New Clause.—(REDUCTION IN COST OF CIVIL SERVANTS.)

HC Deb 04 August 1966 vol 733 cc704-65

(1) Activities carried on for office purposes within the meaning of section 1(2) of the Offices Shops and Railway Premises Act 1963 shall cease to be "non-qualifying" within section 10 of this Act during any period between two successive usual quarter days falling after 5th September, 1967, which has not been preceded by a certificate under subsection (3) of this section given by the Chancellor of the Exchequer within 21 days before the first of two such quarter days. (2) The Chancellor of the Exchequer shall lay before each House of Parliament, on or before 31st October, 1966, a statement showing the total number of non-industrial civil servants employed on 5th September, 1966, in all Government departments (other than the Ministry of Labour) in excepted employments (other than in Her Majesty's forces). (3) After 5th September, 1967, the Chancellor of the Exchequer may (if he is able) give a certificate between 5th March, 5th June, 5th September and 5th December and the usual quarter day succeeding that relevant date certifying that the total number of non-industrial civil servants employed in all Government departments (other than the Ministry of Labour) in excepted employments (other than in Her Majesty's forces) were on the relevant date not less than 6 per cent. below the total set forth in the statement made under the preceding subsection and stating the total number so employed at that relevant date. (4) Such certificates shall be published in the "London Gazette" within five days of being made and shall be laid before Parliament as soon as possible thereafter.—[Mr. Iain Macleod.]

Brought up, and read the First time.

Mr. Iain Macleod (Enfield, West)

I beg to move, That the Clause be read a Second time.

What you have suggested, Sir, will be convenient.

I propose to address my brief remarks to new Clause 1, with some passing references to new Clause 2. The purpose of these Clauses is to achieve a reduction in the number, and, therefore, in the cost of the Civil Service and of comparable office staffs of local authorities. Government expenditure is an extremely topical subject, particularly in the light of recent statements by the Prime Minister.

What we are saying to the Prime Minister by these two new Clauses is, "Physician heal thyself". He and other Ministers have given so much advice to employers all over the country that it would be a good thing if they now listened to some advice. They have dished out so much medicine that it would be a good idea if they swallowed some of their own, and these two new Clauses would achieve just that.

It is unlikely that people will believe that the Government are fully involved in the economic crisis, which is perhaps the worst that the country has ever faced, unless the Government and the Civil Service are prepared to show that they will share in the sacrifices and in the redeployment that others are being asked to make. We offer them the opportunity by these two Clauses.

Treasury Ministers will realise that the drafting of the Clauses is not in the least important. It is the intention that counts. Indeed, we have had to torture words to get within order, on Clause 1 in particular, but after what they have done on the Prices and Incomes Bill the Government should be the last to complain about that.

However, I shall make some points on the words that we have used. First, why 6 per cent.? Because that is the approximate cost of what the Selective Employment Tax would be in relation to the annual cost of a civil servant. Second, why do we leave out the Ministry of Labour? Because the Ministry of Labour, quite wrongly in my view, will have to carry the burden of working this absurd tax as best it can until the Treasury and the Inland Revenue take over a tax which they should never have sub-contracted in the first place.

Third, we put down that there should be a total reduction, that is to say, we do not ask for the reduction of 6 per cent. in every Department. The Government, if they wish, are free to say that the reduction cannot be made in many Departments. In that case, the House is entitled to ask for more severe treatment for the Departments which the Government regard as less valuable. The Clause would apply to about 430,000 civil servants, excluding the Post Office, which is usually excluded when calculating the non-industrial Civil Service, and 6 per cent. comes to a little over 25,000 people.

We suggest that the Government should complete this exercise by 5th September, 1967. In other words, we give them a year to make this examination, which is being carried out by firms and employers in a vastly shorter time. The Government should take on the burden of study and of proof which every company and employer is inevitably taking on.

I am a non-executive director of a firm which is both a bank and, through one of the most important hire-purchase firms in the country, a wholly-owned subsidiary, vastly interested in hire purchase. The cost of the tax to the whole of our group in the United Kingdom would be no less than £140,000. Naturally, these figures were available to us at our first board meeting after the Budget, and, in due course, we found ourselves hit in three different ways. First, we were hit through the Selective Employment Tax, then, because we are very large investors in Australia, Eire and New Zealand, and, thirdly, because of the hire-purchase restrictions.

Because the firm to which I refer, Lombard Banking Limited, is labour-intensive, the figure of £140,000 a year, an enormous sum, is also an extremely high percentage of our profits. It follows that we must spend a great deal of time considering what, if anything, we can do about this new impost of taxation.

Owing to the operation of the Guillotine, the questions, not so much of hire purchase, but of finance, banking and insurance and all the other questions that affect the City of London, for example, have not been discussed. There are many other illustrations of how iniquitous the Guillotine is. That it has proved quite impossible to discuss these matters, except in passing, shows the contempt with which the Treasury Bench persists in treating the House in this matter.

4.15 p.m.

I now return to my illustration. We studied every conceivable possibility, as every firm has done. Could we make ourselves more efficient? That is what the Government want to us to do. Would it be possible to use a smaller labour force in some of our operations, through the use of computers? I add, in passing, that one of the absurdities of the Bill is that in many cases in manufacturing industry if one installs computers and thereby makes oneself more efficient, one may well move out of the manufacturing category and into the service category. I cannot think of anything more ludicrous.

I also wonder whether there are prestige Departments, or parts of Departments, that one was prepared to carry in ordinary years, but that one should look at again in the context of a serious economic crisis. I can give one illustration straight away to the Financial Secretary. On 7th March, 1966, a Written Question to the Chancellor of the Exchequer asked how many public relation officers and Press officers have been appointed during the lifetime of the present Government; and what has been the cost to public funds. The Answer from the Financial Secretary was: 50, … at an approximate cost in salaries of £75,000."—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 434.] The hon. and learned Gentleman could do with a bit of redeployment there to start with, because that is one field in which he should apply the suggestions implicit in new Clauses 1 and 2. This exercise is being carried out everywhere. Why should not the biggest employer of labour in this country, the Government, do exactly the same thing?

The most horrifying statistic that has been given to me is that at the present rate at which the non-industrial Civil Service is rising, an annual rate of over 3½ per cent.—and I think from the Financial Secretary's Answer on Tuesday that it has gone even higher than this—it follows that, if all Government employment increased at this rate, the whole of the working population would be employed by the Government in less than 50 years.

There is, therefore, a clear duty on the Government to put their own house in order, to go through the Civil Service, Department by Department. I am amazed that the Financial Secretary has not accepted the Clause already, because this is the job of the Treasury.

The present Treasury is intent on wasting money, on pouring out £133 million in premiums which nobody wants, intent always on giving approval to additional numbers of civil servants. It should be examining far more ruthlessly every request, from wherever it comes for an increase in the non-industrial Civil Service. But this is not the attitude of the Treasury at all.

Yesterday, my hon. Friend the Member for Dorset, North (Sir Richard Glyn) asked the Financial Secretary what was the increase in the number of civil servants employed full time and part time in the Treasury since October, 1964. My hon. and gallant Friend put this supplementary question: Can the hon. and learned Gentleman say whether the Chancellor of the Exchequer has considered making a substantial reduction in the number of employees in this Department with a view to setting a good example to other employers of non-productive labour? The answer from the Financial Secretary was: No, Sir, particularly as the increase was mainly designed to strengthen the divisions which advise Departments on the improvement of management services and efficiency."—[OFFICIAL REPORT, 2nd August, 1966; Vol. 733, c. 241.] We can think what we like about the end of that sentence, but what horrifies me is the way it opens—"No, Sir". He has not even considered it. That was the question—had he considered it? But, apparently, he will not consider the fact that there has been an enormous increase in the staff of his Department.

The Financial Secretary to the Treasury (Mr. Niall MacDermot)

An enormous increase?

Mr. Macleod

Far too many—67. The Chancellor will not consider the reduction of the number of staff, he has no plans, and he has no thought for it.

A few minutes ago, the Prime Minister, with his customary candour, was giving us the reasons for the establishment of the Parliamentary Commissioner. It seemed to me a most impertinent proposition to put before the House, and the reasons he gave, as everyone knows, are not the real reasons at all. The real reason is that the Government have another Permanent Secretary who is at present on leave and whom they intend to appoint as Comptroller and Auditor General; and to get that out of the way they have to deal with this——

Mr. Speaker

Order. The right hon. Gentleman is getting a little away from the new Clause.

Mr. Macleod

I respectfully agree, Mr. Speaker, and I accept your rebuke. I now pass from it, but I think that it was in order to point out that we now have suggested the creation of an additional Department, without Parliamentary authority. This shows how the trend continues.

I said that I did not want to go into great detail on figures, but I wish to refer to another Question put to the Chancellor of the Exchequer yesterday. My hon. Friend the Member for Southend, East (Sir S. McAdden) asked what had been the increase in the non-industrial Civil Service between October, 1964, and the latest available date, and what the additional cost of their salaries was. In a Written Answer from the Financial Secretary, we are told—this excludes the Post Office, which, as I said, is usual in these matters—that the increase to 1st April, 1966, was 14,900, and that in a full year their salaries would cost about £10 million.

This is what has happened to the Civil Service since October, 1964. We suggest that the Government should slim themselves of approximately that number and that number again—the figure comes to a little less than twice—and that the Exchequer would benefit to the extent of £20 million or, perhaps, a little more.

I mention new Clause 2 only in passing. Again, I am not attached to the drafting. We are here concerned with what one might call office employment. The simple question which everyone should ask himself is: look at your own town hall or county hall. Do you think that the office work done there by, say, 100 people should or could be done by 94? That is the question which we put before the House of Commons now, and I have not the slightest doubt what our answer would be. We say, therefore, that the appropriate Minister, the Secretary of State for Scotland, the Secretary of State for Wales, or the Minister of Housing and Local Government in England should not grant local authorities the refunds unless they are prepared to slim at least to this extent.

There are two things said about our Civil Service, and both are true. The first is that, in the ordinary sense of the word, they are non-productive. The second is that they are the finest in the world. I subscribe to both those statements, particularly to the second. I have been a Minister for too long not to admire to the full the value of our Civil Service, and nothing we say on these two Clauses is, or is to be taken as being, a criticism of the calibre of our Civil Service, which is matchless throughout the world.

But it is possible to have too much, or too many, of a good thing. It is vital that every Department should during this next year prepare regular reports for Parliament putting this matter under the microscope. I should be horrified to think that the Prime Minister was putting all these restrictions upon the people if he was not prepared to take action in the sector where he and his Government are the true employers of labour.

I do not base this case in any way upon criticism of the Civil Service. We have as much regard and respect for our civil servants as right hon. and hon. Members opposite have, and in many cases even more experience of them. I do not base my case on figures. I shall not be in the least impressed if somebody can find a year during the 13 Tory years of office in which the figure went up by 0.3 per cent. more than it did in 1965, or whatever the case might be. That is not the argument at all. The argument is that the numbers in the Civil Service, partly owing to the Government's policies, have increased, are increasing, and ought to be diminished.

The Government, as the biggest employer of labour in the country, ought to take on themselves the responsibility which every other employer is taking and should account to the House for the numbers of their staff now and in the following year.

Mr. John M. Temple (City of Chester)

I direct my attention more particularly to new Clause No. 2, which refers to the important question of the numbers of administrative staff employed by local authorities. During the war, at a moment of crisis, Sir Winston Churchill made a point of cutting down the administrative tail of the Army. He was perfectly right.

Now, in a new phase of crisis, exactly the same approach should be made to the cutting down of administrative staff in both central and local government departments. As the Prime Minister has been compared by the President of the United States with our great war-time leader, these two new Clauses should appeal to the right hon. Gentleman himself. I am very surprised that there has been not one supporter of the Prime Minister sitting on the Government benches, apart from the Treasury Bench and the Parliamentary Private Secretary.

Mr. John Hall (Wycombe)

My hon. Friend will have noticed also that the other half of the Labour Party is not there either.

Mr. Temple

I have a suspicion that the other part of the Labour Party may be engaged in private discussions, and that may be where the Prime Minister is as well. It is significant that when we are debating new Clause 2, which is directed specifically to employment by local authorities, neither the Minister of Housing and Local Government nor his Parliamentary Secretary is present.

The revenue expenditure on local government services in 1965–66 was £3,200 million, and that was an increase of 11½ per cent. on the previous year. It is an easy figure to say, but that was nearly 50 per cent. greater than the total of defence expenditure. No one will ever convince me that there could not be a substantial reduction in the administrative staffs if we set about it in the right way. Unfortunately, the present Government have set about it in the wrong way in the last two years.

I shall concentrate on the question of employment in local government, giving a few concrete examples of additional administrative strain put and being put upon local government, and I shall question whether the net result from some of the schemes introduced by the Government has been a real benefit to the nation when weighed against the actual cost of operation of the schemes themselves.

On 14th June last, on the Second Reading of the Local Government Bill, the Minister of Housing and Local Government said: … we are asking them"— that is, the local authorities— to administer a whole lot of other improvements in rating, rate rebates, rate instalments and, as I shall show presently, domestic rerating. Local authorities are being asked to do more changing during these two years than they have had in the whole period since the war. They have been bitterly complaining about these changes…".—[OFFICIAL REPORT, 14th June, 1966; Vol. 729, c. 1273.] I would ask whether it was wise, in face of the admitted economic difficulties, to seek to bring about administrative chaos throughout more or less the whole of local government. Was it necessary to over-turn all the schemes which were working comparatively smoothly in a period when, admittedly, the whole administration was under strain? I do not believe that it was.

4.30 p.m.

I quote now from the Financial Times of 9th June in which the President of the Institute of Municipal Treasurers and Accountants, in referring to this, says: New services or changes in existing services had often been introduced with little foundation in research, inadequate statistical information and few pilot schemes. This had resulted in signs of strain in the administrative machine. The President of the Institute of Municipal Treasurers and Accountants is well qualified to give his opinion on the strain in the administrative machine.

I now turn to a few specific examples where I believe this strain is building up unnecessarily on local government. Firstly the effect of the Selective Employment Tax itself. Nobody has answered the question as to whether the tax on local government employees is to be on a pay-in pay-out basis or whether it is to be merely a paper transaction. I understand that a Working Party is sitting on this problem at the moment. From an administrative point of view, it would be far easier to have this as a purely paper transaction, with no money changing hands, as against paying the money first to the Treasury and receiving it back through the Ministry of Labour later. This is one of a hundred problems on which working parties are sitting to consider various administrative difficulties in local government at the present time. All the best brains in local government at the moment are employed on these working parties. This is a result of the administrative chaos which has been created by the present Government. Was it wise, I ask again, to get all the best brains employed on this non-productive work at a moment when the country was facing a financial crisis?

I do not know how many right hon. and hon. Gentleman looked at the City columns of The Times yesterday, but significantly there was a photograph there of the dealing office of Long, Till and Colvin. They are local government loan brokers, and I understand that they have never had a busier time than they are having at present. If local authorities have to finance this Selective Employment Tax over a period of months, I forecast that that firm and all other firms lending money to local authorities will have an even busier time in the next few months.

I turn to another matter directly affecting local authorities as a result of the operation of this Clause. It is a matter to which I have referred frequently before on the subject of the Selective Employment Tax. The Clause refers to workers in office premises, or, in other words, cleaners. The local authorities, if they employ cleaners directly, will have the Selective Employment Tax repaid, but if they employ a firm of office cleaners, which is what they are doing to a considerable extent at the present time, the firm will be treated as a service industry. If the Clause is accepted by the Government the effect will be to stop local authorities employing additional cleaners and to continue with contract cleaning services, thereby having a more efficient type of office cleaning operating in their establishments.

I refer to another administrative scheme. I am not saying that some of the schemes are necessarily bad, but I say that they add to the cost of administration in local authorities. I refer specifically to the rate rebate scheme, which I understand—I say that because even the Minister's estimates of the effects of the scheme have been proved to be off-beam—is estimated to cost some £4 million a year to local authorities. Nearly 4,000 additional administrative workers will be required to operate this scheme which is estimated to cost £29 million. I would accept that it may cost less than that because fewer people will benefit from the scheme than anticipated and that therefore the administrative cost may be under £4 million. Nevertheless, if the figure is £20 million and the cost of administration is half of the figure originally estimated, namely, £2 million, it means that the cost of administering the scheme is some 10 per cent. of the benefit which will actually go to ratepayers. I believe, however, that the cost of administration will be nearer 20 per cent., or, in other words, that administratively it will be an extremely costly scheme.

I pass now to the operation of the Land Commission. I will not make any general reference to it because my right hon. Friend has more or less dealt with it on Clause 1. This is a central Government scheme which will mean an enormous number of extra staff. I believe the estimated number is 2,000. But, quite apart from the extra staff employed, there will be the side effect that valuers will not be available to local authorities to do the work. In a market where there is at present a scarcity of staff, the result will be to force up salary levels, and this is a direct result of Government policies.

I now make a brief reference to another piece of unnecessary administrative chaos which is being introduced, namely, the amalgamation of highway grants. It may be a good idea in the long term to treat them differently, although it has not been found necessary to do so over a period of years. But why do it at a time when the administrative machine is already under severe pressure? I remember only too well the time when a Conservative Government was criticised for moving too slowly, but I believe that in past years they were wise to do so, because they saw behind the schemes which appeared to be palatable and acceptable to everyone the wall of administrative difficulties. That is why when we were in government we moved more slowly but much more surely and steadily than the administration now on the Treasury benches.

I make reference now to another aspect of administration where the present Government thought they had all the answers. I refer to the planning field. I must admit that some of the largest files under the control of my secretary deal with planning matters. The Labour Government of 1945–50 were responsible for the Town and Country Planning Act, 1947. We amended it to a certain extent, but I always understood it was the intention of the present Administration to simplify planning procedures. We are still waiting for that to be done, but the way in which we can cut down administration is by simplifying procedures, and I would quote here a sentence from the wise words of Mr. H. R. Page, City Treasurer of Manchester. The Financial Times of 9th June, 1966, in their report of the conference of the I.M.T.A., state: What we want as well as a Royal Commission on Local Government Organisation is a Royal Commission on the Simplification of Local Government Administration. That is a tip I will give gratuitously to the present Government. I believe it would be much more valuable than some of the work the Royal Commission are studying at the present time.

This administrative overlapping and unnecessary work in administration has been the subject of comment in various quarters. I happened to pick up the presidential address of the President of the Institute of Municipal Treasurers and Accountants. He referred to administrative overlapping and the work of a Miss Penelope Hall in a study of the Welfare State and the welfare society. I quote from one sentence: … one City Council which was recommended drastically to overhaul its social services in the light of a report which disclosed that as many as eight visits were being made by different social workers to a single problem family". As my right hon. Friend said, it would be a very strange situation in which any local authority could not cut down by six out of 100 the number of administrative staff which it employed. A great deal of overlapping is going on and it should be carefully considered.

The Government appear to be rather proud of the statement that throughout the country new town hall building has been stopped. When I heard that statement, I imagined in the mind of the Minister making it the picture of great big town halls with banks of flowers against the platforms and chandeliers hanging down and of course portraits of past mayors hanging on the walls. In fact, the town hall in local government is the chief administrative office of the authority. What the Government are doing, not selectively but wholesale, is to cut down on the building of new local government administrative offices. Unless the building of these offices is permitted in certain circumstances, we will not get the cut down of administrative staff which is both possible and vital.

In a speech at the same conference Mr. H. R. Page referred to the necessity for local government bringing in computers in order to cut down the number of administrative staff. This is the advice given to British industry by the Government, but they do not give the same advice to their own Departments or to local authorities. The administrative tail of local government should be pruned, and the administration of local affairs could still be just as effective.

4.45 p.m.

Mr. John Boyd-Carpenter (Kingston-upon-Thames)

If we had television in this Chamber, as one day we may, I think that people outside would be a little surprised that in a discussion of the Selective Employment Tax there were not more hon. Members opposite present than there are officials in the Official Box. People outside would be shocked to know that so little attention was being paid by the Labour Party to this Measure. Of course, we know that hon. Members opposite are going through an internal convulsion and are having to absorb a diet composed largely of a salad made of their election addresses, but, all the same. this is an immensely important issue and there is something very significant about the lack of interest of hon. Members opposite.

After all, we are told that the whole of the Selective Employment Tax is for the purpose of securing the transfer of labour from the services into manufacturing. It has been applied outside the Government service quite ruthlessly, even to activities which earn large quantities of foreign exchange, like banking and insurance, and it is somewhat shocking that the Government should seek to exempt themselves and local government from what they are suggesting is the right process for everybody else who provides services.

As was said by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), this is not an attack on our civil servants. I have known them for a good many years and I know that not only are they the best in the world, but they do a wonderful job. The attack is on the Government for increasing the number of functions of government at this time to a point at which they feel bound to increase the staffs to discharge those functions. If everybody else in the community who renders a service, including those whose services operate directly on our balance of payments, is to have this economic pressure on him to reduce staff, we ought to have some indication from the Government that, either as my right hon. Friend suggests, or in some other way, they are taking action to reduce their own staffs. We have had no such indication.

The other day, in reply to a Question, I was told by the Financial Secretary that not only had staffs increased compared with last year, but that there was every reason to believe that they would increase further next year. Therefore, we have no indication at all—indeed, we have a contrary indication—that the Government are trying to do themselves what they are urging other people to do. If that is their attitude, they are not likely to get a helpful response. People are not likely to respond very willingly to someone who urges them to do things which he is quite unwilling to do himself.

It is absolute nonsense to suggest that it is not possible to reduce staffs central and local. I have some experience of this. I was Financial Secretary in 1951 when my party came to power to deal with the crisis which the Labour Party had left behind, just as we shall have to do at some time in the future. One of the things we did was to cut down the functions of the Government. In a modest way I had something to do with this. They may have been very admirable, but we thought that in that economic situation they were functions which the Government should not carry out, and we reduced staff. I am, therefore, speaking about something of which I have a modest supply of practical experience, and I think that this could be done.

My right hon. Friend referred to the increase in public relations officers and quoted 50 in the central Government service at an additional cost of £75,000 a year. But that is moderate compared with what is being done in local government and in respect of the greatest of all local authorities, the Greater London Council. The House will be aware that the Greater London Council has chosen this moment to announce its intention to set up a great new information department, to tell the citizens of London how well they are governed, at an annual cost of £600,000 extra a year.

I asked the Minister of Housing and Local Government—and I share the indignation of my hon. Friends that not one of his Parliamentary Secretaries even is here when we are dealing with new Clause 2—what he was to do about this. In the politest way possible, he indicated that it was not his business and that he was not going to do anything about it. It is shocking that, at a time when other people are being pressed to cut expenditures and staffs and when valuable services are being cut, the Greater London Council should set up a great new public relations and information branch. Of course, we know why it is doing it. It is to present a happy picture of a Labour-controlled London to delude the electors when they come to vote at the Greater London Council elections in April, but that does not excuse Ministers from dealing with it.

The Minister of Housing and Local Government says that he is not constitutionally responsible and that it is not his business. No doubt he is right, but Treasury Ministers have the ultimate sanction, for they control the general grant and it is not beyond their power to adjust grants so that when a local authority indulges in wanton extravagance plainly contrary to declared Government policy, it should have its grant denied as a lesson to it, so that if something is done, at least it is done without any element of expense to the taxpayer.

I cannot accept the attitude of the Minister of Housing and Local Government that this has nothing to do with him. Expenditure of this sort, bad enough in itself for the London ratepayers, who are already to have a further increase in their rates because of the local authority housing rent freeze, is even more of a bad example to other local authorities when the greatest of all, because it happens to be Labour-controlled and is facing an election, is allowed to get away with this.

There is an example in central Government bearing exactly upon the point that I was trying to make. The right hon. Gentleman the Minister of Land and Natural Resources—I am not quite sure if he still holds that office, because I gather that it is in a state of continuing liquidation—told us a short time ago that the Land Commission is being set up in advance of the Bill becoming law—that seems to be general Government practice—and would be built up to a total staff, central and regional, of 2,000 people.

Many of these people, and this makes it worse, hold very scarce skills, of which we are desperately short. No one would suggest that in this crisis the Land Commission has any relevance at all. I should be out of order if I argued that I hold the view that it will make land scarcer and more expensive. Even if the views of hon. and right hon. Gentlemen opposite, that mysteriously over the years for reasons they have not disclosed, land will become cheaper and more plentiful, are right, it will not have any effect for years to come. Why not, in this crisis, put the Land Commission into cold storage? This would, incidentally, help the Leader of the House with his muddled Parliamentary programme.

The recruiting for the Land Commission should be stopped and the extra 2,000 staff could be doing something more useful. Whatever the merits of the argument, the Commission has absolutely nothing to do with our present situation, or with the situation with which this tax is supposed to deal. The Chief Secretary and the Financial Secretary, with all the apparatus of the Treasury at their disposal, can give us many more examples. The Establishments Division of the Treasury will give the Financial Secretary a great many examples of Government functions which could be dropped.

What about the special licensing areas, with the staffs at the Home Office who are needed to keep the Home Secretary in business as a brewer? Is that an essential function at present? The Financial Secretary will find in the Treasury proposals to do away with that. There are lots of other functions which he knows could be dispensed with without any harm being done to the handling of the present economic crisis and which would benefit the present situation.

We must insist that either in the way proposed by my right hon. Friend the Member for Enfield, West—and I am lost in admiration at the ingenuity of his proposals and the way in which he deals with the narrow restrictions to which we have been subjected—or in some other way, the Government must tell the people that they intend to do for themselves what they insist on everyone else doing in this crisis. For the Government to say, "Do as I say, not as I do", would be an intolerable thing for a Government to do and would not be tolerated by the people.

Mr. Charles Fletcher-Cooke (Darwen)

The shade of Professor C. Northcote Parkinson broods over this debate. There are a great number of shades brooding over it from different quarters of the Chamber, though not so many in the Chamber itself. I would like to follow my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) in emphasising the importance, in this critical period, of the Government setting an example. I want to inquire into why they refuse to do so, because I am sure that they have an argument for so refusing.

I suspect that their argument is that central and local government, being nonprofit-making organisations, are somehow exempt from the rules applying to profit-making organisation. That is usually the argument given as to why the normal disciplines applying to most of our activities do not apply to them. I want to suggest that that is a reason why greater discipline should apply to them rather than to profit-making organisations. A profit-making or a non-loss-making organisation is obliged to comb and cull its labour forces, particularly when it has an impost like the Selective Employment Tax put upon it. Then it has to comb and cull even more rigidly.

There is an internal discipline which means that profit-making or non-loss-making organisations are subjected to something devastating, whereas central and even more so, local government, which are not directly concerned about making a profit or avoiding a loss, are not subjected to the same influences. It is necessary to have additional disciplines such as those suggested in new Clauses 1 and 2, or perhaps other disciplines which might be suggested by the guardians of the public purse, namely, the Treasury Ministers.

By tradition, they are supposed to suggest, propose and publicise disclipines for controlling the expenditure of the public purse and to invite other Departments to agree. The central Government are less to blame in this matter than are the local authorities. It is all the more extraordinary that we have had no representative from the Ministry of Housing and Local Government on the Government Front Bench throughout this debate. That seems to be the most astonishing contempt of what is a matter upon which not only the whole country is looking to us for action, but the whole world—the cutting down of public expenditure.

It is common knowledge that not only in London, but throughout the world, people regard the reduction in Government expenditure as a token of our determination to overcome our economic difficulties. Some people think that this should be done by means of cuts in defence or overseas expenditure, and others, such as myself, think it more important to do so internally. Whichever way it is done, it is a kind of litmus paper showing the determination of the Government to see this through. Rightly of wrongly, the Government have determined not to touch any of the Welfare State expenditure.

One would think that they would be the more determined to reduce internal Government expenditure on the employment of additional public servants, particularly in local government, where the Treasury Ministers, the watchdogs of the public purse, have slightly less control. One would have thought that the Treasury Ministers would have been insistent that the Minister of Local Government or one of his deputies, would have been here.

Mr. MacDermot

We have made great attempts throughout the Bill to secure the attendance of Ministers concerned with aspects of the debates. We Treasury Ministers have assumed responsibility for this. It was done in this case and my hon. Friend the Parliamentary Secretary wanted to attend, and I hope that he will be able to get here. Hon. Members will appreciate that it was not until the selection took place at 1 o'clock today that we knew that this debate would be called. Ministers do have appointments, and hon. Members will understand that these sometimes prevent them being here at a particular hour. But, certainly, it is the intention of the Parliamentary Secretary to be here.

5.0 p.m.

Mr. Fletcher-Cooke

I am grateful for that explanation.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The Parliamentary Secretary was here throughout Question Time. It almost looks as if he has avoided the debate on purpose.

Mr. Fletcher-Cooke

As I say, I am grateful for the Financial Secretary's intervention. It shows that at least he takes the matter seriously.

Mr. Raymond Gower (Barry)

While the Financial Secretary's answer may, to some extent, explain the absence of a representative from that Department, it is significant, is it not, that the Secretary of State for Scotland and the Secretary of State for Wales, who have similar functions in those parts of the United Kingdom, are both unrepresented this afternoon?

Mr. Fletcher-Cooke

It may well be that they are all in the same Committee together. Knowing how matters come up at the last minute, I do not wish to blame them personally.

But concentrating, as we should, after the speech of my hon. Friend for the City of Chester (Mr. Temple), on the local government aspect—it is in this respect more than any other that the pruning should be done—it is a pity that none of the Ministers responsible for local government matters has been able to be present. I am glad that the Parliamentary Secretary to the Ministry of Housing and Local Government has just come in. I am sure that his presence is due to the "early warning system" of the Financial Secretary.

I conclude on this note. It is the note struck by Professor C. Northcote Parkinson. There is no doubt that all the people engaged in central and local government administration are very busy moving paper around. The more people employed, the more paper there is. The Treasury should not take as an excuse the fact that eminent servants, in central and local govenment, are busy as a reason for not reducing their numbers. One of the great laws of Professor Parkinson is that work expands according to the time and people available. There is no doubt that work breeds work and paper breeds paper. The Government must, therefore, resist as strongly as they can the prayers and imprecations of their civil servants who will tell them that all the people in their Departments are thoroughly busy and overworked, as no doubt they are. But this is not a sign that there cannot be, with great advantage to those remaining to do the work, a serious cut made in the numbers employed.

The suggestion of my hon. Friend the Member for the City of Chester, made from war-time experience, should be adopted and the tail should be cut, whether by the 6 per cent. brutal overall figure suggested by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) or by some other figure. As my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, it is no good saying to people, "You should do this, but we shall not do it because we are beautiful and good and non-profit-making and the rules do not apply to us". Even if that were true philosophically, it would be useless as propaganda. People would not believe it, even if it were true, which it is not. We have had too many examples of this.

People are told that they must keep prices frozen until 1st January. But the Post Office is to increase its charges in October. There are no doubt good economic reasons why they should be increased, but people do not understand them. Why should the Post Office increase its charges while everybody else is not allowed to do so? Exactly the same applies to culling staff from civil services and administration. If other people are expected to cull their staffs, they must do it and many of them are engaged directly in the export trade and in industries which affect the balance of payments. If the Government, and particularly local government, do not do it they will get no response and they will not deserve a response.

Captain Walter Elliot (Carshalton)

To me, and to the country in general, the prevailing characteristics of the last few days, weeks and even months have been the feverish activity in high Government circles. I suppose that an outside observer might be forgiven for thinking that this was the instant swinging into operation of all those Socialist plans about which we heard so much at General Elections. But the effect has been to produce a general deadening in the tempo of national life, a slowing down in practically every field of activity.

That is the object of these feverish activities. There has been a standstill in many activities—for example, in the arbitration courts and wage councils. We remember the expression which the Prime Minister used when in opposition. When a Conservative Government stepped in on one occasion, "You may disagree with the referee, but you do not shoot him". The Government have shot all the referees; they will be out of a job.

The Services are to be cut back. We are not to have a carrier. All this cutting back and dampening down must lead to a reduction in the need for administrative services. How can the Government call for economies from private industry if they do not set an example? This is one of the causes of the failure of the Government's incomes policy. While calling for economies from private industry, they do not adhere to the principle themselves. In the area of employment in which the Government have direct control, the country is looking for an example.

Like other hon. Members, I have served in Government offices for three or four years. When anything is cut, or duties are changed, or there is a standstill, it is easy fully to employ everybody in the office. The old dockets are dug out and passed round and old plans which have been pigeon-holed for years are circulated and everybody is fully employed. When the question is put, as one of my hon. and gallant Friends put it yesterday to the Treasury, it is no good the Minister answering, "No Sir; I will not look into the question of reductions".

A determined and definite effort will have to be made if reductions are to be achieved, for unless it is made there will be plenty of work for everyone to do in those offices. They will be fully employed on entirely unproductive work. In the face of the present dreadful crisis, the country is looking to the Government to set an example. I would be very interested to hear what they intend to do.

Sir Douglas Glover (Ormskirk)

I rise to support my right hon. and hon. Friends on new Clauses 1 and 2. What the country is suffering from more than anything else is over-government. In my view, we were suffering from it when the present Government came into power. The Civil Service has gone up by 15,000 people in the last 15 months, and there is every indication that, in the next 15 months, it will go up by at least the same figure.

Mr. Gower

And more.

Sir D. Glover

I think that my hon. Friend the Member for Barry (Mr. Gower) is right. The figure will probably be more.

In this Clause, we are asking that that figure should be reduced by 6 per cent., and it would be achieved if all the increases brought about by the present Administration were cancelled out, although that would still leave us with a very heavy administrative burden.

No general ever got very much respect from his troops if he led them from behind. No general ever got any respect from his troops if he avoided all the sacrifices. What the Government are doing by their credit squeeze is saying that everyone else in the country must suffer except their own machine. What an example that is to the world and to the nation. If the Government dropped the steel nationalisation Bill and accepted these two Clauses, there would be no more need to strengthen the £, because they would show more clearly than any other action that the Government were determined on a course of economy and were reducing the burden of government. However, that is too simple for right hon. Gentlemen opposite.

I may say to my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) that I think the reason why there are so few hon. Members opposite at the moment is that the remainder are asking the Prime Minister to explain why he was not in the Division Lobby last night. But I must not proceed with that, otherwise I shall be out of order.

I now want to give a few practical demonstrations of how the Civil Service could be reduced. When I was in the Army for six years, I became Civil Service minded. When I came out of the Army, my business ran rather on Civil Service lines until trade got so bad under the Government of the right hon. Gentlemen opposite that we had to take economy measures. I discovered, by reverting to the free enterprise system of making quite certain that we were efficient and that no one had a prestige secretary, that we had a turnover twice as big with half the staff, because we made ourselves more efficient.

In the Public Accounts Committee last year, I asked one of the accounting officers a question about his organisation and methods division, which consisted of 177 people, and I inquired by how many people they had reduced the staff of the Department. The reply came, "Oh, no. The Department has gone up." My argument was, what are the organisation and methods people doing? I was not dealing with one of the great spending Departments. There was a Department doing the same job as before, and there were 177 people employed to go round and make certain that it was efficient. All that happened was that the number of people went up. I should have thought that the 177 people in the organisation and methods division would have done much better if they were out of a job in that division, because it is quite obvious that if an organisation and methods division does not reduce the staff by its own strength, it is increasing the staff for no purpose. That is a point in the present crisis which I think right hon. Gentlemen opposite could look into right the way through the Government machine.

5.15 p.m.

It is true in human life, particularly in a non-profit-making organisation, that work is created to fill the hands of its staff. If the staff is reduced, the work load is reduced. There is an enormous amount of to-ing and fro-ing. I have a tremendous admiration for the Civil Service, but, because it is a non-profit-making organisation, it has to have channels of promotion similar to those in the Services. It is a good thing if the head of a department can get ten more people on his staff, because he becomes upgraded. That is the whole system.

I remember what happened when we started demobilising our Forces at the end of the war. People were fighting like Kilkenny cats to prevent men being demobilised. A man who was acting wing commander knew that if a few more men were demobilised he would soon come down to squadron leader. The same thing happened in the Army, because the size of one's department justified one's rank and pay.

I am not criticising the system. I do not think that there is any other way in which to run it, because it is a nonprofit-making organisation. However, in a time of crisis, that which we ask for under the new Clause could be achieved. Every department has an establishment, but when people go on holiday during the summer, its work does not fall behind. It is still done with 10 per cent. of the staff away during the summer months. If 6 per cent. were away permanently, the work would still be done, because efficiency could improve. People would begin to cut corners and ask if certain routine jobs were necessary.

My hon. Friend the Member for the City of Chester (Mr. Temple) quoted an instance in local government where eight people were visiting one family. If, as a result of new Clause 2, pressure were brought to bear on local government, someone in that particular local government office would ask, "How do we cut down?". The service would be streamlined, and one person would go where eight people go today. However, it will not be done unless there is pressure.

I agree with my hon. Friend that some of the services may be very desirable. I believe that, as a result of the incompetence of the party opposite—for the moment, I will leave out what is the reason—we are going through the biggest deflationary effort that any Government have attempted in the country since the 1930s. I fear very much what the situation will be in 12 months' time. It is completely wrong and will not get the effort from the remainder of the economy if the central and local government machines are isolated from what has been forced upon the public at large.

I ask right hon. Gentlemen opposite seriously to think about these two Clauses. If they were put into operation, they might not succeed 100 per cent., but if they succeeded 50 per cent. it would show that the Government were determined to set an example. It would also be introducing a degree of stringency in the Civil Service and, therefore, increasing its efficiency. As a result, I believe that it would help to overcome the problem with which we are all grappling at the present time.

Mr. John Hynd (Sheffield, Attercliffe)

I do not think that anything could better illustrate the synthetic nature of the campaign which the Opposition have been conducting about the Guillotine, and the way in which the Bill has been dealt with, than the speeches which we have heard on these new Clauses and Amendments. I am sure that not one right hon. or hon. Gentleman believes what he is saying.

Mr. Gower

The hon. Gentleman is wrong.

Mr. Hynd

I am not. During the last several days we have been arguing about the importance of having time to discuss the important aspects of the Bill. On the Notice Paper there are a number of important matters worthy of discussion and although time is limited, we are spending a considerable part of that time, at the instance of the Opposition, on a completely phoney proposition, as they know it must be. They are suggesting that there should be an automatic cut of 6 per cent. in Government servants and local authority employees, without stating the basis on which this could be made, or the basis on which one could calculate the 6 per cent.

The hon. Member for Ormskirk (Sir D. Glover) said that during the next 15 months the number of civil servants would probably increase by about 15,000 and when one of his hon. Friends suggested that the increase would be even larger, he agreed.

Mr. Cranley Onslow (Woking) rose——

Mr. Hynd

I intend to make only a short speech, and then the hon. Gentleman can make his contribution to the debate.

Sir D. Glover

The hon. Gentleman has not been here to listen to the debate.

Mr. Hynd

I heard the speech of the hon. Member for Ormskirk, and that of the hon. and gallant Member for Carshalton (Captain W. Elliot).

Sir D. Glover

As the hon. Gentleman has come in halfway through the debate, and therefore has heard only half the argument, how can he give a sensible reply?

Mr. Hynd

I am sorry that the hon. Gentleman considers that his argument is only half an argument. I am replying to the two speeches which superseded mine, and I was encouraged to intervene precisely because the hon. Member for Ormskirk said that there were only a few hon. Members on this side of the House, and none of them was taking part in the debate. I therefore felt that, although I had heard only the hon. Gentleman's half argument, and the speech of his hon. and gallant Friend, I was entitled to make these comments.

Mr. Iain Macleod

How can the hon. Gentleman put forward this argument? The speech which introduced these two important Clauses was made from this Box. The hon. Gentleman did not come to listen to it. That speech set out clearly the basis for the 6 per cent. reduction. How can the hon. Gentleman now argue that no case has been put forward, when he did not even bother to come into the House to hear the speech which set it out?

Mr. Hynd

I thank the right hon. Gentleman for his rather vindictive comments, but, as he knows, there are many activities which claim the attention of hon. Members. I am dealing with my position. I was in at the beginning of the debate. I had to go out because of another important group meeting which I was asked to attend. I am glad to have confirmation from the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). I returned to the Chamber as soon as I could, and I have heard two speeches in support of the Opposition's case.

It may be that the right hon. Gentleman gave some basis for his 6 per cent. calculations. It may be that he put forward reasoned arguments why there should be an average cut of 6 per cent. I am dealing with the speeches which I heard, and I am saying that they made no contribution to any consideration of why there should be an overall cut in the Civil Service, or why it should be 6 per cent. It was certainly suggested that the number of civil servants would rise by about 15,000 during the next 15 months, and possibly by even more. That may be right or wrong, but the hon. Gentleman might have explained why he assessed the figure at 15,000, or possibly more.

Mr. Onslow rose——

Mr. Hynd

I am sorry but I cannot give way.

I am puzzled to know why hon. Gentlemen have spent so much time on this kind of thing, when they have been proclaiming so loudly that there are so many important things to discuss but they are not permitted to discuss them because of the time schedule.

The hon. Member for Ormskirk referred to the Public Accounts Committee. I gather that he was a Member of it, and that he asked certain questions. I believe that one of the duties of the Public Accounts Committee is to investigate any Government expenditure which it considers to be excessive, and to report to the House. Has that Committee submitted any such report? There is also the Estimates Committee, and there is the Auditor-General. We have a number of responsible bodies which keep an eye on the size of the Civil Service, and on the necessity for the various establishments. Do we not discuss the Estimates every year? Are we not in a position to bring forward proposals when we feel that certain Departments are overstaffed? Of course we are, and the hon. Gentleman knows it.

Whatever arguments hon. Gentlemen opposit may try to adduce, the new Clauses are not practical propositions. They have not addressed themselves to the problem at all. Their purpose is either frivolous, or vindictive, and in these circumstances I hope that we will be able to get on to some of the more important points which I should like to discuss.

Mr. Ridley

On the pretext of criticising what my right hon. and hon. Friends have said, the hon. Member for Sheffield, Attercliffe (Mr. John Hynd) has only succeeded in wasting the time of the Committee in a frivolous and unnecessary way. Several of my hon. Friends wish to contribute to this grossly truncated debate, and the hon. Gentleman's speech has not contributed to a problem which is concerning the nation, namely, this massive growth in bureaucracy at a time when the rest of us are being asked to cut back.

I agree with what has been said from this side of the House, but I should like to make a few remarks about Amendments Nos. 114 and 115 which I feel raise an important principle. Clause 4 was not discussed in Committee, again due to the fall of the Guillotine, and it seems wrong that this House should allow to go through a Clause which, in subsection (2), says: The appropriate Minister may make to any employer … such payments … as he may … think fit … That gives any Minister carte blanche to decide when, and how, and to whom, and by how much, he will reimburse the tax paid. It is a thoroughly wrong principle that Ministers should take unto themselves power of this sort.

The fact that the Clause could not be discussed, or be explained, in Committee shows how unfair and harsh the Guillotine is, and how it has prevented this House from doing its work on the Bill. This is something which should be objected to, and should be pointed out.

The Government may say that it does not matter if the Minister gives back a bit too much, or not enough, to local authorities because they are public bodies, and it is merely taking money out of one pocket and putting it into another. But I wonder whether this is true, because there are such things as hospitals, schools, educational establishments under local authorities, and so on, which could be affected by this Clause. Doctors, dentists and many other people will get their tax reimbursed under this Clause, and therefore the idea that this does not really matter seems to me to be a sloppy and wrong one.

Dentists have been told that they will be reimbursed on the basis of the average number of assistants at present employed by dentists, which is 1.9. I have been given the details of one dentist who employs five assistants. He will have to pay five 25 bobs a week, but he will be reimbursed on the basis of 1.9 assistants. This is a most unfair way to approach this problem, and here we see immediately that it is not only the local authorities who will be receiving payments under this Clause, but private citizens whose incomes are by no means large enough to stand an injustice of this sort. The greater the number of assistants that dentists have, the more efficient they are and the more people are treated without using the highly trained and scarce dentists, of which the country could well have more to meet its dental problems.

The effect of the proposal will be to subsidise the dentist who works inefficiently without as many assistants as he would be able to use and to penalise the man who gets through the largest number of cases efficiently out of his own pocket. This is the result of a Clause which was never discussed at all in Committee. The Treasury ought to pay back even to local authorities and bodies dependent upon them the exact amount of tax which they have paid and not some approximate amount which may, in their minds, be equally good. Why take a power to make what payments the Government think fit? Why have they not taken the power to pay back exactly the amount of tax and why the word "may" instead of "shall"?

Surely the right hon. Gentleman must pay back this tax, not "may" pay it back according to a whim of his imagination and depending on how he feels in the morning and on whether he has been up in the House all night. Surely it it should be mandatory upon him to pay back exactly the amount of tax to each employer, whether a dentist, a county council, a water board or a special housing association. I should be grateful if this could be cleared up.

The fact that I have spoken to the two Amendments does not mean that I do not entirely support the case which my hon. Friends have made on new Clauses 1 and 2, but I will not weary the House by going over that ground again.

Mr. Onslow

I welcome the opportunity to debate the proposition mentioned by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), that the size of the Civil Service has increased, is increasing, and ought to be diminished. I realise that the requirements of draftsmanship may have forced my right hon. Friend to insert a once-for-all cut of 6 per cent., which could be attacked as not the best way of achieving this. As a former Civil Servant, I made my own contribution to diminishing the size of the Civil Service some years ago—and I should like to make it plain that whatever I say in criticising the Civil Service is not a criticism of civil servants themselves but of the system and the way in which the machine is being used and abused by this Administration.

I must, however, say, with due deference to my right hon. Friend, that I believe that he has seriously understated the present situation. I put down a Written Question to the Chancellor on 8th March this year, before the election, and his reply is reported in columns 458 and 459 of HANSARD. That Answer shows that, between October, 1964, and 1st January, 1966, the number of non-industrial Civil Servants increased by 10,700 and the total extra annual cost, including pension commitments and accommodation, amounted to some £11 million.

When that Answer is compared with the one given to my hon. Friend the Member for Southend, East (Sir S. McAdden) in a Question asked on 2nd August and reported in column 66, two striking facts at once emerge. The first is that, on the basis of the Answer which I was given to my earlier question, it is clear that the total extra annual cost of the additional 14,900 civil servants whom we now learn were engaged between October, 1964, and 1st April, 1966, must be over £16 million.

I therefore suggest that my right hon. Friend has considerably underestimated the costs which that Government have placed on us in this respect. The second striking fact which emerges from a comparison of those two Questions is that the rate of growth of the Civil Service, on the basis of its performance between January and April, 1966, is now 1,200 a month. This is an annual rate of just under 14,500 a year. I put that point to the hon. Member for Sheffield, Attercliffe (Mr. John Hynd), whom I am glad to see still here. It is one reason why I said that it is probable that the increase would be even more than 15,000.

If the hon. Member wants more evidence, I refer him to a Question reported in the House of Lords HANSARD of 3rd August, yesterday, when the Minister without Portfolio, after being asked how many civil servants were employed at 23rd October, 1964, how many were employed today and how many were expected to be employed in 12 months time, said: The original Estimate for 1966–67 provided for an increase of just over 13,000 staff during the following twelve months. New policies which could not be reflected in those Estimates may bring this figure up to 17,000."—[OFFICIAL REPORT, House of Lords, 3rd August. 1966; Vol. 276, c. 1301.] I hope that he will withdraw the insinuations which he was making——

Mr. John Hynd

There is nothing to withdraw. I was asking only on what basis the calculation of 15,000 or more was made. I am grateful to the hon. Gentleman for giving me the information.

Mr. Onslow

I am grateful that the hon. Gentleman is grateful. Perhaps he could have saved some time if he had let me intervene when I tried to do so in his speech.

The increase in the Civil Service with which we are confronted, and which is undeniable, is also going on on a basis which is not, apparently, within the capacities of prediction of the Government. I found this in a number of cases when I have first asked Questions of various Ministers about the increases in staff which they anticipated over a period as short as six months ahead, and at the end of that six months I have asked another Question to find what the actual increase had been. In many cases, I would say in almost all, I found the actual increase varied wildly from the predicted increase—sometimes it was as much as 50 per cent. out. This is a non-planning situation, which is clearly very serious.

The growth of that Civil Service also, of course, has its effect on its demand for accommodation. I put some Questions recently to the Minister of Public Building and Works about office space occupied by Government Departments. I was given a great many statistics, of which I will weary the House only with two. In December, 1964, the total square footage of office space occupied by Government Departments was 39,320,000. In December, 1965, it was 41,440,000. That is an increase of about 5 per cent. in one year, and this before the real increase in the Civil Service has started to bite—and all this in the context of a Civil Service which is 3 per cent. under establishment, as the Chancellor told me when I asked him a Question on the subject the other day.

Why does all this matter? Not just because of the impact of Parkinson's Laws, although Members of the Treasury Bench may recall, perhaps, the most significant and penetrating of all those laws, that men who are not allowed to take important decisions come to regard as important the decisions they are allowed to take. That law applies, I think, to the whole Cabinet and to the Prime Minister, too.

Apart from Parkinson, whom I commend as bedside reading to the Financial Secretary and the Chief Secretary, I believe that the increase in the Civil Service is dangerous for a number of reasons. It soaks up talent. In our society, there is not an inexhaustible pool of talent and ability, although we sometimes delude ourselves into believing that there is. The Land Commission has been cited as a case in point. The 1968 rating revaluation has had to be postponed because the talents of valuers are to be absorbed into the Land Commission. I expect the ratepayers will have something to say about that when the time comes.

Increases in the Civil Service lead to delay in decision taking and this leads to inefficiency. Bureaucracy and Socialism are to my mind inseparable, and they dance hand in hand with national inefficiency. The situation to which the Inland Revenue has been reduced in its attempts to apply the fiscal measures introduced by the Government last year and this year is an illustration which speaks for itself. The growth of the Civil Service also diminishes national freedom, limits individual enterprise by centralising power and taking decisions out of the hands of individuals. It therefore limits active individual participation in society and relegates men and women to a passive rôle, wherein public faith in the democratic process is progressively destroyed.

We are moving towards a new sort of two-nation situation, the division being between those who are employed in permanent and pensionable Government jobs and those who are not. This reinforces a tendency towards a form of anarchy, a contempt for authority, and of course it also acts as a stimulus to the brain drain, which seems now to be proceeding at a most dangerous level. All of these are social costs which must be added to the purely monetary costs which I have outlined earlier.

I think that I can forecast the Government's justification for their attitude. Apart from saying that the new Clause as drafted would scarcely be capable of implementation—which is the standard Government reply to most new Clauses—they will probably say that the increases which they have created are justified, being necessary to implement the legislative programme on which they think they are embarked. We have already been told that there have been no cuts in establishments or staff in the Civil Service, despite the financial crisis. Following the Prime Minister's statement on 20th July I asked a number of Questions and I was told that the five main employing Ministries had made no cuts in staff. "We need these people to carry out our policies" is what those Ministries say. The Government should think about this matter carefully because now that people are seeing what these policies mean, in terms of money, people and the total social costs, they are turning against these policies because they see that we cannot afford them. The destruction of what the Government think they will be able to do is very closely bound up with this subject—the increase which is proceeding in the Civil Service.

I might be thought to be offering to the Government the solution to their difficulties—in suggesting that if they accept the new Clause they might preserve themselves from defeat at the next General Election. They might do that, although I doubt it. But if the new Clause, or the intent behind it, is not accepted and implemented, we will find that not only our hopes of progress and our freedom as individuals will be destroyed but that the Civil Service as we have known it and have been proud of it will also be destroyed.

5.45 p.m.

Mr. Gower

The figures quoted by my hon. Friend the Member for Woking (Mr. Onslow) suggest that the Government's failure to increase production is not entirely complete. Indeed, in at least one sphere production seems to be booming. It is, therefore, extraordinarily difficult to believe that the Government will entirely reject the principle and basic objectives of the new Clause.

My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) clearly described the nature of S.E.T. on commercial firms and businesses. I was glad that he cited the example of a company with which he is intimately associated. In that way the House was able to have a better picture of what this new taxation will mean. My right hon. Friend also described the careful consideration which he and his colleagues on the board of that company had had to give to this problem.

Recently a small employer in my constituency consulted me on an aspect of taxation arising from last year's Finance Act. It would be out of order for me to discuss that legislation. While advising my constituent I could not help contrasting the plight and difficulties of a relatively small employer and trader with the position of the great Departments of State in matters of this sort. Is it fair that a relatively small trader should be harassed and obliged to consider with great care how he can meet the requirements of this legislation while, at the same time, Departments of State and large local authorises should be absolved from such matters? It is not fair. So far this burden of scrutiny has not been placed on Government Departments and local authorities. As my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) explained, there is no natural tendency for the staffs of Government Departments and local authorities to either remain at their present level or to decline in number. Indeed, the evidence is that their numbers are increasing.

It is significant that this tendency has made it necessary for some of the more enlightened local authorities to call for outside expert opinion in trying to achieve greater efficiency in administration. However, there is no Government sanction at present on local authorities comparable with the sanctions being imposed by S.E.T. on private commercial organisations. Without financial sanctions, the tendency of some State bodies to go in for empire building cannot be denied. It would be disgraceful if, having enjoined on private commercial firms greater efficiency and the more efficient use of manpower, Government Departments and local authorities were completely exempted from doing anything likewise.

When the hon. Member for Sheffield, Attercliffe (Mr. John Hynd) considers the problem in this light he may conclude that we are discussing a part of the Bill which is as important as some other parts of it—particularly those parts which we were not given sufficient time to discuss in detail. This is an important matter which does not arise solely out of S.E.T. However, S.E.T. will make the position worse and it is incumbent on the Government, in the interests of fairness, to ensure comparable efficiency in the State sector by accepting the new Clause. These Clauses in their present form may not be perfect, but I hope that the Minister will not on that account refuse to concede the need in the service sector for similar sanctions to those already imposed on private firms, as that would be most unfair.

Mr. Tim Fortescue (Liverpool, Garston)

I support the new Clause wholeheartedly, but my main object now is to correct a misunderstanding that my hon. Friend the Member for Ormskirk (Sir D. Glover) may have caused in his reference to the Organisation and Methods Division of the Treasury. It is within my direct and personal knowledge that this division is magnificent; that it is one of the best, if not the best, efficiency organisation we have, and I am very happy to be able to pay it this tribute.

The misunderstanding probably arose from the fact that the 177 people who have been mentioned are responsible for organisation and methods throughout the whole Civil Service and not just in the Treasury, and that figure is by no means out of line. The impression that these people are not doing a good job is, perhaps, fostered by the fact that they are powerless to judge or improve any question of policy. Their job is simply to see that the work that is being done is being done to the best advantage by the people there. If the Government, or if this House, choose to instruct the Civil Service to do new things, the Organisation and Methods Division has neither the right nor the power to say that those things should not be done. It can only try to see that they are done as efficiently as possible.

Some years ago, when I was working with one of the specialised agencies of the United Nations in another country, we were lucky enough to get the Organisation and Methods Division of the Treasury to look at what we were doing. I suppose that because they were away from the eagle eye of the Chief Secretary—or whoever then held the equivalent post—the members of the division were able to play a much bigger part in what should be done rather than in just what was being done, and I should like to give a brief example.

We were housed in a very large building, with many floors. As it was the United Nations building, it contained a very large assortment of expensive furniture, typewriters, and so on. Everything was done very lavishly. To keep track of furniture and equipment there were on watch on each floor two gentlemen known as inventory officers. Every time a desk, a chair or a typewriter was moved from one office to another, the move had to be reported to these officers, who then altered their lists. These lists were kept up to date and were audited each year.

We wanted to reduce staff, so we thought that this job could be done by one inventory officer on each floor. There was, of course, a chief inventory officer and an assistant chief inventory officer, but they were on the ground floor. When the people in the Organisation and Methods Division looked into this difficult and technical subject, they asked, "Why do you have an inventory at all?" We said, "It is to keep track of all the valuable furniture and equipment in the building." They told us, "That is foolishness. No one will carry out a desk on his shoulder. You are spending more money on keeping track of all this furniture than you could possibly lose if it were mislaid. Abolish your inventory and carry on without one." I recommend the Treasury Bench to see which Departments are operating an elaborate inventory system and abolish it.

Mr. Maurice Macmillan (Farnham)

Despite the strictures of the hon. Member for Sheffield, Attercliffe (Mr. John Hynd), I do not think that I need repeat my right hon. Friend's arguments, but I should like to take up one point made by my hon. Friend the Member for the City of Chester (Mr. Temple) by asking the Financial Secretary how the proposed adjustment in the Selective Payment Tax would be paid to local authorities if they had to borrow. Perhaps he will tell the House whether in the mind of the Treasury there has been any question of the ratepayers' concern at the possibility of extra borrowing, or, indeed, of Treasury control and influence being used in connection with this forced loan if this tax is paid. It seems arguable that there is an element of sanction here in regard to control of the Parkinsonian expansion of local authorities which may or may not be in the Government's mind.

My hon. Friend the Member for Ormskirk (Sir D. Glover) referred to the size of Departments relative to their work. I hope that I will not be thought frivolous if I ask what the Admiralty does in all those buildings when it has so few ships. In some cases, the vast space required seems to be in inverse proportion to the size and actual responsibilities of the Department. I do not make this point as any criticism of the Civil Service, but merely in order to point out that these people are being asked by the present Government—and, I suppose, to some extent by past Governments—to undertake a task for which they are not trained, organised or equipped.

My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) pointed out how much more freely the members of the Organisation and Methods Division of the Treasury were able to operate outside this country. I would remind the Government that changes in administration made, for example, by Marks and Spencers, does not imply criticism of the way in which their checks and controls were formerly operated, the fact being that the board decided as a board that it was not worth operating them at all. In these difficult times, we must ask the Government to look at some of these ideas if they are asking private employers to reduce their service and administrative staff to this extent.

There is no doubt that the system and responsibilities imposed on the Government, in some cases by the demands of Parliament, enormously increases the volume of paperwork, and, above all, the passing upwards of responsibility and seems to demand greater numbers of staff than are necessary in a commercial organisation. Where possible, the Government should apply more general managerial standards in regard to structure and responsibility than they now have. This applies more to local authorities where, in some cases, far greater discretion could be given to individual officers, but it also applies to the national Civil Service, in which a greater degree of delegation could well achieve a greater degree of efficiency.

My main point is the link that exists between this new Clause and the Prime Minister's announcement this afternoon—the link between our wish to reduce the numbers employed in the non-industrial Civil Service and the need for an ombudsman or Parliamentary Commissioner. They both arise from the policies of all modern Governments, to some extent, but of this one in particular, and the impact that the governmental machine has on each one of our people.

6.0 p.m.

The classical progress of civilisation has been from status to contract. It has taken a Socialist Government to reverse this process and move us steadily backwards to a position where relations between citizens are governed not by contract but by status. Almost every step this Government have taken, almost every measure put before us, reduces the field in which individual citizens in commerce, business, private life and exporting can operate freely within the law knowing the conditions they will find and adds to the extent to which they have to get permission from some Government official or other.

I need give only one example, the replacement of investment allowances by investment grants allowances which used to be paid through the fiscal system to a producer who could know beforehand whether his line of action would qualify. Now, however brilliant he is, he has to go to an individual official for a decision. The same applies to the whole question of allowances for research and development and to the operation of this Selective Employment Tax.

In every way now the liberty and freedom of action of the individual is becoming more dependent on an official decision. That is one of the reasons why this is not just a debate about the efficiency of the Government machine and the Government setting a good example in the times of difficulty by reducing their own staff as well as asking others to do the same. These are very important matters, but this is a debate about something more. It is what my right hon. Friend the Leader of the Opposition called the other day "the great divide". On which side are we?

In this crisis when the Government are asking the people, businesses, employers and employed to make sacrifices, are they prepared to continue, as the Government have shown in the last few days, to treat Parliament with contempt, reducing the area in which the individual can act freely and tending to reduce the respect and concern with which Parliament is viewed in the country as a whole?

That is one side of the case which the Government have to answer this afternoon. The other is how they expect people to act, even those who are trying their best, in the national interest when every time they say, "Don't do as I do, do as I say"?

Mr. John Nott (St. Ives)

If those on the Government Front Bench were to look around the empty benches in this House, they would see ample evidence of the high productivity of our legislators.

Mr. MacDermot

Was the hon. Member present earlier?

Mr. Nott

No—the Financial Secretary is absolutely right. I make no claims, such as hon. Members opposite make, to having been here all the time, but I did hear the opening speech of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod). I make no claims such as are made by hon. Members opposite for having been here throughout the debate.

The productivity of our legislators is perfectly evident in this House today. There are 20 or 24 of us here examining this important new Clause. If we look around we can see almost as many members of the Civil Service also present in the precincts of this Chamber. I believe that without very much difficulty a reduction in the number of civil servants in the country would raise productivity quite considerably. It is only necessary to go for luncheon at the Reform Club or the Travellers' Club to find those clubs simply stuffed with civil servants. Those places are sanctuaries beyond the Organisation and Methods Division of the Treasury. I am sure that many are salted away there beyond the grasp of the Organisation and Methods Division.

Of course the Civil Service could bear this cut. As many of us know, a cut in numbers in large organisations usually raises the productivity of those who work in those organisations. I remember so well when McKinsey carried out the investigation into Shell some years ago. I cannot remember the exact percentage of the cut, but I think it was about 10 per cent. All the executives of Shell threw up their hands in horror at the idea that that great company should have its executives cut by that amount. Looking back to that occasion, I think most people in Shell would now agree that it was an event which raised the productivity of that company by a great amount.

I would be much happier if the Government brought in an outside body such as the McKinsey organisation to examine the Civil Service than if it were done solely by the Organisation and Methods Division, because I would have faith that a completely outside body would examine the ways of the Civil Service and make absolutely certain that they are as productive as they could be. Surely efficiency, like charity, must begin at home. It is no good enough for this House to preach to the country about reform and modernisation if we are not able to reform the procedures of this House ourselves. Likewise, surely it must be right if the Government wish to reduce the numbers of those employed in the administrative process in the country generally, if they wish to reduce the numbers in service trades, to show an example to the country by starting with a cut in the Civil Service and local government. There is no doubt whatever that this could be done. I believe that by such an example the country would derive great benefit.

I hope that in his reply the Financial Secretary will at least show that he has some understanding of the need for such a cut even if he is unprepared to agree to the exact wording of this proposed new Clause.

Mr. Patrick Jenkin (Wanstead and Woodford)

I wish to add a few words to the protests which my hon. and right hon. Friends have made about the pattern of this legislation and the fact that their is nothing in it whatever to make it apply to the public service. I can appreciate the difficulties which any organisation has if it is faced with the problem of cutting its staff. It is an extremely difficult job. Nowhere, obviously, is it more difficult than in the public service.

I had some experience a few years ago in an industrial firm where it became necessary to reduce administrative staff, to thin out, to shake out, to redeploy—whatever the current jargon is—in a period of stringency. It was for me a very educative process, principally because I became aware for the first time, in a way which only personal experience can bring home, of the way in which economic pressures can do their job in these circumstances.

Where a private firm which is subject to the test of profit and of profitability finds itself in a position where its costs are increasing and perhaps its market is not expanding as fast as it expected and it is, therefore, faced with declining margins and diminishing profitability on its capital, if it is to remain in business and to continue to attract new capital, it has to do something about it.

I sat in a series of meetings spread over a period of several months in which this fact percolated right down the organisation, an organisation which worked on a fairly sophisticated budgetary system, and where the budgets for the ensuing year, having been presented in their original form, where they were all collated at the top produced an entirely unacceptable result with the consequence that they were rejected. Each of the managers down the line was told, "You must produce a better result than this. This is simply not good enough".

The managers were then faced with the task of increasing the profitability or, if theirs was purely an expenditure department, reducing the expenditure, of their departments. It was because right from the very top of the firm this pressure was driven downwards through the organisation that there was an effective shake-out, a substantial streamlining of the administration of the firm and its various departments, with the result that, when the budget was represented—in fact, it came half way through the year because of the time these things take— the profitability of the enterprise was back at an acceptable level.

It was painful for those involved. There were inevitably hard cases. I hope that it can be said that they were dealt with generously. It was only because of the acute economic pressure of having to operate in a competitive atmosphere that this very necessary work was done. This was, for me, a lesson which I hope I shall never forget. It was for me, not necessarily the most important, but one of the vital indicia of the value if profit as a test of efficiency.

This does not work in the public service. It does not really work—or it only half works—in the nationalised industries. As my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) said, this is one of the reasons why it is wrong to expand the public sector and to reduce the area over which the test of profitability can operate. It is almost impossible to import comparable pressures into any public administrative set-up.

Much has been said about local authorities. Some of the examples of local authority extravagance, particularly that given by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) of the £600,000 which the Greater London Council proposes to spend on public relations, show the extent to which local authorities, in spite of their being precepting authorities, in spite of their having to go to the ratepayers, who, after all, have been as hard hit as any group of citizens, to raise annual revenue, are still isolated from the sort of pressures which can prevent managers, for that is what they are, from taking these decisions and from apparently being prepared to expand their staffs to this extent.

If it is so difficult for local authorities to do this, how much more difficult must it be for Government Departments to do it? This is the context in which a Government Department must operate, whether it be an organisation and methods division, or whatever it may be, that is charged, or which ought to be charged, with the responsibility of constantly scrutinising its manpower.

This imposes a duty on Ministers, because this pressure can come only from the top, to set themselves the most stringent targets, the most stringent budgets, which they must on no account allow anybody to exceed. These must be determined, so far as possible, on a comparative basis, either comparative with last year or comparative with other Departments. Indeed, why not have a comparison with other countries?

6.15 p.m.

One of the ways in which private industry has been able to tune up its efficiency—it is doing this all the time—is by what are called inter-firm comparisons. Under the British Institute of Management there is a subsidiary organisation which deals entirely with inter-firm comparisons. This organisation is enabling companies and, indeed, quite small departments of companies, to compare the efficiency of their operations by the use of what are called management ratios.

I am far from convinced that this is not possible in the public service. It ought to be made possible because, as I have demonstrated, the need for techniques to supplement pressures—because the pressures are largely non-existent, certainly not to anything like the extent to which they exist in the private sector—is paramount.

These Clauses set out one method by which it would be possible to bring some pressure to bear on the Ministers responsible for Departments by setting them a target, by posing them a situation at which they start at the beginning of the year and on which they have to improve by the end of the year, at which stage they have to come back to the House.

I am under no delusion that this could ever be an adequate substitute for the sort of economic pressures which can operate in the private sector, but it would be a darn sight better than nothing. This is the case for the Clauses. It is because we want to impose from the top—from the House, through the Ministers concerned—the overriding pressure which will compel them to bring to bear the most rigorous scrutiny of their staffing requirements that I believe that the case for the Clauses is overwhelming.

Mr. MacDermot

This debate is one of those rare debates that succeed in achieving the almost impossible task of warming the hearts of Treasury Ministers. This debate does so for two reasons. The first is that it deals with the subject which is our perpetual concern, which is how to contain the growth of public expenditure. The second is that in relation to this debate the premises upon which the Clauses are founded, and which were so clearly expounded by the right hon. Member for Enfield, West (Mr. Iain Macleod) at the outset of his speech, provide a complete justification for everything that we have been saying as to the economic effects of the new tax.

What is being said is that the tax will compel all companies and all businesses in the services sector to scrutinise their manpower usage most carefully and to cut it down and prune it wherever they can. This is what we said that the tax would do.

Mr. Ridley rose——

Mr. MacDennot

It is surprising how hon. Members hardly want to let me finish a paragraph before they interrupt. I have listened patiently for 2¼ hours. If hon. Gentlemen want me to, I am prepared to give way, but I suggest that I should be allowed to elaborate my arguments before giving way.

I repeat that this is what we have said would be one of the effects of the new tax. I remember on several occasions my right hon. Friend the Chief Secretary being jeered at when he advanced this proposition. The right hon. Member for Enfield, West told us that businesses will do it, and do it within 12 months. The right hon. Gentleman implied that many of them would be cutting their staffs by 6 per cent., or something of that order, directly as a result of the tax.

I do not know whether there will be many businesses who will succeed in achieving that, but those were the premises upon which the right hon. Gentleman based his argument and which were elaborated by other hon. Members. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) also did it. The argument was that, because this exercise had to be carried out vigorously in the private sector, something similar should be done in the public sector.

Mr. Boyd-Carpenter

If the hon. and learned Gentleman will refer to my speech, he will find that I said that the tax was intended to have this effect.

Mr. MacDermot

I have so many pieces of paper that it may take me a little while to find the note I made of the right hon. Gentleman's point. I think that the right hon. Gentleman, when he refers to HANSARD, will see that my summary of what he said is correct.

I felt a lot of sympathy for what my hon. Friend the Member for Sheffield, Attercliffe (Mr. John Hynd) said in his intervention, that this debate is an interesting reflection on how the Opposition have chosen to use their time under the Guillotine. They have presented two new Clauses which I do not think any of them thought for a moment could be accepted in the form in which they are put forward. If they do have any thoughts on that line, I shall try to deal with them briefly.

The right hon. Member for Enfield, West, congratulated the anonymous draftsman of the Clause on his ingenuity in managing to get this debate within the rules of order. This was perfectly legitimate, and something that is frequently done by Oppositions to seize the opportunity to raise an important subject of public interest, and to have a debate on it if they can bring it within the rules of order. That is what has happened here.

I welcome the subject as one that I should like to see debated more often and more fully in the House. One of the first speeches I made as Financial Secretary was in reply to a debate on a Report of the Estimates Committee which examined the Treasury control of establishments throughout the Civil Service—this very subject.

While some hon. Members have made very interesting and thoughtful speeches dealing with the serious aspect of this matter, other hon. Members have produced rather emotive phrases about the growth of the bureaucracy which is strangling us all, and so forth. They were rather irresponsible speeches. One knows the contradictions in the minds of hon. Members opposite on this subject. They love making speeches, particularly in their constituencies, saying how their party is out to cut down the bureaucracy, to support free enterprise and all the rest. They attack the growth of snoopers.

But once they become the Government, they pass legislation week by week which increases the number of snoopers, and they have to go into a self-denying ordinance while they are in office until they can again attack the growth in bureaucracy and the number of snoopers. As soon as they are in Opposition again, they let themselves go. But this contradiction does not inhibit them from making speeches, here and outside, constantly demanding that the Government should do this and the Government should do that, all of which would result in substantial increases in the size of the Civil Service and the number of snoopers.

Even the hon. Member for the City of Chester (Mr. Temple), trying strenuously in the debate to make a speech in favour of cutting down the size of the Civil Service, could not refrain from saying that not nearly enough public money was being spent on building new offices and installing new computers for local authorities. This is the dilemma which we are all in. The things which we want to achieve cost money and manpower. The Amendments to this Bill put down by the Opposition would result, if accepted, in very substantial increases in the numbers of civil servants required to administer the Bill when it becomes an Act.

Even the concessions and alterations which have been made in the Bill since my right hon. Friend the Chancellor of the Exchequer first announced his proposals in his Budget speech have resulted in nearly doubling the additional number of civil servants required to administer the Bill. This sort of factor must be taken into account.

Many criticisms have been made about the rough edges in this legislation. But one of the things which guided my right hon. Friend in selecting this form of tax was that it could be got into operation this year, with only a relatively small increase in the Civil Service compared with the vast increase which would have been needed for the very much more sophisticated type of tax which has been urged on us by hon. Members on both sides of the House.

I ask the House to face up to the sort of dilemma which all Members who have been Ministers know one inevitably faces when one tries to frame new legislation in a way that will be economical in manpower. As the junior Treasury Minister responsible for the manpower aspect, I find that the thought has increasingly been forcing itself upon me that a time is coming when we shall need a form and degree of scrutiny of the use of manpower perhaps almost as tight and as thorough as there is on the purely financial side of the control of expenditure.

It is an exceedingly difficult task. But I think that it is one that we have to shoulder increasingly, and for that reason I gave the answer which was criticised earlier by the right hon. Member for Enfield, West, when I was invited to suggest that we should try now to get a cut in the Treasury. I pointed out that only a modest increase in the size of the Treasury has taken place, and that the increase is mainly in that very division so highly praised, and rightly praised, by the hon. Member for Liverpool, Garston (Mr. Fortescue).

Mr. Iain Macleod

I very much agree with what my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) said about the Organisation and Methods Division in the Treasury. It is not in dispute that it is extremely efficient. But the increase in the Treasury is not small. The increase of something like 70 does not take into account the fact that there are now two economic Departments where there was previously one, and although those transferred with work are accounted for in the Financial Secretary's Answer yesterday, he must also take responsibility for all the vast new recruitment to the D.E.A., which is now doing the work that was done by the Treasury before 1964.

Mr. MacDermot

They are doing work that was not done by the Treasury—this is why the D.E.A. was established—and only a very small section of the Treasury was transferred to the D.E.A. when it was set up. Incidentally, the number of Ministers at the Treasury has been reduced from four to three, and I do not think that anybody has complained about the productivity of Treasury Ministers in the past two years. I have experienced no harder work in my life nor known a more hard-working organisation or Department than the Treasury. In view of the vast area of its work and how far its tentacles spread, as we are constantly reminded, I was surprised when I found what a numerically small Department it is compared with many others.

I shall not spend a great deal of time on the proposals contained in the Clause, because it is patently an attempt to get a debate of this kind within the rules of order. It proposes that if the overall strength of the non-industrial Civil Service has not been reduced by 6 per cent. within a year, office workers outside would cease to be non-qualifying. This would have rather curious results. It would not mean that all office workers would attract a refund or premium. Industries within the manufacturing sectors whose office headquarters were in a separate establishment, which could not be treated as one with their factory, would get the refund or premium in respect of workers there, or, where the non-qualifying workers at the moment outnumber the qualifying workers, the Clause might tip the scale and enable them to qualify.

If it is intended as a sanction for bringing great pressure to bear on my right hon. Friend to cut down the scope of the Civil Service, it would not be a very large or effective deterrent. I shall not dwell on that, because I want to come to the substance of the argument. Ministers of all Administrations since the war have sought to grapple with this problem. When the war ended there were about 452,000 non-industrial civil servants. The number fluctuated during the next few years fairly considerably.

Mr. Iain Macteod

This is excluding the Post Office, I take it?

6.30 p.m.

Mr. MacDermot

I am much obliged—excluding the Post Office, which gives a better picture.

The number rose in 1947 to 460,000, and it then fluctuated as follows: 1948, 435,000; 1949, 459,000; 1950, 440,000; 1951, 425,000. That was the time when there was a change of Government. The number then went up again to 435,000 in 1952; and thereafter it fell steadily year by year until 1959, when it reached 377,000.

Thereafter, the number has risen steadily every year: 381,000, 386,000, 396,000, 406,000, 415,000. This was when we came into power. I should say that the dates do not quite correspond because these are figures at 1st January. The number at 1st January, 1964, was 415,000. On 1st January, 1965, it was 419,000, and on 1st January this year it was 426,000. At 1st April, the end of the financial year this year, it was 430,000. That is an increase of 3.7 per cent. since we took over in October, 1964.

As has been stressed repeatedly, since the sanction and economic force of the profit motive, which applies throughout, or mainly, in the private sector to contain expansion, does not apply in the Civil Service, one must look for other ways. All Governments from time to time try to have a drive in reducing their staffs in the Civil Service. One has the impression, anyway, that that happens from time to time. But I think that all with experience of those efforts have found that they do not tend to be very productive. One may gain a few reductions here and there at the margins, but this is not the way in which one achieves anything really effective.

Inevitably, one depends on the expert services, on the Organisation and Methods Division. Following the recommendations of the Plowden Committee, some years ago, most of the main Departments have their own Organisation and Methods divisions. The Treasury both performs a general co-ordinating function and helps other Departments in this respect. I entirely endorse what the hon. Member for Garston said. It is widely recognised, outside the Service as well, that the expertise of the Organisation and Methods Division of the Treasury will bear comparison with that of any other such organisation either in this country or elsewhere. The Treasury Organisation and Methods Division maintains a very high standard. It both helps and advises other Organisation and Methods Divisions, co-ordinating their work, and performs these functions for those Departments which have not their own Organisation and Methods Division.

I commend to anyone who is interested in this work the Report of the Estimates Committee, two years ago, which went into the whole subject. The Committee made a number of recommendations for the improvement of Treasury control of establishments, most of which have now been implemented, but, by and large, it gave, as it were, a clearance certificate to the effectiveness of the system.

I think that the right hon. Member for Kingston-upon-Thames put his finger on the key point. It is not possible, as he said, to secure significant reductions unless one is prepared to abandon policies. It is the development of policies which has been responsible for the growth in the Civil Service since 1959, which has continued under all Governments. As has been said, our published Estimates for 1966–67 envisage a further increase of 13,000, and, as I made clear in answer to a Question, as a result of further developments in policy since then we now put that estimate at 17,000.

The main additions involved in those figures are as follows. In the Ministry of Pensions and National Insurance the figure is 1,950, and most of these are concerned with the new earnings-related benefits which were welcomed on both sides of the House. If hon. Members want cuts, they must realise that, unless and until one can achieve reductions through computerisation, an immediate cut of the kind suggested in the Clause would inevitably mean cuts in services.

In fact—the process was initiated at the time when the right hon. Member for Kingston-upon-Thames was in charge of the Ministry—the Ministry of Pensions and National Insurance makes extensive use of computers. This process is going ahead and will be continued. Indeed, if it had not been undertaken, the growth in the Ministry would have had to be considerably greater than it has been if these policies were to be achieved.

I take next the new Ministry of Social Security, to be set up under legislation now before Parliament. The non-contributory benefits schemes under that Ministry will involve a further 1,200 staff. Setting up the Land Commission will, to start with, involve about 1,800 additional staff. The point has been made that, with the present overall shortage of valuers, the next rating revaluation has had to be deferred. Quite true. But this is one of the problems of priority which confronts any Administration at a time of manpower shortage. It is a matter of policy to decide which is more important.

Ought we to set up the Land Commission which can try to tackle the problem of land prices and also institute a system for recovering a share of betterment for the public, a principle which is accepted by both sides of the House, and which in itself would account for a very large part of the staff? Which is the more important, to do that or to carry out the next rating revaluation? We think it more important to establish the Land Commission. This is an example of the way in which policy determines increases in staff.

The new taxes introduced last year have thrown a great additional burden on the Inland Revenue, and 1,600 of the increase is due to that. One cannot overhaul and reorganise the system of company taxation, with complicated, but, we think, fair transitional provisions, without throwing a great administrative burden on the Inland Revenue and requiring additional staff. We believe that this was something which needed to be done urgently. There is dispute about the way in which it was done and about particular provisions, but I think I am right in saying that it is generally agreed that it was right to introduce the Corporation Tax system.

Mr. Patrick Jenkin

Has the hon. and learned Gentleman any idea of the extent to which that increase in staff of the Inland Revenue is attributable to the Corporation Tax and how much is attributable to the Capital Gains Tax?

Mr. MacDermot

The hon. Gentleman need not worry. I was about to say that a substantial part of that increase is due to the introduction of the Capital Gains Tax system.

That is a system which, to start with, will produce relatively little from a Revenue point of view. To date, it has produced about £375,000. But that is inevitable if one introduces a Capital Gains Tax system and decides not to make it retrospective. If it is to operate only from the date when it is introduced, it is bound to produce very small returns for quite a long time. Meanwhile, of course, one has to set up the administrative organisation.

Hon. Members have criticised the details ad nauseam, but the principle of the Capital Gains Tax system was accepted on both sides of the House.[An HON. MEMBER: "No."] There were some hon. Members who took another view, but it is fair to say that the Opposition Front Bench spokesman accepted that a Capital Gains Tax system was needed. They may have thought that we made ours too elaborate, because we tried to make it too fair, but, error or not, that was a policy decision which resulted in those increases in staff.

Others are due to a miscellaneous series of decisions—to improve and widen the system of land registration, something which has been pressed for over a number of years, to improve our prison system and to introduce a better system of vehicle examination and driver testing. These are the kind of decisions that have resulted in these increases in the Civil Service which are criticised.

The Measures themselves, when proposed and introduced, are almost always wholly welcomed and then afterwards hon. Members put down Questions asking by how much the Civil Service has grown in the past 12 months and how much it is estimated to grow in the next 12 months, without accepting that they themselves bear a share of responsibility in having voted for Measures which resulted in those increases.

Turning to local authorities, the proposal is of the same kind. Is it suggested that local authorities can bring about a 6 per cent. reduction in their staff? What hon. Member is prepared to get up and say he thinks that his own local authority can and should reduce its staff by 6 per cent.? If any hon. Member does so, my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government has said he will be very glad to go into the question and take it up with the local authority concerned.

The right hon. Gentleman who wishes to intervene knows of the great difficulty that his particular local authority is having which to a very large extent is due to the widespread changes introduced in the London Government Act by the party of hon. Members opposite.

Mr. Boyd-Carpenter

There is another local authority to which I would refer, the Greater London Council. Will the hon. and learned Gentleman deal with the suggestion I pressed upon him, that the Government should take steps to halt the expansion in that authority's services, particularly in respect of the very large information service which is now proposed?

Mr. MacDermot

That, again, is an authority which was set up as a result of legislation by the party of the right hon. Gentleman. I do not know the details of the particular case to which the right hon. Gentleman had referred. I would only point out that the Greater London Council is, I imagine, the largest local authority in the world, responsible for the administration for a population which is substantially greater than that of a very large number of sovereign States in the world; and if one looks at that authority's information services in that relativity, I wonder whether it is quite as extravagant and disproportionate as the right hon. Gentleman suggests. But no doubt the point which he has taken up with my right hon. Friend the Minister of Housing and Local Government will be looked into.

Mr. Boyd-Carpenter

Will the hon. and learned Gentleman bear in mind that it is proposed to quadruple the expenditure by this authority on information, at a moment when he is urging economy on all local authorities? Will he give an undertaking not that the Ministry of Housing and Local Government will do anything, but that the Treasury will concern itself with this matter?

Mr. MacDermot

I am certain my right hon. Friend the Chief Secretary, who is responsible on this side within the Treasury, has heard the remarks of the right hon. Gentleman and will give them the attention I am sure they deserve; but I am not myself in a position, as he will appreciate, to answer the particular point that he has raised.

Mr. Fortescue

I, too, would like to accept the challenge of the hon. and learned Gentleman in respect of my own local authority, the City of Liverpool, with particular reference to its recent insistence on the use of direct labour for public works. This is a function which has greatly increased the staff of that local authority and one which, in my view, is not a proper function for local authority. It seems to me to be an ideal example of the kind of thing the hon. and learned Gentleman is talking about.

Mr. MacDermot

I do not know whether the hon. Gentleman is assuming that as a result of direct labour there will be a greater wastage of manpower, which is the point which we are discussing; but that is not a proposition I would accept. An hon. Gentleman wanted my right hon. Friend the Home Secretary to divest himself of responsibility for public houses in Carlisle. I do not know whether he wanted public houses closed or not, but presumably they have to be managed and I do not see what manpower saving would result.

Mr. Boyd-Carpenter

I must respond to the hon. and learned Gentleman's challenge. If he will investigate he will see how heavy is the manning of these nationalised public houses and the administrative structure in the Home Office to deal with that.

Mr. MacDermot

That is something which has happened since the right hon. Gentleman himself was Chief Secretary to the Treasury?

6.45 p.m.

Mr. Fortescue

I understood the hon. and learned Gentleman to say that he challenged any Member on this side to name a local authority which he would like to have investigated.

Mr. MacDermot

I passed on the invitation from my hon. Friend the Parliamentary Secretary for the Ministry of Housing and Local Government to any hon. Member who wishes to do so to take up such matters with him in detail, when he will gladly go into them with the hon. Member concerned.

Finally, may I try to put the particular point about which I was asked, which is made in Amendment Nos. 114 and 115, with which a number of other hon. Gentlemen have dealt—the question of how repayment is to take place with the local authority and why the provisions of Clause 4(2) are in this form.

The hon. Member for the City of Chester (Mr. Temple) is not quite right in saying a working party is sitting to devise the principle of how local authorities will pay and be reimbursed and whether or not this should be a paper transaction. The Minister of Housing and Local Government has held meetings with the local authority associations to tell them of the suggested arrangements for reimbursing the tax and at one meeting one treasurer proposed that it should be a paper transaction. But he was told that that was not possible, that it was a tax which had to be paid on a stamp. He was told that proposals were being put forward for reimbursement.

These are that local authorities will provide the Ministry of Housing and Local Government with estimates of their annual tax payments and they will then be reimbursed in equal monthly instalments, commencing in mid-October of 1966. The total sum reimbursed will be adjusted afterwards when the actual tax payments are available, after the 12 months. In other words, I answer the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) by saying, yes, there will be reimbursement of the actual amounts but they will not be taking place month by month. This is the proposal.

I should say that it is intended to hold one more meeting with the local authority associations, to deal with any queries or suggestions for simplifying this arrangement, but that is the broad nature of the proposal. It was to try to work out such a scheme which would be administratively simpler and achieve the same object in the end by reducing the number of staff and personnel, something which we are all urging, that we chose the method proposed in Clause 4(2), allowing flexibility for the system.

Of course, there is no question of making any hidden premium payment or anything of that kind. At the end of the day the local authority will be paid the amount to which it is entitled; but with this flexibility we can achieve greater administrative economy than it would be right to try to do in the case of repayments to individual employers. The particular case of dentists, taken by the hon. Gentleman, is a separate and different one.

Sir John Hobson (Warwick and Leamington)

Does the hon. and learned Gentleman intend to move Amendment No. 73 when it is called under the Guillotine?

Mr. MacDermot

No, we do not propose to move any Amendments. They are not necessary, because under the existing wording we would not be entitled to pay more than the amounts which have been paid. But we do not want to tie ourselves, because under this system we might pay more in a particular month, which would be illegal, and we would be forced back on a highly complex system of repayments.

Continuing on the question of the dentists, the fees take account of the global amount of the S.E.T. liability. The dentists would then not receive direct reimbursement, but be paid on an item of service basis. It should be a consequence of this that those employing more than the average number of ancillaries would presumably be doing more work and in consequence earning more fees. Thus, their higher state of liability would be indirectly offset by the fee system.

This is an example of the case which is administratively far simpler than trying to make individual repayment to every dentist precisely of the amount which he has paid. It follows the principle overall that the remuneration of dentists should cover their expenses and it is intended to, and, I think, will in practice, work out fairly in individual cases. That is why this system has been adopted.

Mr. Ridley

I am grateful for that explanation, which has cleared up some misapprehension, but will the hon. and learned Gentleman undertake to review the working of this arrangement after a certain period because of the misapprehension, in case it is not working properly? I am not sure that it is a clever way to do it.

Mr. MacDermot

I certainly give that undertaking. If, in operation, the dentists feel that it is not working fairly, we will gladly reconsider it.

The Amendments which you selected, Mr. Speaker, cover a rather wider ground, but I have confined myself to the subjects raised in the debate, which were primarily the Civil Service and the local authorities.

Sir J. Hobson

I want, first, to deal with local authorities. By not accepting Amendment No. 73, the Financial Secretary has left open the power for any succeeding Government, or any change of Administration if it remains Socialist, to pay a premium. It is no answer to say that payments on account are to be made, for in making the final payments the Government could easily exceed the amount by temporary payments and that would certainly not be an infringement of the arrangement by which Parliament has laid down that this device is not to be used for paying premiums to local authorities. I cannot understand why the Government are not prepared to accept Amendment No. 73.

The other notable feature of the local authority problem is that this is the first time that the House has been told during the whole passage of the Bill, or that any public information has been given, about the arrangements for local authorities. We now discover that whereas everybody else at this time of financial pressure and crisis is to wait five months to get his money back, local authorities are to be in the special position of getting it back after one month. This distinction is very surprising.

On the general issue of the number of civil servants employed, the Labour benches have been almost entirely devoid of Government supporters showing the slightest interest in this topic. The only speech from that side of the House was from the hon. Member for Sheffield, Attercliffe (Mr. John Hynd), who sniped at the Opposition for raising the topic at all. He was given the lie direct, both by the Financial Secretary, who said that this was a subject of very considerable public importance, and by the nature of the Financial Secretary's speech, which clearly recognised what an important topic this was.

While the hon. and learned Gentleman dealt with the topic with his usual charm and grace and, no doubt truthfully, said that his heart had been warmed, it did not seem to us that his mind or activity had been stimulated one iota into doing anything at this critical time when everybody else in the country is being expected to make sacrifices. His whole attitude was that while this was a very difficult problem, everything could go on as usual and that he would keep on trying, as we know he does, but that in the end it came back to Government policies which were what cost the money and the manpower.

That is exactly what we all know. That is exactly what we are complaining about. Over the 21 months which the Labour Party has been in office, there have been 14,900 extra employees at an annual extra cost of £10 million, and we think that something should be done about it. We listened to the additions which the hon. and learned Gentleman enumerated, but we noticed the total lack of any sense of urgency that something should be done to cut down this manpower, for the Government themselves to recognise that there is a crisis and to put pressure to reduce

the use of manpower. We find the hon. and learned Gentleman's answer unacceptable and I must advise my right hon. and hon. Friends to divide the House.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 185, Noes 260.

Division No. 157.]	AYES	[6.55 p.m.
Alison, Michael (Barkston Ash)	Grimond, Rt. Hn. J	Noble, Rt. Hn. Michael
Allason, James (Hemel Hempstead)	Gurden, Harold	Nott, John
Awdry, Daniel	Hall, John (Wycombe)	Onslow, Cranley
Baker, W. H. K.	Hall-Davis, A. G. F.	Orr, Capt. L. P. S.
Balniel, Lord	Hamilton, Michael (Salisbury)	Orr-Ewing, Sir Ian
Batsford, Brian	Harrison, Col. Sir Harwood (Eye)	Osborn, John (Hallam)
Beamish, Col. Sir Tufton	Harvey, Sir Arthur Vere	Osborne, Sir Cyril (Louth)
Bennett, Sir Frederic (Torquay)	Heald, Rt. Hn. Sir Lionel	Page, John (Harrow, W.)
Bessell, Peter	Heseltine, Michael	Pearson, Sir Frank (Clitheroe)
Biffen, John	Higgins, Terence L.	Peel, John
Birch, Rt. Hn. Nigel	Hiley, Joseph	Percival, Ian
Black, Sir Cyril	Hill, J. E. B.	Pike, Miss Mervyn
Body, Richard	Hobson, Rt. Hn. Sir John	Pink, R. Bonner
Bossom, Sir Clive	Holland, Philip	Pounder, Rafton
Boyd-Carpenter, Rt. Hn. John	Hordern, Peter	Powell, Rt. Hn. J. Enoch
Boyle, Rt. Hn. Sir Edward	Hornby, Richard	Price, David (Eastleigh)
Braine, Bernard	Howell, David (Guildford)	Prior, J. M. L.
Brinton, Sir Tatton	Hunt, John	Pym, Francis
Brown, Sir Edward (Bath)	Hutchison, Michael Clark	Quennell, Miss J. M.
Bruce-Gardyne, J,	Irvine, Bryant Godman (Rye)	Rawlinson, Rt. Hon. Sir Peter
Buchanan-Smith, Alick (Angus, N&M)	Jenkin, Patrick (Woodford)	Renton, Rt. Hn. Sir David
Buck, Antony (Colchester)	Jennings, J. C. (Burton)	Ridley, Hn. Nicholas
Bullus, Sir Eric	Johnston, Russell (Inverness)	Rossi, Hugh (Hornsey)
Campbell, Gordon	Jones, Arthur (Northants, S.)	Russell, Sir Ronald
Carlisle, Mark	Jopling, Michael	St. John-Stevas, Norman
Carr, Rt. Hn. Robert	Joseph, Rt. Hn. Sir Keith	Scott, Nicholas
Cary, Sir Robert	Kaberry, Sir Donald	Sharples, Richard
Clark, Henry	Kershaw, Anthony	Shaw, Michael (Sc'b'gh & Whitby)
Clegg, Walter	Kimball, Marcus	Sinclair, Sir George
Cooper-Key, Sir Neill	King, Evelyn (Dorset, S.)	Stainton, Keith
Cordle, John	Kirk, Peter	Steel, David (Roxburgh)
Corfield, F. V.	Knight, Mrs. Jill	Stodart, Anthony
Costain, A. P.	Lambton, Viscount	Stoddart-Scott, Col. Sir M. (Ripon)
Craddock, Sir Beresford (Spelthorne)	Lancaster, Col. C. G.	Summers, Sir Spencer
Cunningham, Sir Knox	Langford-Holt, Sir John	Talbot, John E.
Currie, G. B. H.	Lewis, Kenneth (Rutland)	Tapsell, Peter
Davidson, James (Aberdeenshire, W.)	Lloyd, Rt. Hn. Selwyn (Wirral)	Taylor, Edward M.(G'gow, Cathcart)
d'Avigdor-Goldsmid, Sir Henry	Longden, Gilbert	Teeling, Sir William
Dean, Paul (Somerset, N.)	Loveys, W. H.	Temple, John M.
Deedes, Rt. Hn. W. F. (Ashford)	Lubbock, Eric	Thatcher, Mrs. Margaret
Dodds-Parker, Douglas	McAdden, Sir Stephen	Thorpe, Jeremy
Doughty, Charles	Mac Arthur, Ian	Turton, Rt. Hn. R. H.
Eden, Sir John	Macleod, Rt. Hn. Iain	van Straubenzee, W. R.
Elliott, R. W.(N'c'tle-upon-Tyne, N.)	McMaster, Stanley	Vaughan-Morgan, Rt. Hn. Sir John
Evans, Gwynfor (C'marthen)	Macmillan, Maurice (Farnham)	Vickers, Dame Joan
Eyre, Reginald	Maddan, Martin	Wainwright, Richard (Colne Valley)
Farr, John	Maginnis, John E.	Walker, Peter (Worcester)
Fisher, Nigel	Marten, Neil	Ward, Dame Irene
Fletcher-Cooke, Charles	Maude, Angus	Weatherill, Bernard
Fortescue, Tim	Maudling, Rt. Hn. Reginald	Webster, David
Foster, Sir John	Mawby, Ray	Wells, John (Maidstone)
Fraser, Rt. Hn. Hugh (St'fford & Stone)	Maxwell-Hyslop, R. J.	Whitelaw, William
Gibson-Watt, David	Maydon, Lt.-Cmdr. S. L. C.	Wills, Sir Gerald (Bridgwater)
Giles, Rear-Adm. Morgan	Mills, Peter (Torrington)	Wilson, Geoffrey (Truro)
Gilmour, Sir John (Fife, E.)	Miscampbell, Norman	Winstanley, Dr. M. P.
Glover, Sir Douglas	Mitchell, David (Basingstoke)	Wolrige-Gordon, Patrick
Godber, Rt. Hn. J. B.	Monro, Hector	Wood, Rt. Hn. Richard
Goodhart, Philip	Morrison, Charles (Devizes)	Wylie, N. R.
Goodhew, Victor	Mott-Radclyffe, Sir Charles	Younger, Hn. George
Gower, Raymond	Munro-Lucas-Tooth, Sir Hugh
Grant, Anthony	Murton, Oscar	TELLERS FOR THE AYES:
Gresham Cooke, R.	Nabarro, Sir Gerald	Mr. More and Mr. Blaker.
Griffiths, Eldon (Bury St. Edmunds)	Neave, Airey
NOES
Abse, Leo	Foley, Maurice	Mason, Roy
Albu, Austen	Foot, Michael (Ebbw Vale)	Mayhew, Christopher
Alldritt, Walter	Ford, Ben	Meltish, Robert
Allen, Scholefield	Forrester, John	Millan, Bruce
Anderson, Donald	Fowler, Gerry	Miller, Dr. M. S.
Archer, Peter	Fraser, John (Norwood)	Mitchell, R. C. (S'th'pton, Test)
Armstrong, Ernest	Fraser, Rt. Hn. Tom (Hamilton)	Molloy, William
Ashley, Jack	Freeson, Reginald	Morgan, Elystan (Cardiganshire)
Atkins, Ronald (Preston, N.)	Gardner, A. J.	Moyle, Roland
Atkinson, Norman (Tottenham)	Garrett, W. E.	Murray, Albert
Bacon, Rt. Hn. Alice	Garrow, Alex	Neal, Harold
Bagier, Cordon A. T.	Ginsburg, David	Newens, Stan
Barnes, Michael	Gourlay, Harry	Norwood, Christopher
Barnett, Joel	Gray, Dr. Hugh (Yarmouth)	Oakes, Gordon
Beaney, Alan	Greenwood, Rt. Hn. Anthony	Ogden, Eric
Bence, Cyril	Gregory, Arnold	O'Malley, Brian
Benn, Rt. Hn. Anthony Wedgwood	Grey, Charles (Durham)	Orbach, Maurice
Bennett, James (G'gow, Bridgeton)	Griffiths, David (Bother Valley)	Orme, Stanley
Bidwell, Sydney	Griffiths, Rt. Hn. James (Llanelly)	Oswald, Thomas
Binns, John	Gunter, Rt. Hn. R. J.	Page, Derek (King's Lynn)
Bishop, E. S.	Hamilton, James (Bothwell)	Paget, R. T.
Blackburn, F.	Hamilton, William (Fife, W.)	Pannell, Rt. Hn, Charles
Blenkinsop, Arthur	Hamling, William	Park, Trevor
Boardman, H.	Hannan, William	Parker, John (Dagenham)
Booth, Albert	Harrison, Walter (Wakefield)	Parkyn, Brian (Bedford)
Boston, Terence	Hart, Mrs. Judith	Pearson, Arthur (Pontypridd)
Bottomley, Rt. Hn. Arthur	Haseldine, Norman	Peart, Rt. Hn. Fred
Bowden, Rt. Hn. Herbert	Hattersley, Roy	Pentland, Norman
Boyden, James	Hazell, Bert	Perry, Ernest G. (Battersea, S.)
Braddock, Mrs. E. M.	Henig, Stanley	Perry, George H. (Nottingham, S.)
Bradley, Tom	Herbison, Rt. Hn. Margaret	Price, Christopher (Perry Barr)
Bray, Dr. Jeremy	Hooley, Frank	Price, Thomas (Westhoughton)
Brooks, Edwin	Horner, John	Price, William (Rugby)
Broughton, Dr. A. D. D.	Houghton, Rt. Hn. Douglas	Probert, Arthur
Brown, Rt. Hn. George (Belper)	Howarth, Harry (Wellingborough)	Pursey, Cmdr. Harry
Brown, Hugh D. (G'gow, Provan)	Howarth, Robert (Bolton, E.)	Rankin, John
Brown, Bob (N'c'tle-upon-Tyne, W)	Howie, W.	Redhead, Edward
Brown, R. W. (Shoreditch & F'bury)	Hughes, Emrys (Ayrshire, S.)	Rhodes, Geoffrey
Buchan, Norman	Hughes, Hector (Aberdeen, N.)	Richard, Ivor
Butler, Herbert (Hackney, C.)	Hughes, Roy (Newport)	Roberts, Albert (Normanton)
Butler, Mrs. Joyce (Wood Green)	Hunter, Adam	Roberts, Gwilym (Bedfordshire, S.)
Cant, R. B.	Hynd, John	Robinson, Rt. Hn. Kenneth (St. P'c'as)
Carmichael, Neil	Jackson, Peter M. (High Peak)	Roebuck, Roy
Castle, Rt. Hn. Barbara	Janner, Sir Barnett	Rose, Paul
Coe, Denis	Jay, Rt. Hn. Douglas	Ross, Rt. Hn. William
Coleman, Donald	Jeger, George (Goole)	Rowland, Christopher (Meriden)
Concannon, J. D.	Jenkins, Hugh (Putney)	Rowlands, E. (Cardiff, N.)
Conlan, Bernard	Jenkins, Rt. Hn. Roy (Stechford)	Ryan, John
Corbet, Mrs. Freda	Johnson, Carol (Lewisham, S.)	Sheldon, Robert
Cousins, Rt. Hn. Frank	Jones, Dan (Burnley)	Shinwell, Rt. Hn. E.
Craddock, George (Bradford, S.)	Jones, J. Idwal (Wrexham)	Shore, Peter (Stepney)
Crawshaw, Richard	Judd, Frank	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Crossman, Rt. Hn. Richard	Kenyan, Clifford	Short, Mrs. Renée (W'hampton, N. E.)
Cullen, Mrs. Alice	Kerr, Russell (Feltham)	Silkin, John (Deptford)
Davidson, Arthur (Accrington)	Lawson, George	Silkin, S. C. (Dulwich)
Davies, Dr. Ernest (Stretford)	Leadbitter, Ted	Silverman, Julius (Aston)
Davies, G. Elfed (Rhondda, E.)	Ledger, Ron	Silverman, Sydney (Nelson)
Davies, Ednyfed Hudson (Conway)	Lee, John (Reading)	Skeffington, Arthur
Davies, Harold (Leek)	Lestor, Miss Joan	Slater, Joseph
Davies, Ifor (Gower)	Lever, L. M. (Ardwick)	Small, William
Davies, Robert (Cambridge)	Lewis, Ron (Carlisle)	Snow, Julian
Dell, Edmund	Lomas, Kenneth	Spriggs, Leslie
Dewar, Donald	Loughlin, Charles	Steele, Thomas (Dunbartonshire, W.)
Diamond, Rt. Hn. John	Luard, Evan	Stewart, Rt. Hn. Michael
Dickens, James	Lyon, Alexander W. (York)	Stonehouse, John
Dobson, Ray	Lyons, Edward (Bradford, E.)	Summerskill, Hn. Dr. Shirley
Doig, Peter	McBride, Neil	Swain, Thomas
Driberg, Tom	MacCoil, James	Symonds, J. B.
Dunn, James A.	MacDermot, Niall	Taverne, Dick
Dunnett, Jack	Macdonald, A. H.	Thomas, Iorwerth (Rhondda, W.)
Dunwoody, Mrs. Gwyneth (Exeter)	McGuire, Michael	Thornton, Ernest
Eadie, Alex	McKay, Mrs. Margaret	Tinn, James
Edwards, William (Merioneth)	Mackenzie, Gregor (Rutherglen)	Varley, Eric G.
Ellis, John	Mackie, John	Wainwright, Edwin (Dearne Valley)
English, Michael	Maclerman, Robert	Wallace, George
Ensor, David	McMillan, Tom (Glasgow, C.)	Watkins, David (Consett)
Evans, Albert (Islington, S. W.)	McNamara, J. Kevin	Weitzman, David
Evans, loan L. (Birm'h'm, Yardley)	MacPherson, Malcolm	Whitaker, Ben
Faulds, Andrew	Mahon, Peter (Preston, S.)	White, Mrs. Eirene
Fernyhough, E.	Manuel, Archie	Whitlock, William
Finch, Harold	Mapp, Charles	Wigg, Rt. Hn. George
Fitch, Alan (Wigan)	Marquand, David	Willey, Rt. Hn. Frederick
Floud, Bernard	Marsh, Rt. Hn. Richard	Williams, Alan (Swansea, W.)

Williams, Alan Lee (Hornchurch)	Wilson, William (Coventry, S.)	Yates, Victor
Williams, Clifford (Abertillery)	Winnick, David
Williams, Mrs. Shirley (Hitchin)	Winterbottom, R. E.	TELLERS FOR THE NOES:
Williams, W. T. (Warrington)	Woof, Robert	Mr. Charles R. Morris and
Willis, George (Edinburgh, E.)	Wyatt, Woodrow	Mr. Harper.