening to the speech of the hon. Member for Dagenham (Mr. Parker).
Many years ago in the House of Commons, I heard the late Sir Winston Churchill describe a debate on the Address as not only an occasion to discuss the Government's proposals but an annual inquest on the affairs of the nation. Whatever Opposition may say, I suppose that no Government is altogether bad, and certainly no Government is perfect. I should like, as objectively as a member of the Opposition can, to examine three of the principal economic problems and how the Government have handled them during the past year. The first is the sterling crisis; the second, the trade deficit; and the third, the question of future growth.
When the Government were faced with the crisis at the end of the summer, they had only one choice, either to devalue or to borrow. There were, I think, some who were in favour of devaluing. I suspect that some hon. Members opposite thought that if we had devalued, that would avoid the necessity of disagreeable deflationary measures. I am convinced that the Government were right. I do not believe that devaluation is a satisfactory alternative. In the long run, and in the not very long run at that, after deflation we should have needed to have even more severe deflationary measures and we should have found ourselves in a weaker position in a poorer world.
I pay tribute to the authorities for their efficient handling of these vast loans, but I do not think that we were lent the money so much because of foreign confidence in the Government's measures as because of a realisation of the consequences and the international damage that would follow devaluation of sterling. The Government, therefore, can take neither credit nor discredit. They must be judged by how they use the time which they have rightly but expensively bought.
The Chancellor of the Exchequer said the other day "Sterling is saved; that
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battle is won. We have not yet won the battle of the economy." I cannot agree with the Chancellor. Sterling cannot be saved until the battle of the economy is won.
Our trade deficit last year was very serious, but to hear right hon. Members opposite talk about it one would think that there had never been a big deficit before. It is true that we have to go back to the days of a Labour Government to find one of the same magnitude. If, however, any hon. Member refers to HANSARD for 5th November, 1952, he will see that we were running into debt in 1951 at the rate of £800 million a year and that in one half-year the drain on our gold reserves was at the rate of £1,000 million per annum. If reference is made to a few years earlier—to 6th April, 1948—it will be seen that the late Sir Stafford Cripps then said that in 1947 the drain on our reserves was £1,023 million, which he attributed partly to a disappointing falling-off in production.
There has been a considerable improvement in the capital account, but this is largely non-recurring. The year 1964 was one of exceptionally heavy foreign investment. Far more interesting as an indication for the future is what has happened on current account. The deficit there looks like being down from about £400 million to about £200 million, but nearly half of that improvement is due to the improvement in the terms of trade, which were more favourable to us than at any time since Korea. That is no credit to the Government, nor is it something which we can depend upon to recur. Most of the rest of the improvement was due to the decline in stockbuilding, which would have happened in any event.
The test of the Government's measures is not how much we have reduced the deficit this year, but how well we will compete in world markets in future. Costs are rising. If total spending—by which I mean what we spend as consumers, what the Government spend and what industrialists spend on industrial investment—grows faster than production three things must happen. First, costs must rise and, therefore, we export less. Secondly, home demand must increase, and so delivery dates are lengthened and we export less. Thirdly, if home demand increases, more goods are sucked in from

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abroad and, therefore, we import more. These things are bound to happen. The only remedy—there is no gimmick or short-cut solution—is either to produce more or to consume less.
The First Secretary seems to have an idea that we can get out of our problems by a system of controls. It has, I am sure, been pointed out to him many times before that if temporarily, by some artificial device, he can keep down prices without keeping down money incomes, the inflationary pressure will be all the greater and the position all that much more serious.
The First Secretary is a great planner. I understand that he spends a lot of his time planning what should be produced in the years ahead on guesses what people will want during those years. Such guesses, however, often prove to be wrong, because in a free society the people frequently change their minds. I suggest to the right hon. Gentleman that he could be far better occupied by turning his attention to the vital immediate planning that is necessary: that is, regulating the speed of the economy.
No Government, whether Conservative or Labour, comes out of this very well. They have not had available the indicators to know exactly when to expand or when to contract. Time and time again, we contracted only when we had a balance of payments crisis or expanded only when unemployment reached a high level. That meant that we had to alter course far more violently than would otherwise have been necessary. When we have done that, our instruments for altering course have been far from perfect. I must here pay tribute to my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who produced what was much our best instrument in the shape of the regulator.
I do not claim that a Conservative Government are blameless in this regard, but I would say to right hon. Gentlemen opposite that if my Conservative colleagues had taken the present Labour Ministers' advice, the economic inheritance that they talk so much about would have been infinitely worse. If anyone is in doubt about that, I suggest that he looks at the Budget debates for 1963 and 1964 and, in particular, at the speeches made by the present Prime Minister, the
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present Chancellor of the Exchequer, and the present President of the Board of Trade.
One reason why all Governments have run the economy dangerously fast and, as a consequence, we have had rising prices, balance of payments troubles and less growth than we could have had, has been an obsession about unemployment. We have been as frightened of unemployment as Germany has been of inflation. I can understand that fear because of our appalling inter-war experience, when we had mass unemployment. But there is no need for that today, and that fear is quite groundless. We know now how to avoid a glut of goods without the money to buy them. The tragic thing is that we should only have mass unemployment again today if we had a severe enough balance of payments crisis. So the obsession about unemployment, more than many other things, has endangered our balance of payments position.
Do the Government accept that? If anyone studies the National Plan it looks as if the writer of Chapter 6, paragraph 4, has never heard of Lord Keynes. Do the Government realise that their measures are not going to work unless they reduce the pressure on the labour market? It is a medicine which does not work unless it proves a little nasty.
All experience shows that we cannot safely run the economy at much above 95 per cent. of full capacity. Whenever we get much above 95 per cent., we have balance of payments troubles, we get big rises of prices and I believe we actually get slower growth. Ninety-five per cent. is equal to a little over 2 per cent. unemployment, which is a very small part of what Lord Beveridge anticipated and a good deal less than Mr. Gaitskell declared when he was Chancellor of the Exchequer, which hon. Members will find in column 319 of the OFFICIAL REPORT for 22nd March, 1951. I believe we could safely get unemployment down to 1½per cent. in the South. The difficulty is that it reaches far higher figures in the North, and that raises the average. The solution must be to try, by the regional arrangements which are often referred to, to get it down in the North. I was glad to see in this week's Economist, which is not always friendly to the Conservative Party, a tribute to what my right hon.

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Friend the Leader of the Opposition had done at the Board of Trade. It said that the improvement which has taken place probably owes most to the incentives devised by my right hon. Friend.
We must be prudent. If we tried to bring down unemployment sensationally in the North by forcibly moving factories that could not economically go there, the cost would be colossal and we should be taking grave risks. It must inevitably be a slow process.
In the days of a Conservative Government I often said that we can afford much larger unemployment pay and we ought to afford it and we ought to spend much more on retraining centres. What we cannot afford to do is to blow up the whole economy so as to bring about excessive labour pressures where there is already a shortage.
I want to examine quite briefly the deflationary measures of the Government. First of all, I am critical about their timing. If they had prescribed a stiffer dose last autumn, a stiffer dose now could have been avoided. With all the double talk that there has been and the slowness in application, I am not entirely sure that they have done enough, and certainly they have not done enough if they are going to carry out the National Plan.
I would like to ask whoever is going to reply tonight what the Plan means. Is it a wishful-thinking programme of what the Government would like, with a bit of an election manifesto thrown in, or is it really an estimate of what they intend to do? If the latter is the case, I am convinced that it is impracticable.
They propose increasing production by 25 per cent. before 1970. That means increasing productivity from under 3 per cent. to about 4¾ per cent. Is that really possible? I am quite sure that it is not in the world as we know it, and that is why Professor Day, who is not at all an unfriendly critic of the Government, said this in the Observer of 19th September, 1965:
"The chances are that this is a plan which will be more successful in creating another sterling crisis in 1967–8 than in creating more prosperity in 1970 than we should enjoy anyway."
Secondly, I want to criticise the Government's dependence on investment for curtailing spending. It would have been far better to have brought pressure to
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bear on consumption. According to the Board of Trade Journal of 2nd October, the credit squeeze has already, in the second quarter, brought down industrial investment by 3½ per cent. The cutting of the road programme and the revised programmes for school and university building all seem like eating seed corn, which I have always understood is an unwise thing to do. How much better it would have been to risk the unpopularity of reducing consumption? How much better it would have been to cut present enjoyment for a time rather than the basis of future prosperity?
Thirdly, I want to criticise some of the Chancellor's taxes. There are those who say that we cannot afford to spend any more on the Welfare State. I do not go all the way with them, because I believe that the amount that we can afford to spend on the Welfare State is the amount which we can tax expenditure on spending. As my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle) said recently, it is vital to get right the balance between total national resources and claims on those resources. Some taxes just come out of savings, and therefore they do not reduce the claims at all. They are of no use. Some taxes discourage effort and enterprise and actually reduce those resources. Those, therefore, are worse than useless. I would go so far as to say that any tax which does not affect consumption serves no economic purpose; but taxes that reduce the resources more than they reduce spending must be bad taxes, and some of the Chancellor's taxes come into that category.
The final problem that I want to examine is how to get more growth of the economy. I have no doubt that I shall have everyone with me when I say that we can only have a high wage economy and the improvement of the welfare services that we want if we can get more growth of the economy. Not enough attention is paid to the difference between more production and more productivity, what the Treasury call the productive potential. As we saw during the war, it is often possible to squeeze a little more production by bringing in older people and older machines. But look at the cost.
that is not growth. One gets growth only when one gets greater output per

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man. That means modernisation. I understood the Prime Minister to say today—though I am open to correction—that on the question of modernisation our record of money spent on research was bad compared with other countries. I do not know why he should choose to belittle the activities of the country of which he is Prime Minister, but I think that he has got his facts wrong. The O.E.C.D. Report for October, 1963, says:
"The proportion of the gross national product devoted to research in Great Britain is very little behind the United States of America and is ahead of any other country."
Indeed, between 1955 and 1964 the proportion of the national income devoted to research went up by more than 50 per cent.
Mr. Maxwell: How does the O.E.C.D. Report disprove the Prime Minister's statement that we have not been spending sufficient of our national resources on research and development?
Sir A. Spearman: I may have misheard the Prime Minister, but I thought he said that we were a long way behind other countries in the amount that we were spending on research and development. If he said that, why should he belittle the country of which he is Prime Minister? Secondly, if he reads the O.E.C.D. Report, he will see that we are spending a bigger proportion of the national income on research and development than any other country except America, and we are spending only very little less than she is. The Prime Minister loves talking about modernisation, but I fancy that this is one of the subjects on which he finds words easier than deeds.
If we are to get modernisation, we have to do two things—make better use of labour, and get more investment. We cannot increase output unless we do those two things. In the 13 years of Tory rule output per man hour went up from under 2 per cent. to nearly 3 per cent. I think that that was because the proportion of the national income devoted to industrial investment doubled. In 1951 it was 6½ per cent., but by 1964 it had risen to 13 per cent. The National Plan does not indicate a progressive increase in investment on anything approaching that scale. If we spend a lot on consumption, clearly we cannot spend it on investment, and
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from the retail trade returns in The Times this morning it looks as though the Government's Measures are leading to a considerable increase in spending and a decrease in savings.
Modernisation means changes, and changes hurt. Perhaps I might give two examples. One is over-manning in many industries. This means redeployment, and redeployment means temporary unemployment. Secondly, if we went into the Common Market, and we had a market of 250 million people instead of 50 million, I have no doubt but that our manufacturers could reduce their costs. They could produce more at less cost. There would be a great increase in national prosperity, but it would hurt some people.
Lord Beeching said the other day, and these words are well worth listening to:
"Britain's prosperity is slipping away because the nation had resisted change for the sake of present comfort…".
I do not know what happened in the past, but I believe that today there is more resistance to change on the Government benches than there is on these. There are, of course, many notable exceptions, and I hope that I shall not embarrass them if I name but two—the hon. Member for Pembroke (Mr. Donnelly), and the hon. Member for Birmingham, All Saints (Mr. Walden).
We have a choice between progress and a quiet life. There is something to be said for both. I am for progress, but there is something to be said for the other. To try to get both means getting neither. It means that we shall get the worst of both worlds.
I believe that if the Government relax their present inflationary measures, in the immediate future we shall have a grave balance of payments crisis. It will be no consolation to us on these benches that it will do infinite harm to the Government. If they do not relax their present measures, I think we shall find a slow rise in unemployment and a drop in earnings. The Prime Minister this afternoon consoled himself with the fact that these things had not happened, but I do not think anyone said they would. What we said was that if there were deflationary measures nearly a year would elapse before they would bite and unemployment would reach its peak. I

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have never thought that if the Government's measures were to bite there would be serious unemployment in the immediate future; but I think we are in for a period of partial industrial stagnation which will last longer than the short sharp recession which many of us advocated, and that is because the Government have not decisively faced the unpopular measures which they ought to have taken.
I believe it will soon become clear that the Government have fumbled in their economic policies. I believe that one reason for this is the clash between the Treasury and the Department of Economic Affairs, which was commented on in a leading article in The Times yesterday. I believe that the time has come for the Prime Minister to intervene between these two Departments. My right hon. Friend the Leader of the Opposition said that the Prime Minister was more concerned with appearances than with administration. Perhaps that is the explanation. What we need today is a Prime Minister who can act decisively.
6.58 p.m.
Mr. James Hamilton: After listening to the hon. Member for Scarborough and Whitby (Sir A. Spearman) I have come to the conclusion that he has not heard of Scotland and the North-East. He is advocating a policy which in essence means that we must once again have large numbers of unemployed in this country. Is it necessary to remind the House that when the right hon. Member for Wirral (Mr. Selwyn Lloyd) was Chancellor of the Exchequer, and when we had a balance of payments deficit of about £500 million, he introduced a policy which, in 1962, led to 19,500 people being unemployed in Lanarkshire, and 79,000 people being unemployed in Scotland as a whole? There was also heavy unemployment in the North-East and in Liverpool. Because we do not at the moment have heavy unemployment, the hon. Gentleman is advocating that the Government should introduce the Measures to which he referred so that he can then point out to the country that the Socialist Government are not capable of running the country's affairs.
The Gracious Speech contains many of the pledges made in our election
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manifesto, and therefore we on this side of the House unhesitatingly support them because they were the basis on which we fought the election. Jibes have been thrown across the Floor because steel is not mentioned in the Gracious Speech. I come from a predominantly steel constituency, and I fought my last election campaign on the nationalisation of steel. This resulted in my majority being almost doubled, and there is no doubt that the people in my constituency, and in others where steel is a major issue, take the view that steel must once again come under public ownership.
I submit that the case for the nationalisation of steel could be accepted by the whole country. I need not remind hon. and right hon. Gentlemen opposite that under their Administration, when they denationalised steel in 1953, Richard Thomas and Baldwins—which was and still is publicly controlled—entered into competition with Stewart and Lloyds, in Wales, with a view to taking over a steel firm. When the competition had finished, Richard Thomas and Baldwins bought back for £4 million a firm which had been denationalised in 1953 after having been taken under public ownership under the previous Administration for £8 million. In essence, this means that when it suits hon. Members opposite they are prepared to accept nationalisation.
We also know that prior to the last election much of the money which could have gone to the workers in the steel industry was spent on advertisements to try to delude the people to believe that they should not vote for a nationalisation policy under any circumstances. At the same time, in my constituency and throughout Lanarkshire brochures were issued to the headmasters of schools advocating a policy of denationalisation. We must therefore come to the conclusion that the steel owners were prepared to put all their resources into a campaign to try to delude the electors.
We are satisfied that steel will be nationalised under the present Government. We readily recognise, however, that we must get our priorities in order. As the Prime Minister has said, if right hon. and hon. Members opposite are prepared to tell us what legislation they feel ought to be left out of the Gracious Speech we shall be prepared to consider

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it. We all realise that steel is a controversial subject and that any legislation concerning it will meet with a great deal of opposition. On that basis, if the tactics which were adopted when the Defence Bill went through the House recently are repeated, much of the legislation that we want to go through will not become a reality.
In the Gracious Speech the Government make it clear that they are going to spend money on education. This is a question to which we must all give serious consideration. We are now embarking on a policy of comprehensive education. We cannot do this without the necessary financial resources. We are also conscious of the fact that we require many more teachers, even without the introduction of comprehensive education. When we analyse the situation, however, we find that many Scottish youngsters with higher academic qualifications than their counterparts in the South are going to colleges with two A-levels and four O-levels and then, on entering the teaching profession, are going home with the handsome sum of £9 1s. a week. Some honours graduates are married, and some have families. They are taking home £13 a week.
We also find that lads who come from industry in order to become teachers in our technical colleges, and who therefore obviously have a vocation for teaching, are getting less when they are teaching than they were when they were training. In these circumstances the Government must give this problem serious consideration—otherwise, all the talk about bringing more men into the profession will be pious platitudes.
I also submit that all the education associations, with the Government, must recognise that non-graduate males must be allowed into the profession. When the crash programme was accepted in the post-war years many of our best teachers were non-graduate males. I therefore hope that the Government and the associations will give this matter serious consideration, because I am convinced that with a crash programme this serious and pernicious problem can be solved.
Mr. Gregor Mackenzie: I am following with interest my hon.
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Friend's argument about the recruitment of non-graduate males to the teaching profession, but I suspect that he is talking purely of primary education. Perhaps he will clarify his argument.
Mr. Hamilton: I thought that I had made that quite clear. I am talking of primary education at this stage. Once people come into the profession the opportunity can be given them to take their degrees, with the assistance of the Government or the local authorities. In our schools we have men with degrees who do not have the necessary finance to allow them to go to a training college for the necessary 12 months' training. As a consequence we are losing valuable men from the teaching profession.
Reference has been made to the National Plan. I have been concerned with the implications of the National Plan at Parliamentary level and at trade union level, and I have even had discussions about it with employers. We must agree that since 1939 every Government without exception have attempted to plan our economy. The workers in industry have now reluctantly decided to accept this. The difference is that in 1961, when we had a very serious recession, there was a cut back in investments, the introduction of the wages pause and, at the same time, a gift of £80 million to the Surtax payers. With this fact firmly inculcated in their minds our workers were not prepared to accept a planning of the economy at that time.
Let us be honest and make an appreciation. If one were a worker in industry and realised that the Government were taking that sort of approach, would one give that Government the co-operation for which they ask? Under the present Administration, not only will prices be taken care of—at least they are attempting to do something in that respect—and wages dealt with, but salaries as well. I am convinced that if everyone—the Government, the trade unions and the industrialists—showed a keen desire to put the best foot forward, the 25 per cent. increase in productivity by 1970 will become a reality.
Sir A. Spearman: I am sorry to interrupt the hon. Gentleman, because he is making a perfectly arguable case. However, if he accepted that the reduction

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in Surtax—not on investment incomes but on earnings incomes—led to increased effort and enterprise and an expansion of resources and thereby enabled more investment to take place and more to be spent on the welfare services, hospitals and education, would not the hon. Gentleman agree that that was worth while?
Mr. Hamilton: That is taking place at present. I want to follow only the trend of the contributions made by the hon. Member.
In the steel construction industry, because of the introduction of time and motion studies, the employment roll has now decreased from 600 to 350 in one factory, and the rate of reduction has increased. Workers are being redeployed into industries which need their skills, and this is beneficial to the economy.
I wish to submit that all the Measures in the Gracious Speech are ones which we must accept and which I am sure will not be opposed by the Opposition. On that basis, I am proud to say that I am a member of a Government which has put through in the past 12 months legislation greater than that put through by any other Government in our history. When we complete the present programme, it will have put through legislation which will be unequalled in Parliamentary history.
7.13 p.m.
Mr. Gordon Campbell: I am glad to follow the hon. Member for Bothwell (Mr. James Hamilton) and I should like to pursue two of the points which he made. First of all, he told us that he had support in his constituency from many who work in the steel industry and who saw in the Labour Party manifesto that it would be nationalised. I wish him luck in explaining to those constituents why steel nationalisation appeared in the Gracious Speech for the last Session but has been dropped completely from that for the present Session.
Secondly, he referred to the Labour Party manifesto as something which he stood by word for word. With that claim in mind, I should like to consider two subjects and to compare the wording of the Gracious Speech before us today with what was said a year ago.
The first subject is that of disarmament, which is mentioned at the beginning of
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the Speech. It is stated that they—the Government—will:
"…promote disarmament, and in particular will seek the conclusion of a treaty to prevent the further spread of nuclear weapons."
In the Labour Party manifesto of a year ago on the same subject, it is stated:
"First and foremost will come our initiative in the field of disarmament…We shall appoint a Minister at the Foreign Office with special responsibility for disarmament to take a new initiative in the Disarmament Committee in association with our friends and allies."
That is on page 21 of the Labour Party manifesto.
I should like to ask the Government whether this initiative has yet been taken. At one stage, the impression was given that the initiative would be a new draft treaty for non-dissemination of nuclear weapons. This would not have been a new concept, of course, because this was enshrined in the unanimous resolution of the General Assembly of the United Nations in 1961. The project for a non-dissemination treaty has since then been a major part of the Conservative Government's programme and proposals at the United Nations and in the disarmament meetings in Geneva.
But this summer we were led to believe that a new British draft treaty would be tabled by the United Kingdom. So far as we could see, this was to be the new initiative described in the Labour Party manifesto. The Prime Minister said in the House on 27th July:
"This is why the Government have taken the initiative at Geneva—or will be doing so—in tabling proposals to stop the spread of nuclear weapons."—[OFFICIAL REPORT, 27th July, 1965; Vol. 717, c. 224.]
But, so far as I know, that draft treaty was never tabled.
An American draft treaty was tabled on 17th August and the United Kingdom did not or could not co-sponsor that treaty with the Americans. I hope that when the time comes for a Minister from the Foreign Office to reply to the debate, he will explain what had been happening during the previous months of preparation before the Geneva talks were resumed. Why was this difference of opinion with the Americans discovered so late—apparently in the last two weeks? If the Prime Minister knew that it existed, why was it that, on 27th July, just before the conference re-assembled at Geneva, he so

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confidently stated in the House that the United Kingdom would be tabling a draft treaty?
I should like to compare this record with the negotiations of the previous Administration in disarmament, which so successfully led to the conclusion of a partial Test Ban Treaty in 1963. It was publicly acknowledged at that time that the United Kingdom played a leading part with the United States in the conclusion of that treaty.
To continue the fantasy, I should like to read an extract from the Prime Minister's message to the Labour Party on the first anniversary of the coming into power of the Labour Government, as it appeared in The Times of 18th October:
"In disarmament; where we have taken the lead with a new plan for stopping the spread of nuclear weapons."
Again, I ask, what is the new plan? Is it the American draft treaty, or is it still some British draft treaty which has not been tabled?
I notice that a quite different wording appears in the Gracious Speech on Prorogation. Describing the Government's activities in the last Session, it says:
"They have been active in seeking progress towards disarmament and the non-dissemination of nuclear weapons."
The words "active in seeking progress towards" are a quite different and a much more accurate form of words.
Again in the manifesto, we find reference to the United Nations and the statement referring to the time before this Government came into office:
"…time and time again Britain is to be found among the ranks of the abstentionists on vital issues of freedom and racial equality."
This is an appropriate moment to read those words, because only last Friday, in the General Assembly, the United Kingdom again did not participate in a vote in which there was a massive majority on a resolution about Rhodesia.
I will not go into that particular subject now, but it is an example of the many times over the years when Britain has voted against, or abstained on, resolutions at the United Nations when the question of competence was raised and when we in Britain did not think that the General Assembly was competent.
Mr. John Rankin: Would the hon. Member say whether he agrees with that decision of the British delegate to oppose that resolution?
Mr. Campbell: I would say that the parties on both sides of the House have been in agreement when in office about questions of competence and whether the United Nations had competence to investigate matters of internal jurisdiction or colonial affairs.
Mr. Rankin: What is the answer to my question?
Mr. Campbell: I will give way to the hon. Member again in a moment. I would explain that this happened only last Friday, and it has also happened several times in the last year. But it happened also at the time of the Labour Government in 1945–51.
Mr. Rankin: What about my question?
Mr. Campbell: I remember this situation very well—
Mr. Rankin Mr. Rankin rose—
Mr. Speaker: Order. This is a debate, not an attempt at a dialogue.
Mr. Campbell: I was working at the headquarters of the United Nations for three years in its early days when it was at Lake Success, and I recall that the Labour Party was the first British Government faced with this problem. For example, in 1949, the Labour Government voted against or abstained on at least ten resolutions on colonial or similar subjects, and on at least five in 1950. When the question of apartheid came up for the first time at the United Nations in December, 1950, the British Government voted against the passage in the resolution which called upon South Africa to refrain from implementing apartheid Both parties when they have been in office have had to face this problem, and the same action has been taken. This statement in the Labour Party manifesto trying to make capital out of abstentions in the United Nations is therefore utterly false and misleading.
On another page in the foreign affairs section of the manifesto it is stated,
"We will seek to strengthen the United Nations…by reforming the Security Council and the Economic and Social Council so that they are more representative of the new nations".

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If this means anything at all it means expanding the membership of the Security Council from 11, which was the figure under the Charter, and of the Economic and Social Council from 18. Although the manifesto did not say it, this had already been done by a resolution in the General Assembly in 1963, long before October, 1964, and all that was then required were the requisite number of ratifications by member countries for this to come into effect—which eventually it did. This document is thoroughly misleading. If it meant anything it indicated that the Labour Government, if elected to office, would either bring this about or else would attempt to take the credit when it happened as a result of decisions taken in 1963. I am ready to give way to the hon. Member for Glasgow, Govan (Mr. Rankin) now if he wishes.
Mr. Rankin: I thank the hon. Member for doing so. Mine is a simple question, and he did not answer it. I asked him whether he opposed or supported the attitude of the British delegates when that resolution came up which asked for the employment of force in solving the Rhodesian problem. So far as I know, his own Front Bench and he himself supported, the Government in their attitude. Why does he criticise them now?
Mr. Campbell: The hon. Member misunderstands me. The attitude of the British delegate was not what he has stated it to be. The attitude of the British delegate was that he did not participate in the vote. He did not even abstain. He used a new phrase—"not participating"—to show that he had absolutely nothing to do with the vote at all. He made some remarks to the Press, I understand, explaining why he did this, but his attitude was non-participation, which indicates that he did not believe that the United Nations had the right or the jurisdiction to take part in this matter. On that I think there has been general agreement on both sides of the House. I am not sure about the attitude of a number of hon. Members opposite, but there has been agreement between the two Front Benches. The Government will have an opportunity to explain later, when foreign affairs or Commonwealth affairs spokesmen from the Front Bench take part in the debate, exactly why they did not participate. I suspect that it is exactly the same reason
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as that of Governments in the past, but which has been quite erroneously described in this manifesto.
Such documents as the manifesto and the Prime Minister's message to the Labour Party are probably drafted at Labour Party headquarters in Transport House. As they are political documents they cannot normally be composed in Government Departments or the Foreign Office. But that is no excuse for their being so misleading and making mistakes of this kind. There are four Ministers of State as well as the Foreign Secretary, and I believe that they now all realise that the world cannot be moulded by good intentions or high-sounding declarations. They have to come to grips with the facts and to comprehend the views, interests and actions of other nations. I urge them to instil some realism and responsibility into the scribes at Transport House, otherwise there is a danger that those scribes will also become Pharisees. The readers of Transport House effusions will remain in a fairyland of fantasy if they do not follow other accounts of what is happening in the world.
I turn to my second point arising from the Gracious Speech and that concerns transport. I read near the end,
"My Ministers will bring forward proposals for the more effective co-ordination of inland transport".
What happened, I should like to ask the Government Front Bench, to the integration about which we heard so much? Will the mystery of Lord Hinton's Reports be solved? The hon. Member for Bothwell attaches such importance to every word of the manifesto, but in that manifesto it was stated,
"The new regional authorities will be asked to draw up transport plans for their own areas. While these are being prepared, major rail closures will be halted ".
That is page 11. On page 12 there is the statement,
"Rural areas. Labour will ensure that public transport is able to provide a reasonable service for those who live in rural areas."
I assure the Minister of Transport and his colleagues that these words are a mockery in the north of Scotland and the Highlands. In my constituency and thereabouts it is a fact that about three weeks ago the first railway lines in the Highlands were closed, almost exactly to

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the day a year after the Labour Government came into office. We have only to compare this with what is stated in the manifesto and with the fact that the regional councils have not yet been able to consider the requirements of the area. Again, we find that there is no relation between what has happened and what is written in the manifesto. The other Highland lines which were considered under a Conservative Government were retained by a decision of that Government. These are the first lines in the Highlands to be closed.
In Scotland there is also the question of the new Forth Road Bridge and the tolls upon it. When it was opened the arrangement was that there would be a year of experiment. That year ended early in September, and many Scottish hon. Members on both sides of the House would like to know what the decision will be for the future. I inquired about this matter last week, when we were given some information. I have given the Under-Secretary of State for Scotland notice that I would be raising this point if I was fortunate enough to be called today, and he was good enough to explain that he might not be able to be present. At Question time last week I asked the hon. Gentleman:
"How does the hon. Gentleman reconcile the Government's present attitude with the statement in the pre-election pamphlet, 'Signposts for Scotland', that the imposition of any toll on this bridge was indefensible?"
The Under-Secretary replied:
"It is a matter for great regret that the hon. Gentleman persists in misreading manifestos of all parties, including his own. The fact is that the Labour Party manifesto did not say that. Even though my hon. Friend the Member for Fife, West (Mr. William Hamilton) might have wished otherwise, it said that if industrial development was inhibited, tolls would be abolished."—[OFFICIAL REPORT, 2nd November, 1965; Vol. 718, c. 867.]
Both of those statements by the Under-Secretary were completely wrong. The words I used were exactly as they appeared in "Signposts for Scotland", which states on page 10—and I have a copy of the document with me:
"The Government's projected imposition of tolls to finance the building of the Forth road bridge, to be followed by the Tay and Erskine bridges, is indefensible…"
If one searches through the Labour Party manifesto one finds nothing about tolls.
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On page 10 of it one merely finds an endorsement of the document "Signposts for Scotland". The gratuitous rudeness about my interpretation of my party's manifesto I cannot account for because I cannot recall any occasion on which I have been required to interpret it. Thus, both of the Under-Secretary's statements were wrong, which again brings out my case that Members of the Government seem to have completely forgotten, if they ever knew, what was written in their own party statements.
I understand—because it was announced in the Press during the Recess—that the Paymaster-General has been responsible for liaison between Transport House and the Government. It was stated, I think in September, that he was giving this job up and that it was being taken over by the Minister of Housing and Local Government. At least that told us something of what the Paymaster-General had been doing because previously we had always found it extremely difficult to get any information about his activities when we asked Questions in the House.
Whether or not this liaison and coordination, such as it is, will improve with his departure I do not know, but I advise the Minister of Housing and Local Government—who, we leraned earlier, is an expert in psychological warfare—to make sure that his party headquarters writes manifestos and documents which bear some relation to the policy which his party will later follow. Otherwise we will continue to have the situation in which there are different voices in the party and a difference between the image being presented of the party and reality. If the Minister of Housing and Local Government can do this, in addition to all the other tasks which he has, I think that we can assume that he is carrying out another part of the Gracious Speech, where it stated:
"For the protection of consumers, a Bill will be introduced to strengthen the law on misleading trade descriptions"
7.35 p.m.
Mr. J. B. Symonds: I do not wish to detain the House for long and I will concentrate my remarks on a few points arising out of the Gracious Speech, although I must first make it clear that, having listened patiently to the speeches of hon. Gentlemen opposite this afternoon, I can only conclude that they

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are following the pattern which I have seen them follow for the last 40 years, since I first took the opportunity to be politically minded.
I recall hearing one hon. Gentleman opposite say, in effect, "We must have an average of at least 2 per cent. unemployment". I trust that hon. Gentlemen opposite realise that only because of the extreme unemployment in the North can that figure be arrived at. The same hon. Gentleman opposite suggested that there should be increased benefits for those unemployed. However, I did not hear him say a word about reducing profits and putting them back into the economy so that we may put the economy right and have those reduced profits used for the benefit of the public at large.
I was surprised to hear one hon. Gentleman opposite say that everything hinged on the question of reducing the amount spent in the Welfare State. Anyone would think, listening to hon. Gentlemen opposite, that the benefits of the Welfare State were free to all recipients. That is not so and they should not forget that working men are paying from 10s. to 14s. a week to enable them to benefit from the Welfare State, in addition to the contribution made by employers. Do hon. Gentlemen opposite feel that the State's contribution should be reduced? Perhaps they do. In any case, the hon. Gentleman who spoke in those terms was merely carrying on in the true Tory tradition. The average man and woman realises that he or she can benefit from the Welfare State in a time of crisis merely because of the contributions made in the past.
The Gracious Speech contains the words:
"…a Bill will be introduced to strengthen the law on misleading trade descriptions."
I hope that the Government will go a stage further and will, when that Bill is introduced, arrange the legislation so that consumer councils are established throughout the country. I know from experience that 1d., l½d. or 2d. is placed on the cost of certain articles while something else is reduced by, perhaps, 1d. If such consumer councils were established throughout the country the Government would receive on-the-spot reports and would know the effect of prices throughout the nation. I understand that something like this was tried by groups of
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housewives in two areas and that the experiment proved successful. I hope that the Government will consider the establishment of these councils to ensure that shopkeepers do not add a copper here and there to the prices of certain goods, particularly at the weekends.
The Gracious Speech states:
"A Bill will be introduced to assist the financing of the coal industry and the redeployment of its manpower".
I hope that, in our actions towards the coal industry, we will ensure that pit closures do not take place until there is sufficient alternative employment available in the areas concerned. I feel particularly strongly on this point. I have been advised that in Cumberland two pits are to be closed shortly and that in my constituency there is the prospect of unemployment because if pit closures. In Whitehaven and Cleator Moor there is an unemployment rate of 3·7 per cent., so hon. Members will readily understand my anxiety that there should not be any pit closures at all, either there or in any other part of the country, until other employment has been found for the men who have to be discharged.
I appeal to the Government to look again at the coal mining industry. The Act says that the pits shall not be run for a profit but in the best interests of the community as a whole. As long as pits are paying their way I do not see why they should be closed. They should be kept in operation. In my area in Cumberland we supply our type of coal to the steel industry at Workington and at Bristol, and we have also exported it on occasion from Whitehaven to Northern Ireland. Would it be fair and just to put men out of work merely because someone says that this or that pit is not paying? Surely, the Government will look at the social consequences of the closing of any mine in the country.
An hon. Member opposite said that there would be a period of unemployment during the redeployment of manpower. I hope that a Labour Government will not have men put out of work until alternative jobs are found for them. A duty and responsibility rests on the Government, in which I have confidence, to see that other jobs are provided for those people. Reading the Gracious Speech, I feel that the Government will

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take note of this when the Bill is introduced for the financing of the coalmining industry.
The Gracious Speech also mentions the new system of Exchequer subsidies for local authority housing. I hope that the Minister of Housing and Local Government will take account of the housing needs a local authority may have. It may be all right for the Minister to say that the housing subsidy will be so much, but will that same subsidy apply to all local authorities in the country whether or not they have a housing problem? Will Birmingham or Newcastle or London get the same rate as the small local authority that has very little housing to do, or will a particular local authority get a larger amount of subsidy because that is in the best interests of the area concerned?
Another way of aiding the housing programme would be to charge a cheaper rate of interest to local authorities in addition to the subsidy they are to receive. When young couples approach a local authority it should be able to borrow at a rate lower than the present rate, providing that it is responsible for lending the money. I well remember that in 1959–60 the then Government were able to lend to building societies at a rate of interest of 1 per cent. below current Bank Rate. The building societies were lent over £100 million. They, in turn, lent the money at a rate of 6 per cent. to people who wanted to buy houses built prior to 1920. They made a profit of 1 per cent. If such a thing could be done then, it is now only right and fair that young couples wanting to buy their own houses should have the chance of borrowing at a cheaper rate from local authorities.
I am pleased that the Government are to give assistance to men and women who are in the early stages of sickness. Those are the men and women who are entitled to help, so that they can get better and return once more to the employment that it vitally necessary to our economy. I know perfectly well what it is to be unemployed. Have hon. Gentlemen opposite ever had the experience of being told at the labour exchange, "There is no money for you this week. You are not entitled to any".? When a man has a wife and family, to be told that is a harrowing experience, but that
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was the experience of unemployment known to men in the North in days gone by. I am pleased to know that now, when a man through no fault of his own becomes unemployed, he will be helped to get fit and return to work.
What have the Labour Government done over the last 12 months? It has been said from the benches opposite and outside this Chamber that we have never kept any of our promises. Speaking in my constituency, I asked the old people whether they were pleased and satisfied with the £4 they got last Christmas. Did hon. Members opposite support that action? Did they and their party, during 13 years of power, ever once give the old folk in receipt of National Assistance a grant at Christmas time? Again, did they ever give a guinea a week increase for the old couple? Did not hon. Members opposite increase the prescription charges, and did we not remove those charges altogether, as we promised to do in our manifesto? These are things that a Labour Government have done in the last 12 months and I have confidence in what the same Labour Government propose to do now.
One has to bear in mind the mess that the present Government have had to clear up. It is all very well for hon. Members opposite to say that we did not inherit that balance of payments deficiency, but they knew very well that it was there. Even their own ex-Chancellor of the Exchequer has said what he would have done to meet it. Because we have got over that difficulty, are trying to make the country self-supporting and get the wheels turning, our people will see the benefits from the efforts that everyone will make. I am quite satisfied with the proposals in the Gracious Speech. I hope that the Government will take note of my one or two suggestions, particularly that in respect of the coal-mining industry, which I believe is very important.
7.50 p.m.
Sir Robert Cary: I hope that the hon. Member for Whitehaven (Mr. Symonds) will not expect me to follow him into the refinements of his speech, vigorous though it was, except to say that I fully sympathise with him in his horror at unemployment and some of the sufferings he has witnessed. That horror was also voiced by the hon.

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Member for Bothwell (Mr. James Hamilton). I want both hon. Members to be fair to my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman). My hon. Friend did not advocate a return to those hideous prewar years when I, as a young Member of the House, saw every weekend on returning to the industrial North the decay and disintegration which mass unemployment brought to our people.
When hon. Members opposite read my hon. Friend's speech tomorrow they will surely recognise that he was pointing out the great disadvantages which exist in our time from overfull employment. My hon. Friend's concern was centred on the Government getting the exact balance in the labour position; hence my hon. Friend's claim that things may yet go wrong unless we have a complete reassessment of the Welfare State which, after all, was founded upon Beveridge—I witnessed it in the House—with an unemployment potential of some 8 per cent. to 10 per cent. The late Mr. Hugh Gaitskell later said that he would accept something round about 6 per cent. to 7 per cent. My hon. Friend was merely saying that in overfull employment for sheer national safety it might be the right course to follow not even a 2 per cent. level of unemployment but perhaps 1½per cent.
In moving the Loyal Address, the hon. Member for Manchester, Cheetham (Mr. Harold Lever) made a witty and charming speech. The hon. Gentleman is not now in his place. Perhaps I may be allowed to say that he made a speech which in its texture will live for all time in my mind as a Parliamentary gem. I say this because, like the hon. Gentleman, I have had the privilege for years of representing the great city of Manchester in the House. Being the first Mancunian called in this debate following the hon. Gentleman's charming speech, I think it is not an impertinence for me to congratulate him from this side of the House.
The hon. Member for Cheetham named the great citadels which dominated his boyhood—Manchester Grammar School, the Cathedral, the Royal Exchange and that great institution the Manchester Guardian, which has now become national. The hon. Gentleman also named one of the city's tragedies, the great Strangeways Prison. I agree with
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the sentiments the hon. Gentleman expressed about that. I hope to survive long enough, if not as a Member of the House, certainly as a citizen of Manchester, to see this ancient, penal and grim institution abolished and demolished.
The two matters on which I wish to comment occur right at the end of the Gracious Speech, with the exception of the reference to Scotland. I want to refer, first, to the proposed appointment of a Parliamentary Commissioner—an ombudsman. I have an open mind on this. Like most hon. Members, I have seen from television documentaries what is happening in Scandinavian countries. In one country the effect of the appointment of a Parliamentary Commissioner is beginning to decline. It was a novelty, but it is perhaps not quite fulfilling the ambitions which were held for it.
I am interested in the phraseology employed:
"with powers to investigate individual grievances."
I thought I had been playing the rôle successfully for the last 30 years in the House. If my constituents must have a Parliamentary Commissioner, surely I am that person. Until a more refined discussion of this matter takes place, I cannot quite see what part the Parliamentary Commissioner will play. Is he to become a form of Post Office for the private Member of Parliament? If so, and if he is to investigate individual grievances, let me name one. In all my years in the House and in all my years as a candidate during the 1920s following the First World War, the Ministry of Pensions and National Insurance has never acknowledged that coronary thrombosis is an acceptable basis on which to grant a pension because it occurred as a result of war service. All hon. Members must have thick casebooks on this one dominating feature. I have seen many of the papers, although I have not them with me tonight. Hon. Members will appreciate that I am the Parliamentary Chairman of the British Limbless Ex-Servicemen's Association. As such, I see much of the residue of documents concerning those who have made a claim about coronary thrombosis attributable to war service, either in the First World War or in the Second World War. Will all those individual grievances land up on

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the table of the Parliamentary Commissioner to be dealt with by him and passed back through Members of Parliament to constituency level? I repeat my mind is open on this matter. The experiment has been tried in other countries, but it has been only partially successful. I hope to be more enlightened when the matter is discussed in detail than I am by this one sentence in the Gracious Speech.
My second point concerns the proposals
"designed to promote greater safety on the roads."
This is a very topical moment to raise this matter, because every hon. Member must be concerned about what happened on Friday night on the M.6, which was converted into a battlefield. We must do something about this problem now. I said earlier that the points I wished to raise concerned proposals made at the end of the Gracious Speech, with the exception of the reference to Scotland, but I hope that this matter will be dealt with much earlier. I believe that it should be dealt with in the next few weeks, because we are now at that time of the year when fog and ice will cause great trouble and difficulty on our main motorways. It requires of the Minister of Transport firm, positive action.
A senior police officer described the driving on the M.6 and M.4 on Friday evening as "diabolical". It will be within the minds of hon. Members that motorway driving is something quite different from ordinary driving. One has to obey a certain discipline of the motorway before one can become a safe driver. In periods of fog and of ice not only is additional care required but in certain cases of dense fog it may be necessary to close the motorway altogether and not allow any movement on it.
The newspaper headlines in the last few days referred to excessive speeds. No doubt hon. Members witnessed on television the cross-examination of the Chief Constable of Lancashire and the Parliamentary Secretary to the Ministry of Transport. Excessive speeds were talked about and the Chief Constable said that 20 m.p.h. and 15 m.p.h. are excessive speeds in dense fog. There must therefore be control by signs, speed limitation and even the closure of motor-
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ways during periods of emergency, and there must be adequate punishment for those who, despite instructions from those in authority, still drive recklessly. The Government must deal urgently with these matters.
In that excellent programme "24 Hours", broadcast on B.B.C. television every night, viewers were shown for eight minutes what happens on the German autobahns. The electronic loop system which has ben developed by the Germans for use on the autobahns is very interesting. One of the great motor firms of Germany is offering outright co-operation with the Government in the installation of small transistor sets in cars for use to give road warnings to drivers. This is one of the ways in which some of the wonderful electronic devices can be developed and used for our protection. According to Press reports the Minister of Transport, who has just returned from Paris, may be making a statement in the House tomorrow on giving this traffic problem the most urgent priority.
Mr. Gower: Is my hon. Friend aware that although the Germans have had much longer experience of motorway driving than we have they have to endure the terrible carnage on the autobahns?
Sir R. Cary: I agree that the German casualties are extremely high. They are also extremely high in the United States.
I want to make clear to the Minister of Transport that I am not in any way indicting him in this matter. Britain is still one of the safest countries in which to drive in spite of our densely concentrated urban areas which are full of traffic. I should like to make an urgent plea to the Minister on behalf of an old friend who is not present here today, the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) who has taken a great interest in the traffic problems of the M.6 where the recent disaster occurred and who lives near the motorway. A report in The Guardian says:
"Mr. Ellis Smith said yesterday that the Ministry should help local authorities to provide lighting without delay."
He was dissatisfied with the replies given to him by the Ministry of Transport and he went on to say,
"I am surprised to think why any Minister should try to shelve what I believe to be a national responsibility on to the backs of the

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poor little urban and borough councils. Experienced lorry drivers tell me they shudder to think what might happen to them on motorways in fog, and many are giving motorways a wide berth."
I beg the Minister of Transport to give his hon. Friend the Member for Stoke-on-Trent, South a more reasonable, more profitable and worth-while answer than the one complained of by that hon. Gentleman.
8.5 p.m.
Mr. Robert Maxwell: I warmly welcome the Gracious Speech and I believe that so will the vast majority of my constituents whether or not they voted for me and the Labour Government. The bulk of the people in my constituency earn their livelihood in the railway works, the brickyards or in agriculture.
I welcome the paragraph in the Gracious Speech which reads:
"Legislation will be introduced to remove statutory limitations impeding the proper use of the manufacturing resources of the nationalised industries."
I should like to bring to the notice of the House the serious damage done by the former Administration to our great national assets in skill and equipment in the railway workshops when a few years ago, in support of the political backers of hon. and right hon. Members opposite, the Railways Act introduced this limitation and in effect sentenced the railway workshops to destruction.
In the carriage and wagon works at Wolverton, which has a history in excess of a century, there are the finest craftsmen in the world. The evidence of that is seen in the fact that it is in those workshops that the Royal trains have been made for many decades. By introducing a limitation such as the former Administration introduced to prevent these workshops from accepting orders from private enterprise or from abroad, those responsible have in effect destroyed the morale of the men and today this once great workshop, manned by skilled manpower, finds itself being turned into a secondhand repair shop.
I hope that the legislation which the Government now promise to introduce will be in time to save this great reservoir of skill and goodwill for British Railways to the point that the Wolverton works will be allowed to be re-equipped with modern tools to accept orders from
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private enterprise and to help with the export drive instead of being closed down and the men and their families being forced to look for work elsewhere.
Another part of the Gracious Speech which I welcome is that relating to the implementation of the National Plan and the prices and incomes policy. Again, I refer to the men who work in the workshops and for British Railways. They have just been compelled to accept, in negotiation, a miserable pay increase of 3½ per cent. They are bitterly disappointed because their skill and effort are not being rewarded. Their trade union leaders have accepted this miserable and unfair increase because they believe what the Government say about the guiding light. This wage increase has been referred to the National Board for Prices and Incomes, and I make a plea to the Government to treat the railway workshop men and railwaymen better than the 3½ per cent. They deserve it. If the Prices and Incomes Board is to achieve credibility, if the men on the workshop floor are to believe in it when wage claims are referred to it, it must not be just a vehicle for keeping wages down but, when justice requires or where, in the national interest, it is worth while, the Board should not hesitate to recommend a higher increase than the 3½ per cent. which has been negotiated, and should not be afraid to back-date any such increase. Unless the Prices and Incomes Board does that, the men on the workshop floor, whether in the railway workshops or elsewhere, will lose faith in the Government's pay and prices machine.
Brick manufacture is another important industry in my constituency. Brick workers and their families will welcome the passages in the Gracious Speech which deal with housing, because they represent a firm guarantee that the brick industry's capacity will be used to the full. I remind the House that in the National Plan, for the first time, and on the initiative of this Government, it is envisaged that our brick industry, which in my constituency and elsewhere produces the finest bricks at the lowest price in the world, will open export markets for itself. There is considerable need for bricks on the Continent, and I congratulate the Department of Economic Affairs on taking the initiative in this matter. Not only will this mean that

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the brick industry will help our export drive, but, perhaps even more important, exports will enable the industry to even out its demand so that we get away from the cycle of glut and shortage from which it has been suffering.
Many hon. Members opposite have taunted the Government and my party about why we are not proceeding with steel nationalisation. As is well known, I am a firm supporter of the nationalisation of this industry. However, on the question whether we should leave out certain important legislation in favour of it, I back the Government. It is not a matter of whether we shall nationalise the steel industry but, as the Chancellor has said, of when, and I am quite certain that the time cannot be long delayed. But this proves that the Labour Party does not propose to nationalise steel or any other industry for ideological reasons. We shall nationalise it only because it has failed the nation, and this was the basis on which we fought the last General Election.
My constituents will welcome the foreshadowed legislation for a Land Commission. For too long we have seen racketeers and land speculators holding the community to ransom. In my constituency, the local authorities, that is, in effect, the ratepayers, and the Chancellor of the Exchequer, have been forced to pay many tens of thousands of pounds for land urgently needed for housing, schools or hospitals. The new Bill will put an end to that.
While on the subject of the Land Commission, I put a plea to the Government about compensation to tenant farmers for land compulsorily acquired for public purposes. This is a matter of great concern to many of my constituents because it is in Buckingham that the Government have decided to site a new town. This will call for the requisition, by compulsory purchase order, of vast acreages. It will mean displacing many tenant farmers who have lived and worked on that land, in some cases for generations. The present compensation for tenant farmers is niggardly in the extreme. When the Land Commission comes into being, the Government should, in justice and in equity to tenant farmers, provide for compensation either on five years' profits or ten years' rent, whichever be the higher,
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instead of, as at present, two years', which is really quite insufficient and grossly unfair.
The Gracious Speech tells us that the Government will be implementing the National Plan and
"will extend the range of the Economic Development Committees and encourage British industry to achieve greater competitive efficiency by reorganisation, the more general use of advanced technology, and better use of manpower".
In the plan issued by the Department of Economic Affairs, there is envisaged the use by the Government of their purchasing power to induce British industry to increase its exports, to modernise itself and to use its manpower more efficiently. As is well known, shareholders are not, by and large, an effective instrument to induce efficiency and effective management. Corporations have grown so large that they hardly take any notice of anyone in what they are doing. They take notice only if the purchaser complains or insists that something be put right. In effect, both nationally and locally, the Government are spending about £8,000 million a year. This immense purchasing power could be used as an effective and immediate tool to induce British firms to become more export-minded and to do all that is necessary to make our country pay its way.
Here are two examples to show precisely what I have in mind. The great company, Vickers, is managed, I believe, by a chairman who is a former major-general and a managing director who was formerly an eminent civil servant. Both these gentlemen have achieved brilliant careers in their respective spheres—I think that I have their former occupations right, but they may have been the other way round—but they have proved that brilliance in the Army or the Civil Service is no guarantee of managerial efficiency in a private enterprise company with huge assets involving hundreds of millions of pounds.
This company has utterly failed to make use of its opportunities both at home and abroad. It has disappointed its shareholders and its workpeople in most of the places where its undertakings are located as well as its medium and higher management. It will not be induced to change merely by Government exhortation.

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However, I venture to say that the board of this huge company, if it realised that, unless it increased its exports, Her Majesty's Government would remove it from some of the Government bid lists through which it now acquires millions of pounds worth of Government business, would make the company more modern, more effective and more efficient. We could rest assured that the board would change its attitude in order to make sure that it was restored to the bid lists by rapidly changing its management and increasing exports.
Another example concerns how the Government are placing additional financial burdens on the taxpayers through the method of contracting for the construction of public buildings. A contract is let for a huge Government building, perhaps a barracks or a hospital. None of the builders or furnishers are concerned with maintenance after the building is finished. They are merely asked for bids and the lowest receives the contract. No one takes any notice that the way in which the Government purchase that building involves the taxpayers in hundreds of millions of pounds in extra expenditure in maintenance.
Why should not the Ministry of Public Building and Works, which is one of the largest buyers in the construction industry, say to contractors, for instance, for floor coverings, "We will award you the contract but it will not only be for the laying of the floor but for its maintenance for the next 10 years."? Then we should see floor manufacturers taking a very considerable interest in ensuring that the covering not only looked good but lasted more than a few weeks or months. They would do research and development on coverings that would last for 10 or more years and which would be maintainable at the lowest possible cost.
As a consequence, not only would the Government be able to buy cheaper but the floor manufacturers would become more efficient and use science and technology to greater effect. In addition, of course, the housewife would be able to buy better floor coverings than she can obtain now.
Sir R. Cary: In these circumstances, could the hon. Gentleman persuade housewives to give up stiletto heels?
Mr. Maxwell: Whoever invented stiletto heels deserves a plaque from floor manufacturers all over the world. Until floor covering manufacturers have an interest in ensuring that floor surfaces survive even stiletto heels and last a few years, nothing will be done about it. The sooner the Government use their power to insist in the contracts they award that floor coverings should last, the sooner manufacturers will bring in materials that will resist such highly dangerous things as stiletto heels.
The vast majority of my constituents will also welcome the legislation to establish a new system of Exchequer subsidy for local authority housing. A great many rent increases have taken place by local authorities because of the fluctuations in the Bank Rate. The higher the Bank Rate the higher some of these rents. Now the Government are to bring in legislation to allow local authorities to borrow at fixed rates, which means that the threatened rent increases by local authorities caused by higher Bank Rate will no longer need to take place.
I am sure that the long overdue Bill to lessen the injustices of the rating system and to limit the burden of rates will be welcomed by the vast majority of the population. The increases in rates year after year have become intolerable. This is particularly so for those who, in the 1920s and 1930s, saved and skimped and deprived themselves to buy their own homes and are now retired on a small pension. Such people cannot meet the rate burden imposed by the cost of the services which have been introduced.
My last point refers to the very welcome paragraph on agriculture in the Queen's Speech. The farmer is to be given an opportunity to increase his income by increasing his production. This is as it should be. Only if the farmer has additional income will he be able to pay better wages to the agricultural worker, who will nor, be kept on the land much longer unless he is paid a better wage.
I wonder why no right hon. or hon. Gentleman opposite has said anything about agriculture so far in this debate. In the policy which it adopted last October, and of which the Leader of the Opposition is so proud, the Opposition has accepted the policy of abandoning

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the guaranteed prices on which the prosperity and security of British agriculture have lasted for so long. This is a gross betrayal of the farmer and the farm worker by the Conservative Party and I am sure that I will not be proved wrong in forecasting that the N.F.U. will come out against Conservative Party policy because it endangers the livelihood and prosperity of one of our most vital industries.
I repeat that the vast majority of my constituents will welcome this Gracious Speech—including railwaymen and railway workshop men, brick workers and their families and last, but not least, farmers and farm workers.
8.28 p.m.
The Marquess of Hamilton: I do not intend to follow the arguments raised by the hon. Member for Buckingham (Mr. Maxwell) concerning the Conservative Party's agricultural policy, but doubtless that policy will be appearing in next year's Gracious Speech. However, since I represent a predominantly agricultural constituency comprised of small farms I want briefly to comment on the mention in the Gracious Speech of farm structure and the policy to encourage voluntary amalgamation of farm holdings.
Such a scheme must not be regarded by the Government as a substitute for a fair and realistic price policy. It is the current fear and opinion of small farmers that the Government will, however, regard it as such. The small fanners fear that they will be forced out of farming by the Government introducing the carrot and the stick—the stick being a tough and unacceptable Price Review such as the industry received this year. The vast majority of small farmers would prefer a proper price policy rather than the proposed "handshake".
I am also convinced that the scheme will only achieve its objective if the present incentives are greatly increased. The proposed hand-outs are on the same scale both for the owner-occupier and for the tenant, in spite of the fact that it is a far greater and more drastic decision for the owner-occupier to make. Therefore, I believe that there should be a distinct differentiation of compensation resulting in the owner-occupier receiving
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a substantially increased compensation. Again, there should be a distinct difference in the scale of compensation between the part-time small farmer and the owner-occupier who has no other source of livelihood outside farming.
The majority of farms are located in remote, outlying areas of the United Kingdom where alternative employment is generally impossible to obtain. So if this proposed scheme is to prove successful then the Government must first succeed in attracting new industry, preferably light industry, to those remote areas by further drastic curtailment of industrial development certificates in the congested Midlands and South-East, otherwise the redundant small farmer will be faced with unemployment, which, to the individual small farmer, is a continuous personal problem which he will resist at all costs by holding on to his small farm. So, naturally, the small farmer is waiting for action by the Government to steer industries to these remote areas of the United Kingdom to achieve the much-publicised balanced regional development.
The Government must also remember that the concern with redundancy does not affect the farmer alone, for it affects equally the employment of his entire family. Therefore, the Government's proposed policy must take fully into account the human element. If they desire to achieve their objective the Government must also realise that there is no single optimum size of farm holding, and I am quite convinced that in the generations to come we shall continue to have the small family farm, providing the small farmer receives a fair price policy, for which there is no substitute.
I fully appreciate that the real test for survival in the years ahead will be through high efficiency and a high standard of commercialism, but the Government must remember that output per man from the land has risen twice as fast as output on the factory floor. However, although farming is now at the top of the production league, farm incomes are at the bottom, and I sincerely hope that during the course of the next year the Government will rectify this wholly unsatisfactory position.
8.33 p.m.
Mr. Arthur Probert: I think that all hon. Members will agree that on

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these beaches there has been a warm welcome for the Gracious Speech—with the notable exception of any reference to the public ownership of the steel industry. Indeed, it was very gratifying to hear the Leader of the Liberal Party praising the Gracious Speech, saying that, in fact, many of the proposals in it were, as he said, due to the activities of his party and himself. Well, if that be true I would say that obviously they have had more effect on the Government benches than upon the electorate.
There are many points on which I should like to have said a word, but there are so many of my hon. Friends wanting to speak that I shall omit to do so, about certain measures omitted from the Gracious Speech. I have referred to the notable omission of provisions for the public ownership of the steel industry. I must say that I was impressed by the speech of my hon. Friend the Member for Bothwell (Mr. James Hamilton) who represents a steel constituency, and I think that his remarks on this subject are worth noting.
I would refer very briefly to one or two other measures, and the first is the question of
"providing incentives for industrial investment with due regard to the development of the economy and the special needs of particular areas."
It has become apparent in recent years that the provisions of the Local Employment Act have not been sufficiently effective. Either its teeth have not been sufficiently sharp, or, as I suspect to be the more true, the Government of the day did not have the will to put into effect the measures there available. The present Government have already accepted that there are weaknesses in the Act, and indeed, as a temporary measure, in recognising its weaknesses, have extended the provisions of the scheduled areas to many areas which even at the present time have a very high degree of employment, rather than of unemployment.
I think it is recognised as a fact that the way to tackle the deployment of industry is not to do it in a piecemeal manner. I was very impressed by the remarks of the hon. Member for Scarborough and Whitby (Sir A. Spearman), who was obviously referring to the
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effective deployment of industry, though I must say I was rather fearful of his remarks about having a degree of un employment runing at 1½ per cent. or 2 per cent. nationally, because what he obviously forgot was that at present, owing to ineffective operation of the Local Employment Act, there are areas in Scotland and Wales which have a high degree of unemployment, even to the extent of 9 per cent., 10 per cent., 11 per cent. and 12 per cent.
On this question of the deployment of industry, I sincerely trust, speaking of my own country, Wales, and particularly South Wales, that the Government will be aware of certain problems which at the present time are affecting South Wales. There is a rapid development, and I consider over-development, along the coastal belt in the south-east, with the effect that there has been depopulation of the valleys northwards. I think that what the Government should realise is that what is happening in South Wales now is similar to, though to a much smaller extent, of course, what is happening in the South-East and the conurbations around London. I hope that the lessons of the South-East and the large conurbations around London will have been learned when we come to tackle the problem of the deployment of industry in South Wales. I would ask the Government to make the appropriate planning authorities in South Wales aware of this problem. I am not so certain myself that all the planning authorities of Monmouthshire and Glamorgan are really up to this problem.
On the question of leasehold reform, it is particularly pleasing to South Wales Members to find this statement in the Queen's Speech, although the Prime Minister stated this afternoon that this problem is now affecting many parts of the United Kingdom. The previous Tory Administrations, year after year, despite the blandishments of certain South Wales Tories, have refused to do anything about this grievous problem. I am pleased to see that it is not just leasehold reform to which the Gracious Speech refers but also leasehold enfranchisement. I am glad enfranchisement has been included, and I trust that the Government's proposal means what it says. For far too long, as you, Mr. Deputy Speaker, are aware, the people of South Wales have

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been dispossessed of their homes because of the operation of the leasehold system.
Security of tenure was denied to hundreds of thousands of people by the operation of the infamous Rent Act. This has been alleviated by the relief given to many thousands of tenants, but, in a lesser degree, great hardship has been caused over a number of years, particularly in areas of South Wales, by the operation of the leasehold system. Homes have been handed over to landowners, metaphorically speaking, on a platter when they have not even contributed a nail or a penny to the construction of the house in question. I shall, with my hon. Friends who represent constituencies in South Wales, watch with interest the Government's proposals when they come before the House. I feel, as you, Mr. Deputy Speaker, probably do, that the question of how the individual can purchase the freehold of his house is something about which we shall have many arguments.
In view of the time, I will deal with housing subsidies and rating legislation together. For years successive Governments have been considering the question of housing subsidies. Indeed, for several years the previous Administration introduced measures to deal with this problem. I want to say in fairness to them that for Welsh authorities they operated fairly successfully, but it is obvious that the present position on housing subsidies is far from desirable because, as has been said, different authorities have different needs.
On rating legislation, I remind the House that when the Labour Party was in opposition it implored the Tory Government from time to time to investigate the rating system. I well remember that we tabled a Motion to prevent the introduction of the new valuation system until the Government had made an inquiry into the rating system and had the results of that inquiry before them. However, they refused to do that, with the serious consequence that a heavy rate burden has fallen on those least able to bear it.
My purpose in referring to those two matters is this. Welsh local authorities have a particular interest in them because of the high cost of house construction due principally to geological factors and,
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particularly in the mining areas, to mining subsidence. In the past, legislation has recognised this, and I freely admit it. As I have stated, Welsh local authorities have benefited from the concessionary subsidy Sections of the Act and the operation of the rate deficiency grant. I hope that my right hon. Friend the Secretary of State for Wales will keep these two points in mind when the Minister of Housing puts his housing subsidy proposals and any new rating proposals before the House. Serious consequences for Welsh housing finance could result if the rate deficiency grant and the subsidy concessions were abolished.
I refer now to the workmen's compensation proposals. A number of my hon. Friends and I have tried for years to get something done for those on partial compensation and those who are totally disabled. My right hon. Friend the Minister of Pensions and National Insurance, like myself, represents many people who have commuted their claims under the old workmen's compensation legislation or who are totally disabled and are receiving some benefit. But there are still those who are partially disabled. I make this plea to my right hon. Friend. I ask her to give consideration to those who have had to commute their claims under the old system. This is a very difficult subject, and I agree that in law they have, perhaps, no legal status. But, in fairness to those hundreds of thousands of people who have commuted their claims, may I remind my right hon. Friend that they did so in very difficult circumstances.
8.44 p.m.
Mr. Rafton Pounder: In the speeches which I have made in the House during the two years of my membership, I have always sought to be brief. I have no intention of departing from that practice this evening.
Without further preamble, may I make five brief observations on the Gracious Speech. I start with the obvious omission to which reference has already been made several times in the debate. Although Northern Ireland is not a producer of steel, it is a substantial user of that vital raw material. I am certain that the omission from the Gracious Speech of any reference to the nationalisation of steel will be most welcome to my countrymen. Not only does the Government

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appear to have had second thoughts about proceeding with this, to my mind, iniquitous piece of nationalisation, thereby undermining a most important industry; but there is also the serious point to be borne in mind that this major industry is., as far as one can gather, still being allowed to dangle in a state of animated suspense. I regard this as extremely serious. I trust that the Government's omission is not merely a stay of execution but is in fact a quashed conviction.
Having referred thus to the omission, may I now refer to four points which are mentioned in the Gracious Speech? One—I shall not go as far as to say that it is the most welcome, but it is certainly one to which, I am sure, no exception can be taken—is that which refers to the relationship of insurance benefits to wages. This is something which, I am convinced, all hon. Members, regardless of party affiliation, must welcome.
The fifth paragraph of the Gracious Speech refers to the attempt of the Government to bring to a successful conclusion
"their discussions with the Government of the Republic of Ireland on the establishment of a Free Trade Area between the two countries."
Clearly, my Ulster colleagues and myself will await with the greatest possible interest any developments in these discussions. Obviously, it would be inappropriate to speculate on what might be the outcome. Suffice it to say that at this stage my colleagues and I regard these discussions as being most important and we will keep a weather eye open for all developments on the subject.
Three paragraphs later, one finds in a few words what is, perhaps, one of the most serious points that will emerge in legislation in the coming year:
"A measure will be laid before you to reorganise the Army Reserve and Auxiliary Forces."
Nobody would dispute that there is a case for streamlining the Territorial Army, but from what one could gather from the statement by the Secretary of State for Defence at the end of July, this was to be a case not of streamlining, but of decimation. Not only will it tear the heart out of the vital Territorial Army Reserve from a defence point of view, but it will result in the annihilation of the civil defence organisation, and all this
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for the saving of 1 per cent. of the defence budget.
Do the Government seriously believe that they can tear the heart out of the Territorial Army and not, at the same time, considerably affect recruitment for the Regular Army? I am certain that when the Measure is laid before the House, my colleagues and I will be extremely interested in it. There is, of course, also the point in regard to civilian employment. In Northern Ireland, where we are most interested in matters relating to employment, we will be anxious to safeguard, if that is humanly possible, the employment of those persons who may be affected.
It seems extraordinary, however, that if the Government, as has been rumoured, are to present during this Session White Papers on Civil Defence, the Regular Army and the Territorial Army, their first effort should be directed towards the Reservists. Further comment can be deferred until the White Paper has been published.
There is no doubt also that the reference to public service pensions is most welcome, but will this legislation which is promised in the Gracious Speech be merely an up-to-date version of the triennial Act of increase of the kind which we have seen in 1957, 1960 and 1963, or will it be a revolutionary step forward with the gearing of public service pensions to length of service and to the post or rank held, regardless of the date of retirement?
The answers to questions which were asked in the last Session on these matters indicated that the total cost would be in the region of £100 million. I hope that it will also be borne in mind by the Government that two Private Members' Motions on the subject, both last year and the year before, attracted a vast number of signatures. I hope that when the Measure is brought before the House, it will not be merely an upgrading of the public service pension to take account of increases in the cost of living during the last three years, but that it will be an imaginative step forward.
I conclude my remarks with some observations about the second paragraph in page 3 of the Gracious Speech, which refers to the development of the economy and the special needs of particular areas.

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On 26th October, as a result of the Northern Ireland debate, widespread anger and bitterness were felt in Northern Ireland at the announcement of the closure of H.M.S. "Sea Eagle", and I am not going to retread that ground tonight. Although it would appear to have been a disastrous decision, whether viewed from social, economic or military standpoints, I trust that it is not too late for the Government to have second thoughts.
The closure affects 500 jobs, for a saving of one-fortieth of 1 per cent. of the defence budget at best, which is a fraction of a sum by any accounting standard. These 500 are men who have known virtually no other form of employment, and they will be cast on the dole as a result.
May I draw attention to my own home city of Belfast? As a Belfast Member, I hope that the Government will make some form of statement about the future of the aircraft factory in the city. My hon. Friend the Member for Belfast, East (Mr. McMaster) has at all times been assiduous in acquainting the House of his concern for the future of this very important factory. I accept that the consultants' final report on the future of that factory is not yet ready, but is it beyond the bounds of possibility for the Government to issue an interim statement on the company's future? The absence of any statement is bound to have the most serious effect upon confidence in the firm, not only of its employees but also of its potential customers. It is quite outrageous to keep that great firm dangling in a state of suspense.
On 4th August, 1964, in a television programme on Northern Ireland which I shall never forget, since I appeared in it, the First Secretary said, "You can build aeroplanes". Since 15th October, 1964, there has not been a single Government contract for aircraft given to the Belfast factory. That is particularly serious when one bears in mind that the Government have a controlling financial interest in that factory.
It is to be hoped, in addition, that in the coming Session the Government will finally come clean and renew the solemn pledge given by the previous Government that employment in that factory will not
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fall below 6,000 between now and 1970. That very important undertaking that the last Government gave has not been renewed by the present Government, and that has inevitably added further anxiety about the future of the company.
I would go almost so far as to suggest that any statement on the future of the company may well be held up until after the Northern Ireland General Election, for fear of prejudicing the chances of the Northern Ireland Labour Party in the Belfast constituencies. That is a feeling which is widely held, and it is incumbent upon the Government to allay the fears that exist and give a categorical undertaking quickly that they will stand by the firm.
On the subject of shipbuilding, one waits with the keenest possible interest for the publication of the Geddes Report. What will be in it is anyone's guess, but I hope that the Government will not drag their feet when the Report is published. A great deal depends upon it for the future of Fairfield's the ripples of which have been felt far beyond the Clyde. If the Report recommends the reintroduction of shipbuilding credit schemes, I hope that the Government will not hesitate to implement it, because there is no doubt that shipbuilders and shipowners contribute substantially to our foreign earnings, and anything that can be done to stabilise those earnings is of advantage.
Reverting to the Belfast aircraft factory. I hope that at some stage during the debate on the Gracious Speech a clear statement will be made on the future of the factory, or, failing that, something to give the people of Belfast an indication of what is in store for some 8,000 men in that important industry.
8.55 p.m.
Mr. John Rankin: Unlike the hon. Member for Belfast, South (Mr. Pounder), I do not set out to be brief, as he indicated he would be, nor do I favour being too lengthy. I like to strike a happy medium between those two, but after 20 years I have not yet discovered it. Maybe I shall make that discovery tonight.
I sympathise with a good deal of what the hon. Gentleman said. As he probably

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knows, in my division we have been going through shipbuilding difficulties with Fairfield's, but I notice—and I say this without any malice—that whenever any problem afflicts any industry in which the party opposite is specifically concerned, hon. Gentlemen immediately turn to the Government for help, while from the other side of their mouths they say, "We do not want interference from the Government in our business". I could cite innumerable instances of that having happened, but that might draw me into the process of being too lengthy.
I once had the privilege of attending a dinner which is held every November in a well-known hotel not far from here. I listened to the Minister for Aviation in the Government who are now the Opposition telling a vast mass of supplicants for Government aid and Government money in the aircraft industry, "There are too many beggars in this beautiful hall. Away back and rationalise yourselves into smaller numbers and smaller units". That was in November, and by December they had done exactly what the Minister had ordered them to do, and now we have a great unit on the engine side of the industry, three great units on the construction side, and one on the helicopter side. I am not going to argue nationalisation at the moment, but they came very near to it when they were told what to do, and they carried out the Minister's edict very quickly indeed.
The Gracious Speech has been subjected to a good deal of criticism. I am not going to criticise it. I find in it one of the most comprehensive programmes that I have found in a Gracious Speech. There are very few things that are not tackled in it, and it offers both sides of the House a Session which, when we reach the end of it, we will probably find to have been one that has taxed our physical and mental energies to the utmost.
That is perhaps semi-bellicose language, so I start my coments on the matters set out in the Gracious Speech by referring to peace. I am attracted, in the second paragraph, to the desire of the Government to secure peace in Vietnam and to the reiteration in the penultimate paragraph of the first part of the Gracious Speech of the Government's desire to negotiate
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"a peaceful and honourable solution in Rhodesia on a basis acceptable to the people of the country as a whole."
That second part is most important. In all the language that is now being employed about Rhodesia it should be remembered that the north of that country, in Zambia, President Kaunda is seeking to create a multi-racial society. If this can be done in Zambia it ought to be possible in Rhodesia. If it is to become possible, however, it can be achieved only by peaceful methods.
According to The Guardian the Foreign Secretary has recently laid it down that the Atlantic Nuclear Force is no longer among the Government's top priorities. Priority is now given to non-dissemination and to the extension of the Russo-American détente. That is most important. At the moment both sides of the House agree that one of our primary aims should be to reduce the amount of money spent on defence. If we go on spending over £2,000 million a year on defence the social and economic advance that we all want to see taking place in Britain will be handicapped, if not held up.
From what the Foreign Secretary said it is clear that N.A.T.O. is no longer an end in itself; it is now simply a means to an end. We can, therefore, say that if the sacred cow is no longer productive it may soon be consigned to the knacker's yard. If this interpretation is correct the arms race and the proliferation of arms are more dangerous than Russian aggression or Chinese alleged aggression.
Last Thursday I asked a Question of my right hon. Friend the Prime Minister on this matter, and in reply he said:
"One of the main purposes of our diplomacy…is to ensure a non-proliferation agreement so that neither Germany nor anyone else not in possession of nuclear weapons will in fact get them."—[OFFICIAL REPORT, 4th November, 1965; Vol. 718, c. 1228.]
That immediately brings to our mind the question: how could we prevent Germany from building nuclear weapons? I do not think it can be done. The only way it might be done is to ensure that she cannot test them. At the moment she cannot build them unless she can come to some agreement with another nation under which she is given space in which to test. There is, therefore, some control in the matter at the moment.

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This shift in foreign policy has to be viewed in the light of Mr. Lee Kuan Yew's statement that there is something wrong about blond men with guns defending Asians. I wonder how we would feel if black men with guns were defending us in our territory. When we in the West talk about getting a military balance in Europe, do we apply that east of Suez, and if we do, are we to impose it there by force of American arms, and can we do so without the good will of China?
If not, then that would be a revival of the discarded policy of containment, which I am sure the Prime Minister would never support, in view of his declaration at Blackpool that he had:
"…turned down an American request for a token force in Vietnam before receiving the latest instalment of United States support for the pound."
This seems to show that our Government believe that American policies in Vietnam are not fully justified. If they were, it would appear that a token British force would have been justified, and the Prime Minister said that it was not.
He has also said that there can be no outright victory in South-East Asia for either side. If there is to be a war of attrition we shall only make East-West relations worse, without getting any positive results. Therefore, in my view, our wisest course now is to dissociate ourselves from American policies in South-East Asia, rather than to become involved in the consequences. We might say—
Mr. Charles Doughty: Would the hon. Member include in that statement abandoning the Australian troops in South Vietnam?
Mr. Rankin: Of course, as the hon. and learned Member for Surrey, East (Mr. Doughty) knows perfectly well, we were never consulted about the sending of Australian troops to Vietnam. Therefore, we cannot be involved in the question of whether or not they should be withdrawn or left there if we follow the policy I have recommended.
I was about to say, before I was interrupted, that we might be encouraged in the attitude I have postulated now that, according to The Times of 4th November, America has intervened in Rhodesia to
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warn Mr. Smith about reprisals. We might also be encouraged by President Johnson's assurance, according to the Daily Express of 5th November, that America would back a boycott on Rhodesia. How can we value the help of the President of the United States in achieving for the African the self-determination which he is fighting by every means—human and inhuman—to prevent in South-East Asia? One would like to hear those two policies reconciled.
The solutions involved in the use of force are Dead Sea fruit. Today, 20 years after the physical acts of war have ceased, we still have not made a peace treaty with Germany. The Archbishop of Canterbury, who needlessly jumped into this business, and said that we had stepped into Poland to honour an obligation, forgot completely that the Poland of today is not the Poland which we stepped in to defend. That Poland has disappeared.
A large part of it is in Russia. As compensation, we have taken part of East Germany and given it to the Poles and have thereby left seething in that part of Eastern Europe a problem which is, at the moment, almost insoluble. It will become worse as the years roll on. Therefore, the use of force ought not to be entertained in Rhodesia; nor in Vietnam, and what is happening in South-East Asia ought to cease as soon as possible.
Mr. Gower: Is not the logic of the hon. Member's argument that we should not have resisted Nazi Germany?
Mr. Rankin: If the hon. Member wants to hear me at very considerable length he has only to make a few more interruptions of that nature. Nothing that I have said has anything to do with the past. The past is past. We must turn to new methods of dealing with these old problems. The methods which we employed in the past have failed to solve the problems which we still face, and they ought not to be pursued. Every support ought to be given to the Prime Minister in his attempts to avoid bloodshed in Rhodesia. Underlying Vietnam and Rhodesia is the same fundamental misconception that the natives cannot be trusted to shape their own future and therefore America and other Powers are trying to shape it for them. That policy will fail in Vietnam and in Rhodesia

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because it has been a failure wherever it was applied.
I turn to a few other matters which attracted my attention when I read the Gracious Speech. I could not cease talking without saying something about Scotland. I have roamed to Vietnam and Rhodesia and no one will grudge me spending; some time in Scotland, my ain land, my native land. There is a mention of Scotland in the third last paragraph:
"Provision for meeting the special needs of Scotland will be made in the various measures proposed by my Government."
The Gracious Speech concludes with a Prayer. I do not wish to pray for Scotland but, unlike some people, I do not prey on it.
I want to refer to the Economist of last weekend, 6th November, which had a very interesting and comprehensive article on Scotland. It referred to the fact that
"Industrial Scotland has certain very serious problems."
All of us here—on both sides of the House—have known that for quite a while.
"It needs help to solve them, in certain very important ways. More yet, it needs its own will to solve them."
I do not disagree with that.
The Economist goes on to point out that Scotland's fortunes have changed because of the new pattern of regional development that is now under way. I welcome that. One of the serious problems of industrial Scotland is to be found in the shipbuilding industry. As hon. Members know, in my division Fairfield's faced a very serious situation. This situation was relieved competently and speedily by the present Government.
I have said previously in the House that I hope that both management and men will seize the lifeline which has been flung to them by the Labour Government—that they will grasp it with both hands and co-operate in drawing themselves to safety and to the prosperity which I believe still resides in shipbuilding. I say that because whatever arguments may be adduced about the needs of peace, defence vessels will still be built for a very long time to come.
The same can be said of passenger vessels. They will still be required, as will tankers, although perhaps fewer of both because of increased speed. In addi-
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tion, increasing numbers of ferries will be required. Last summer an average of 9,000 persons per day were carried across the English Channel to the Continent. This summer about 15,000 persons crossed every day. This shows the immense increase that is being made in this type of sea transport. It also shows that shipbuilding is not necessarily a declining industry.
I hope that at this stage in the Fairfield problem there will not be any castigating of the men; talking tough to them. I say that because there are two forces engaged here, the management and the men. Probably both have not worked together in the past as they should have done and I am appealing to them to cooperate. Nevertheless, we must recognise that the shape of management, not only in shipbuilding but in many other industries, cannot go on as at present. There must of course be control and direction. If the Government are asked to aid, an industry which gets into trouble, then the Government could naturally and, in my view, properly claim a share in directing the fortunes of those they help, with Government representation on the board of management. This can no longer be denied.
At the same time, we must remember that men are just as important as money. That must be borne in mind if men must work in the industry. After all, the men contribute a great deal. Indeed, if we try to translate the value of their work into £ s. d. we find, according to an estimate of the economist, Colin Clark, that there is an increased value of at least £250 per year per man. Thus, multiply that figure by 5,000—the number of men employed at Fairfield's—and one gets an idea of the contribution made to the industry by the employees.
Because of these facts, the men must be regarded as eligible, through representation, to have a say in the direction and control of the industry. While I appeal for co-operation between the men and management, it must be remembered that the Economist stated the difficulties of Scotland but failed to outline the biggest difficulty which Scotland has faced, historically and now. Scotland's biggest difficulty is England. That is her biggest danger. With five million people living side by side with 50 million people, surely there is danger.

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The large tends to absorb the small. The glitter of London, the glitter of Coventry, has absorbed the best in Scotland's industrial life for years now. We have London clubs, and we have churches filled by Scots people in Coventry. These are the attractions that continually sap away our people. These are the things that have to be stopped; a narrow belt of people in Scotland of about four million and on both sides, north and south, a great vacancy, with 250,000 people at each end.
We cannot live like that, and yet while the Government—and our Government, I hope—have said that we must disperse people and industries from London, and have been doing so, when it comes to an Act of the greatest and most vital importance to Scotland, they put the Forestry Commission into the London area, at Basingstoke, only 47 miles from the centre of a city in which today people at certain hours cannot move. Instead of getting more industries and more Government offices out of London into the provinces and into Scotland we are creating another for the London environs which will increase the traffic jams where no one can move.
New York has a population of 6¼ million people in a country with a population of 210 million. The population of Russia is 180 million, with 7 million in Moscow, the capital. In London we have 10 million people in a country with a population of 50 million. No country on earth would tolerate that position; one-fifth of the entire population of Britain living in this concentrated, over-populated and over-chaotic area. That is a problem for my Government, and I hope that they will not forget it. One great thing a Government can do is to carry out a policy of gradually but continually dispersing the population of London by putting Government offices in those parts of the United Kingdom which need them most.
So, Mr. Speaker, I have come to the end of what I wanted to say; not to the end of what I could say. I could say a lot more, but I shall have other opportunities of saying it. I see the hon. Member for Aberdeenshire, West (Mr. Hendry) smiling, perhaps in the hope that I shall continue—no, I see that he is smiling in
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the hope that I shall sit down, and in the hope that he will be lucky in catching the eye of Mr. Speaker.
9.24 p.m.
Mr. Forbes Hendry: After that beautiful peroration by the hon. Member for Glasgow, Govan (Mr. Rankin), I do not think that the House will grudge me if I very briefly continue the hon. Gentlemen's remarks about Scotland, because we have the privilege at the moment of the presence of a Scottish Minister. I shall, however, be very brief on the point.
I am a little concerned about the reference in the Gracious Speech to Scotland:
"Provision for meeting the special needs of Scotland will be made in the various measures proposed by My Government."
I have a horrible suspicion that the intention of the Government is to include a great deal of Scottish legislation within the ambit of United Kingdom Bills. I need not stress the undesirability of that to the Minister of State. I will not weary the House by reading extracts from long speeches made by him on this very subject. In this instance it is particularly important that we should avoid such a course.
I hope that the House will forgive me if I point out four instances where I think it is very desirable that there should be separate Scottish legislation. The first concerns the proposed Land Commission, which proposes a completely new type of land tenure, which would appear to apply to Scotland. From my reading of the White paper on the proposed Land Commission, I very much fear that the Scottish provisions will be included in a United Kingdom Bill. This is most undesirable. I ask the Minister of State to call on all his experience and to advise the Government along the proper lines.
The next point is the new system of Exchequer subsidies for local authority housing. I hope that the Minister of State, again exercising his long experience, will ensure that that is introduced into the proper legislation and not, as has been done once or twice in the past, included in a vast Bill covering the whole of the United Kingdom, because conditions in Scotland are completely different. Thirdly, the rating system in Scotland is completely different from that in England

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and it is most undesirable that this local authority matter should be mixed up. The last point concerns education.
Having said that, I propose to say no more about Scotland but to leave it to the good and sound common sense of the Minister of State.
The point in the Gracious Speech which concerns me more than any other is the almost complete lack of any reference to defence. There is quite a lot in the Gracious Speech about efforts to secure peace, but on defence it simply says that the Government
"will continue to support Britain's alliances for collective defence and will work for a generally satisfactory organisation of the nuclear resources of the Allies."
That is all very well, but there is a great deal being done by British sailors, soldiers and airmen in various parts of the world at the moment. It would have been gracious of the Government to have advised the inclusion in the Gracious Speech of some recognition of what these British Forces are doing to protect British lives and British interests in various parts of the world where there is a complete lack of stability. I hope that an acknowledgment will be made in the course of this debate of the work which is being done.
This is frightfully important. It is all very well to speak about trying "to secure peace in Vietnam". It is equally important to recognise that British Forces are maintaining peace and stability in the Far East where stability is absolutely essential in the interests, not only of this country, but of the whole world.
Further, British sailors, soldiers and airmen are playing a valuable part at the moment—a vast army of them—in keeping peace and stability in South Arabia, probably the most important part of the world from that point of view at the moment. This is hardly ever mentioned, but the whole oil supply, not only of this country but of most of the world, depends on stability in that part of the world. Some reference should be made to the part that our forces are playing in keeping stability in a part of the world where there would be a complete vacuum if we left. It is absolutely essential to maintain the flow of oil, not only to ourselves but to the rest of the world, including America.
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I turn to our defence at home. There is no mention whatever of this in the Gracious Speech, except these most ominous two lines about the reorganisation of the Army Reserve and Auxiliary Forces. This is a repeated threat to destroy our reserve forces. We have had many warnings about this. I warn the Government that there is a very strong feeling throughout the country on this. The feeling is that with the small Regular Forces we have at the moment if we destroy our Army Reserve and Auxiliary Forces we shall be left defenceless. This is a very serious matter in my view and in the view of thousands of ordinary people throughout the country. I hear of this every day in my constituency where Territorial Army and regimental traditions are strong.
There is not a single farmhouse or cottar house in my constituency which has not some connection or other with our ancient traditional regiments and there is a great deal of disquiet about this subject. I am not satisfied that there never will be an invasion of this country, by sea or air, of a conventional kind. In the 1930s the great fear was not of nuclear weapons but of gas. All our training immediately prior to the last war was anti-gas training. Gas was considered to be the ultimate deterrent and everybody was so terrified of and horrified by the use of gas that when the war came gas was never used and we had conventional war. I am not satisfied that if another war should come it would not be for a long time a conventional war, and it seems to me that if we had an invasion we should be absolutely naked and defenceless unless we had reserve forces here on traditional lines.
In 1939, by means of the Territorial Army, we doubled our Armed Forces overnight. Circumstances might be such again that it might be necessary to have a Territorial Army upon which the Regular Army could be built up in time of need. We will destroy our Territorial Army at our peril. If it had not been for the Territorial Army in this country in 1940 at the time of the evacuation from France the country would have been invaded and we might not have been here today, certainly not in our present circumstances. Goodness knows what would have happened to the world if we

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had not had our reserve forces to fall back upon in this country in 1940.
Even if the worst took place, and we had a nuclear war, the presence in this country of a disciplined body of trained men would be absolutely essential. There would be absolute chaos and when the time came for an ordinary invasion and the enemy came in to take possession there would be nobody to stop him if we did not have a reserve force here. To speak about the reorganisation of our reserve forces and the Territorial Army along the lines previously discussed is dangerous nonsense. I appeal to the Government to think again about this. The cost is negligible, but the feeling of security given to the whole country by the presence of reserve forces is very great indeed.
I cannot stress sufficiently the feeling in Scotland, England and Ireland for the regimental system as we know it. Millions of people have some connection, however vague, with the traditional system, and it promotes a feeling of patriotism. This is vital. It seems to me that in this country we are liable to go soft. We are far too liable to concern ourselves with welfare and to avoid dealing with these real problems and with tangible things like patriotism, both local and regimental If we destroy this traditional system which has grown up over the centuries here we shall be destroying something very precious. I appeal to the Government to think again about it. They should think about all the implications before producing legislation which will destroy one of the most valuable safeguards of the country.
9.35 p.m.
Mr. Hugh Jenkins: The hon. Member for Aberdeenshire, West (Mr. Hendry) has a great nostalgia for the past, but this, though it may give him proper cause for pride in some things, is not always a good guide. In many ways, I share his nostalgia, but the sort of feeling for the past which he expressed, valuable though it is, can, if it informs our present actions, sometimes leads us into serious error. For example, it leads the hon. Gentleman in the direction which he indicated when he spoke about a possible occupation of this country after a nuclear war and the rôle which a Territorial Army would then
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have to play. After a nuclear war, there could be no question of this country being occupied by anybody. Therefore, the traditional idea of troops moving in, which, I believe, stems from the practice of infantry following an artillery bombardment or, nowadays, an air bombardment, simply does not apply. We have reached a point when no one can follow anything or anybody. Everything is finished.
We are living in a new world, and, if we do not realise this, we shall be guilty of the sort of fallacious thinking which leads us to conclusions which are entirely false, although they may be based on ideas which are good in themselves. If we spend public money on the maintenance of forces which have no useful purpose to serve now, we shall do no service to the people of this country. The Government intend to take certain action regarding our home forces which, in my judgment, is right and proper. The facts of home defence are well known to those who have had anything to do with them. Many years ago, the London County Council, after examining the subject extremely closely, said that there could be no such thing as civil defence in London in the nuclear age.
If we are to do anything effective with our civil defence force, we must find a useful and productive activity for it in which the public-spirited people who belong to it and similar services can feel that they have a good function to perform, a realistic function which they can embrace and carry out in peacetime, not just a theoretical activity which they can never carry out in the circumstances of nuclear war.
I hope that the Government, after their review, will not simply abolish the civil defence service as it now exists but will reshape it as a sort of civil rescue service which could have a thoroughly worthwhile and effective function in coming to the aid of people at any time of industrial accident or disaster such as must, in the nature of things, befall a highly industrialised community.
I turn now to the Queen's Speech, though not to the Labour Party election manifesto. Earlier today, listening to the speeches of hon. Members opposite, one could almost imagine that Her Majesty had read from the Labour Party manifesto instead of delivering the Gracious

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Speech. There was some ground for this misunderstanding, of course. Although I shall have some criticisms to make, it is true that, if one takes this Gracious Speech along with the previous one, one finds that something like 90 per cent. of our election manifesto is included. But the exceptions are important.
There is a problem which worries those of us who are new to the House until we begin to realise that Government undertakings are of two kinds. There are the positive and specific undertakings, legislative undertakings, which they have the power and ability to carry out within our own country, and there are, on the other hand, those statements which represent attitudes of mind or approaches which will inform the Government in their handling of affairs abroad. In the first part of the Gracious Speech, we have the statements of attitude of mind and of approach. For instance, there is the statement that
"My Government will seek to promote peace and security throughout the world, to increase international confidence and co-operation and to strengthen the United Nations."
This is an admirable proposition. I believe that something similar has been included in Gracious Speeches under previous Governments. The question is how much value can one put upon it. It is all very well to say that we believe in strengthening the United Nations but the way to do that is to pay regard to its will. The last Government were instrumental in lowering the prestige of the United Nations more than any other by their action at Suez, in which they flouted its will.
We must ask whether the present Administration pay greater regard to the will of the U.N. We may have reason to hope so because their approach is the right one. Yet the key lies in the question not as to whether one supports the U.N. when one agrees with its decisions but whether one continues to support it when it makes decisions with which one disagrees.
The development of a world society depends upon Governments forming internationally the sort of civilised conventions whereby we in this House abide by decisions taken by the House as a whole whether or not we ourselves agree with them. We must translate that readiness to accept decisions on a national scale to
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acceptance of decisions made on an international scale.
In this, the Government have not entirely proceeded on the lines that one would have wished. For example, there are the cases of Aden and Rhodesia. The Government are finding it possible to carry out the rôle of policeman in Aden. Yet it is a rôle which the U.N. has said that it does not wish to carry out. The hon. Member for Aberdeenshire, West seems to feel that this country should continue to carry out the rôle of world policeman which it had in the past. Such a rôle is completely beyond our capabilities now and we are wrong if we try to carry it out in any part of the world unless we have a particular function to do so and unless we do so as an instrument of the U.N. in carrying out its will.
It would be possible for us to do just that in Rhodesia. President Kaunda has suggested that the best way to avoid bloodshed in Rhodesia is for the British forces to act as policemen before trouble really starts. It is an arguable proposition and I do not think that one could prove it, but it is certainly possible that an intervention at a fairly early stage would avoid bloodshed which might occur if an intervention were not made.
The Gracious Speech goes on to say that the Government will seek a treaty to prevent the further spread of nuclear weapons. In this respect, an ounce of example is worth a ton of exhortation and advice. It seems that the ideas of internationalisation, of the Atlantic Nuclear Force, and of the mixed-manned force are beginning to be seen as the impossible propositions which some of us felt them to be from the beginning. The question facing the Government is what is to happen if the internationalisation of nuclear forces proves impossible.
Is there, in that event, to be a return to the independent British deterrent or are we prepared to make an example and say to other countries, "We disbelieve so profoundly in the efficacy of this deterrent that we are prepared to get rid of it ourselves". That is the only way. It is a desperate measure. But in a world moving in the direction of disaster as rapidly as this one is, talking about disarmament while piling up arms, some dramatic gesture of that sort seems

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the only way to avoid the holocaust likely otherwise to come within 10 or 20 years.
On Vietnam, my right hon. Friend the Prime Minister equates the Vietcong guerrillas with the United States Air Force and says that first they should cease fighting in their own country as a condition of the cessation of the United States bombing. The bombing of civilians is murder whether it is carried out by mistake or design and whether it is carried out north or south of any particular parallel, and I hope that my right hon. Friend will give some further consideration to this, for we should ask ourselves how far we have fallen away from the standards of war which we adopted at the beginning of the last war, when our pilots used to come back from the other side and drop their bombs in the sea—when sometimes men killed themselves doing just that, dropping their bombs in the sea—rather than drop them just anywhere, where they might conceivably drop on civilians.
Those were the standards which we adopted, though we ourselves later in the war so far lost those standards that we were taking over blockbusters and bombing civilians wholesale. And those latter are the standards today. I, too, am nostalgic in this as much as was the hon. Member for Aberdeenshire, West, because I think we should return to the better standards which used to operate at the turn of the century, when we had such a thing as international law, under which civilians were protected. Remember what an uproar there was in the 'thirties over the bombing of a small town, Guernica. We do not hear much now about bombing, which involves hundreds more people.
I welcome many of the proposals in the Gracious Speech—the proposal, for example, for leasehold enfranchisement. Not only do I welcome it, but householders in my constituency will welcome it, people of all parties.
I welcome, too, the Exchequer subsidies which are going to enable local authorities really to get on with some house building. The situation in London is desperate; there is desperate need for house building. It is still the greatest problem, which affects all of us, and houses need to be built above all—not
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exclusively so, but primarily—to rent, and to be let at reasonable prices, and they will be built only by local authorities. So we welcome the Exchequer subsidies.
I see that we are going to lessen the injustices of the rating system. I hope that this is merely a preliminary to a total and complete re-examination of our whole local government set-up. This is what we really need, because it is not sufficient merely to start tinkering with the rating system, but we have to look at our whole method of raising local finance and of spending local finance. We have to look at our whole method of local government. It is not sufficient to do as we have been doing during the last ten or twenty years, gradually removing power and authority from local government and transferring it back to the central Government or to separately appointed boards responsible to nobody. This is the negation of democracy. We have to create local government exercising real and wide power, which we should devolve upon it, and leave it to local government to carry on.
I have recently travelled in Europe, visiting some 10 countries, and in six countries I studied its local government closely, and I found that, with one exception, which is Turkey, this country has now become the most centralised society in the whole of Europe. In this respect we are moving in the direction of the corporate State, and it is high time that we reversed the process and re-created living local democracy in our own community, in our own towns.
I welcome the proposals to increase public service pensions. They say that signing Motions is a waste of time, but, as has been pointed out on the other side of the House, there have been a lot of signatures to one Motion, in particular, bearing on this subject, and it has been pointed out that there have been one or two Amendments to that Motion and some signatures to the Amendments from this side of the House. From whatever causation the Government have introduced this provision in the Gracious Speech, we welcome it on this side of the House, and we like to think that our signatures to Motions, or Amendments to Motions, are not less effective, are, perhaps, a little more effective, than signatures from the other side of the House.

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I welcome the Prime Minister's agreement to a review of immigration. I disliked intensely the very harsh wording of the passage in the Gracious Speech which said:
"Further steps will be directed to the effective integration of immigrants into the community and to strengthening the control of Commonwealth immigration."
However, I liked very much what the Prime Minister said this afternoon, that the Government will have a look at their entire immigration policy. This is what we need to do if we are to avoid the charge that our immigration policy is based on a colour bar. We must look at the whole question and make sure that the measures which the Government intend to introduce do not have the effect of making life harder for a member of the Commonwealth than for anybody else. What would be the value of the Commonwealth if such a step were to be taken? It would tear it apart.
There are other things which I regret are not in the Gracious Speech. There is no proposal to limit aircraft noise. There is no proposal to licence employment agents. Legislation to license employment agents has been in the Home Office pigeon holes since 1951, but no Government have taken it out, dusted it down and brought it forward. There is no proposal to provide by legislation minimum standards backstage and elsewhere in entertainment—another thing which has been in the Government locker for some time. I trust that some private Members will bring forward legislation on these subjects. If they do, I hope that the Government will decide to make room for it if they can.
Finally, I should like to say a word or two on steel. My view on this matter is an ideological one. I was greatly convinced by the arguments previously put forward in the House that steel nationalisation was not only necessary but urgent. I find it difficult, indeed impossible, to unconvince myself at this stage about that urgency. If an Amendment to the Gracious Speech were put forward suggesting that steel nationalisation should be reintroduced into the Gracious Speech, I think that I should have the utmost difficulty in avoiding signing it. I understand the difficulties, but I hope that before the debate is over the Government will give us some further reasons as to
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why it has become necessary not to include this essential measure which was so urgently and ardently advocated last time.
With these qualifications—and I realise that they are substantial qualifications—I say that, in spite of the criticisms which I have made of it, this is a very remarkable Gracious Speech, and I warmly welcome it.
9.53 p.m.
Mr. Raymond Gower: I agreed with some of the things which the hon. Member for Putney (Mr. Hugh Jenkins) said, but, naturally, he will appreciate that I disagreed with one or two of his conclusions. Referring to his remarks about the United Nations, I would remind him that, while I understand that one should respect its wishes even if one does not agree with those wishes, there is a third category where one considers that the United Nations is seeking to act in a sphere in which authority was never conferred on it by the member nations. That has been the conclusion of successive Governments of both sides of the House.
A remarkable thing about the debate has been the degree of confidence by the Prime Minister. Confidence is a good thing, but there was in his confidence almost an arrogance, a feeling of complacency about the future which, I felt, was not entirely warranted by events or conditions.
It may be that the Prime Minister was confident because of certain opinion polls, but certainly he had, I thought, far less confidence on the country's economic position. The evidence is that during the last 12 months, while there may have been improvements in the barometers, there has been no real improvement in our basic position as a trading country. Successive years since the war, under successive Chancellors of the Exchequer of different parties, have shown certain weaknesses and difficulties in our economy and these difficulties have asserted themselves at intervals of about three or four years. We had a difficulty of that kind under the late Sir Stafford Cripps, we had one under the late Mr. Gaitskell and we had one under successive Conservative Chancellors. Nothing that has been done in the last 12 months has cured this.
I agree with the statement in the Gracious Speech that we should seek to

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achieve greater competitive efficiency by reorganisation. The National Plan is not something which I oppose. On the other hand, I trust that it will not be regarded as a rigid instrument. I trust that hon. Members on both sides, particularly the Government side, will realise the limitations of our capacity for planning, because we can never plan the future of the exports that the foreigner is prepared to accept from us.
Who could have foretold, for example, had there been a national plan in Italy after the war, that Italian shoes would become a substantial export? Who could have foretold in Italy immediately after the war that the small Lambretta would become one of that country's chief exports for a certain time, to be succeeded in due course by the baby Fiat? Who, being a supreme arbiter of these things in Japan in post-war years, could have foreseen that the transistor radio was something to which to apportion a substantial amount of national resources? This only shows the limitations of planning at this level. Let us have all the available statistics and information and let us try to interpret these things intelligently, but let us not adhere rigidly to very strict planning, because if we do this we may be in greater difficulties than before.
The Gracious Speech contains also a reference to providing incentives for industrial investment. In the sort of mixed economy which we have and which is forecast in the Speech, it is obvious that that kind of industrial investment, apart from the national sector, must come from the private sector. Nothing that has happened in the last 12 months has encouraged me to feel that this kind of investor has been encouraged or is likely to be encouraged in the months ahead. I hope that I am wrong in this. Certainly, there have been many things to frighten the investor whose help we need.
There is scant or little reference in the Gracious Speech to any intention to try to adhere closely to Europe. The Leader of the Liberal Party is quite right in commenting on this fact. As Ministers will be aware, my party has stated fairly clearly that this is our desire as soon as suitable conditions arise. This is also the view expressed in even stronger terms
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by the Liberal Party. I believe that this country can remain apart from Europe only under conditions of great difficulty.
The hon. Member for Dagenham (Mr. Parker) made a speech in which he explored and examined the problems of the motor car industry. Surely, increasingly one of the major problems of that industry is that it caters for a domestic market of only 50 million people. That is the problem, and, whatever our party views and whatever Government are in office, it is a problem that will increase in difficulty in the months ahead.
Naturally, with my own constituency problem, I welcome the change in the leasehold law—
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed Tomorrow.

BRITISH ARMY (MR. M. WILKINSON)
Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Harriet Slater.]
10.1 p.m.
Mr. Peter Doig: I desire to draw attention to what I believe to have been an injustice to one of my constituents, a Mr. Michael Wilkinson, who joined the Army on 1st June of this year. At that time, when he had a medical examination, he informed the doctor that he had previously attempted to join and had been rejected because of ear trouble. In spite of volunteering that information, which the Ministry accept that he gave to the doctor at that time, the doctor passed him as medically fit for service in the Forces. On the strength of that, he gave up his civilian job, but he found that, in the words of the Ministry of Defence, he was discharged
"after only a few days' service".
I wrote a letter to the Ministry of Defence suggesting that compensation ought to be paid to him, and it was refused. I want to quote part of the letter that I received from the Under-Secretary, in which he says:
"It is of course unfortunate that his ear condition was not discovered at that stage and because it was not, that Michael gave up his civilian employment to enlist in the Army."

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It seems to me that to describe that as "unfortunate" is an under-statement. It was the Department's mistake, if a mistake was made. It is wrong that my constituent should have to suffer because of that mistake. After all, he has lost his job, and he must have incurred some expenses on joining. I know that when I joined during the war, I had to buy quite a lot of things that I would never have bought otherwise, and I have no doubt that he had to do the same.
Having told his friends that he was joining the Army, he also suffered the embarrassment of meeting them within a few days and having to explain that he had been discharged. That can be quite embarrassing. Taking all things together, I feel that he deserved better treatment than he got, because all he got was seven days' paid leave.
I want to quote another part of the Defence Ministry's letter as the excuse for his rather niggardly treatment. They say:
"His situation, however, is essentially no different from what it would have been had he given up that employment for another civilian job, which for some reason was found to be unsuitable."
In the first place, he did not find the job unsuitable. He was found to be unsuitable for the job, for a trouble to which he had drawn their attention when he had his medical examination.
It seems to me that there is a vast difference between changing from one civilian job to another and changing from a civilian job to enlist in Her Majesty's Forces. It seems to me that there is a vast difference between the two.
There is one further passage that I wish to quote from this letter. My hon. Friend said:
"I think that, by allowing him to go home on paid leave after the Medical Board on 17th June had recommended his discharge until the 25th June when the final discharge formalities were completed, the Army treated him perfectly fairly. The leave was, in effect, equivalent to a period of paid notice and I cannot see that any further compensation is justified."
The paid notice was the minimum that any employer could give and I think that that was pretty niggardly treatment. Mr. Wilkinson has not been treated fairly at all, and I think that he is due some compensation from the Army.
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I should like to draw my hon. Friend's attention to the effect that this case could have on future recruitment for the Army or, for that matter, for the other Services. I seems to me that someone who has the slightest doubt about his medical condition, even if he draws the doctor's attention to it, and even if he is thoroughly examined, may find that, having given up his civilian job and torn up his roots, he can be discharged within a few days with nothing more than the minimum paid leave which any employer would have to give.
I think that my constituent has had a raw deal, and I ask my hon. Friend to look at this case again to see whether Mr. Wilkinson can be treated a little more fairly than he has been, bearing in mind the effect that this could have on other possible recruits for the Army or for the other arms of Her Majesty's Forces.
10.8 p.m.
The Under-Secretary of State for Defence for the Army (Mr. G. W. Reynolds): My hon. Friend the Member for Dundee, West (Mr. Doig) has very briefly covered the ground affecting the case of his constituent Mr. Michael Wilkinson. I am in complete agreement with all the information—it is basically factual information—which my hon. Friend has put before the House. Mr. Michael Wilkinson was medically examined, and I am sorry that a mistake was made in carrying out that examination. The defect from which he was suffering was not discovered until he had a further medical examination when he reported at the depot.
He is 19 years old and in civilian life he was employed as a locomotive fireman. When he reported for a medical examination on 19th May, 1965, to join the Black Watch, he did, as my hon. Friend said, draw attention on the form that he had to fill in to the fact that he had previously been rejected on medical grounds when he tried to join the Army in 1963. Nevertheless the medical officer, having been told by Mr. Wilkinson that since that examination he had satisfactorily passed a civilian medical examination, examined him and could find no reason for rejecting him on the grounds of ear trouble, and Mr. Wilkinson therefore reported to the Highland Brigade Depot on 31st May.

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The procedure in all cases is that after the initial medical examination there is a further medical examination when the recruit arrives at the depot. This was carried out, and the medical officer suspected that there was ear trouble. Therefore, in accordance with normal procedure, he sent him to see a specialist. Mr. Wilkinson was examined by a specialist on 9th June, 1965, about ten days after joining the Army. The specialist reported that Mr. Wilkinson suffered from a perforation of the right eardrum. He was given a medical board on 17th June, and told that he was to be recommended for discharge on medical grounds. As my hon. Friend said, he was sent home on leave until the final formalities were completed on 25th June.
I must stress that Mr. Wilkinson presumably knew that he had a perforated eardrum when he went for his initial medical examination. He said that he had suffered from ear trouble, but not that he had a perforated eardrum. This was not discovered then, but I do not think it could have proved a shock to him when, about 10 days later, he had a further medical examination and the medical officer suspected that he did in fact suffer from ear trouble. I would go further and say that I doubt whether he was surprised that the specialist diagnosed his condition during a further medical examination on 9th June.
I am sorry that this has happened, but my hon. Friend must realise that we have to carry out medical examinations in all three Services on about 71,000 men and women every year. Unfortunately, whatever system we have some mistakes are bound to be made. We take action continually to try to reduce the number of those mistakes and we have been successful in more than halving the number of errors of this kind that have occurred during the last six years. We are at present looking again at the organisation which now exists for carrying out these initial medical examinations to see if there is any other way in which we can improve the system to cut down the regrettable errors that occur from time to time. But there will be a certain number of errors like this when we are having to deal with 71,000 medical examinations every year.
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My hon. Friend based his argument on the fact that his constituent ought to receive some compensation from my Department. My hon. Friend says that Mr. Wilkinson lost his job. I prefer to say that he gave up his job to join the Army, as he would have had to do if he had taken any other form of employment. My hon. Friend went on to say that he was put to some expense in joining. This would have been minimal, because he would have received a day's pay and a railway warrant to take him to the Highland Brigade's depot—a journey from Dundee to Aberdeen.
The only other point made by my hon. Friend concerned the embarrassment which he claims his constituent suffered by reason of his not having been accepted by the Army and of his having to tell his friends that he was regarded as being unfit for service in the Army, after probably having boasted that he was going to join and to make it his career. I am sorry about this, but embarrassment is not something that we can measure in cash terms and relate to a claim for compensation. I do not think that it was a shock to Mr. Wilkinson to find that he had a perforated eardrum. He knew that he had ear trouble, and he put this down on the form he signed. But the medical officer did not discover the exact nature of the ear trouble at the preliminary medical examination.
I am sorry that I cannot find anything in the three points made by my hon. Friend, namely, that his constituent lost his job, or gave it up, as I prefer to say—as he would have given up his job to take any other employment; that his constituent was put to the expenses of joining, because I cannot believe that the amount incurred on joining the Highland Brigade was anything other than marginal, and that embarrassment was caused to his constituent, because that is not something which can be measured in cash terms. On the question of compensation, therefore, I am afraid that I have to tell my hon. Friend that I cannot see anything in what he has put forward this evening, or in the correspondence that he has sent to me, to suggest that there is any case on which one could assess any form of cash compensation.
From correspondence that I have received from my hon. Friend I understand

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that Mr. Wilkinson now feels in some way or other scorned by the Army, and takes the view that having been rejected by the Army he can no longer be a useful citizen. Because somebody has been rejected for the Army on medical grounds it does not necessarily follow that he cannot be a useful citizen in civilian life. The medical standard for the Army has to be higher than that required for a more sedentary or normal civilian occupation. We would have done him a disservice if, having discovered that he had a perforated eardrum, we had accepted him into the Army and he had been sent overseas. He might have been caused considerable pain, and might have even further damaged his ear. Had he been kept in the Army in this country he would have had a restricted career, and his promotion prospects would have been negligible.
But our having discovered, perhaps belatedly, this medical defect which not
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only meant that he was not able to have a full career in the Army, but that it was impossible for him to serve in any circumstances as a soldier, we had no other choice than to medical board him and send him back into civilian life. This does not mean that he is medically incapable of carrying on any other occupation and having a good career in civilian life. As far as the Army is concerned, this is no form of disgrace. He simply was not up to the exacting medical standards required by the Army. I am sorry that we could not accept him as a soldier, but I sincerely hope that he will quickly find another job. He probably has done so already. I assume he has done so. In any case I hope that he will make a successful career in some other form of employment.
Question put and agreed to.
Adjourned accordingly at a quarter past Ten o'clock.