Commons Sitting of 29 November 1967

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

    Protein Supply
    Dr. David Kerrasked the Minister of Agriculture, Fisheries and Food what support he is giving to research into alternative sources of protein supply for animal and human consumption, respectively.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): Research into this subject is being carried on under the auspices of the Agricultural Research Council. My right hon. Friend has asked the Food Research Advisory Committee to consider whether further Government support for this kind of research is required.
    Dr. Kerr: I thank my hon. Friend for that helpful reply. However, would he not agree that one of the most grave shortages of any foodstuff in the world is that of protein food? May we have an assurance that research being conducted in this country has in mind the needs of overseas countries whose protein shortage is even more serious than ours is likely to be?
    Mr. Hoy: I give my hon. Friend and the House that assurance. A considerable amount of research is being done, not only by the Government, but under the auspices of private industry. We all have in mind the needs of overseas countries as well as our own.

    Bacon
    Mr. Buchanan-Smithasked the Minister of Agriculture, Fisheries and Food whether he is satisfied that home
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    production of bacon is fulfilling its allocation of the Bacon Sharing Agreement; and if he will make a statement.
    The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): Although home production of bacon is likely to fall short of our minimum allocation in 1967–68, it has shown a considerable increase in the last six months. Production in the July-September quarter was over 15 per cent. higher than in January-March.
    Mr. Buchanan-Smith: Bearing in mind that last year bacon imports cost this country £123 million—64 per cent. of our consumption—would not the right hon. Gentleman agree that the time has come to renegotiate the Bacon Sharing Agreement and to give more encouragement to home producers?
    Mr. Peart: As the hon. Gentleman knows, the Bacon Sharing Agreement has been in existence for a long time, even before I was Minister. It is reviewed every year. I note what the hon. Gentleman says. I am looking at this matter carefully. I am glad to say that the latest figures show that the breeding herd in Great Britain at September, 1967, was 3 per cent. up.

    Agricultural Production (Expansion)
    Mr. Buchanan-Smithasked the Minister of Agriculture, Fisheries and Food if he will initiate an inquiry into how the balance of payments position of this country could be strengthened by an expansion in British agriculture.
    Mr. Peart: My right hon. Friend the Chancellor of the Exchequer has already said that we are reviewing the implications for agriculture of the new situation created by devaluation.
    Mr. Buchanan-Smith: Is the right hon. Gentleman aware that as long as he delays introducing measures and incentives to expand home production he is stifling one of the industries which can contribute most to this country's economic recovery?
    Mr. Peart: I am not attempting to stifle the industry. I have already made a public pronouncement about the effects of devaluation and I have paid tribute to the agriculture industry. In addition, I

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    have always defended the selective expansion programme and the rôle which home agriculture can play. In view of devaluation, I am looking at this matter carefully and having it re-examined.
    Mr. Mackintosh: When my right hon. Friend has completed his re-examination, will he either bring the Price Review forward or make an announcement so that farmers may alter their plans for the coming year to fulfil what the Chancellor of the Exchequer requires in the way of expansion?
    Mr. Peart: As my hon. Friend knows, I am examining this matter, and if I have to make an announcement I will do so. I recognise that there are certain commodities which need to be considered. There is no attempt at delay.
    Mr. Godber: We are all glad that the Minister is reviewing the matter, but would he agree that there is urgency about it because farmers' costs have increased and every hon. Member wants to see a real expansion in production and to give all the assistance we can to achieve it? Would the right hon. Gentleman make a statement as soon as possible?
    Mr. Peart: Certainly. I am glad that all hon. Members will assist me when I make a statement and will help to carry out the policy. I am most grateful.
    Mr. Tudor Watkins: Will my right hon. Friend give serious consideration to the imports of mutton and lamb and try to bring about expansion, particularly as there is so much concern about this matter in view of the Common Market negotiations?
    Mr. Peart: I have said that I am looking at this matter, and I will make a statement as soon as possible. I cannot go further than that. I note what my hon. Friend says.
    Mr. Turton: Surely there is a special procedure laid down for occasions such as this—a special agricultural Price Review? Will not the Minister invoke this procedure instead of waiting for March when, by dillying and dallying, he will have lost a great opportunity for agriculture?
    Mr. Peart: The right hon. Gentleman knows full well that there are certain
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    things which I can do, but I want to look at this matter carefully. There is no reason why we should panic. Immediately devaluation was announced, I set in motion a careful examination which my officials are now carrying out. As soon as I decide the priorities, I will inform the House.
    Sir Frank Pearson: Does the right hon. Gentleman recollect that, as far back as the much vaunted National Plan, the proposal was that agricultural production should increase substantially? This has not happened. Will he now accept that very urgent measures are necessary in the light of the present situation and see that this does happen?
    Mr. Peart: I am anxious that the industry should make its maximum contribution. This has been stressed by the Chancellor of the Exchequer, the Prime Minister and myself. I believe it can do so and I hope there will be no pessimism from any source.
    Mr. Henry Clark: Will the Minister search for different ways of making promises of expanded agriculture more credible to the industry than previous promises seem to have been?
    Mr. Peart: It is unfair of the hon. Member to say that. I have had discussions and am in close touch with the National Farmers' Union, which represents the industry. We work well together. I know the Union's views and I always take note of what its members say in relation to the expansion programme. Although we did not lay down specific commodity targets, the broad policy was accepted by the industry.

    Beef (Deficiency Payments)
    Mr. Hawkinsasked the Minister of Agriculture, Fisheries and Food what estimate he has made of the deficiency payments for beef during the current financial year.
    Mr. Maxwell-Hyslopasked the Minister of Agriculture, Fisheries and Food what are his latest estimates of price support payments in 1967–68.
    Mr. Peart: The Winter Supplementary Estimates which will be published in the next few days will include some £18 million on account of the possible increase in the cost of price support in

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    the United Kingdom, of which £13½ million is for fat cattle. In accordance with normal practice this is about three quarters of the increase we think may be needed and is attributable in large part to changes made at the Annual Review.
    Mr. Hawkins: Does the Minister not realise that these high payments, even though they may be reduced temporarily because of the shortage of cattle through foot-and-mouth disease, will produce a demand for cuts in subsidies from townspeople? Will he at once start levies on imports, beginning with Argentine beef?
    Mr. Peart: I am rather surprised at the hon. Member suggesting that I should adopt immediately a levy system because that would mean the end of the subsidy system as we know it. [HON. MEMBERS: "Hear, hear."] His hon. Friends take up the cry, "Cut the farmers' subsidies." This system is imperative to the guarantee. We emphasised that at the last Price Review and I believe we were right to do it.
    Mr. Maxwell-Hyslop: Why did the Minister begin reconsideration only after devaluation? Was he deceived by the Prime Minister's assurances that there would not be devaluation? Why did he not make contingency plans against devaluation and bring in an immediate Review after them instead of waiting until after it had happened?
    Mr. Peart: The hon. Member is out of touch with reality. When a decision was made I accepted collective responsibility and started my plans. Hon. Members must know full well that I could not inform many people about a major decision before embarking on this. I hope that the hon. Member will be realistic.
    Mr. Prior: Why is the Minister pouring such scorn on a levy system? Does he not realise that devaluation is tantamount to a 15 per cent. levy on all imports, except that we do not get the benefit from it?
    Mr. Peart: When the hon. Member says that I am pouring scorn on the system he should know that our system is working very well. Our agricultural support system, which we have built up on the 1947 and the 1957 Acts, is the
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    admiration of many countries in Europe. I do not want easily to destroy it for some false Conservative approach.

    Barley
    Mr. Hawkinsasked the Minister of Agriculture, Fisheries and Food what effect the rise in barley production in France is having on exports of barley from this country and on prices in the market here.
    Mr. Hoy: As a result of higher production of barley on the Continent, including France, it had been expected that exports from the United Kingdom would be lower this season than last. It is not possible to isolate the effect of this on the home market price, nor to assess at present the effect of sterling devaluation on United Kingdom barley exports.
    Mr. Hawkins: Does the Minister not believe that this rise in production of barley abroad, coupled with low consumption at home because of foot-and-mouth disease, is due to lower profitability of livestock? Does he not think it will mean a sharp decrease in profits for the barley farmer? What is he going to do about it?
    Mr. Hoy: The hon. Member should not be so pessimistic. We do not underestimate the fall in the number of cattle as a result of this most unfortunate outbreak, but I do not think we should use that for this purpose. After all, the guarantee is there and I am certain that those who grow barley are appreciative of it.

    Farm Costs
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food if he will take immediate steps to relieve the pressure of increased costs on farmers' incomes.
    Mr. Monroasked the Minister of Agriculture, Fisheries and Food if he will estimate the rise in costs to agriculture in Great Britain since the 1967 Price Review, on the basis of a full year's figures.
    Mr. Turtonasked the Minister of Agriculture, Fisheries and Food whether he will now hold a special agricultural Price Review in order to secure a saving of £200 million this year on our balance

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    of payments account, and in order to compensate producers for their increased cost of production resulting from devaluation of the £ sterling.
    Mr. Peart: I cannot yet say what the total rise in costs will be in a full year. In particular, it is too early to assess what additional costs may arise from devaluation. In present circumstances, I do not consider a special Review would be justified, but the Government are considering the implications for agriculture of the new situation.
    Mr. Mills: Will the Minister bear in mind that costs to farmers are increasing from every angle and that many of these costs are the direct result of this Government's measures? Will he not have a special Price Review, bring forward the Review so that these costs can be recouped immediately?
    Mr. Peart: I accept that costs have risen. I give one example, wage costs. This will have a major effect. These are matters which we shall have to consider in the Review. It is not yet possible to estimate any increases caused by devaluation.
    Mr. Monro: Will the Minister accept that the figure of rising costs is already at least £30 million this year? When considering the Price Review, can he not anticipate rises in wages so that farmers are not always a year behind?
    Mr. Peart: I will not commit myself to a figure. This is something we must discuss with the industry and it would be wrong to try to be precise. Anyone could make a guess and be right or not right, but I do not think it would be right for me to make a guess.
    Mr. Turton: If the Minister will not hold a special Review, is there not a danger that we shall not get the saving of £200 million on our balance of payments which is absolutely essential to this country? Will he not therefore initiate a policy of cutting down unnecessary food imports, starting with eggs and beef?
    Mr. Peart: I have said that we are looking at this whole question which arises from devaluation. We do not need a special Review for this. There are some commodities on which we can take
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    action without having any Review procedure. We are having discussions, but I am not going to be pushed into taking a panic measure.
    Mr. W. Baxter: Would it not be helpful if the Opposition would make clear whether they are in support of import control or of bringing forward the Price Review?—[HON. MEMBERS: "Both."]—I imagine that my right hon. Friend is entitled to know their views.
    Mr. Peart: My hon. Friend is quite right. We are not certain what the policy of the Opposition is. I am not certain whether they want import control, import substitution, or the direct agreements—which they signed, not I.
    Mr. Maclennan: Will my right hon. Friend enter discussions with the Chancellor of the Exchequer with a view to raising the ceiling on credit for farmers, particularly in Scotland, and easing the general situation of farmers' borrowing? This is something which must be undertaken for the Price Review whenever it is held.
    Mr. Peart: I will take note of what my hon. Friend has said, and I am sure the Secretary of State for Scotland will take note of his question and bear it in mind. This is a matter for discussion with the unions.
    Mr. Stodart: Is the Minister aware that, unhappily, he is sounding more casual than usual about this matter and that continually "giving consideration" is not enough in an urgent situation such as this? There has been a substantial and sudden change in costs. Will he start the Review machinery earlier?
    Mr. Peart: I have told the hon. Gentleman and his hon. Friends, including the right hon. Gentleman who leads the Scottish Opposition, that I have acted already. Immediately devaluation was announced I got my own Ministry officials working on this, and we are having a precise examination of where we can best assist the industry in relation to specific commodities. I believe that that is the right course. I do not accept the view that we need the Review to be put forward or a special Review. I am certain that this is the view of sensible people in the industry.
    Mr. Emrys Hughes: In view of the difficulties of the small tenant farmer, will the Minister consider getting in touch with the leaders of the Opposition to see if we can get agreed legislation to provide for a moratorium on rents?
    Mr. Peart: I think not.

    Milk
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food if he has completed the details of the pool price dilution formula for milk; and if he will now announce it.
    Mr. Hoy: The Government have agreed with the Farmers' Unions the factors to be taken into account in the implementation of the milk price assurance given at the 1966 Review. This year's figures will be published in the 1968 An Dual Review White Paper.
    Mr. Mills: Yes, but does not the Minister realise that the farmers are very anxious to know exactly how this plan is going to work? Does the Minister realise, too, that if he wants calves he has got to have cows, and if he is to have cows he has got to have milk—[An HON. MEMBER: "And a bull."]—and if he is to have milk he has got to have money for it?
    Mr. Hoy: I must say that I left the bull to the hon. Gentleman who has not made a bad job of it. Of course farmers know what conditions there are. They have been worked out by the N.F.U. and the Government. There is an agreement, and indeed, the provisional estimate of the United Kingdom average producer price in 1967–68 is rather more than ¾d. more than last year. The indications are that the farmers' incomes are rising, and I am delighted to see it. We are disappointed with calf retentions. We have said this, and we hope they will improve, but on the whole it is not a bad story.
    Mr. Grant-Ferris: Would it not be a good thing if the hon. Gentleman were to impress upon his right hon. Friend that he ought to revise his plans altogether in view of the chronic stock shortage, which has become obvious and is likely to become more so before we have done with this scourge?
    Mr. Hoy: I take that into consideration, but the figures do not bear out
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    what the hon. Gentleman has just said. The figures are up considerably compared with 1964. Talking off the record, I think it is about 230,000 up—off the cuff, I should have said, but I think that hon. Gentleman will know that I mean. I do not have the figure with me, but I think that it is 230,000 up compared with 1964.
    Mr. Peart: A sluggish Opposition.
    Mr. Bryant Godman Irvineasked the Minister of Agriculture, Fisheries and Food what further action he proposes to take in order to prevent the dilution of the producer price of milk by imports of dumped and subsidised milk products.
    Mr. Hoy: Producers' returns are maintained at their proper level through the mechanism of the guarantee, which is reviewed annually, in the light of all the relevant factors. This long-standing arrangement has stood the test of time. Any application for the imposition of anti-dumping duties should be made to the Board of Trade.
    Mr. Irvine: As the Minister has recently made arrangements for dealing with some of these imports, should not these arrangements be widely extended?
    Mr. Hoy: We certainly took action in one specific instance, and I am grateful for the hon. Gentleman's thanks.
    Sir Frank Pearsonasked the Minister of Agriculture, Fisheries and Food what is his present estimate of the average producer price for milk during the year 1967–68.
    Mr. Hoy: It is estimated that the United Kingdom average net producer price for milk in 1967–68 will be about 3s. 3½d. a gallon.
    Sir F. Pearson: Would the Minister agree that the low price attracted by manufactured milk is the bugbear of the milk price structure? In view of the need to expand production over all spheres, will the Minister consider having a new look at the whole principle of the standard price?
    Mr. Hoy: Quite obviously the amount that goes to manufacture has its effect, but about 90 per cent. of our total milk production is covered by the guaranteed price, and I repeat that the price this

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    year will be about ¾d. more than last year, because since June our forecast of milk production has gone up by a further 60 million gallons.

    Fatstock Producers (Abatements)
    Mr. Maxwell-Hyslopasked the Minister of Agriculture, Fisheries and Food what steps he proposes to take to relieve the abatement suffered by fatstock producers prior to his announcement in July.
    Mr. Peart: In disbursing the expected final payment after the end of the fatstock year 1967–68 we propose to give priority to producers who suffered heavy abatements in the three weeks before my announcement in July, so as to put them on an equal footing with those who sold immediately afterwards when the abatement was limited to 6s.
    Mr. Maxwell-Hyslop: But would not the right hon. Gentleman agree that in the economic conditions of today it is lunacy to fine farmers for over-production when what we need is more domestic production?
    Mr. Peart: I hope that the hon. Gentleman will realise the history of the scheme, and that it was introduced by my predecessor—
    Mr. Maxwell-Hyslop: In 1967?
    Mr. Peart: Not in 1967. The scheme was operative then. I took the action which I thought was right, and it was welcomed by the industry.

    Agriculture (Selective Expansion Programme)
    Sir G. Sinclairasked the Minister of Agriculture, Fisheries and Food if he will make a progress report on the selective expansion programme for agriculture.
    Mr. Peart: We do of course look at progress under the selective expansion programme at the Annual Review; but we are now looking at the programme in the light of devaluation to see what agriculture might contribute.
    Sir G. Sinclair: But does not the Minister realise that Britain's most efficient industry, the farming industry, is straining at the leash to expand? What is his pro-
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    gramme for implementing the promise of the Prime Minister of a programme of expansion?
    Mr. Peart: I can assure the hon. Gentleman that we are not stopping the industry from expanding. In fact I believe that the industry is a very dynamic industry. We have given it tremendous support. I said, and I repeat, that we are looking precisely at the effects of devaluation, and when I am in a position to make a statement I will do so. But there is no attempt to restrict the industry.
    Mr. Mackintosh: Would not my right hon. Friend agree that the farming industry appreciates the great opportunity it now has, and that there is no desperate need for an immediate announcement, but that mid-January would be the last date that an announcement should be made, and would my right hon. Friend accept that and say that it will come before then?
    Mr. Peart: I hope the hon. Member will not tie me to a date—[HON. MEMBERS "Oh."]—for making an announcement. It could come sooner. I will decide and nobody else.
    Hon. Members: Oh.
    Sir G. Nabarro: Gauleiter Peart.
    Mr. Stodart: Can the right hon. Gentleman explain why it is that since he launched his selective expansion programme the production index of the agricultural industry has fallen steadily by one point each year?
    Mr. Peart: No. I cannot accept that. In view of the reactions of hon. and right hon. Members opposite I would ask, surely it is right that the Minister should make the decision when to make the announcement?
    Sir G. Nabarro: May I speak—[HON. MEMBERS: "No. Withdraw."]—for the Worcestershire farmers? Is not the right hon. Gentleman aware that the reputation he is rapidly earning in Worcestershire is that of a person guilty of endless, windy, pious platitudes and no effective action to help our local farmers?
    Mr. Peart: I believe that that statement by the hon. Member represents his view, and his standing with the farming community is very slight.

    Calf Slaughterings
    Mr. Joplingasked the Minister of Agriculture, Fisheries and Food whether the increased level of calf slaughterings is in accordance with the selective expansion programme as outlined in the National Plan.
    Mr. Hoy: Many of the extra calves kept for rearing in 1964 and 1965, when slaughterings were almost halved, proved to be overcostly to fatten and made poor quality beef. A return this year to a more selective approach is not inconsistent with the declared objectives of the Plan.
    Mr. Jopling: In view of the high rate and cost of slaughtering this year would not a more honest answer to my Question have been "No"?
    Mr. Hoy: I do not understand the meaning of that supplementary question. I have already, in reply to an earlier Question, expressed my regret at the calf slaughtering. What is true is that the number of breeding cows is increasing in the dairy herd in England and Wales and in the bed herd in Scotland and Northern Ireland. I can now confirm the figure I gave off the cuff just now. In 1967 the herd was 230,000 more in the United Kingdom than it was in 1964.
    Mr. J. T. Price: Yes, but does not this increased slaughtering of calves suggest another aspect of the matter, that a lot of hon. Members in the House know that a great many calves are being produced under rather inhumane factory methods to provide delicacies for expensive hotels, and manufactured foods, and that many Members of this House have the strongest objection to those methods?
    Mr. Hoy: What I am interested in is that more calves are being retained. I think that this is the best way to make a contribution to our stock, and to the farming community.

    Statutory Bodies (Cost)
    Mr. Joplingasked the Minister of Agriculture, Fisheries and Food what has been the cost to farmers of statutory bodies established since October, 1964.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): The direct charges on farmers by river authorities have averaged about £200,000 a year. The net cost to farmers of the Home Crown Cereals Authority averaged £140,000. Figures for levies on farmers by statutory bodies for 1967–68 are not yet available.
    Mr. Jopling: Would the Minister care to tell us how much the Training Board is likely to take from the industry as well? Would he not agree that it has been the cause of the farmers' lack of confidence more than any other one thing, and, bearing this in mind, would he try to recoup the farmers for that?
    Mr. Mackie: As the hon. Gentleman knows very well, it is very difficult to evaluate all the value to the agricultural industry of these various bodies which have been brought in in the last two or three years. I think that the hon. Gentleman knows perfectly well, as a farmer, the chaos there was in the commodity markets, meat and cereals in particular, so that we had to do something to get order in the marketing of these commodities.

    Horticulture (Fuel Oil Surcharge)
    Mr. R. W. Elliottasked the Minister of Agriculture, Fisheries and Food what additional costs will fall on to horticulturists during the current financial year as a result of the surcharge on fuel oil.
    Mr. Alisonasked the Minister of Agriculture, Fisheries and Food what additional costs will be incurred by the agricultural industry during the current financial year as a result of the surcharge on fuel oil.
    Mr. John Mackie: It is estimated that in the financial year ending 31st March, 1968, the 2d. per gallon surcharge on fuel oil may increase agricultural and horticultural costs by about £2½ million of which about £0·4 million relates to oil used for glasshouse heating.
    Mr. Elliott: Will the hon. Gentleman make quite sure that the officials in his Department looking into the effects of

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    devaluation on the agriculture industry alone will take into account the extra burden which the hard-pressed horticultural industry will experience through devaluation?
    Mr. Mackie: Yes.
    Mr. Ridley: Since not even this Government would suggest burning coal in agricultural tractors, why can they not remove the fuel oil tax altogether from agriculture?
    Mr. Mackie: Agriculture has to bear its fair share of any increases like these which, because of the Middle East situation, are almost unavoidable. For agriculture, they are taken into account in the Price Review.
    Mr. Godber: In that last Answer, is the hon. Gentleman telling us that horticulture will be reimbursed in the next Price Review?
    Mr. Mackie: The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) asked me specifically about agriculture, and I replied about agriculture. If the right hon. Member for Grantham (Mr. Godber) is asking me about horticulture now, I am prepared to answer him. The right hon. Gentleman obviously did not listen to what his hon. Friend asked me. There is the Horticulture Improvement Scheme to help the horticulture industry, and it is taking tremendous advantage of it to the tune of about £5½ million a year.

    Fertilisers
    Mr. Henry Clarkasked the Minister of Agriculture, Fisheries and Food what will be the extra cost to the agricultural industry of fertilisers during the current financial year as a result of a reduced rate of subsidy and an increase in manufacturers' prices; and what effect on the use of fertilisers by farmers he estimates this will have.
    Mr. John Mackie: The 6 per cent. increase in fertiliser prices last March and the reduction in subsidy rates from 1st June are estimated to add about £7½ million to farmers' fertiliser costs in the current financial year. The temporary surcharge on nitrogen could add a further £1½ million if it continues to the end of the financial year. Demand for fertilisers remains buoyant and these additions in
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    farmers' prices are not expected to have any appreciable effect on their use in the rest of the year.
    Mr. Clark: Even accepting that the Minister's very optimistic reply is correct, how does he tie that in with his right hon. Friend's statement that the Government are not stopping the expansion of agriculture?
    Mr. Mackie: I do not quite follow that supplementary question. I do not think that my right hon. Friend said that, in any case. As I say, the demand for fertilisers is buoyant. I do not want to weary the House with figures, but the demand is rising every year, apart from 1965–66. This year, the estimate is to the tune of 1,638,000 nutrient tons.
    Mr. J. E. B. Hill: Does that figure include horticultural production? If it does, would the hon. Gentleman bear in mind that, if the added cost is not recouped under existing procedures, that is an additional reason for aiding horticulture?
    Mr. Mackie: My reply to the right hon. Member for Grantham (Mr. Godber) applies to this Question as well.

    Store Lambs
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food how prices of store lambs this autumn have compared with those a year ago.
    Mr. Hoy: The average prices of store lambs of both hill and other breeds were up to 8s. per head higher in September and October of this year than in the same months of 1966. Information on hill sheep sales in November is not yet complete, but the prices of lambs of other breeds have been running higher than last year by between 10s, and £1 per head.
    Mr. Stodart: Is the hon. Gentleman aware that this is welcome news but that, last year, the sheep industry went into a very deep trough? The prices which he has mentioned are still below those of three years ago, while costs have been soaring. Will he take steps to reimburse this sector of the industry which perhaps has been harder hit than any other?
    Mr. Hoy: I am grateful that the hon. Gentleman thinks my information is

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    welcome. However, even taking the year 1965 as a comparison, we are up to that level this year, which shows an even greater improvement. The hon. Gentleman also mentioned prices. He knows what was done in this year's annual Price Review to help this section of the industry, and we shall be looking at it again, together with other relevant factors, when the next Price Review takes place.
    Mr. Maclennan: Will my hon. Friend bear in mind that, while the average price may be up, in certain areas of Scotland the poorer quality lambs have not been so rewarded by higher prices? Will he consider what steps the Government can take to assist the fattening of lambs and substituting for the production of store lambs a rather more intensified form of fatstock production?
    Mr. Hoy: It is always the case, no matter what branch of industry one is in—agriculture or otherwise—that poorer qualities obviously fetch lower prices. I would remind my hon. Friend that the guaranteed price for fat sheep was increased by 1d. per lb., and that will have helped. If further assistance can be given, we will look at it.

    Republic of Ireland (Discussions)
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food if he will make a statement about the discussions which he has been having with the Minister of Agriculture in Eire.
    Mr. Peart: These discussions are still in progress and I cannot say anything about them at the moment.
    Mr. Stodart: Can the Minister say why these talks have had to be held at all, in view of the Prime Minister's assurance that the position of the British farmer would be in no way prejudiced by the Irish Trade Agreement—or is it that the right hon. Gentleman has found himself a victim of yet another misleading statement by his right hon. Friend?
    Mr. Peart: I am certain that the hon. Gentleman knows full well why I initiated talks. I was worried about the impact of Irish products on our market, and the lack of phasing. I felt that it was right that I should see also that the Irish Government did not put on an export subsidy, as they did last year. That is
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    why we have been having talks. I think that that is sensible.
    Sir Knox Cunningham: Because of the present economic situation, has the right hon. Gentleman made any suggestion for a reduction in the £10 million which is annually borne by the United Kingdom taxpayer for the benefit of Eire agriculture?
    Mr. Peart: I do not think that we should cancel it. It is mutually advantageous to have the Agreement. It is good for our industry. We want Irish stores, and I have asked for them. I am glad to say that the figure has shown an improvement this year.

    Meat Imports
    Mr. Bryant Godman Irvineasked the Minister of Agriculture, Fisheries and Food how much he estimates will be spent on imports of meat during 1967.
    Mr. Peart: I cannot predict the final cost but our imports of meat and meat preparations of all kinds from January to September cost £290 million. Of this total, imports of carcase meat and offal accounted for £132 million.
    Mr. Irvine: Particularly after devaluation, does the Minister not think that this is a staggering figure which ought to receive immediate attention?
    Mr. Peart: It is a large figure. It has always been part of our traditional food policy to import, as well as putting an emphasis on home production. There are some people who would wish us to stop all imports, and I hope that hon. Gentlemen opposite who are nodding their heads in agreement will answer this question: would they stop imports of meat from New Zealand?
    Mr. Hugh Fraser: Would the Minister consider whether it would not be advantageous now to import meat off the bone from a certain area where foot-and-mouth is endemic? It would save money and, if his advisers at Pirbright advocated it, it might afford some relief from the danger of foot-and-mouth.
    Mr. Peart: I know that the right hon. Gentleman has a Question down on this subject. I hope that it will be reached. I should prefer to wait until it is reached before answering it.
    Mr. Hazell: In my right hon. Friend's Review of agricultural production, will he give added consideration to stimulating the production of home-produced meat?
    Mr. Peart: Of course, we did that in the last Review. We increased the guarantees. That was a declaration of our intention.

    Agricultural and Horticultural Holdings (Planning Permissions)
    Mr. Loveysasked the Minister of Agriculture, Fisheries and Food whether he will now revise his present policy concerning support by his Department to planning applications on agricultural and horticultural holdings, so as to give a clear indication of support when he considers the proposals are of benefit to the industry.
    Mr. Peart: I believe that a change of policy is desirable. However this is a complex matter and my consultations are not yet complete. I share the desire of the hon. Member for an early solution.
    Mr. Loveys: I thank the Minister for once again expressing his concern about this matter. May I ask whether we can have something rather more definite, as many local farmers misunderstand the general position, which is being unhelpful to the agricultural industry?
    Mr. Peart: I shall be in touch with the hon. Gentleman as soon as possible, and inform him directly.
    Mr. Loveysasked the Minister of Agriculture, Fisheries and Food whether he is satisfied that comments and advice given by his Department to local authorities concerning planning applications on agricultural and horticultural holdings are submitted by suitably qualified officers; and if he will make a statement.
    Mr. John Mackie: Yes, Sir. Advice to local planning authorities is given only by professionally qualified officers of the Agricultural Land Service.
    Mr. Loveys: Is the hon. Gentleman aware that specialist horticulturists are expressing concern about comments coming from the Agricultural Land Service, because they feel that the most qualified officers in the specialist field are the horticultural officers of the N.A.S.? Will the
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    hon. Gentleman give this special consideration?
    Mr. Mackie: I appreciate that it is very difficult for everybody to be specialists in all the details of horticulture, and we are looking at this, along with the other points mentioned by my right hon. Friend.

    Cereals (Import Costs)
    Mr. Kitsonasked the Minister of Agriculture, Fisheries and Food how much he estimates the imports of cereals will cost during 1967.
    Mr. Peart: About £200 million.
    Mr. Kitson: Will the Minister make a statement in the very near future in order to stimulate home production, bearing in mind that plans for sowing times have to be made very soon?
    Mr. Peart: I shall note that. It is one of the commodities which I had in mind when I replied to an earlier Question.

    Agricultural Wage Award
    Sir C. Mott-Radclyffeasked the Minister of Agriculture, Fisheries and Food what additional costs will be incurred by farmers during the current financial year as a result of the recent agricultural wage award.
    Mr. John Mackie: About £3 million in Great Britain.
    Sir C. Mott-Radclyffe: As devaluation has produced a new situation, with a heavy increase in costs for all imported feedingstuffs and fertilisers, is not this another argument for trying to hasten the Price Review so that farmers can plan ahead with some confidence?
    Mr. Mackie: My right hon. Friend answered the point—[Hon. Members: "No."]—he may not have answered it to the satisfaction of some hon Gentlemen opposite, but he has answered the point about an additional Price Review. The £3 million is for a short period of the financial year. For a full year it will be much more. It will only affect next year.
    Mr. Hazell: As the new wage award does not become operative until February, 1968, will my hon. Friend give consideration to an earlier date being fixed for this award?

    Wheat
    Mr. Priorasked the Minister of Agriculture, Fisheries and Food what effect imports of soft wheat are having on prices of home-grown wheat.
    Mr. Hoy: It is impossible to isolate the effect of imports on domestic market prices, but before devaluation these were running at a generally lower level than last year.
    Mr. Prior: Is not the hon. Gentleman aware that there was more home production this year, and therefore we needed imports less? Apart from that, does not he think it is time that his right hon. Friend and he had a fresh look at agricultural policy, instead of coming to the House with the negative and complacent attitude which they have produced up to now?
    Mr. Hoy: I was interested to see the hon. Gentleman reading that supplementary question. Let me say in reply that our home crop is up by 400,000 tons. The hon. Gentleman will remember that at the last Annual Price Review we put the guaranteed price up by 10s. a ton. The farmer's protection is the minimum import price, and let the hon. Gentleman remember that even the E.E.C. took steps not to impair that.
    Mr. Pavitt: Will my hon. Friend bear in mind, in regard to all his import policy, that he is serving the Ministry of food as well as agriculture, and will he bear in mind, too, the cost to housewives as well as the interests of farmers?
    Mr. Hoy: I have said this before in the House, that what we have to endeavour to do is to be fair to our home producers, and at the same time take steps to protect the housewife who is the purchaser of all these goods.
    Mr. Stodart: Is not the British producer of cereals the lowest cost producer in the world?
    Mr. Hoy: I am not arguing against that. What I said in reply to my hon. Friend was that when prices are being fixed it is the duty of this Ministry, whichever Government are in power, to look after the interests of both the producer and the consumer.

    Agricultural Workers
    Sir Frank Pearsonasked the Minister of Agriculture, Fisheries and Food to what extent the annual decline in the numbers of agricultural workers is in accordance with the lines laid down in the National Plan.
    Mr. John Mackie: The outflow of workers varies from year to year.
    The National Plan indicated a fall in the labour force by 1970 of some 140,000, but no annual rate of outflow was given. The Agricultural Census shows a reduction between June, 1964, and June, 1967, of some 84,000 regular workers.
    Sir F. Pearson: Against the background of the Minister's acceptance of the need for increased agricultural production, may I ask whether he will now recognise that in many parts of the country there is an acute shortage of trained stockmen, and will he revise his previous policies and take steps to encourage the recruitment of such men?
    Mr. Mackie: Up to now, with a steady decrease in the labour force, we have had a steady increase in efficiency and production. We see no reason for this not to continue. I agree with the hon. Gentleman that there are areas of the country in which there is a scarcity of stockmen, but if he would like proof that labour can come out of agriculture he should look at page 37 and the photograph in last week's issue of The Farmer's Weekly.
    Mr. Mackintosh: Would not my hon. Friend agree that there are some parts of the country in which the run-out of labour in agriculture affects all sections of industry, and is extremely serious? Will he consider the suggestion made by my hon. Friend the Member for Norfolk, North (Mr. Hazell), about bringing forward the wages award so as immediately to encourage the retention of workers in this section of the industry?
    Mr. Mackie: I do not think that bringing forward the award would have any effect. I agree with the hon. Gentleman opposite, as I do with my hon. Friend, that there are areas in which labour may be scarce but I do not think that either the hon. Gentleman's or my hon. Friend's suggestion would make any difference in the meantime.

    Sugar Prices
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food what are the prospects of an international agreement on sugar prices being reached; and if he will make a statement.
    Mr. Peart: At its meeting earlier this month the International Sugar Council discussed the preparations being made by the Secretary General of UNCTAD for a negotiating Conference to be held next April. The Council welcomed this prospect
    "in view of the general belief that such a Conference now had a reasonable chance of success."
    I share that belief and welcome these developments.
    Mr. Farr: What it the attitude of the Common Market countries in this discussion? Is it true that by their uncooperative attitude they are proving to be the main stumbling block in reaching international agreement?
    Mr. Peart: It is not for me to answer for Common Market policy. I think that one must explore that further.

    Commonwealth Sugar Agreement
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the recent London talks on the Commonwealth Sugar Agreement.
    Mr. Peart: Yes, Sir. The talks ended last Wednesday. There are no changes in the price and quota arrangements for 1968. In view of our application to join the E.E.C. it was agreed not to discuss the question of extension.
    Mr. Farr: I thank the right hon. Gentleman for that reply, but can he give the House an assurance that he has borne in mind the immense value of the Commonwealth Sugar Agreement to many of the under-developed Commonwealth countries? Moreover, is he aware that the economies of many of these smaller nations are entirely dependent on their sugar crop?
    Mr. Peart: I am grateful to the hon. Gentleman for his remark. I pay tribute to the Commonwealth Sugar Agreement. It gives long-term security to many parts
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    of the world where they have only monoculture and provides prosperity for their people. It is of great value.

    Farms (Amalgamation Grants)
    Mr. James Davidsonasked the Minister of Agriculture, Fisheries and Food whether, in the event of the occupiers of a large farm and of a non-commercial holding both wishing to purchase a non-commercial holding vacated by a third party who has obtained a grant or annuity under the terms of the Agriculture Act, both prospective buyers are given equal consideration for amalgamation grants.
    Mr. John Mackie: Whichever buyer the outgoer chooses will be eligible for the amalgamation grant provided the amalgamation meets the conditions of the scheme. The outgoer would not qualify for a grant or annuity until the approved amalgamation had been completed.
    Mr. Davidson: If it is the intention of the Government to create a larger number of viable commercial holdings should not preference be given to amalgamations which will create additional commercial holdings and not merely increase the size of farms which are already viable units?
    Mr. Mackie: The hon. Member has argued this with me very often on previous occasions. My reply is the same. It would do away with the voluntary nature of the scheme, and that we do not want to do.

    Farming and Forestry (Loans)
    Mr. James Davidsonasked the Minister of Agriculture, Fisheries and Food if he will consider seeking to establish a Land Bank to give fixed-interest loans for both farming and forestry on the lines of the French Credit Agricole which lends at 3 per cent., details of which have been sent to him.
    Mr. Hoy: No, Sir. I do not think that an institution on these lines would be appropriate in view of our present arrangements for supporting and financing agriculture and forestry.
    Mr. Davidson: Are the Government aware that the present Bank Rate is a crippling burden on the agricultural

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    industry and that if the industry were permitted to invest a higher proportion of borrowed capital it would be able to reduce its liabilities more rapidly than it can at present?
    Mr. Hoy: Yes. We appreciate what the interest rates are, but the House as a whole will appreciate the arrangements that we have made through the agriculture corporations for the lending of money to British agriculture. Interest rates cannot be taken alone when considering the position of agriculture. We have also to consider the support price and guaranteed prices in our system.
    Mr. Emrys Hughes: Why does my hon. Friend give such a conservative answer? Is not he aware that many farmers who have overdrafts at the bank complain bitterly about the high rate of interest? Does not he think that some new initiative would help to relieve them from the pressure of high interest rates?
    Mr. Hoy: Yes—and the Government have made provision in this respect. For certain lending institutions we provide a certain sum of money free of interest. As hon. Members opposite will remember, I had to defend this in Committee on the last Agriculture Bill.
    Mr. Godber: Will not the hon. Gentleman acknowledge that if he is defending existing interest rates as being necessary for farmers it adds importance to the claims made to his right hon. Friend for an early decision on increased prices to help the farmers?
    Mr. Hoy: My right hon. Friend has never sought to deny what they were. He will also be aware that the Government guarantee money and provide money which keeps these long-term loans down to the lowest possible figure. I am not seeking to use this as an excuse, but many people in other industries would be grateful if they could get loans on the same terms as are granted to agriculture.

    Brucellosis (Accredited Herds) Scheme
    Mr. Kitsonasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the progress so far made on the brucellosis eradication scheme.
    Mr. Peart: Up to 20th November we received 7,850 applications for member-
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    ship of the Brucellosis (Accredited Herds) Scheme. Of these, 700 have been withdrawn: 6,400 preliminary visits have been made and 4,550 herds are in varying stages of their qualifying tests; and eight herds are now on the Register. I regret that while the epidemic of foot-and-mouth disease continues we cannot deal with new applications, and there will be delays in routine testing.
    Mr. Kitson: Is the right hon. Gentleman aware that many farmers are very worried about the present scheme, in that infected cattle are being put into cattle markets, purchased and sent into brucella-free herds? When does he intend to start his eradication policy?
    Mr. Peart: This happened before, in T.T. days. I am anxious that we should get ahead with this. I pressed for it and made an announcement. I am having co-operation, but it is too early to give a full estimate of how the scheme is going. Applications representing just under 4 per cent. of the total number of herds have been received.
    Sir A. V. Harvey: Is the Minister aware that if only eight herds are free from brucellosis it is disgraceful at this stage? When will he tackle this problem vigorously, in the interests of the health of the British people? When will he do something about it?
    Mr. Peart: I do not think that, in the circumstances, progress is slow. I have made a start, which is more than my predecessors did.

    Agricultural Holdings
    Mr. Bodyasked the Minister of Agriculture, Fisheries and Food how many agricultural holdings are owned or administered by his Department; and how many of them have been separately visited by him in the last 12 months.
    Mr. Peart: 1,365 agricultural holdings are in my possession or administered by my Department. This includes 805 smallholdings managed by the L.S.A. on my behalf. I visited a number of the holdings on one of my estates last winter and my senior professional officers frequently visit Ministry properties on my behalf.
    Mr. Body: Is the Minister aware that that Answer is even worse than I expected? Does he realise that there are 271 agricultural holdings in the County of Holland and that he has still not visited any of them?
    Mr. Peart: I cannot see every holding in the country. I spend as much time as possible every weekend, travelling about the country and speaking to the farmers. I cannot do any more than I am doing.

    Smallholdings
    Mr. Bodyasked the Minister of Agriculture, Fisheries and Food why he opposes tenants of his smallholdings acquiring a tenancy of a nearby smallholding owned privately or by a county council, although the two holdings together would make an economic farm.
    Mr. John Mackie: I would refer the hon. Member to my reply to his Question of 3rd May list.—[Vol. 746, c. 63–4.]
    Mr. Body: Is the hon. Gentleman aware that his reply will cause no satisfaction to some of his tenants in the County of Holland who are trying to make a livelihood off 10 acres? Is not this one more reason why the Minister should visit the 271 tenants that he has in the County of Holland?
    Mr. Mackie: I have crossed swords with the hon. Member on this subject before. I am afraid that the answer is the same. The tenants sign an agreement not to take land from outside the estate. Our policy of amalgamations would be stultified if we were to allow this and I think that the hon. Member knows this only too well.

    Warble Fly
    Sir J. Gilmourasked the Minister of Agriculture, Fisheries and Food what estimate he has made as to the number of cattle which receive treatment against infestation by warble fly.
    Mr. John Mackie: I cannot estimate the exact number, but a survey of over 15,000 herds made in 1966 showed that about 7 per cent. of them had been treated with systemic insecticides.
    Sir J. Gilmour: In view of the damage to hides caused by warble fly will the Minister consider a scheme under which
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    notification will be given to people who sell fat cattle, whether their hides were so infected after the animal was killed?
    Mr. Mackie: We are directing a lot of publicity to farmers. It would be administratively difficult to carry out the hon. Member's suggestion, but I will look into the matter.

    Rabbits
    Mr. J. E. B. Hillasked the Minister of Agriculture, Fisheries and Food (1) on how many occasions in 1965, 1966 and 1967 he has prosecuted owners or occupiers of land for failing to abate an infestation of rabbits, authorised the exercise of his default powers of entry to carry out necessary rabbit clearance work, or issued formal warning letters to the owners and occupiers of rabbit-infested land;
    (2) whether, in view of the fact that it is possible for an offender to avoid conviction by taking only nominal remedial action, he is satisfied that his powers under the Agriculture Act, 1947 to protect farmland from infestation by rabbits are sufficient; and if he will make a statement.
    Mr. John Mackie: During the years ended 30th September, 1965, 1966 and 1967 there were no prosecutions; in each of these years two entries were made in default and 33, 13 and 17 warning letters respectively were sent.
    I should, however, like to emphasise that this formal statutory action is taken only in those comparatively rare cases where persuasion fails.
    We do not agree that an occupier can circumvent the law as the hon. Member suggests; our present powers under the Agriculture Act, 1947, and the Pests Act, 1954, to see that rabbits are properly controlled are adequate.
    Mr. Hill: Can the Minister say how long the normal interval is between the first inspection by his officers and the exercise of default powers or prosecution, if there were a prosecution? Secondly, does not he agree that if this pest is to be kept under permanent control the ultimate sanction must be made more severe and effective than it is at the moment?
    Mr. Mackie: I cannot give the hon. Member exact figures at the moment but

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    I will look into the matter and let him have them. On the other point, we feel that rabbits had been kept fairly well under control with a voluntary scheme. The hon. Member's right hon. Friend is continually at me in other contexts for taking too many powers. I hope that the hon. Member will not ask for more powers than his right hon. Friend wants me not to have.

    Hill Farmers (Income)
    Mr. Monroasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present level of income of hill farmers; and if he will make a statement.
    Mr. Peart: Hill farmers' returns will benefit this year from the increases in the hill cow, hill sheep and calf subsidies at the last Annual Review and the stronger store markets. We shall, of course, be considering farmers' incomes soon in the context of the Annual Review, together with all other relevant factors.
    Mr. Monro: Is the right hon. Gentleman aware that in an earlier reply the indication was that the underlying trend of incomes for hill farms was static and that costs were rising? What is the right hon Gentleman going to do about it?
    Mr. Peart: As the hon. Member knows, this is a matter for the Review.
    Mr. Hooson: Will the right hon. Gentleman bear in mind that small hill farmers in areas adjacent to parts of the country affected by foot-and-mouth disease have had to bear heavy additional costs this year because they have had to retain their store cattle and store lambs, and to buy fodder?
    Mr. Peart: This question of cost is a factor that we have to bear in mind.
    Mr. Godber: Does not the right hon. Gentleman realise that his answer to this Question, like his answer to some earlier ones, adds to the need for an early statement that we shall recoup farmers for these costs? Will he give an answer which will show that he realises the need—as expressed by hon. Members on both sides of the House—for an early statement?
    Mr. Peart: I said that I will make a statement as early as possible. These are matters for Review procedure and discussion with the unions.
    Rear Admiral Morgan Giles: Will the right hon. Gentleman assist hill farmers and all other farmers by cancelling forthwith the importation of beef from the Argentine?
    Mr. Peart: That has nothing to do with this Question about hill farmers.
    Mr. James Johnson: Is my right hon. Friend aware that many hon. Members on these benches and many farmers in East Yorkshire take exception to the way in which the Opposition wish to involve him at this stage in some ill-thought and unpremeditated action?
    Mr. Peart indicated assent.

SOUTH ARABIA
The following Written Question stood upon the Order Paper:
Mr. JAMES JOHNSON: To ask the Secretary of State for Foreign Affairs if he will make a statement on South Arabia.
The Secretary of State for Foreign Affairs (Mr. George Brown): With permission, Mr. Speaker, I should like to reply to Question No. 89 on the Order Paper in the name of my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson).
I informed the House on 14th November that Her Majesty's Government had decided that South Arabia should become independent and that the withdrawal of our forces would be completed by 30th November—
Sir G. Nabarro: On a point of order. Question No. 89 is to the Secretary of State for Scotland.
Mr. Speaker: The right hon. Gentleman should have said that he was answering Written Question No. 89.
Mr. Brown: As I carefully said, Mr. Speaker, I am answering Question No. 89 in the name of my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson). If I had not made this statement orally

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today, the House and my hon. Friend would have thought that they had a quarrel with me. Therefore, I deliberately chose to do what I thought was the desire of the House, to make the statement orally and not simply by means of Written Answer.
I informed the House on 14th November that Her Majesty's Government had decided that South Arabia should become independent and that the withdrawal of our forces would be completed by 30th November.
I am now glad to tell the House that the withdrawal of British forces was successfully completed at noon today and that South Arabia will become independent at midnight local time, that is, 9 p.m. our time, tonight. An Order-in-Council providing for the relinquishment of Her Majesty's sovereignty in South Arabia was made yesterday.
The House will be aware that negotiations began in Geneva on 21st November between a British delegation led by my right hon. and noble Friend Lord Shackleton and a delegation from the National Liberation Front led by Mr. Qahtan al Shaabi. I am glad to say that agreement on many of the points which have been discussed was reached this morning. A joint communiqué has been issued and I am arranging for a copy to be placed in the Library.
The talks were adjourned to allow the National Liberation Front delegates to return to Aden for Independence Day, and they will be resumed shortly.
As the communiqué indicates, the discussions in Geneva have covered a wide range of subjects, including the transfer of power and the questions of civil and military aid. On the latter point, as the communiqué says, we have agreed to continue aid at the existing levels for the next six months, while negotiations continue.
As regards the islands, the wishes of the inhabitants have been ascertained and decisions as to their future have been taken by us. These decisions entail further discussions with the South Arabian authorities and in that situation I hope that the House will agree that the best course would be to defer an announcement on this subject for a few days.
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The representatives of the National Liberation Front naturally regard the formation of a Government as one of the first tasks to be undertaken on their return to Aden. I am not, however, at this stage in a position to give the House any indication of the form which these representatives think the new Government will take.
I am sure that the House will join me, on the eve of the new State's independence, in wishing it every success, and will be glad to note that it has been agreed to establish diplomatic relations between us and to exchange ambassadors. The talks in Geneva have been conducted in a good atmosphere, and I have every hope that we will have the best possible relationship with the independent State, which is to take the name of the People's Republic of Southern Yemen.
I am sure the House would wish me to pay tribute to the devotion and courage of all those officials and civilians who, over many years and in the face of increasing difficulties, have sought to prepare South Arabia for independence. The Armed Forces, under the distinguished leadership of Admiral Sir Michael Le Fanu, deserve special recognition for the skill and forebearance with which they have carried out their exceedingly difficult task. [HON. MEMBERS: "Hear, hear."]
Finally, I am sure that the House will acknowledge the special contribution of Sir Humphrey Trevelyan, who is returning to London this afternoon on relinquishing his post as High Commissioner. He willingly put his experience and his special skills at the disposal of Her Majesty's Government at a critical time in the Middle East and in South Arabia particularly. The safe and peaceful withdrawal of the last of our forces in recent weeks is due in large part to the confidence between Briton and Arab, which has been built up so patiently out of suspicion and strife.
Mr. Johnson: We note that discussion on some subjects, particularly financial aid, will be resumed after independence, but is my right hon. Friend aware of the keen satisfaction of hon. Members on these benches that we have now completed the disciplined withdrawal of our forces, and about the establishment of good relations with the people who are

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now to form the future Government of the People's Republic of Southern Yemen? Will the financial aid, whatever it may be in future, phase out over a period to ensure at least some stability in the new State?
Mr. Brown: I am obliged to my hon. Friend for the preamble to his question. As I have said, we realise that the new Government must be allowed and enabled to get themselves into the saddle. That is why we will continue aid at, I repeat, the existing levels for the next six months. During that period, while negotiations are being resumed, we will consider what the situation ought to be after that.
Sir Alec Douglas-Home: Will the right hon. Gentleman accept that the whole House will be glad that the evacuation process has been completed without loss? Sir Humphrey Trevelyan has carried out, with his usual distinction, a most disagreeable task, as have the Command and the troops. Questions inevitably arise on these matters which would be better debated later.
Of course, the new State is not entitled to a continuance of aid, but it is difficult to contest the right hon. Gentleman's desire to avoid chaos in the next few weeks. However, will he keep this aid under strict review and see that there is some return for the aid in respect of the treatment, in particular, of British nationals?
My last question is about the Federal rulers, about whom I think that the right hon. Gentleman will have something to say.
Mr. Brown: I am obliged. On aid, I am clear that it must be carried over for a period, and I thought that six months was a reasonable period during which negotiations could take place. The right hon. Gentleman will know at least as well as I do that we have considerable commercial interests there which earn us a good deal of foreign exchange. It could not possibly be in our interests—quite apart from anyone else's—that chaos should ensue if it can be avoided.
We have received assurances from the N.L.F. delegates about British nationals and we shall, of course, watch how they are carried out. We are leaving behind an embassy under a chargé d' affaires and we shall also keep part at any rate of the naval task force in the area for a
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time. Of course, these things will all be carefully watched. As the right hon. Gentleman knows, only a few of the Federalis are detained. We have raised this matter repeatedly and I have grounds for hoping that even they will shortly be released, though the right hon. Gentleman may be assured that we will keep this in the negotiations which will be resumed shortly.
Mr. Paget: Is my right hon. Friend aware, first, that the payment of protection money rarely buys protection? Secondly, which of the six principles which are necessary to our recognition of Rhodesia have been applied to Aden?
Mr. Brown: I do not understand the relevance of the latter point, but I will tell my hon. and learned Friend and his hon. Friends on the other side of the House that one straight principle that we bear in mind is the right of self-determination—[HON. MEMBERS: "Answer."]—and the ending of colonial rule, and we have applied this in Aden.
As to the first part of the question, there is no question of protection money here. I repeat that no more is being paid than we were already committed to pay, and I am continuing it for six months while we see how the negotiations go.
Sir J. Langford-Holt: The right hon. Gentleman will be aware that the outgoing Government had undertaken certain international agreements, notably the freedom of passage through the Straits of Perim. Can the right hon. Gentleman assure the House that the new Government have accepted those international obligations and will observe them?
Mr. Brown: There is as yet no new Government, but the delegation from the N.L.F., in the course of discussions in Geneva, as the communiqué shows, had agreed to accept the international obligations which we have extended to Aden, and one of those is the Geneva Convention which seeks to ensure free passage through international waterways. One of these is the waterway of the Straits of Perim.
Mr. Faulds: Will my right hon. Friend accept that we on this side of the House, with one or two ludicrous exceptions—[HON. MEMBERS: "Oh."]—have great admiration for the skill and incisiveness with which he has managed the transfer of power in South Arabia—[HON.

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MEMBERS: "Oh."]—a very skilful job extremely well managed?
Mr. Brown: I am obliged to my hon. Friend. May I say to the House, and to those who find this a matter of humour and frivolity, that some of us, not only on this side of the House—
Mr. Goodhew: Humbug.
Mr. Brown:—but also on the Front Bench opposite, know the great anxiety that we have been through during the last few days, and I would beg the House to conduct itself in accordance with our traditions.
Mr. Boyd-Carpenter: What arrangements have been made to offer evacuation to those Aden nationals who fear for their safety because of their service to the British régime—for example, in the police and the Civil Service?
Mr. Brown: We cannot undertake unlimited commitments to other people, but we have certainly ensured that all the British civilians and all the expatriates from other countries knew that evacution was available for them if they wanted to take advantage of it, and that the decision to stay was theirs and theirs alone.
I am very happy to say that the atmosphere in Aden now is far better than any of us could have expected a short while ago. The morale of everybody there is pretty high, and I beg the House to keep it that way and not try to spoil it.
Mr. Colin Jackson: Bearing in mind the limited task force which is to remain behind, can my right hon. Friend say what he considers the position to be now in the Yemen? Does he think that the Egyptian troops, for example, are continuing to withdraw?
Mr. Brown: I have no doubt at all that the Egyptian withdrawal from the Yemen has not only gone so far, but will very shortly be completed.
Mr. James Davidson: May I add a tribute from the Liberal bench to those already paid by the Foreign Secretary? May I also ask to whom and in what manner was responsibility for control actually transferred? What safeguards are there for the future of the political and racial minorities in the area?
Mr. Brown: Until there is a new Government there is no Government to whom control can be passed. This is one of the complications of this moment. But we have had these discussions with the N.L.F. delegates. We have got the agreement with the N.L.F. delegates and they have now returned to Aden. As I said in my statement, they will, no doubt, shortly form a Government to whom control will pass and with whom our relations will then be assumed.
The question of the minorities in Aden and in South Arabia has been discussed with the N.L.F. delegates and we have received assurances from them about their intentions to honour our approach to the question.
Mr. Francis Noel-Baker: My right hon. Friend has repeatedly stressed the desire of the British Government to associate the United Nations with the settlement in South Arabia. Can he say what has been done in that respect?
Mr. Brown: In the end and in the ultimate the solution of this problem has been worked out between us and the N.L.F. delegates, but we have kept the United Nations fully informed at every stage. The United Nations Mission has not in the ultimate played the part that some people hoped it would have done earlier, but this has very much changed in the last few months. We have, as I said, kept the U.N. fully in touch with the situation.
Sir S. Summers: If the right hon. Gentleman thinks that this House is in need of a lecture on decorum, will he arrange for another Minister to give it?
Mr. Brown: Yes, Sir, but I could not possibly arrange for a member of the Opposition to give it, could I?
Mr. Whitaker: While accepting the sincere congratulations of us on this side of the House for his historic extrication of this country from an untenable position, will my right hon. Friend make absolutely sure in the future that we never face such a predicament in the Persian Gulf?
Mr. Brown: I suggest that we do not link too many things together here. There is a situation in Aden. I agree with my hon. Friend that it is a very great relief

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to have been able to extricate ourselves in this w ay from that situation.
On the question of the Gulf and our commitments there, our intentions are a very different matter altogether, but we shall do our duty there as, of course, we are committed to do.
Lieut.-Commander Maydon: In defining the principles of self-determination, how much weight do Her Majesty's Government give to the incidence of terrorism in a case like this? Furthermore, could the right hon. Gentleman tell the House how much in total the civil and military aid is likely to amount to over the next six months?
Mr. Brown: May I remind the hon. and gallant Gentleman that Government after Government—Conservative, Liberal and Labour—have found it necessary to come to terms with people who were previously called terrorists—like, for example, Cyprus, Ireland and many places? it does not do any good when one has come to terms with it to hark back to the past and use these phrases. I would remind the hon and gallant Gentleman that the distinguished President of Kenya, for example, was referred to in very different terms some time ago from the terms which are applied to him now. One must deal with the situation as it now is, and with the Government that can come to power.
I repeat that aid is continuing at present levels, and at present levels it may total over that period something like £9 million, plus, I think, the £3 million to which we are already committed anyway.
Several Hon. Members rose—
Mr. Speaker: Order. Mr. David Steel.

SCOTLAND (FOOT-AND-MOUTH DISEASE)
Mr. David Steelasked the Secretary of State for Scotland whether he will now give clear guidance to the local authorities in the Border counties as to the steps which they should be taking to prevent the spread of foot-and-mouth disease into Scotland.
The Secretary of State for Scotland (Mr. William Ross): The veterinary advice given to my right hon. Friend the Minister
442
of Agriculture, Fisheries and Food who is responsible for operational control measures against foot and mouth throughput Great Britain, is that, while the initiatives taken in this matter by local authorities and others are to be welcomed, there are, in fact, few steps open to them that can add materially to the protection provided by the widespread control measures put into operation by my right hon. Friend.
I should, however, like to take this opportunity of expressing my appreciation of the various voluntary measures taken by public and private bodies throughout Scotland in restricting movements and activities involving contact with livestock.
Mr. Steel: Is the right hon. Gentleman aware that I am grateful to his hon. Friend the Under-Secretary for seeing me so quickly about this problem yesterday? Is he aware, however, that different policies are being pursued by different counties along the Border? Should not disinfectant splashes be set up on all roads into Scotland and, if so, will the right hon. Gentleman undertake to see that the cost involved in doing this does not fall on the ratepayers of these counties?
Mr. Ross: If I thought that it was necessary to give that advice, it would be given, but I do not believe that it is essential at the moment. While appreciating the concern which everyone feels about this, I would be reluctant to dissuade anybody from taking action that might be helpful. Naturally, the action that is taken varies according to where it is taken. If disinfectant splashes are established at, for example, individual farm entrances, that is of far more value than establishing them on busy roads.
Mr. Noble: Will the right hon. Gentleman keep the situation under very careful observation with his right hon. Friend who, I know, has operational control in this matter? I say that because it appears odd to Scottish farmers that disinfectant straw mats are being laid across bridges over the Thames while no similar effort is being made in Scotland.
As soon as the right hon. Gentleman feels that something useful can be done, will he take the necessary steps and make certain that all local authorities cooperate with his staff to achieve the maximum security along the Border?
Mr. Ross: This Question arises because of the contact that has existed between the Ministry of Agriculture, Fisheries and Food's veterinary officials, local authorities and local farming interests. I assure the right hon. Gentleman that I am in very close contact at all times with my right hon. Friend about this matter. I hope that the right hon. Gentleman is not unaware of the stringency of control already applying in Scotland; the control area machinery and the fact that there is no movement of livestock either way between England and Scotland.
Mr. Rankin: Has my right hon. Friend noticed that the Irish Governments, both North and South, have decided to seal off Ireland in the interests of safety, although Ireland has the safeguard of the water that surrounds her shores? Is he satisfied that, because of Scotland's contiguity with England, similar steps might not be advantageous to the farmers and people of Scotland?
Mr. Ross: I am satisfied at the moment by what is being done in concentrating on the areas which have been so disastrously affected and to ensure that there is control and isolation there. I am also satisfied, in addition to the steps that have been taken in those areas, that steps are being taken in Scotland and on the Borders—indeed, in all contiguous areas—to limit movement.
Mr. Monro: Is the right hon. Gentleman aware that the precautions being taken by Dumfries County Council on the Border are being taken entirely at the council's own initiative and that they are costing about £300 a week to run? Will the Secretary of State pay for this?
Mr. Ross: The hon. Gentleman knows that my generosity towards Scottish local authorities is such that I am prepared to consider anything. This and other authorities will not, I am sure, be unwilling to approach the Secretary of State for help, either directly or through the rate support grant.
Mr. Emrys Hughes: What are the latest figures of outbreaks of foot-and-mouth in Scotland?
Mr. Ross: We hope to keep the figures as they are; none at all.
Mr. Baker: Would the right hon. Gentleman assure the House on two points: first, of the efficiency of the germicides and viricides that are available; and, secondly, that adequate stocks of these exist should it be necessary to use them on a widespread scale in Scotland.
Mr. Ross: Yes, if the occasion should arise—but we must concentrate our resources at present on the affected areas and where the danger lies. The danger comes from these areas. This, in the long run, will be to the benefit of Scotland.
Mr. J. T. Price: Will the Secretary of State convey to his right hon. Friend the Minister of Agriculture, Fisheries and Food the deep admiration which many of us, certainly on this side of the House, feel for him and his Department for the great fortitude and industry with which they have coped with this grave epidemic? We also wish to congratulate the Minister of Agriculture, Fisheries and Food on the way in which he has resisted some of the hysterical appeals made to him to take panic measures at a time when the Ministry has proved beyond doubt that, coupled with the tactical efforts of his veterinary staff and the veterinary profession generally, everything possible has been done to allay the fears that still rest in the minds of many farmers?
Mr. Ross: I am sure that my hon. Friend was expressing the true feelings of the House for the efforts of my right hon. Friend and his staff. Some of the pressures put on him were a bit unfair; for example, it was suggested that he should have been visiting some smallholdings at this time.
Mr. Brewis: At this time of year, when there is usually a good deal of movement of stock in Scotland between farms, what advice is the Secretary of State giving to farmers about whether these moves should take place? Will he also give guidance about the holding of public functions like young farmers' club meetings?
Mr. Ross: If anybody is in doubt on this issue, he should get in touch with the veterinary services. This applies to both movements and gatherings. I welcome the voluntary efforts that have been made to restrict these movements. As

445
the hon. Gentleman no doubt knows, the movement of stock is subject to licence, in any case. Each application is considered on its merits, and although there have been suggestions about certain hardships being caused by the complete barrier that exists between Scotland and England, these must be accepted in the present situation.
Mr. James Davidson: Is the right hon. Gentleman aware that, according to my information, there is still some movement of horses and ponies between prohibited areas in England and areas so far free of foot-and-mouth in Scotland? What steps does he intend to take to try to prevent this movement?
Mr. Ross: The first thing is to get the information about it.
Earl of Dalkeith: Would not the right hon. Gentleman agree that it is not only the movement of livestock that causes anxiety to farmers in Scotland, but the movement of lorries and other vehicles from the South into Scotland? In view of the layout of the Scottish Border, would it not be sensible now to have certain control points on the Border with disinfectant pads and mats?
Mr. Ross: I have already said that the real danger points are at the farm roads. I am satisfied that the farmers themselves are taking certain steps. I do not want to spread or waste our efforts by taking measures which might be quite unnecessary.
Several Hon. Members rose—
Mr. Speaker: Order. We must get on.

SCOTLAND (FOOT-AND-MOUTH DISEASE)
  BILL PRESENTED
    EDUCATION
    Bill to amend the law as to the effect of and procedure for making changes in the character, size or situation of county schools or voluntary schools and to make certain other amendments as to the approval or provision of school premises; and for purposes connected therewith, presented by Mr. Gordon Walker; supported by Mr. Stewart, Miss Alice Bacon, the Attorney-General, and Mr. Harold Lever; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 14.]
  PRIVATE MEMBERS' BILLS
    MAINTENANCE ORDERS
    Bill to amend the enactments relating to matrimonial, guardianship and affiliation proceedings so far as they limit the weekly rate of the maintenance payments which may be ordered by magistrates' courts, presented by Mr. Quintin Hogg; supported by Mr. Charles Pannell, Dame Joan Vickers, Mr. Eric Lubbock, Mr. Leo Abse, Mr. R. Gresham Cooke, and Mr. Anthony Grant; read the First time; to be read a Second time upon Friday, 8th December, and to be printed. [Bill 15.]
  ADOPTION
  Bill to make provision for extending the powers of courts in the United Kingdom with respect to the adoption of children; for enabling effect to be given in the United Kingdom to adoptions effected in other countries and to determinations of authorities in other countries with respect to adoptions; and for purposes connected with the matters aforesaid, presented by Mr. Walter Alldritt; supported by Mrs. Braddock, Mr. Richard Crawshaw, Mr. James A. Dunn, Mr. van Straubenzee, Mr. Eric Ogden, Mr. Simon Mahon, Mr. Gordon Oakes, and Mr. Tim Fortescue; read the First time; to be read a Second time upon Friday, 23rd February, and to be printed. [Bill 16.]
  NATIONAL LOTTERY
  Bill to authorise the creation of a National Lottery Board; to empower and require the Board to organise and operate a lottery scheme and to make grants in aid of charitable organisations, medical research and other social and welfare purposes; and for connected purposes, presented by Mr. James Tinn; supported by Mr. R. Graham Page, Mr. Walter Alldritt, Mr. Bernard Conlan, and Mr. Ted Leadbitter; read the First time; to be read a Second time upon Friday, 2nd February, and to be printed. [Bill 17.]

  DIVORCE REFORM
  Bill to amend the grounds for divorce and judicial separation; to facilitate reconciliation in matrimonial causes; and for purposes connected with the matters

  447
  aforesaid, presented by Mr. William Wilson; supported by Mr. Leo Abse, Sir George Sinclair, Dame Joan Vickers, Mrs. Lena Jeger, Mr. John Parker, Mr. Emlyn Hooson, Mr. Nicholas Ridley, Mr. Peter M. Jackson, Dr. David Kerr, Mr. Anthony Royle, and Mr. Ian Gilmour; read the First time; to be read a Second time upon Friday, 9th February, and to be printed. [Bill 18.]

  NATIONAL INSURANCE (FURTHER PROVISIONS)
  Bill to make provision for the payment of pensions out of the National Insurance Fund for certain classes of person not eligible for pensions under the National Insurance Act 1946, presented by Mr. Terence L. Higgins; supported by Mr. Airey Neave, Dame Irene Ward, Sir John Vaughan-Morgan, Mr. Turton, Miss Harvie Anderson, Mr. Maurice Macmillan, Mr. W. H. Loveys, Mr. Michael Alison, Mr. David Mitchell, and Mr. Richard Sharples; read the First time; to be read a Second time upon Friday, 16th February, and to be printed. [Bill 19.]
  CARAVAN SITES
  Bill to restrict the eviction from caravan sites of occupiers of caravans and make other provision for the benefit of such occupiers; to secure the establishment of such sites by local authorities for the use of gipsies and other persons of nomadic habit, and control in certain areas the unauthorised occupation of land by such persons; and for purposes connected with the matters aforesaid, presented by Mr. Eric Lubbock; read the First time: to be read a Second time upon Friday, 1st March, and to be printed. [Bill 20.]
  PUBLIC SERVICE AND ARMED FORCES PENSIONS REVIEW
  Bill to provide for regular reviews of public service and armed forces pensions in order to ensure that they rise with the cost of living, presented by Mr. Frank Taylor; read the First time; to be read a Second time upon Friday, 26th January, and to be printed. [Bill 21.]
  LOCAL AUTHORITIES (GOODS AND SERVICES)
  Bill to make provision with respect to the supply of goods and services by local authorities to certain public bodies, and for purposes connected therewith, presented by Mr. Hilton; supported by Mr. Arthur Blenkinsop, Mr. Archie Manuel, Mr. W. T. Williams, Mr. William Hamling, Mr. Arnold Shaw, and Mr. Robert Maxwell; read the First time; to be read a Second time upon Friday, 15th December, and to be printed. [Bill 22.]
  SUNDAY ENTERTAINMENTS
  Bill to make, in place of certain statutory provisions relating to Sunday observance and the playing of games, provision, in relation to Sunday, for preventing, in the case of certain spectacles taking place during certain hours, payments being made by members of the public for the privilege of watching them and, in the case of public dancing so taking place, payments being made by members of the public for the privilege of participating therein; to exclude certain acts from the scope of the Sunday Observance Act 1677; and to make provision for, and in connection with, the winding up of the Cinematograph Fund, presented by Mr. William Hamling; supported by Mr. John Parker, Mr. Ian Gilmour, Mr. David Ensor, Mrs. Renee Short, and Mr. William Hamilton; read the First time; to be read a Second time upon Friday, 8th December, and to be printed. [Bill 23.]
  THEATRES
  Bill to abolish censorship of the theatre and to amend the law in respect of theatres and theatrical performances, presented by Mr. G. R. Strauss; supported by Sir David Renton, Mr. Norman St. John-Stevas, Mr. Emlyn Hooson, Mr. William Wilson, Mr. Andrew Faulds, Mr. Michael Foot, and Mr. Hugh Jenkins; read the First time; to be read a Second time upon Friday, 23rd February, and to be printed. [Bill 24.]

  DOMESTIC AND APPELLATE PROCEEDINGS (RESTRICTION OF PUBLICITY)
  Bill to make further provision for enabling Courts to sit in private and for preventing or restricting publicity for

  449
  certain proceedings, presented by Sir Lionel Heald; read the First time; to be read a Second time upon Friday, 15th December, and to be printed. [Bill 25.]

  PREVENTION OF CRIME (SCOTLAND)
  Bill to enable constables in Scotland to detain and search persons suspected of having offensive weapons with them in public places without lawful authority or reasonable excuse, presented by Mr. Alick Buchanan-Smith; supported by Mr. Norman Wylie, Mr. T. G. D. Galbraith, Mr. Edward M. Taylor, Mr. Esmond Wright, Mr. Anthony Stodart, Miss Harvie Anderson, Mr. George Younger, Mr. Hector Monro, Mr. Gordon Campbell, Mr. John Brewis, and Mr. Baker; read the First time; to be read a Second time upon Friday, 26th January, and to be printed. [Bill 26.]
  CLEAN AIR
  Bill to make further provision for abating the pollution of the air, presented by Mr. Robert Maxwell; supported by Mr. Robert Edwards, Mr. Frank Allaun, Mr. Geoffrey Rhodes, Mr. Dan Jones, Mr. Leslie Huckfield, Sir Gerald Nabarro, Mr. Eric Lubbock, Mr. William Deedes, and Mr. Duncan Sandys; read the First time; to be read a Second time upon Friday, 2nd February, and to be printed. [Bill 27.]
  LIVE HARE COURSING (ABOLITION)
  Bill to abolish live hare coursing, presented by Mr. Eric S. Heffer; supported by Mr. Rafton Pounder, Mr. William Price, Dr. Winstanley, Mr. Victor Yates, Miss Joan Lestor, Captain Henry Kerby, Mr. Peter Bessell, Mr. David Ensor, Mr. John Ellis, and Mr. Kevin McNamara; read the First time; to be read a Second time upon Friday, 15th December, and to be printed. [Bill 28.]

  LOCAL AUTHORITIES' MUTUAL INVESTMENT TRUST
  Bill to extend the scope of the powers of investment made collectively by local authorities through the Local Authorities' Mutual Investment Trust, presented by Mr. Stanley Henig; supported by Mr. Arthur Blenkinsop, Mr. Tom Bradley, Mr. Bob Brown, Mr. Charles Fletcher
  450
  Cooke, Mr. Arthur Jones, Mr. Richard Mitchell, Mr. James Wellbeloved, and Mr. Peter Mills; read the First time; to be read a Second time upon Friday, 26th January, and to be printed. [Bill 30.]

  TOWN AND COUNTRY PLANNING (AMENDMENT)
  Bill to confer certain rights upon parish councils in connection with applications for planning permission under the Town and Country Planning Acts; and for purposes connected therewith, presented by Colonel Sir Harwood Harrison; supported by Mr. James Ramsden, Mr. Antony Buck, Mr. Prior, Mr. Michael Jopling, Mr. Jeremy Thorpe, Sir Frank Pearson, and Mr. Francis Noel-Baker; read the First time; to be read a Second time upon Friday, 1st March, and to be printed. [Bill 31.]
  SHOPS
  Bill to repeal certain sections of the Shops Act 1950 and to limit the hours of work of shop assistants and others, presented by Mr. Nicholas Scott; read the First time; to be read a Second time upon Friday, 26th January, and to be printed. [Bill 32.]
  FRIENDLY AND INDUSTRIAL AND PROVIDENT SOCIETIES
  Bill to make further provision with respect to the accounts of friendly societies and industrial and provident societies and the auditing of those accounts, and with respect to the rules and valuations of friendly societies, presented by Mr. Paget; read the First time; to be read a Second time upon Friday, 8th December, and to be printed. [Bill 33.]

  AIRCRAFT NOISE
  Bill to restrain nuisance by aircraft noise; to restore freedom to pursue actions against aircraft owners and operators for nuisance by noise and vibration; to empower the President of the Board of Trade more effectively to limit and restrain aircraft noise to empower the Parliamentary Commissioner to inquire into and report on all such questions; and for purposes connected

  451
  therewith, presented by Mr. James Johnson; supported by Mr. Hugh Jenkins, Mr. George Jeger, Mr. Frederick Willey, Mr. S. C. Silkin, Mr. Russell Kerr, Mr. John Ryan, Mr. Sydney Bidwell, and Miss Joan Lestor; read the First time; to be read a Second time upon Friday, 15th December, and to be printed. [Bill 34.]

  AUTHORISED SWEEPSTAKES
  Bill to authorise sweepstakes by the persons, on the terms and for the purposes hereinafter prescribed, presented by Mr. Simon Wingfield Digby; supported by Mr. Ian Percival, Mr. Ian Lloyd, Mr. R. Graham Page, and Miss Quennell; read the First time; to be read a Second time upon Friday, 9th February, and to be printed. [Bill 35.]
  EMPLOYER'S LIABILITY (DEFECTIVE EQUIPMENT)
  Bill to make further provision with respect to the liability of an employer for injury to his employee attributable to any defect in equipment provided by or by arrangement with the employer for the purposes of the employer's business; and for purposes connected with the matter aforesaid, presented by Mr. John Cronin; supported by Mr. Leo Abse, Mr. Sydney Silverman, and Dr. David Owen; read the First time; to be read a Second time upon Friday, 1st March, and to be printed. [Bill 36.]
  ROAD SAFETY ACT 1967 (AMENDMENT)
  Bill to amend certain provisions of the Road Safety Act 1967 relating to breath tests and disqualification from driving, presented by Mr. Marcus Kimball; supported by Mr. Timothy Kitson, Mr. Anthony Boyle, Mr. John Osborn, Sir Frank Pearson, Mr. Anthony Berry, Mr. John Smith, Mr. Geoffrey Johnson Smith, Mr. Ian Lloyd, and Mr. Peter Crowder; read the First time; to be read a Second time upon Friday, 16th February, and to be printed. [Bill 37.]
  AGRICULTURAL HOLDINGS (DECEASED TENANTS)
  Bill to make further provision with respect to the tenure of agricultural holdings by extending in appropriate cases the tenancy of an agricultural holding where the original tenant had died; and for purposes connected with the matters aforesaid, presented by Mr. Roy Hughes on behalf of Mr. Elystan Morgan; supported by Mr. Donald Anderson, Mr. William Edwards, read the First time; to be read a Second time upon Friday, 1st March, and to be printed. [Bill 38.]
  WILD PLANTS PROTECTION
  Bill to protect wild plants and for purposes connected therewith, presented by Mr. Peter Mills; supported by Mr. Michael Jopling, Mr. Timothy Kitson, Mr. James Ramsden, Mr. Marcus Kimball, and Mr. Alick Buchanan-Smith, read the First time; to be read a Second time upon Friday, 2nd February, and to be printed. [Bill 39.]
  REPRESENTATION OF THE PEOPLE ACT 1949 (AMENDMENT)
  Bill to amend the Representation of the People Act 1949 by extending the franchise to all persons of eighteen years or over, presented by Mr. Donald Anderson; supported by Mr. William Hamling, Mr. Stanley Henig, and Mr. Eric S. Heffer, read the First time; to be read a Second time upon Friday, 1st March, and to be printed. [Bill 40.]
  TRAVEL CONCESSIONS
  Bill to remove certain restrictions on the power of local authorities to make arrangements for the granting of travel concessions, and to enable road passenger transport undertakings to make such arrangements, presented by Mr. Bob Brown; supported by Mr. Albert Booth, Mr. Blackburn, Mr. John Ellis, Mr. Alan Lee Williams, Dr. Ernest Davies, Mr. Trevor Park, Mr. William Price, Mr. Leslie Huckfield, and Mr. Arthur Davidson; read the First time; to be read a Second time upon Friday, 9th February, and to be printed. [Bill 41.]
ORDERS OF THE DAY

  FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL
  Considered in Committee.
  [Sir ERIC FLETCHER in the Chair]
  4.3 p.m.
  Lord Balniel: I do not wish unduly to detain the Committee, Sir Eric, but may I raise a point of order which I think is of importance to the rights of back benchers and of the Opposition especially in connection with the Committee stage of the Bill?
  For reasons which we understand, the Committee stage has been substantially delayed. On 16th November we were told by the Leader of the House—as he is not present I hasten to say that I make no criticism of him—that the reason was:
  "I gather that my right hon. Friend the Minister of Social Security has some late Amendments and that it would be for the convenience of the House to see them in due time to debate them."—[OFFICIAL REPORT, 16th November, 1967; Vol. 754, c. 638.]
  'The Committee stage was subsequently further postponed, and I asked the Leader of the House on 20th November:
  "Are we to understand that the Amendments are drafting Amendments or are connected with the economic situation?"
  The Leader of the House replied:
  "I think that the second assumption would be correct."—[OFFICIAL REPORT, 20th November, 1967; Vol. 754, c. 953.]
  No Amendments by the Government have been put on the Notice Paper, nor has any statement been made by the Minister of Social Security, as we were led to believe would happen. That is a matter which lies in the Government's discretion. But earlier this week my hon. Friend the Member for Chelsea (Mr. Worsley) asked what had happened to the Amendments which we had been led to believe were to be tabled. The Minister replied:
  "He will get a full explanation when we discuss the Bill on Wednesday."—[OFFICIAL REPORT, 27th November, 1967; Vol. 755, c. 33.]
  The Chief Whip of the Liberal Party also asked whether we would get an explanation from the Government of the consequences of their devaluation measures
  454
  on the Bill, and again the Minister asked us to await the debate on Wednesday.
  My point of order is that I understand that in Committee we debate the very narrowly defined Amendments and also the Questions, That Clauses stand part. I understand that on neither of those occasions is it possible for the Minister to make a full explanation. On Third Reading, also, we can discuss only matters which are contained in the Bill, and I therefore ask you, Sir Eric, how it is possible for the Minister to implement the undertakings which were given earlier this week?
  The Minister of Social Security (Mrs. Judith Hart): Further to that point of order. I should be very happy—indeed, I am anxious—to explain, as I promised, why there are no Government Amendments. Some procedural difficulties are presented, as the noble Lord recognised. It might well be held that an explanation of this kind might be relevant to our discussions, particularly on the first two Amendments. It might equally he held that it might be relevant to our discussion either on the Question, That Clause 1 stand part, or on the Third Reading. Those all seem to me to be possibilities.
  I find myself in the difficulty that to explain why we have not put down Amendments presents particular procedural difficulties and I, too, would welcome your guidance, Sir Eric. I am happy to give an explanation at whatever point the Committee thinks best.
  The Chairman: In answer to the point of order raised by the noble Lord, the Minister has indicated that she desires to give an explanation, and I imagine that she will endeavour to do so within the rules of order on one or other of the Amendments which are being called.
  Lord Balniel: Further to that point of order. If the Minister gives that explanation, are we, as an Opposition, entitled to a full-ranging debate of the matters which she raises? With great respect, it seems to me that the Committee is in a considerable difficulty. Perhaps, a solution might be for the Minister to move to report Progress, and to make a statement of the Government's policy, which the whole Committee is awaiting. Then perhaps we could have a full, wide-ranging debate of the issues involved.
  Mrs. Hart: Further to that point of order. The difficulty is not quite as the noble Lord seems to summarise it. It is not that the Committee is awaiting a statement of policy from the Government. The Committee is waiting to hear why there are no Government Amendments. I must distinguish between the two rather carefully, because what might be held to be relevant to the Bill in terms of the absence of Government Amendments would certainly not be relevant in terms of a general discussion of the whole Government policy about one particular aspect of devaluation—at least, not on this occasion and in this Committee.
  I seek your guidance, Sir Eric. It would be perfectly convenient for me at this point to explain why there are no Government Amendments, if you would regard that as being suitable.
  Mr. John Pardoe: Further to the point of order, Sir Eric. I, too, find myself in some difficulty, as does the noble Lord the Member for Hertford (Lord Balniel). I fully understood from what Government spokesmen said that we should have a chance to discuss the aftermath of devaluation in relation to the Bill. I am in a quandary. I notice from the list of selections that none of the new Clauses has been selected. I imagine, Sir Eric—I should be grateful if you would clarify the position—that this means that we shall not have a chance to discuss the new Clauses. Realising that the Government had failed to put down Amendments of this sort, I tabled the widest possible new Clause 3 to enable a discussion to take place and to enable us to be given a specific answer.
  Mrs. Hart: Further to that point of order, Sir Eric. I cannot allow the hon. Gentleman to suggest that he was led in any way by any of my right hon. Friends or myself to suppose that there would be on this occasion and the further stages of the Bill an opportunity for a full discussion or a full statement to be made about the Government's policy as regards the effects of devaluation on the most vulnerable.
  I would refer the hon. Gentleman, as did the noble Lord the Member for Hertford (Lord Balniel), to what was said in the House. The hon. Gentleman will find that on both occasions when the Lord President of the Council was
  456
  answering questions about the timing of the further stages of the Bill and when I was answering a question related to this on Monday all of us were discussing the further progress of the Bill. On Monday, I said that consideration was being given to the implications of devaluation on the further progress of the Bill—no more, no less. Therefore, the Committee is entitled to expect from me an explanation of what our view was on the further progress of the Bill, but no more.
  Several Hon. Members rose—
  Sir John Eden: Further to the point of order, Sir Eric—
  The Chairman: If the Committee will allow me, I will deal with the points of order already raised.
  In answer to the point of order raised by the hon. Member for Cornwall, North (Mr. Pardoe), the new Clauses have not been selected because they are out of order.
  In answer to the point of order raised by the noble Lord, it would be out of order in this Committee stage to have anything in the nature of a far-reaching debate on devaluation. Equally, it would be out of order in the Committee stage to have any kind of debate as to why there are no Government Amendments.
  I should have thought, if I may suggest it to the Committee, that the best course would have been to proceed with the Amendments which are on the Notice Paper and which have been selected and see how far we can get in discussing them with the matters, so far as they are in order, that both sides of the Committee want to raise.
  Sir J. Eden: Further to that point of order, Sir Eric. If I may say so with respect, you have accurately stated the dilemma in which we find ourselves. It is apparent from what the right hon. Lady has said already that she is anxious, where it is possible, to meet the wishes of the Committee and give us some of the information which she has in her possession.
  It is distinctly within my recollection that in one of the earlier exchanges the Leader of the House indicated that Government Amendments would be tabled in time for full study before the weekend.

  457
  These have not materialised. I think that there is a clear solution before the right hon. Lady, and that is to report Progress, a suggestion put to her by my noble Friend the Member for Hertford (Lord Balniel), one to which I hope she will give very serious consideration, because in that way she would be able to meet the full wishes of the Committee and make the explanation that she is anxious to give.
  Lord Balniel: Further to the point of order, Sir Eric. Perhaps it might be of assistance if I myself moved to report Progress so as to enable the right hon. Lady to explain why the Amendments have not been tabled and also give the Committee some outline of the policies which are now to be pursued to assist the poorest sections of our community and save them from the full impact of the Government's devaluation proposals.
  I beg to move,
  That the Chairman do report Progress and ask leave to sit again.
  The Chairman: It would certainly regularise the procedure in the Committee if I were to accept a Motion to report Progress on the understanding that it was designed to enable the Minister to make a short statement as to matters that the noble Lord has raised with a view to our then proceeding with the Amendments as soon as that matter has been disposed of.
  Mr. Geoffrey Hirst: Further to that point of order, Sir Eric. If Progress is reported for the purpose that you have said, which I think is very reasonable and the only possible solution, your statement that the Amendments on the Notice Paper should then be proceeded with would deny quesioning of the statement by the Minister. That, surely, must he contained within any short debate to report Progress. I trust that you are not ruling in advance that it must be purely for the purpose of a statement by the Minister, excluding any discussion on it.
  The Chairman: The Standing Orders on the subject are quite explicit. Any debate on a Motion to report Progess is very narrowly circumscribed.
  Mr. Peter Tapsell: Further to that point of order, Sir Eric. Can you say whether, when the second Amendment which I understand the Chair is likely to call is put, it will be in order to
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  discuss the closely related Amendments to the Schedule?
  The Chairman: My present intention in calling the second Amendment is to have a number of related Amendments discussed with it as indicated in the list in the Lobby.
  The Question is, That the Chairman do report Progress and ask leave to sit again.
  4.15 p.m.
  Mrs. Hart: I welcome the opportunity that the noble Lord has given me to clarify the situation. As I said a moment or two ago, I realised that the Committee would have bee wondering why we had not put down Government Amendments to the Bill in view of the fact that on one occasion, and on one occasion alone, the Bill was delayed so that we could consider the matter. I emphasise that it was on one occasion alone. The second delay was for the rearrangement of business last week to allow a debate on devaluation. The total delay has not been more than eight days.
  The Government have made it quite clear that one of their main concerns is that the most vulnerable shall be protected from the consequences of the rise in prices due to devaluation. The Committee will want to hear from me which groups we identify as likely to be in need of protection and at what time we see this as likely to be necessary, because it has a bearing on the Bill. We see the most vulnerable as those with slender resources who are old or sick and those families which must support their children on very low incomes. It is these groups who must be given help at the right time.
  We start off, fortunately, in a good position. As my right hon. Friend the Secretary of State for Economic Affairs said last week, we calculate that the increase in the cost of living due to devaluation will be about 2½ to 3 per cent. It was only a month ago that we increased the scales of supplementary benefit, by 5s. at the single householder rate. So those among the old and sick with the greatest need start off from a new and better level of income. At the same time, we are now in the Bill legislating for an increase in family allowances, to take full effect in April. An increased family allowance for each fourth and subsequent

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  child in larger families was, of course, put into payment at the end of last month.
  The groups that we identify as likely to be in need of protection therefore start off from this new and better level of income which the present Government have assured for them.
  What we propose to do is to watch price trends carefully, and I can give the Committee a complete assurance that at the right time we will take the appropriate action to protect these groups. We shall, of course, be intent upon directing our help to those groups which need it most—
  Mr. Frederic Harris: In what way?
  Mrs. Hart:—perhaps the hon. Gentleman will have patience.
  In the field of the poorest of those who are old or sick. we have an easy and accepted method by way of supplementary benefits. In relation to poor families, we must, of course, consider the help which is to be given in the context of redistribution of purchasing power to which my right hon. Friend the Chancellor of the Exchequer referred a week ago.
  The Committee will appreciate that it was thought advisable to delay by a week or so the further stages of the Bill because I wanted to make sure that no options that we might wish to use would be closed to us. Taking a power in the Bill would have been one of them, but I am satisfied that there are other ways in which we can do whatever we may need to do. So I have not proposed any Amendments to the Bill.
  I can, however, assure the Committee that at the right time action will be taken, and the House of Commons will be asked to approve our proposals.
  Lord Balniel: This is the first occasion we have had of hearing from the Government the policies which they will implement to fulfil the promise which was given by the Prime Minister to protect the weakest sections of the community from the full impact of devaluation. The righ hon. Lady has now given the Committee her estimate of the increased prices which will follow from devaluation. There is no doubt that the £ in the pockets of
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  ordinary members of the community has been devalued, in spite of the slightly different story they were told on television. We will have to have an opportunity of studying this important statement and we hope to have an opportunity of debating it at an early date.
  Three questions occur to me immediately. First, when will legislation be introduced? I do not think that the right hon. Lady told us that. Secondly, she selected certain groups of the community would be hardest hit by devaluation. One of the groups which she mentioned were families with a large number of children in a low income bracket. It is precisely these families who could be helped by the Bill if the right hon. Lady were prepared to amend it.
  Mrs. Hart: I think that the noble Lord may find it helpful if I remind him of the exact passage of my statement to which he is presumably referring. I identified as one group those families who must support their children on very low incomes.
  Lord Balniel: I think that the right hon. Lady, if I have understood her correctly, has confirmed that my hearing was absolutely correct. It is precisely these families who could be helped if Amendments were tabled by the Government. We shall want to have the opportunity of studying the statement and debating it. At this stage I express our very deep regret that the Government have not been prepared to accept the advice we proffered them on Second Reading to amend the Bill to help the lowest income families who are hardest hit by rising prices.
  Sir J. Eden: I was hoping that we would get—if not from the Minister herself, at any rate from some other occupant of the Government Front Bench—a clear indication of what the right hon. Lady meant by "at the right time". Her statement was couched in extremely general terms. She said that she would take appropriate action, that she would direct help to those who most need it, that she would do this at the right time, and that action will then be taken.
  All these, as the Minister will appreciate, and as was clearly intended, are very general terms. They beg an enormous number of questions. There are

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  many hon. Members on both sides who must believe, as I do, and as my noble Friend obviously does, that this is the right time, that this is the opportunity, that the right hon. Lady has the chance now of taking appropriate action to help those who need help most, and that the Bill is the opportunity which is provided for her. All that we heard during the days preceding this Committee stage indicated that the Government were considering tabling Amendments to the Bill. The right hon. Lady has not made it clear why that action was not taken, why she considers the Bill to be the inappropriate time, and why she has decided to delay bringing help to those who really stand in most need of it.
  If we cannot have any further intervention from the right hon. Lady at this stage of our proceedings, some other occupant of the Treasury Bench—some other right hon. or hon. Member of Ministerial rank—should have the courtesy of explaining the full implications of the words the Minister used, because her assurances were in such loose general terms that we are entitled to hear more detail from the Government about what is intended.
  Captain Walter Elliot: On a point of order, Sir Eric. The right hon. Lady said earlier that, if she made a statement, it would probably be found that her statement would affect Clauses 1 and 2 and that it might be convenient to allow the debate to cover those two Clauses. I think that you ruled earlier that that would not be possible. In my opinion, the right hon. Lady was absolutely right and her statement considerably affects our deliberations on these two Clauses. I wonder whether you could rule now on the question whether we shall be able in the course of the debate to discuss the statement which the Minister has made.
  The Chairman: I am not sure that I understand the import of the hon. and gallant Gentleman's point of order. In so far as I do understand it, my answer is that we shall have to wait until we reach the Amendments to see precisely what is in order and what is not. It would be premature for me to rule on hypothetical questions of that kind now.
  Mr. Pardoe: I regard what we have just heard from the Minister as disgrace-
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  fully complacent. Hon. Members will know that we have been given a categoric assurance; in many statements from the Government during the last week or so we have been assured that the Government would table Amendments to the Bill and would make proposals for taking care of the very real increase in the cost of living which will occur as a result of devaluation. I am one of those who has argued the case for devaluation over the last three years. It does no good to the case for devaluation to be complacent about the effects it will have on the living standards of the people whom the right hon. Lady has delineated as the old, the sick, and families on low incomes.
  The Minister said that one of the options open to the Government was taking the power which I suggested, but that she had discarded that. I cannot think why she has discarded it. If she is to help the families on low incomes, I think I am right in saying that she will have to introduce new legislation, with all the delays involved in that process. The Minister knows full well how many increases there have been in family allowances in the last 20 years. It will take goodness knows how long to get another increase through. The Bill is out of date today. It is out of date long before it is due to come into force in April: it is devalued.
  Sir Douglas Glover: I had not intended to take part in this debate, but I have been provoked into rising because the right hon. Lady's reply to the Motion was thoroughly disgraceful. Although the Motion was moved as a formality so that the Minister could have an opportunity to make her explanation, as the result of her explanation I think that the Committee should carry the Motion. The Minister has said, in effect, that what the Prime Minister said about protecting the under-privileged from the effects of devaluation will not be put into effect for months. It cannot be, unless it is incorporated into the Bill.
  Everybody concerned with this Committee stage has been expecting the Minister to table Amendments, right up to the last minute. The Minister has explained why she has not done so—because the Government have no intention of doing anything at present. I am sure that many hon. Members opposite,

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  too, would like to table Amendments to put into effect the pledge given by the Prime Minister on television, namely, that it was the Government's intention to protect the under-privileged element in the community. It would have been in order for hon. Members to have done this. I think that the Motion should be carried so that the Committee stage of the Bill could be delayed and hon. Members on both sides could table appropriate Amendments to carry out the Prime Minister's pledge.
  Mr. Hugh D. Brown: I do not want to spoil the enjoyment and pleasure of some hon. Members opposite. If they make their speeches now, it may save time later. It would be unreasonable to assume that the effects of devaluation will be obvious even by April, which is the point of time we shall be discussing later.
  I am not trying to make political capital out of this, as some hon. Members opposite are. I would like my right hon. Friend to assure me that a special watch will be kept on the rise in the cost of living which is expected to occur as a result of devaluation. Hopes having been raised, and statements having been made by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer, old people, particularly those who are being exploited mercilessly at the moment by hon. Members opposite—[HON. MEMBERS: "Oh."] I am entitled to my opinion. It is quite reasonable to expect my right hon. Friend to assure us that a close watch will be kept on the rise in the cost of living resulting from devaluation.
  The Chairman: Order. I cannot allow this to become a general debate on devaluation. What the hon. Gentleman is saying does not relate to the Motion, although it may be appropriate to some other occasion.
  Mr. Brown: I am a very fair-minded man, but that was the whole purpose of the exercise by hon. Members opposite. What I am asking for is specifically related to what my right hon. Friend said in her statement, when she said that the cost of living would be likely to rise by 2½ per cent. to 3 per cent. All I am asking for is an assurance that this will be watched
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  and that when the cost of living starts to rise because of the devaluation, we shall have an indication that the appropriate time has arrived for further increases in benefits to be announced.
  4.30 p.m.
  Mrs. Jill Knight: Many of us were dumbfounded as well as angered by the Minister's statement. I can only assume that she is not sufficiently seized of the problem facing those about whom she said rather nebulously would eventually have to be helped. She said that the rise in the cost of living, against which we are anxious that this legislation should protect those about whom the right hon. Lady has said she is concerned, would be between 2½ per cent. and 3 per cent. due to devaluation, but is extraordinary to imagine, as the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) suggested, that no increase in the cost of living will be felt until next April.
  That is ridiculous. Certainly, the increases about which we are concerned will not be kept down to 3½ per cent. or even 2½ per cent. Price increases for things such as bread, butter, tea, coffee and meat, increases against which those about whom we are concerned need protection, not by next April but in this legislation, will have occurred long before next April. Many of us are extremely concerned about the right hon. Lady's attitude which seems to be "jam tomorrow", and never help for those who need it today.
  Mr. Hirst: Our proceedings are becoming a complete farce. Once the right hon. Lady had intended not to put forward any Amendments to the Bill there was only one thing which she could do and that was to withdraw the Bill until the Government had made their decision. It is prejudicial to the reputation of Parliament that we should have to discuss Amendments to a Bill which in a short time will have no relevance to the protection of those who are badly hit by devaluation.
  The suggestion that the Motion should be accepted is the only right and dignified way to proceed, and I am surprised that the Government should have dreamt for a moment of presenting this situation to the House and insulting those concerned at the same time.
  Mr. Tim Fortescue: It can be seldom that a Minister has had such an opportunity for using legislation actually before Parliament at a time of devaluation or some other economic tragedy. Will the right hon. Lady explain rather more fully why she does not choose to make use of this wonderful opportunity? She has said that she will not do so, but we should like to know why.
  Mr. Frederic Harris: I join with my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) in confronting the right hon. Lady with her extraordinary estimate of a 2½ per cent. to 3 per cent. increase in the cost of living because of devaluation. What basis has she for such a figure? Does she not know that already the cost of imported goods is rising in excess of that amount and that Australian foods have already gone up? Even the Chancellor gave an estimate of about 6 per cent., or 7½d. in the £.Where does the right hon. Lady get the idea that it will be 2½ per cent. to 3 per cent.? [HON. MEMBERS "That is about 7½d."] So it is; I retract that argument.
  The Chairman: Order. This kind of detail is not relevant to whether we should proceed with the Bill.
  Sir Spencer Summers: I may be voicing an opinion which no one else shares, but I cannot help thinking that an important point in the right hon. Lady's statement may have been missed. On Second Reading, my right hon. Friends complained that everything was to be done irrespective of the incomes of the beneficiaries and that the Bill lacked the opportunity to select and to make sure that help was going where it was really needed. It was for that reason that we found fault with the method of using this Bill, but we felt that if it bad to be used, then we would make the best of it.
  I understood the right hon. Lady to say that in her desire to fulfil the Prime Minister's promise to help certain sections of the population who will suffer she has come round to our point of view that the Bill is not a suitable opportunity to fulfil and that she is endorsing our fundamental proposition on Second Reading by saying that she cannot use the Bill to fulfil the Prime Minister's pledge.
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  Let us hope that she does not take too long to find another vehicle.
  Lord Balniel: You have been extraordinarily good to the Committee, Sir Eric, in allowing us to debate this Motion. I am a little disappointed that the right hon. Lady has not taken the opportunity to take back her Bill and re-examine it and try to help those sections of the community in greatest need.
  Before withdrawing the Motion, discussion of which has been of the greatest assistance to the Committee, there are three points which I should like to put from an immediate and off-the-cuff study of the statement. First, the Government clearly have absolutely no intention of giving any immedate help to those in greatest need. They are not prepared to amend the Bill, which comes into operation next April. Those families in the greatest need will not receive enough until next April, and we know already that the benefits which they will be receiving will by then have become seriously devalued from the time of their introduction on Second Reading.
  Secondly, it is clear that if she wished the right hon. Lady could amend the Bill absolutely immediately—only an alteration in the Financial Resolution is required—and it is, therefore, clear that the Government have no wish to amend the Bill to bring help to needy families.
  Thirdly, it is clear that the right hon. Lady has no intention of telling the country when legislation will be introduced—and legislation will be necessary—to implement the Prime Minister's pledge. We will clearly have to seek an early opportunity to debate this thoroughly unsatisfactory statement. We are grateful to you, Sir Eric, for giving us the opportunity to elicit it and with your permission. I beg to ask leave to withdraw the Motion.
  Hon. Members: No.
  Question put and negatived.

  FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL
    Clause 1.

      (INCREASE OF FAMILY ALLOWANCES AND RELATED AMENDMENTS.)
      Sir S. Summers: I beg to move Amendment No. 1, in page 1, line 7, leave out from 'words' to end of line 8.
      Mr. Deputy Speaker: It would be for the convenience of the Committee if we also discussed Amendment No. 2, in page 1, line 10, leave out from '1' to end of line 2 on page 2.
      Sir S. Summers: These Amendments are part and parcel of the same proposition. The effect of this Amendment is to confine the increase in family allowances to the third, fourth and fifth and subsequent children of families, instead of the second, third, fourth and fifth. In other words, it is to leave the position of the second child, or the first qualifying child, unchanged by the increases foreshadowed in the Bill.
      I have always felt that we were not justified in giving special help to the second child of the family. I have not forgotten the original debates when family allowances first began. The justification for family allowances as a principle, advanced as a basis upon which the Beveridge Report was built, was, among other things, that only if the larger families were specially taken care of would it be possible for the two sides of industry to negotiate the rate for the job. The question arose as to where the line should be drawn to enable the rate for the job to be negotiated, knowing full well that larger families were being taken care of separately. The line was drawn at families larger than one.
      I have always contended that there was no justification for drawing that line there. I have always thought that it was a perfectly fair proposition to say to parents that they ought to be capable, through their own exertions, and the normal arrangements in the Welfare State, to take care of two children, and that only for the third and subsequent children should special help be called for, in part to enable the rate for the job to be negotiated without the complications of claims for large families.
      I have had it in mind on a number of occasions to eliminate the help already provided for the first qualifying child. I studied the Bill with some care to see whether this opportunity should be taken to fulfil that ambition. When I reflect upon the increases in the cost of living—no doubt considerably greater than the figures quoted today—which will fall on every family in the land, it seems to be a very inappropriate time to attempt to
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      justify taking from a family the help for the first qualifying child which they already receive. I therefore abandoned the idea of eliminating help for that child. Today I found my case not on the proposition of eliminating existing help, but leaving the position of the first qualifying child unchanged and confining the help to the third and subsequent children of the family.
      When I ventilated this topic I found few people who appreciated the enormous expense of dealing with that child out of the money that we are talking about. Approximately 60 per cent. of the total expenditure on family allowances goes to those with one qualifying child. I am told that out of the £124 million, which is the additional cost of the improved benefits inherent in this Bill, over £70 million is involved in providing the increase from the present 8s. to the proposed 15s. for the first qualifying child.
      4.45 p.m.
      I accept that there is a case for helping families with a number of children. I have not sought to diminish in any way the help that the Government are proposing to give to families of three, four, five or six, on the grounds of national economy or anything else. We have tilted the scale insufficiently favourably towards the large family, and spent too much of the money on the second child. When we are told by many qualified people that Government expenditure must be cut if we are to derive benefits from devaluation it is quite unjustifiable to spend £70 million in those circumstances to improve the position of the second child of every family. The addition of £124 million forecast in the Bill to bring up the total for family allowances to £280 million a year or thereabouts is a staggering item in the total budget under social security.
      If we can give help to the large and deserving families without touching the position of the second child and at the same time save something like £70 million annually of taxpayers' money this must be in the interests of the nation. It would prevent devaluation from producing a worse state of affairs than we had previously.
      Sir J. Eden: I do not know whether I am required to declare an interest, being the parent of what might be described

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      as a larger family, having more than two children. In any case I am speaking against my interests, if I had to declare them, because I want to support my hon. Friend the Member for Aylesbury (Sir S. Summers). He made out on extremely strong case for withholding this proposed increase from the first qualifying child. The figures he gave to the Committee about the weight of total expenditure which will be occasioned by the increase for the first qualifying child are particularly significant at this time.
      In the light of our economic situation we should limit total expenditure as much as we can and ensure that such expenditure as we do incur goes to those families which appear to be most in need. As the right hon. Lady has said, it is the large families, admittedly large families with a low income—I took down her words on this point—which will be qualifying most for the special action which she promised to the Committee, and for which vie have to wait until it is decided that a due and appropriate time has arrived.
      This Amendment gives the Committee an opportunity to move in that direction. This is the chance that we now have to point such help as we believe right in the direction of those most in need. I do not know what information the right hon. Lady has had coming into her Department. It will certainly be much more comprehensive than the results of my own experiences. Therefore, she will be able to give full information about the evidence of need among families in which there are only two children. But I should have thought that it was self-evident that those who had more than two children were likely to be in greater need than those families with just two children.
      Surely we are considering primarily those in need and those in the low income groups. Surely we have not in mind every family with two children or more regardless of income. I do not need the family allowance, I am glad to say, and a number of other hon. Members are in exactly the same position. The counter-argument to the argument that one should not draw it in those circumstances is, "You lose it anyway in taxation". If that is so, this is a totally unnecessary exercise. If the Minister lends herself to that argument, she is supporting the con-
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      cept that what she has most in mind is the poorer family in the low income group.
      We must strive to find a way of giving most help to those in most need. The larger poorer family must certainly be in more need of assistance and benefit than the smaller poorer family. Therefore, in these times of economic stringency, we are right to limit the amount which we propose to spend on this category.
      My hon. Friend the Member for Aylesbury fairly said that he thought that this was not the right time to do away with it altogether. He may be right. But to support the proposition which he made would certainly be taking a step in the right direction, for there can be no justification for the Committee at this time to endorse a proposition to increase from 8s. to 15s. the allowance payable in respect of the first qualifying child. Surely all parents with two children in the family and no more will do whatever they can to look after their own affairs and not so to conduct their home life as to make it necessary for them to depend on the additional 7s. a week.
      If there are families to which the extra 7s. a week is critical—and undoubtedly they exist—there are already facilities in the Welfare State to which they can turn for special help. They can turn to some form of supplementary allowance.
      Mrs. Hart: A man in full-time work—and this applies to many of the poorest families—has nowhere else to turn.
      Sir J. Eden: The man in full-time work certainly has nowhere else to turn, but if he has two children surely he should be able to earn sufficient to make it unnecessary for him to depend on an additional 7s. a week. That is my argument.
      This is a difficult point to explain. What one is saying is that if a family cannot get beyond the second child without having to rely on this additional element of 7s. a week, one hopes that the family will not get any larger. I put it quite bluntly—and I believe this very strongly—and say that we must inculcate some sense of responsibility in these matters. Surely this is the time, when grave economic and financial difficulties are facing the country, to make a start in that direction.

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      Therefore, I support what my hon. Friend the Member for Aylesbury said. While leaving the 8s. element in for the first qualifying child, we should take this opportunity of not endorsing the increase.
      Mr. Will Griffiths: I did not intend to intervene at this stage, and I do so only because I wish to be clear about what the hon. Member for Aylesbury (Sir S. Summers) and those who support him are trying to do.
      The hon. Member for Bournemouth, West (Sir J. Eden) said that anybody with two children should be capable of looking after them. If that is a representative view of the Opposition—and I suspect that it cannot be—
      Sir S. Summers: The hon. Gentleman has misquoted my hon. Friend. My hon. Friend thought that in today's circumstances the family with two children only should be capable of looking after them without an increase of 7s. for the first qualifying child.
      Mr. Griffiths: I do not know whether the hon. Member for Bournemouth, West is like me, but I do not like other people to interpret my speeches. If I misunderstood him, I should have thought that the hon. Member for Bournemouth, West was capable of explaining what he said without the aid of the hon. Member for Aylesbury.
      Sir J. Eden: Since the hon. Gentleman invites me to do so, may I endorse what my hon. Friend the Member for Aylesbury (Sir S. Summers) said? I emphasised throughout the element of the increase before us—the 7s. I endorse what my hon. Friend the Member for Aylesbury said about retaining the 8s. element already in existence.
      Mr. Griffiths: The position is that hon. Members opposite do not object to a family allowance on the existing scale being paid for the first qualifying child.
      Sir J. Eden: The matter can be summed up by asking: when will we take some account of the fact that in the present circumstances, in which we have had to have devaluation, we must bring to an end some element of self-indulgence?
      Mr. Griffiths: If it is the Opposition's view, which I do not think it is, taking
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      them in toto, that as a principle a family with two children should be able to provide for itself, clearly that has not been the view during the years in which both hon. Members have been in the House. During the years of Conservative Government, family allowances were raised. I remember Lord Butler, when he was Chancellor of the Exchequer, raising the family allowance in 1952. We must be generous to the Opposition in assuming that they do not want to end a principle which has obtained since the first Family Allowances Act was introduced, namely, that the first qualifying child should receive some kind of benefit—and we can argue about how much it should be.
      I wish to understand what the Amendment seeks to do. We talk about selectivity or universality in social benefits. Many of my hon. Friends believe that the amount of money available for welfare services should be concentrated on the worst off groups. That is the view which we have heard from the hon. Members for Aylesbury and Bournemouth, West. Am I not right in assuming that the Amendment does not suggest that, by leaving out the second child, the whole of the saving so effected should be concentrated on the third and fourth child? The plain fact is that what the hon. Member for Aylesbury and his colleagues are trying to do is to save money at the expense of a certain number of people entitled to family allowances under the existing law.
      The Amendment seeks to reduce the total amount of money that the Government propose to spend on family allowances. That may not be the intention, but it is what the Amendment would do. On a future occasion I should like to join in the argument with my hon. Friends and hon. Members opposite about where the incidence of support for poor families and people in distress should alight. I emphasise to my hon. Friends and hon. Members opposite, if they are so concerned about poverty in the economic circumstances of the moment, that this would be the worst time of all to cut down on family allowances as suggested by the hon. Member for Aylesbury.
      5.0 p.m.
      Mr. Pardoe: I cannot support this Amendment. Some strange attitudes have

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      been expressed in this debate which I have not heard even from the Opposition recently. I thought those suggestions were dead and buried.
      There has been talk about indulgence. I suppose sexual indulgence was meant. There is absolutely no connection at all between the size of the family allowance and the size of the family which anyone is prepared to have. This has been shown by research all over the world. I remind the hon. Member for Bournemouth, West (Sir J. Eden) that the value to him and to me—because I imagine we both pay tax at standard rate—of the incentive of tax allowance to have more children is infinitely more than it is to anyone in my constituency who is trying to make do on £9 10s. a week take-home pay.
      Sir J. Eden: I do not take the point made by the hon. Member too seriously, but, lest anyone should do so, I should explain that the use by me of the word "indulgence" was not in the terms that the hon. Member would have us believe. I am concerned, as everyone must be, with the position in which the country finds itself. When we are increasing expenditure of any nature we should examine it more critically than ever now. My use of the term "indulgence" was meant to embrace the total of expenditure, because this is watched critically by people outside the country.
      Mr. Pardoe: The hon. Member has explained that to his own satisfaction, but not to mine. A phrase which I am certain occurred in his speech was that people ought to be able to look after a family of two children in present economic circumstances. That is not the case in the kind of family I am talking about.
      In the Bill we are not concerned primarily to relieve poverty. I hope that the Government and the Opposition are with me on this. The principle enshrined in family allowances when Beveridge brought them in was that it is far more expensive for a married man with children to bring up a family and maintain the same standard of living as a single man or a married man without children. All the surveys done on expenditure by the Ministry of Agriculture, Fisheries and Food and the Ministry of Labour show
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      that it takes a married man with two children two-and-a-half or three times as much expenditure to maintain the same standard of living as a single man. This principle is partly what we are talking about. It is not just the relief of poverty.
      We enshrine the principle in our tax system. I would be more convinced by the Amendment if any suggestion had been made by those supporting it that they were prepared to give up the tax allowance in respect of the second child or, indeed, of the first. For my first child, I receive £47 10s. from the State through tax allowance. Someone who does not pay standard rate of Income Tax receives for the second child—
      Lord Balniel: Would not the hon. Member agree that there is a very substantial difference between a family allowance and a tax allowance? A family allowance is something given by the State to an individual; a tax allowance allows an individual who has earned money by his own work to keep a greater proportion of those earnings if he has a family because he has greater commitments than a bachelor or a married person without children. Surely the hon. Member sees this very elementary difference between the two types of allowance?
      Mr. Pardoe: The noble Lord's memory should be long enough to know that since he asked that question two weeks ago there is no point in my giving the answer to it again and saying that I disagree. I cannot see the fine distinction he seeks to make between the money passed over the Post Office counter and money one gets because the State thinks it necessary for one to have it to bring up a family. The proposal is to do away with the £39 at present paid to people in respect of a second child, but to allow the likes of us to keep not only the £39, but the £47 10s. we get in respect of the first child and the allowance in respect of the second child.
      Apart from me, no one seems to be proposing that we should do away with both and reallocate the money. I would have found the Amendment more acceptable and more honest if any suggestion had been made from the Opposition that they were prepared in the interests of the nation, during this terrible catastrophe, to do away with their tax allowances as well. For these reasons we should undoubtedly oppose this Amendment. There

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      is very good reason to suppose that there are many families with only two children who are suffering poverty. There are many families with only one child who suffer poverty although the Family Circumstances Survey does not show this up. It would be wrong in any circumstances to give away that which we have been given by the Government in the Bill.
      Sir D. Glover: The hon. Member for Cornwall, North (Mr. Pardoe) has put forward a most extraordinary argument. Unless one believes that everyone in the country should draw the same income, his argument is untenable. What one gets in tax allowance for children is an amount of money one is allowed to keep as a result of efforts made for the benefit of one's family. It is not something given by the State, but something which the State does not take away.
      That is totally different from the same person paying tax to allow an allowance to be paid from the State to someone in poorer circumstances to relieve his poverty. I cannot believe that a society such as we have in Britain could begin to accept that. One of the things we have been arguing about for a long time is the incentive for people to work. If we take away the family tax allowance, we would take away another incentive to work. Why should a person try to earn more if we take away the benefit he wants to create for his family by his effort?
      I turn to a different argument. The Committee might think that I am a little muddled, because I disagree with a great deal of what my hon. Friend the Member for Bournemouth, West (Sir J. Eden) said. I would, however, recommend the right hon. Lady to accept this Amendment, for a reason which I will now try to put to her, but which has very little to do with the arguments so far put about it.
      There is a great deal of sense, in a time of stringency, not to increase benefits to people who manage to jolly along—I will not put it any higher than that—on the present arrangements. As my hon. Friend the Member for Aylesbury (Sir S. Summers) said, payment of this to the second child will cost more than half the amount that this Committee will disburse; in other words, it is going to cost about £70 million.
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      This is the point I should like to put to the right hon. Lady, in the conditions in which the country finds itself. In other conditions, if the Clause had been produced at some other time, I would be inclined to accept it, but the right hon. Lady has already said this afternoon that she is proposing to carry out the pledge of the Prime Minister that those in the bottom income categories will be protected against devaluation. She will, I have no doubt, remember the Chancellor's speech winding up the debate on Wednesday of last week, when he said that we were going to face a tough time because of devaluation, and a lowering of the standards of living, and that it meant that increases of pay had got to be fought ruthlessly—I think that was his word. I should like to say to the right hon. Lady that here she has got £70 million which could be put into the kitty for the relief of a lot of other cases of suffering, and she could do it by accepting the Amendment moved by my hon. Friend the Member for Aylesbury.
      When she begins to produce her proposals for alleviating suffering and poverty—after all, it is not just children who were the categories the Prime Minister was referring to—she is going to come up against an enormously tough battle with the Treasury and the Chancellor of the time. By this Amendment she would not be taking anything away from anybody, but would be leaving the allowance for the second child, and she would be saving £70 million. She would then be in a very much stronger position, in arguing with the Chancellor about other measures which she will want to carry out, if she could say, "On the Family Allowances Bill, because of the problems confronting the country, I accepted an Amendment which saved you and the Treasury £70 million". Then the Chancellor and the Treasury would be in a very much more difficult position in refusing the proposals that she will probably want to bring before us.
      Mr. Will Griffiths: I wonder whether the hon. Member appreciates, as I am sure he does, that the Bill was published before devaluation, and that it was, therefore, the appreciation by the Government, and presumably the appreciation by the House, at that time, that the vast majority of the families involved—as,

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      indeed, we have heard during the debate today—were then in need of this increase. In consequence of devaluation it is generally accepted that the cost of living will increase. Therefore, if we withdraw he family allowance from the first qualifying child we must worsen the conditions of the family which has a first qualifying child. Surely that must be the case?
      Sir D. Glover: I think the hon. Member has slightly misunderstood the Amendment. The Amendment is not withdrawing anything from anybody. It is leaving the payment of 8s. for the second child and not increasing it to 15s.
      However, I was just going to finish. I do not want to delay the Committee much longer. This Bill was produced before devaluation, and, as I have already said, I do not go along with a great many of the arguments put for this Amendment. I am putting this case to the right hon. Lady in the special context in which we are now debating the Bill. Now, after devaluation, when the right hon. Lady, as Minister of Social Security, is going to have to produce benefits which will cost money, she is going to have to come up against a lot of opposition, particularly from the Treasury and the Chancellor of the time, in getting that money voted, and in these circumstances I believe there is a great deal to be said for accepting this Amendment, which would save her £70 million.
      Mr. Will Griffiths rose—
      Sir D. Glover: I will not give way again. After all, this is Committee stage, and the hon. Member can speak again if he catches your eye, Mr. Mallalieu.
      I have said what I wanted to say. I do not suppose the right hon. Lady will accept the Amendment, but I think that three or four months from now, when she is battling with the Treasury, she will remember the words I have put to her today and will wish she had listened to the hon. Member for Ormskirk.
      5.15 p.m.
      Mr. Marcus Worsley: Before commenting briefly on the content of the debate, I should like to remark on the comments of the hon. Member for Cornwall, North (Mr. Pardoe). That a Liberal Member of Parliament cannot under-
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      stand the difference between social benefits paid under the insurance scheme and a tax allowance, which is a measure of ability to pay tax out of one's own income, astonishes me. We are familiar, of course, with this argument from hon. Gentlemen opposite. Clearly, many Socialists believe that there is no difference, but the fact that an hon. Member speaking from the Liberal bench, apparently as an official spokesman for his party on this matter, should seriously argue that there is no difference is itself a reason why so many people cannot understand the difference between the Liberal and the Socialist parties.
      My main purpose, however, is to comment on the main substance of the debate. My hon. Friend the Member for Aylesbury (Sir S. Summers) has done the Committee a service in introducing it. There is some difference of opinion in the Committee about where the existence of need lies in different sizes of family. My hon. Friend the Member for Bournemouth, West (Sir J. Eden) thought the main need fell in the larger families; the hon. Member for Cornwall, North thought the main need fell in the families with two children. I would not like to give an answer to the question, and I hope that the right hon. Lady, when she replies to the debate, will take the opportunity to speak at greater length about where the hardship lies in relation to the size of family.
      I attempted to put to her a Written Question on this subject last week. I must say that she was not very informative in her Answer. She referred me to an Answer which she had previously given to one of her hon. Friends. I looked that up, and I found that that Answer referred us to the Report on the circumstances of families. So we were not very much wiser, particularly because my Question related not to the situation as it was at the time of that review, but the situation as it would be if these increases were made. In other words, I was not referring to the 500,000 children but to the 250,000 children who would be left, as a result of the Government's measures, below the poverty line. Therefore, I hope the right hon. Lady will take this opportunity to give us this information.
      We need to be persuaded that the ratio she proposes for paying the allowances

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      is right. We need to be persuaded that it is not just the number first thought of. She has added a figure of 7s. to each qualifying child. This, to begin with, alters the present ratio. The relationship between Os. for the first child, 15s. for the second, and 17s. for the third is not the same ratio as Os., 8s., 10s., which is the present ratio. Is this change of ratio something thought out? Or is it, as I strongly suspect it to be, simply a figure thought up and added without proper research? We have criticised the Government over and over again for a lack of consistent research in these matters, and we would like to know exactly what has been the research behind these figures.
      My sympathies are with my hon. Friend the Member for Bournemouth, West. I cannot believe that the ratio which the right hon. Lady is suggesting is based on a scientific assessment of need. I feel certain that it is not, but I willingly and with pleasure give way to her, and hope that she can convice me that it is.
      Mrs. Hart: Let me deal with some of the points raised, but, first, I want to endorse exactly what my hon. Friend the Member for Manchester, Exchange (Mr. Will Griffiths) said, because what we have heard today from some hon. Members opposite has been a classic example of the Conservative approach to the social services, using the slogan of giving help where it is most needed to justify a reduction in total expenditure on the social services.
      That is exactly what the hon. Member for Aylesbury (Sir S Summers) has tried to do, and some of his hon. Friends admit it. He is proposing to take away the increase from the smaller poor family, and at the same time he is proposing to give nothing more to the larger family—
      Sir S. Summers: And the smaller rich family as well.
      Mrs. Hart: The hon. Gentleman is concerning himself with something which strikes me as particularly noteworthy, and I refer to what might be called crocodile tears about poverty in general. I remember that we had a debate last Friday on poverty, initiated by my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts). We had 13 speakers
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      from this side of the House, and only one speech from the other side. That was from the hon. Member for Paddington, South (Mr. Scott). The only other person present on the other side of the House was a poor, lonely hon. Member who was waiting for his own Motion to be called. Let us not have the kind of crocodile tears which we have had today, and I will not have any spurious pretence from hon. Members opposite that they are more concerned about poverty among families than the Government are.
      Mrs. Knight: It is nonsense for the right hon. Lady to suggest that hon. Members on this side of the Committee are not concerned about poverty. She knows quite well that many of us have engagements in our constituencies on Fridays with, about and among the very people for whom she now accuses us of caring nothing. Had a debate on the subject occurred on a recognised Parliamentary day, great interest would have been shown from this side of the Committee.
      Sir D. Glover: Where are all the hon. Members opposite today?
      Mrs. Hart: My hon. Friends are not here because they know that we are discussing an Amendment which makes no sense.
      It is true that many Ministers and back bench hon. Members have constituency and other duties on Fridays, but the hon. Member for Birmingham, Edgbaston (Mrs. Knight) knows as well as I do that the degree of general interest in a subject by any of the parties in the House is fairly represented by the number of hon. Members who attend a debate on a Friday.
      Hon. Members: No.
      Mrs. Hart: Judging by that, it was extraordinary that there were 13 times the number of hon. Members on this side of the Committee who found their constituency engagements allowed them to attend the debate to which I have referred.
      Sir D. Glover: On a point of order, Mr. Mallalieu. Would you rule on what the attendance during a debate last Friday has to do with an Amendment during the Committee stage of this Bill?
      The Temporary Chairman (Mr. E. L. Mallalieu): I do not think that that is a point of order.
      Mrs. Hart: If interventions are permitted by the Chair then it is in order for me to reply to them. May I point out to the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) that when she was sufficiently interested in one Bill passing through the House, the Medical Termination of Pregnancy Bill, her constituency engagements did not keep her away.
      Lord Balniel: In studying the Amendment moved by my hon. Friend the Member for Aylesbury (Sir S. Summers), who for many years has had a great interest in these matters, it is open to all of us to have reservations about certain aspects of it. However, probably quite unwittingly, the right hon. Lady has distorted his argument by saying that he is proposing to reduce the expenditure on family allowances by £70 million—
      Mrs. Hart: I never mentioned that figure.
      Lord Balniel: She might not have mentioned the figure, but that is what it is. What my hon. Friend is doing is releasing a figure of £70 million. He cannot suggest that it be concentrated in particular directions, because the Financial Resolution is drawn so tightly that it is impossible to achieve what we believe should be achieved, which is a concentration of family allowances to those in the greatest need.
      Mrs. Hart: The noble Lord might do well to maintain a little patience, even when provoked. I had only just begun to deal with the arguments advanced by the hon. Member for Aylesbury, and, in a moment, I shall come to the other relevant considerations bearing upon the Amendment.
      I began by saying, and I repeat, that this is a classic illustration of the Conservative approach to the social services in that they advance the somewhat spurious argument under which the concentration of effort on those who most need help is used as a justification for cutting down the amount to be spent on the services as a whole. I start off with that observation.
      The hon. Gentleman makes an assertion in Amendment which is a highly
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      relevant and debatable one. If we leave out of account the fact that he would be seeking to save money on the deal as a whole, he asserts that poverty is to be found more frequently amongst larger families than amongst smaller families. He asked if I had any figures to illustrate our approach to this, and I can help him.
      I have to refer to the Family Circumstances Survey. This has to be the case, as was the case in my reply to the hon. Member for Chelsea when he asked me a Question last week. To that extent, I cannot give up-to-date figures because, so far, we have not instituted a regular running survey which would keep our figures up to date all the time. Perhaps we should consider doing that, as well as considering what priorities we should give to research in my Ministry. It is a matter to which I am giving attention at the moment. The only reliable figures which we have are those of last year's Survey, and the figures revealed have to be qualified by a number of factors none of which it is possible to measure accurately.
      As I explained on Second Reading, there are a number of factors which can change the incidence of family poverty, such as pay increases, rent rebates and rate rebates, which tend to reduce family poverty, and rent increases and price increases, which can increase it. It is impossible to quantify precisely the extent to which, in different and opposing ways, each factor affects the figures in the Survey. Therefore, I can only quote those figures with reservations.
      What the Survey showed was that, of the families with two or more children where the fathers were in full-time work and whose incomes were below the supplementary benefit level as it applied in 1966, 45 per cent. had only two children. In other words, just a shade less than half of the families whose fathers were in full-time work and who were defined as living in poverty were families of only two children. If one takes fatherless families, excluding the one child family which tends to be fairly frequent, 55 per cent. of fatherless families identified as living in poverty were families with only two children.
      The moment that we introduce the kind of Amendment proposed by the hon. Gentleman to restrict the increase in

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      family allowances proposed in the Bill to families where there are more than two children and do not apply the increase to families with only two children, we automatically cut out from the benefits of the Bill a very high proportion—just less than half—of the families with whom we are primarily concerned. I do not believe that hon. Gentlemen opposite would wish to do this, taking it on the merits of the case, unless they were deliberately seeking to cut down the total cost of the Bill and to save expenditure on the social services, because there could be no logic in a desire to do it for any other reason.
      5.30 p.m.
      There are many different views about whether the increase should be distributed according to the number of children in the family. I think that the House knows as well as I do the varying public reactions to the Bill, and to the proposed increase. There are at least four reactions which hon. Members must have met.
      There is, first, the reaction which bears closely on what the hon. Member for Cornwall, North (Mr. Pardoe) said about the relationship between taxation and tax allowances, family allowances, and cash benefits. The argument here is, "Do not give family allowances, or any increase in family allowances, to the better off". Hon. Gentlemen opposite have said this. The answer is that one must closely relate taxation, and what happens within a progressive system of taxation, to what is paid out in family allowances.
      We could do it by the strict "give and take" method, which the hon. Member for Cornwall, North, and some others would like, and in which I see many advantages—and I am looking at all the possibilities—or we could use other methods; but, whichever way we do it, if we have a system of progressive taxation, the net result will be that the better off will pay, in taxation, to subsidise the cash benefits paid out to those who most need them, the less well off. The two cannot be divorced, and this is the answer to those who say, "Do not give family allowances to the better off; confine them to those who are less well off".
      Some argue that higher family allowances should he paid in respect of older children, and this is a tenable argument.
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      It can be argued that as a child gets older the cost to the family increases, because it eats more, it needs more expensive clothes, and more expensive equipment, but this argument is full of difficulties. We do not at the moment have any easy method by which this can be done, and there is the counter argument that, in many families, by the time the children are older the father is perhaps earning rather more, and is therefore less in need of the help which he would get from family allowances. This is an argument on which there are two aspects to be considered.
      There is, then, the third argument, and I am glad that it has not been raised by anyone today, and I think that on Second Reading we all rejected it. It is strongly felt by some members of the public, but I have no sympathy with what they say. They ask, "Why should we who have smaller families subsidies the larger families?". It is a prevalent argument in which I hope all hon. Members will refrain from joining. I hope they will actively counter it among their constituents who may raise it with them, because it is a dangerous argument, and one which we must wholeheartedly reject.
      The fourth public reaction is the opposite of that of the hon. Gentleman. It is, "Why do you not concentrate more of the money available for family allowances on the first child, because it is the first child who is the greatest expense to the family. It may be the first child who necessitates the family moving into a larger house, buying a cot, buying equipment, and so on."
      There are a number of different points of view in relation to the strict merits of the hon. Gentleman's case. Some are tenable and debatable, while others are not. Bearing in mind the figures which I have given, which show that just under half the families defined as living in poverty are families who would not benefit from the Bill if the Amendment were accepted. I say that the Committee should not agree to it. I hope very much that, having explored the issues, and promoted a stimulating debate, the hon. Member for Aylesbury will feel able to withdraw the Amendment.
      Sir S. Summers: I do not propose to delay the Committee for many minutes, but there are a number of points which

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      the right hon. Lady has mentioned which cannot go unchallenged.
      I very much regret that in the first debate in Committee on social security in which the right hon. Lady has participated since she took over this office she hay brought into it what can only be described as a kind of auction of compassion and concern between the two sides of the Committee. If we are to be treated to a lecture about who is more concerned with poverty—and I hope that it will not happen again—we shall consider comparing the degree of compassion shown by her and her predecessor, who felt unwilling to continue in the job with the amount of money put at her disposal.
      We have been told that the effect of the Amendment, which is to save £70 million, is a classic example of the Conservative approach to these matters. There was a classic example of the Socialist approach to these matters in the last thing said by the right hon. Lady, namely, that because some families on the poverty line have two children, therefore all families with two children should necessarily be helped to the extent of an extra 7s. a week. This universality of approach is one reason why far more money than is necessary or appropriate is being spent on the social services.
      When it comes to the question of £70 million, if a case can be made—
      The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Charles Loughlin): I am grateful to the hon. Gentleman for giving way, and I am not trying to be awkward, but the figure of £70 million has been used repeatedly in connection with the Amendment, and I am in some difficulty in finding out where it comes from. As I see it, the net cost of the total upgrading of family allowances under the Bill would be £83 million, and I am assuming that the £70 million relates to the saving in consequence of the non-application of the 7s. to the second child. Perhaps the hon. Gentleman will clarify this for me.
      Sir S. Summers: I have here the figures for 1965, which show that out of 6,423,000 children receiving family allowances, 3,869,000 payments were for the second child only, and since then the population has increased. Perhaps the right hon.
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      Lady understands this, and therefore need not listen. The £70 million to which I am referring is part of the £124 million referred to in the Explanatory Memorandum, the gross payment which the Bill provides. This is, in effect, the payment to the first qualifying child. The right hon. Gentleman is right to say, as was mentioned during the Second Reading debate, that the net cost is about £85 million. The net effect of the Amendment would he about £50 million, rather than £70 million. The hon. Gentleman shakes his head. Approximately two-thirds of the cost of the Bill is in respect of the first qualifying child. Whether one takes the gross figure, or the net figure, it is about two-thirds of the cost of the Bill, and this is a fact which cannot be disputed.
      Mr. Peter Archer rose—
      Sir S. Summers: I cannot give way. We have spent a long time on this, and I was interrupted on a number of occasions during my previous speech. The Minister seems completely to have lost sight of the fact that this is a question of priorities. I do not consider that the claim to public money, to the tune of £70 gross or £50 net, in respect of families with a first qualifying child is anything like as good as the claim by many other sections of the community to public money, in terms of social security.
      The Minister will soon ask us to approve a new Bill for tens of millions of £s to help families particularly in need, if the Treasury will agree. Perhaps the Treasury will not allow the Prime Minister's promise to be honoured, but if such a Bill does come forward my case is that the priority for that Bill will be far greater than the priority for spending money on the first qualifying child.
      It is not up to us to suggest how this money should be spent or whether it should be a saving to the taxpayers' money in total. We are not able to suggest alternative methods of dealing with this £70 million gross or £50 million net. But I am convinced that this is not the best way for public money to be spent at present, and I am sorry that the Government have seen fit to attempt to do so at this juncture.
      Amendment negatived.
      The Deputy Chairman (Mr. Sydney Irving): I think that we can take, with Amendment No. 3, in Clause 1, page 2, line 12, leave out "4s." and insert "3s.", Amendment No. 13, in Schedule 1, page 6, line 21, column 4, leave out "13 0" and insert "14 0"; Amendment No. 15, in line 32, column 4, leave out "13 0" and insert "14 0"; Amendment No. 17, in line 52, column 4, leave out "13 0" and insert "14 0 "; Amendment No. 19, in line 54, column 4, leave out "13 0" and insert "14 0"; Amendment No. 21, in page 7, line 31, column 4, leave out "13 0" and insert "14 0"; Amendment No. 7, in line 39, column 4, leave out "13 0" and insert "14 0"; Amendment No. 23, in line 44, column 4, leave out "13 0" and insert "14 0"; Amendment No. 25, in line 45, column 4, leave out "13 0 and insert "14 0"; Amendment No. 27, in line 46, column 4, leave out "1 10 6" and insert "1 11 6"; Amendment No. 9, in line 48, column 4, leave out "1 10 6" and insert "1 11 6"; Amendment No. 29, in line 56, column 4, leave out "13 0" and insert "14 0"; Amendment No. 31, in line 57, column 4, leave out "13 0" and insert "14 0"; and Amendment No. 11, in line 58, column 4, leave out "1 10 6" and insert "1 11 6".
      Mr. Loughlin: On a point of order. As I understand it, Mr. Irving, it is sought to have two debates on this series of Amendments dealing with dependency benefits—a debate on the second child Amendments and a debate on subsequent child Amendments. It would be for the convenience of the Committee and certainly for those moving Amendments to have one overall debate on all the Amendments relating to the proposed changes in dependency benefits, because they are all inter-related.
      Mr. Worsley: The Minister has anticipated me. I entirely agree with him. In moving the Amendments that I wish to move I shall find myself, of necessity, indulging in repetition, which I hope would be not too tedious, but which might be.
      The Deputy Chairman: If that is the wish of the Committee it will be satisfactory from the point of view of the Chair. If we are to take Amendment No. 4, in page 2, line 13, leave out paragraph (c), with Amendment No. 3 it will bring into
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      the debate all the other Amendments to the Schedule, namely, Amendment No. 14, in page 6, line 21, column 5, leave out "11 0" and insert "17 0", Amendment No. 16, in line 32, column 5, leave out "11 0" and insert "17 0", Amendment No. 18, in line 52, column 5, leave out "11 0" and insert "17 0", Amendment No. 20, in line 54, column 5, leave out "11 0" and insert "17 0", Amendment No. 22, in page 7, line 31, column 5, leave out "11 0" and insert "17 0". Amendment No. 8, in line 39, column 5, leave out "11 0" and insert "17 0", Amendment No. 24, in line 44, column 5, leave out "11 0" and insert "17 0", Amendment No. 26, in line 45, column 5, leave out "11 0" and insert "17 0", Amendment No. 28, in line 46, column 5, leave out "1 8 6" and insert "1 12 6". Amendment No. 10, in line 48, column 5, leave out "1 8 6" and insert "1 12 6", Amendment No. 30, in line 56, column 5, leave out "11 0" and insert "17 0", Amendment No. 32, in line 57, colunm 5. leave out "11 0" and insert "17 0", and Amendment No. 12, in line 58, column 5, leave out "1 8 6" and insert "1 12 6".
      Mr. Worsley: I beg to move Amendment No. 3, in page 2, line 12, leave out "4s." and insert "3s.".
      I am grateful to you, Mr. Irving, for allowing us to take all the Amendments together. It will not have escaped your notice, or that of the House, that we have been in great difficulty, in framing Amendments, in expressing them in the terms that we would wish. It has been difficult for us to keep within the rules of order. This fact, and the extremely close wording of both the Long Title and the Money Resolution, make us regret even more the fact that the Government have not put down any Amendments. They have the ability to alter these things, and we do not. I must leave the matter there.
      The terms of the Amendments are not necessarily those which we would have preferred, and I hope that this will be understood. The Order Paper is littered with our good intentions, but, very properly, the Chairman has not selected them all. In particular, we realise that in discussing this wide group of Amendments there is nothing whatever to help solve the problem of low-earning families

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      or families subject to the wage-stop. matters in respect of which we sought to put down Amendments but which we will not have the opportunity of discussing
      5.45 p.m.
      The effect of the Amendments would be to provide that those who are on National Insurance benefit of any kind should receive the full benefit of the increase proposed in family allowances, instead of only part of it as proposed by the Bill. I know that the Minister and my noble Friend the Member for Hertford (Lord Balniel) had a passage of arms on this subject during the Second Reading debate. I appreciate that these matters are difficult to follow, but I trust that what I am going to say is correct.
      Clause 1(2) increases the benefit for the first child by 3s. The first child is not subject to family allowance. The subsection goes on to decrease the benefit for the second child by 4s. Thus, a family with two children drawing benefit and family allowances would receive a 6s. increase. In other words, a family with two children would draw 1s. less than a family not drawing benefit. I want to know why the Government have chosen this figure.
      Under the Amendments we are maintaining the increase of 3s. for the first child and reducing the decrease in respect of the second child from 4s. to 3s., so that the family with two children will receive an additional 7s. benefit.
      Under the Bill family allowance in respect of the third and subsequent children is increased by 7s. Benefit is reduced in most cases by 6s, and for widows and other analogous cases by 4s. Thus, most families entitled to benefit would, under the Bill, be only 1s. better off in respect of children after the second and, in the case of widows, 3s. better off for children after the second. Thus, a family of three children with sickness benefit would he, in total, 6s. better off and a family with four children 8s. better off. Our Amendments would give the full benefit of 7s. for each child.
      Our first purpose in putting down the Amendments was to discover what thinking lay behind the Government's selection of these figures. Why give a net increase of 3s. for a sick or unemployed family with one child, 6s. for
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      a sick or unemployed family with two children, and 7s., and so on, for a family with three children? It is an odd sort of selectivity. It concentrates the additional help strictly on the first two children of the family.
      I do not want to run over the whole course of our last debate. We then sought some information from the Minister but we got precious little. Is the sort of information that she was able to give the House all that the Government are using for a basis of their choice of figures in this matter? The right hon. Lady, who I am sorry is not present, listed the public prejudices in this matter and the different opinions of the bigger or smaller family. But we should base our social policy not on public prejudice but on knowledge. I regret that, some months after we pressed in the debates on the Ministry of Social Security Bill for a social research unit in the Department, the Minister should still be thinking about it. It is high time that we had knowledge instead of prejudice to go on—
      Mr. Pardoe: What sort of knowledge is the hon. Gentleman asking for the research unit to do? Does he want to establish where poverty exists or needs to be eradicated in these families, or does he want to determine some relationship between the size of the family and the expenditure necessary to keep up a certain standard of living?
      Mr. Worsley: With respect, I see no great distinction between those two kinds of research—
      Mr. Pardoe indicated dissent.
      Mr. Worsley: Perhaps we could debate this more fully some other time.
      I want very wide research. I want the questions which the Minister herself put answered to discover where poverty lies and I hope that the Parliamentary Secretary will give more solid information tonight. This is not just a matter of giving a figure of 45 per cent. or 55 per cent. for different categories. Taking all the families in the country, we want, to know whether there is relatively greater poverty in big or small families.
      The second objective of the Amendments is to argue our general case that

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      help should be given where needed and not across the board. My hon. Friends intend to discuss particular categories and problems, and I am putting the general case. Most of the families categorised in Schedule I, that is, those entitled to benefit under the National Insurance Scheme are in need. This applies not to all, but to most. Most of those helped under Clause 1(1) are in need. Neither of these facts is controvertible. Surely we should concentrate all our help on families in need.
      We wish to help every category beyond those covered by these Amendments. The more one looks at the figures in the Government's proposals the more remarkable they become. The anomaly is that they propose to give, for example, a man earning £100 a week—to take an extreme example—with four children an increase of 21s. a week. But a man on the same income with four children who is unemployed or sick would have an increase of 8s. a week. Is this Labour Government selectivity? The larger the family, the more absurd the difference. If such a man had six children, he would receive, under the Bill, an increase of 35s. a week, but if unemployed or sick 10s. a week—
      Mr. Loughlin: Does not the hon. Gentleman understand what the Bill does? Does not he know that this is a family allowance Bill and not an up-rating Bill for National Insurance? If he does not understand the Bill, he should not speak on it.
      Mr. Worsley: I am grateful to the hon. Gentleman for his courteous manner of expressing himself. What matters to a family is not whether the money comes from the National Insurance Fund or by way of family allowances, but the total amount which will be received. The hon. Gentleman should not cast remarks like this across the Floor, since they show his total ignorance of how families behave. My point is simple and he is not seeking to dispute it. It is that a man with a high income and six children would get an extra 35s. a week under the Bill, while a family with sickness or unemployment benefit would get 10s. It would make no difference to any of those families where the money came from.
      Of course, I am aware that any hon. Gentlemen opposite who speak—there are
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      remarkably few present—may argue that the solution is by way of taxation. We have debated this already, but I hope that the Committee will draw a distinction, now more than ever, between the disincentive effect of taking away a tax allowance and a social benefit, because, unless we do, we will never achieve the sort of incentives for the family man who can increase the wealth of the country and therefore our ability to help the weak.
      Therefore, the Government's selectivity is stupid; we should identify need and then help it. If the Minister cannot come with us all the way in this, it would be possible, indeed, relatively easy, to select certain categories which we have mentioned. The right hon. Lady has borrowed in the Bill a good Tory precedent for giving special benefit to widows, widowed mothers and the like. We respond to this, as far as it goes, but she should go much further. Within the categories listed in the Schedule there is a number of sub-categories which should be specially helped.
      I end with a special plea for the chronic sick. Surely it should be possible to give special help to those families in which sickness is of long duration. It is illogical and hard-hearted to give exactly the same treatment for short-term and long-term sickness. Surely the impact upon the family of long-term sickness is different from and far more deadly than that of short-term sickness. Among these categories, could we not select the chronic sick?
      To give another example—I must not, unfortunately, refer to the Amendment of my hon. Friend the Member for Newbury (Mr. Astor), which is not selected—we could make a sub-category of those requiring constant attendance. But, instead of any particular categorisation, the Government intend to give an overall increase, not selecting areas of need. It is because we feel that the Government should turn from this universal approach, which leaves large numbers of people still in poverty, to a more selective one that we support these Amendments.
      6.0 p.m.
      Mr. Tapsell: I support the Amendment so ably moved by my hon. Friend the Member for Chelsea (Mr. Worsley) and I wish to deal with one of the special

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      categories of need to which he referred and to which we seek to draw attention in Amendments Nos. 9 and 10, in the names of two of my hon. Friends and myself, dealing particularly with the child dependants' allowances of widowed mothers. The purpose of Amendments Nos. 9 and 10 is to ensure that the widowed mother should receive under the Bill increases equivalent to the full 7s. increase in family allowances for each of her qualifying children. In these Amendments we have taken account of the fact that there is under the Bill an increase of 3s. in the dependents' allowance for the first child.
      Perhaps I should briefly give specific examples of the effects that these two Amendments would have. Let me give, first, the example of the widowed mother with two dependent children. At present she receives a family allowance of 8s. a week for her second child, dependants' benefit of £2 2s. 6d. a week for her first child and £1 14s. 6d. a week for her second child, making a total from family allowances and dependants' benefit of £4 5s. 0d. a week.
      Under the Bill it is proposed to increase the family allowance for her second child by 7s. from 8s. to 15s. a week, to put up the dependants' benefit for the first child and £1 14s. 6d. a week for her by 4s. a week the dependants' benefit that she receives for her second child.
      Therefore, the difference between the position of the widow with two children, before and after the Bill, is that her income is increased by 6s. a week. If she were getting the benefit of the full family allowances increase, the difference ought to be 7s. Our Amendment, therefore, increases the dependants' benefit for the second child by 1s. which would ensure that the widowed mother would get her 7s. increase, in just the same way that a man at work and earning £100 a week gets the full 7s. increase for his second child.
      The next example is that of the widow with three children. Her family allowances at present are 8s. for the first qualifying child and 10s. for the second qualifying child, and her dependants' benefit amounts to £2 2s. 6d. for the first child, £1 14s. 6d. for the second and £1 12s. 6d. for the third, making a total of £6 7s. 6d. a week.
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      The effect of the Bill would be to increase the family allowance for the second child by 7s. to 15s. a week, and by 7s. to 17s. a week for the third child, and to increase the dependants' benefit by 3s. for the first child to £2 5s. 6d. a week, but it would cut by 4s. a week the dependants' benefit that she at present receives for both the second and third child. Her total income, therefore, under the new proposals would be £6 16s. 6d. a week, an increase of 9s. However, if she were getting the benefit of the full 7s. increase in family allowance for each of her two qualifying children, the difference would be not 9s, but 14s. a week.
      Our first Amendment increases the dependants' allowances for the second child by 1s., and our second Amendment increases the dependants' allowance for the third child by 4s. to make up the remainder of the difference. The effect of both the Amendments is to ensure that the widowed mother with dependent children gets the whole of the proposed 7s. increase in family allowances and does not have any of it taken away as a result of the reduction in child dependants' allowances.
      I am not saying that the method envisaged by our Amendments is necessarily the ideal method which I would use if I were bringing forward legislation, but, of course, within the rules of order one has to debate these subjects as best one can. Nor, let make it clear, am I advocating any general increase in the overall level of expenditure on social services. Of course, this is not an appropriate occasion to indicate where savings should be made to pay for the increased expenditure from the National Insurance Fund which these Amendments would involve, but I hope that on another occasion I shall have an opportunity to show where I would make those savings.
      The Prime Minister's pledge, which has been reiterated in a very vague and general form this afternoon by the Minister of Social Security, is to protect particularly vulnerable groups from the serious price rises which are bound to result from devaluation. This must be an aim which we all share, however, much we may deplore the policies which have inevitably produced this catastrophe. There must be general agreement, too, that the widowed mother with dependent children

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      is particularly in need of our compassion and our help at this time.
      I was sorry that the right hon. Lady, who is not with us at the moment, saw fit earlier this afternoon to suggest that we on these benches are, in her words, "shedding crocodile tears" when we indicate our anxiety and sympathy for the underprivileged groups in our community. If I may say so with respect to the right hon. Lady, whose qualities I admire, I think that at this early stage in her career as Minister of Social Security this is an unfortunate approach. We shall, no doubt, have many debates on these matters. I fully accept the compassion and sincerity with which she and her colleagues approach suffering and poverty in our midst, and I would have thought it was childish nonsense to suggest that this was not a feeling that is shared by Members in all parts of the Committee. I hope that in future we shall be able to conduct our debates without these rather out-dated and disagreeable charges being bandied about.
      There can be few people in our community more vulnerable to a rise in prices of the basic necessities of life than the widowed mother. I naturally welcome the recent increases in dependent child allowances for widows, but I am unable to understand the reasoning behind the decision taken in this Bill, and which I seek to challenge in these two Amendments to which I am speaking. I put down these Amendments not in any hostile or partisan spirit but to enable the Joint Parliamentary Secretary to explain the reasons behind the thinking in this Bill, and in particular to give answers to the two following questions.
      First of all, why in this Bill, as in the legislation introduced in 1964 by the present Government, has the Minister abandoned the policy of Conservative Governments, anyhow from 1956 onwards, of singling out the widowed mother with dependent children for especially favourable treatment when funds are made available for an increase in welfare benefits? When I say "especially favourable treatment" I am comparing her, for instance, with the sick and unemployed. I hope that no one will suggest that I do not fully accept the case for giving them special help, too, but I am now arguing the narrow point
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      of whether, in various categories of special need, there is not a continuing case, as was accepted by Conservative Governments, for giving especially favourable treatment to the widowed mother with dependent children.
      After all, in the great majority of cases the need for sickness or unemployment benefit is of relatively short duration. It tends to arise in families where the breadwinner is still alive and where, because he has recently become unemployed or sick, one may usually expect there to be some economic buffer, as a result of savings when he was at work, against real hardship. With the widowed mother with dependent children—except during the first few weeks after the death of her husband, the family's breadwinner—this is not the case. Widowhood and motherhood are generally of much longer duration than sickness and unemployment. This was presumably the reason which led Conservative predecessors of the right hon. Lady in her office to give greater increases in various forms to widowed mothers than to other categories of special need. While all were helped, the widowed mother got slightly more help than the others. Against this background, I ask the Minister what has led the Government to abandon this policy of especially favourable treatment for the widowed mother with dependent children.
      My second question is this. The Beveridge Report treated family allowances—which had already been announced in principle by the war-time National Government before the Report was published—as separate from, although essentially complementary to, the insurance-based welfare benefits which were recommended in that Report.
      This approach, of keeping family allowances separate from National Insurance benefits, has been followed by all Governments ever since. When family allowances were increased under Conservative Governments, National Insurance benefits were not reduced to take account of this. Yet, in the Bill, it is proposed to reduce some child dependent allowances to take account of the increase in family allowances.
      It is important for the Committee to realise, whatever the arguments for or against doing this, that the proposal to

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      do so introduces an entirely new principle in to the administration of the social services. Never before when family allowances have been increased have National Insurance benefits for dependent children been reduced. There may be a good reason for this but we have not been told what it is and I hope that the Parliamentary Secretary will state the reason that has led the Government to introduce this new principle.
      I ask the Government to bear in mind the psychological impact of this. realise that all Governments, from time to time, when they have adjusted National Insurance benefits in an upward direction, have adjusted National Assistance benefits downwards to take account of that. I hope the Minister will accept that that has always led to a widespread sense of injustice. I readily accept that Conservative Governments did it. More than 10 years ago, when I was responsible in the Conservative Research Department for social security matters, I sought to persuade Conservative Ministers that some administrative method should be found so that when National Insurance benefits went up, they should see that at the same time or shortly afterwards National Assistance scales did not go down.
      Although it is true that what really matters is the overall income of a family, people who are very near the poverty line and who read in their papers that they will get a certain number of shillings more—hon. Members know from experience of receiving letters precisely what happens—they are upset to find that a lot of the increase is taken away with the other hand.
      6.15 p.m.
      It has always seemed to me—and I have argued this at party committee meetings upstairs and elsewhere—that when National Insurance benefits are increased, then a new and higher level of what used to be called National Assistance scales should be brought in at the same time to ensure that the beneficiary gets the new and full increase. The right hon. Lady's proposals seem to be extending this bad old tradition from the past of which both Conservative and Labour Governments have been guilty—into a new sphere. For the first time, she is going to adopt exactly the same approach when increasing family allow-
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      ances. She will take away some of the increase with the other hand by reducing the widow's child dependent allowances.
      I urge her not to approach this problem with a closed mind and to realise that it is not merely material help that is important to these people but also that they should feel that we in the House of Commons and the people in Whitehall who administer their affairs regard them as individuals and understand their problems.
      Why has the Minister introduced this entirely new principle of reducing National Insurance child dependents benefits when increasing family allowances? If, as I hope, the Minister feels that there may be some force in my arguments, I trust that she will indicate her readiness to accept the spirit of Amendments 9 and 10 and, in due course, introduce her own Amendments to give widowed mothers with dependent children the full benefit of the proposed 7s. increase in family allowances.
      Mr. Fortescue: I am glad to speak following my hon. Friend the Member for Horncastle (Mr. Tapsell) because I had intended to make much the same point, but in a different way. The preamble to the Bill announces that the Measure is designed to:
      "…increase family allowances … and make related adjustments of certain benefits under the National Insurance Act, 1965…"
      and other enactments. My first question is similar to that asked by my hon. Friend the Member for Horncastle. Why should such benefits under the National Insurance Acts be in any way related to family allowances? They never have been before. Why are they being so related this time?
      On Second Reading the Minister pointed out forcibly and convincingly that the chief problem of poverty related to the families of wage-earners whose wages were not high enough to properly support their children. There are, of course, many other problems, but hon. Members were made to realise that this is a real problem which we should ' be considering. Other problems can be dealt with by other means, but the children of a large family of a man who is not earning enough to keep them properly, who are, therefore, suffering and

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      who are unable to obtain any benefit from anywhere else must today receive our careful attention. The Bill falls far short of bringing the right kind of help to these children. It in some measure helps the other children who are in poverty, but the main burden of child poverty is not properly tackled by the Measure.
      It has already been pointed out that the relation of family allowances to payments to children under the National Insurance Acts results in the production of figures and calculations of great complexity. On Second Reading and today there have been friendly arguments about exactly how much is involved for how many children and whether certain allowances should be increased or decreased. A large mass of figures appears in the Schedules to the Bill and today we are considering many Amendments to those Schedules.
      These matters are now so complex that it takes a considerable expert to understand them. Most of those affected by the changes do not understand them, and very much resent the docking of an increase to which they think they are entitled. I am sure that the Joint Parliamentary Secretary hears about this from his constituents, just as we do. The point should not be overlooked. It is important that in our social security legislation justice should be seen to be done, and at the moment it is becoming too difficult for many people to understand.
      During the Second Reading debate I suggested that it would be far simpler to deal with this complex question by introducing negative Income Tax and completely abolishing family allowances as such. The Parliamentary Secretary replied to that point at considerable length, and I see from the OFFICIAL REPORT that last Friday he replied to it at even greater length when the question was raised by some hon. Members opposite. I very much regret that I was not here on Friday. The right hon. Lady's criticism also applies to me, but I believe that it was possibly more important to try to give advice to the people of Liverpool who are affected by the Government's policies than to have been here arguing about them.
      Last Friday the Parliamentary Secretary said that negative Income tax should
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      not be disregarded completely, and he went much further than he did during the Second Reading debate. He even commended the system in some ways, but he again raised innumerable objections about the practicability of introducing it because of administrative difficulties. But there would be great simplification if the principle of negative Income Tax were applied only to those in employment and the present system of benefits, exemplified in the Schedules to the Bill, were retained for those worse-off members of the community in whose families the breadwinner is not in employment. The family allowance could still disappear completely, and the system of negative Income Tax could be introduced simply for those in employment.
      I could quote many of the objections the hon. Gentleman raised and refute them, but I do not think that this is the occasion. If the system of negative Income Tax were restricted to those in employment, the objections would not hold much water. The Parliamentary Secretary asked on Friday how Income Tax in reverse would be paid if a man left his wife. I do not think that that was a very relevant argument, because many people leave their wives, I regret to say. I do not seek to encourage the practice, but there is no great difficulty in dealing with their Income Tax affairs by a system of negative Income Tax after they have done that regrettable thing.
      I do not want to pursue that point much further, because I believe that I am entirely out of order. But I suggest to the Parliamentary Secretary that if the principle we argued about last week could be re-examined, with a view to applying it only to those in employment and not to the other categories of the worse-off people, it might seem suddenly to be much more practical than it did in the past.
      Mr. Loughlin: May I make an oblique reference in passing to this issue, which is completely out of order?
      The Chairman: Only if it is very short.
      Mr. Loughlin: The hon. Member for Liverpool, Garston (Mr. Fortescue) did me the courtesy of reading the speech I made on Friday. But I can only

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      assume that he did not read it very carefully, because I said that I would not rule out a system of negative Income Tax but that we should have to be absolutely sure that we got it right before we would dream of introducing it.
      I should now like to turn for a moment to what was a rather silly outburst by me against the hon. Member for Chelsea (Mr. Worsley). I am afraid that I was a bit rude to him. I consider that that was silly, and I hope that he will accept my apologies and let me withdraw the remark. I became a bit exasperated because, having been associated with the fill over a long period, I have reached the point where I make clear divisions in examining its real purpose and intent.
      The Bill does not pretend to be a general up-rating of National Insurance benefits for children. Those benefits were increased by 2s. 6d. a week as recently as last month. The Bill's main aim is to increase family allowances. My right hon. Friend the Minister said on Second Reading:
      "The object of a family allowances increase, after all, is to help families who cannot be helped through the National Insurance and supplementary benefits scheme, and to restore to some extent the balance between family allowances and the benefits under those schemes …"—[OFFICIAL REPORT. 8th November, 1967 Vol. 753, c. 1039.]
      Unlike insurance benefits, family allowances are payable whether or not the recipient is in work. Several hon. Members have referred to Beveridge, who advocated a system of universal children's allowances. When he did that, Beveridge recognised that earnings do not normally take account of the differences in the size of families. However, a working person with children is relatively worse off than a childless person with the same earnings. Family allowances, which are taxable and therefore decline in value with increased earnings, are one way of recognising the difference in responsibilities.
      Similarly, on personal benefit alone, beneficiaries with children would be worse off than the childless beneficiaries. But that is already recognised in the provision for the children of beneficiaries by dependency benefits, which supplement family allowances and bring the amount payable for each child of a beneficiary up to the appropriate total.
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      In the Bill, we are fixing this total at 28s. per week for the child in regard to most National Insurance benefits, and £2 5s. 6d. for widows. Contrary to what some hon. Members opposite have said, the rates of benefits have always reflected the existence of family allowances. This is seen clearly in the provision of lower rates for second and subsequent children than for the first child. But because family allowances have previously been allowed to fall behind the improvements in benefits, it has been necessary for benefits to form a larger and larger part of the total provision.
      6.30 p.m.
      The hon. Member for Horncastle (Mr. Tapsell) said in his very clear speech that the offsetting of dependency benefits on this occasion was contrary to the policy pursued by the Tories in the past. He said that when the Tories increased family allowances they did not decrease widows' child allowances. The Tory Administration in 1952 increased the family allowance from 5s. to 8s., and at that time the widows' child allowance was half-a-crown. It would have been extremely difficult for the Tory Government to reduce that half-a-crown.
      Mr. Tapsell: On the occasion to which the hon. Gentleman is referring the Conservatives had just come to power after six and a half years of Labour rule and were facing the very serious situation that they inherited from the Labour Government.
      Mr. Loughlin: The hon. Gentleman gets over-sensitive and distorts history. I do not want to have a discussion on this Bill that is loaded politically. Hon. Members know my attitude to political debate and discussion. I do not think that I have ever had a reputation here for being kindly to my political opponents, but I believe that there are occasions when one can do it and occasions when one need not.
      Let me take the hon. Gentleman back to 1952, without going into whether there was an economic crisis or not. I am not arguing that the Tories were wrong in merely increasing the family allowance from 5s. to 8s. That is not under discussion. The point is that it would have been very difficult for them to reduce the widows' allowance when it was half-a-crown.

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      The second increase in the family allowance by the Tory Administration was in October, 1956, when the increase was 2s. per week. That was tied to only the third and subsequent children. If anyone had talked about making adjustments in any other benefits in relation to increases of that kind, it would have been almost impossible to sustain.
      Mr. Tapsell: I apologise for interrupting the hon. Gentleman a second time. I also am very reluctant to get involved in anything in the nature of partisan discussion on this matter. But the hon. Gentleman must admit that he is slightly trailing his coat. Having dealt with two family allowance increases, he will be going on to emphasise the very substantial increases which Conservative Ministers made in child dependency allowances to widowed mothers which they inherited at the absurdly low level of 2s. 6d. a week from the Socialists.
      Mr. Loughlin: The hon. Gentleman is getting excited for no reason. I am merely dealing with the point that he made. I am not seeking to score any political advantage. All I am saying is that in the light of the increases granted during that period, it would have been virtually impossible for the Tory Administration to make corresponding decreases in the dependency benefits. It is as simple as that, and I am not seeking to score a point. I am not arguing that the Tory Party did not increase the dependency benefits, for that would be flying in the face of history. I hope that the hon. Gentleman will believe me when I say that all I want to do is to explain what the position is.
      I should have thought that the complementary nature of the benefits did not need explaining. Any examination of the existing dependency benefits, or even the proposals in the Bill, would have demonstrated that in one case the dependency benefit is a pure dependency benefit—because no family allowance is paid in respect of the first child—and that in all other cases the sum total, which at present is 25s., is made up of the existing rate of family allowance with an element of dependency benefit bringing it up to the 25s. We are not doing anything in practice to which exception can be taken.
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      If it is not accepted that the dependency benefits and the family allowances have a complementary nature, I can understand why there is some argument about the concept that we are giving substantial sums of money to people earning £100 a week and taking from people when they are sick and unemployed. But we must get clear in our minds that what we are dealing with here is only one facet of the social security structure to which both sides of the Committee have subscribed so far. The £100 per week man is a bit of a red herring. Whatever we do in this field, unless we accept the situation of complete selectivity it will always be possible for someone to say that we are giving a lot of money to someone who does not need it and could give more money to someone who does.
      I shall be ruled out of order it I tall, about selectivity in this debate, and I do not want that. I merely tell the hon. Gentleman that I think that he was less than fair—I put it no higher than that—when he began to talk in terms of the £100 per week man and the person who is unemployed and sick. My right hon. Friend and I are as concerned about the unemployed, the sick and all who are dependent upon National Insurance benefits as any hon. Member. But if it is accepted that there is a complementary nature between dependency benefits and family allowances, what we are doing is reasonable.
      It could be argued on this basis that there is no need to increase dependency benefits. Family allowances, on the one hand, are designed to assist parents with large families and with family commitments. I accept the point made by the hon. Member for Cornwall, North (Mr. Pardoe) that there is an additional factor, but in the main the purpose of family allowances is to deal with the situation where a man is in work. The purpose of dependency benefits, on the other hand, is to deal with the situation where a man is not in work but is in receipt of National Insurance of one kind or another.
      I said that it could be argued that in a family allowance uprating Bill of this kind it would not be wrong if there were no increases in dependency benefit rates. But we are increasing those rates on this occasion. The figures given by the hon.

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      Member for Chelsea (Mr. Worsley) were correct. We are increasing the first child allowance by 3s., making the total 28s instead of 25s. We are increasing the total allowance for the second child by 3s. Then there is the increase of Is. for subsequent children.
      The hon. Gentleman asked me on what basis we arrived at these figures. The purpose of partial offsets, as distinct from total offsets, is that this constitutes part of a package deal. There will shortly be increases in charges for school meals and for welfare milk for children below the age of five. The hon. Gentleman confessed that he was a little confused about the figures. He was not half as confused as I became when I attempted to calculate the effect of this, with all the permutations that arise from some children being at school and some not being of school age.
      We have calculated, as far as it is possible to calculate, that we can offset, by the amounts by which we are increasing dependency benefits, the possible increases for families which may arise consequent upon the increased charges for school meals and welfare milk. In the package deal we are ensuring that the fourth and subsequent children of families will receive free school meals as of right.
      Mr. Worsley: Is the hon. Gentleman saying that the whole of the net increase of benefits and family allowances, taken together, will go, as part of this package deal, in the increased cost on school meals and welfare milk?
      Mr. Loughlin: No, the whole of the net increase will not go in that way. We have tended to err on the generous side. It must not be assumed that the whole of it will be expended in this way. There is an added benefit in our calculations by virtue of the fourth and subsequent children in large families receiving free school meals. It works out at 3s. 4d. a week over the year for each child having free school meals.
      6.45 p.m.
      Mr. Tapsell: As the child dependency allowance for third and subsequent children is being reduced by 4s., the larger family is losing as a result of the reduction in the child dependency allowance.
      Mr. Loughlin: I would not be dogmatic about this. It does not neces-
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      sarily follow in this context that a family with more children, taking the balance between the household's expenditure and its income, needs a greater amount of money because the offsets are part of a package. Some work has been done on this. Frankly, it is not very clear. I appreciate that we are reducing the benefit for the fourth and fifth child by a greater amount than we are for the second and third child. The three-child family gets the additional benefit for the first child of 3s. We have tried to deal with this situation on the basis of the complementary nature of the benefits. We have done it with a degree of equity. I hope that in the light of this explanation the Amendment will be withdrawn.
      Dame Irene Ward: I must apologise to the Committee for not being here when the debate began. I was attending the Select Committee dealing with the Parliamentary Commissioner. I am therefore at a disadvantage in that I have not heard the whole debate. I also apologise to the Chair for not having risen quickly enough to catch the eye of the Chair before the Joint Parliamentary Secretary began his reply. In the beginning I regretted my tardiness, but now I am rather pleased about it, because I have had the benefit of hearing the whole of his case.
      The hon. Gentleman merely said that the Government could not do anything for the widowed mother. He gave no satisfactory explanation why there was this particularly unfortunate attack, because I regard it as such, on the widowed mother. The country does not understand the complexities of this scheme. However much study is devoted to this subject, it is difficult to understand the reasoning behind the Government's decision. I have had a great deal of correspondence on the subject. I have written to the appropriate Ministers asking for a reply. We all appreciate the fact that we get full explanations from the Ministry, an establishment which was laid down a long time ago. Whether we agree with the explanations is another matter.
      We all have every reason to thank Ministers from this Ministry for the way in which they try to explain their decisions, and I am always grateful on behalf of those who write to me and to whom

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      I send on the correspondence. Whether they are any wiser when they have read the answers is a moot point, and I sometimes do not understand them myself.
      I want to quote one paragraph from a letter about a constituent of mine. It took the Parliamentary Secretary three full pages to reply to me about a very simple case of a widowed mother. I will not weary hon. Members by reading it all, but suffice it to say that the explanation is much wider than that which the Parliamentary Secretary has just given us, although equally unsatisfactory. It is about one of my constituents and it explains the reduction in the allowance for one of her children. It says:
      "First of all, I should confirm that the family allowances increase which"—
      my constituent—
      "is now receiving for her fourth child has led to a reduction in the amount of the increase of widowed mother's allowance payable for that child. As a result of the recent changes, she receives for the child 5s. a week extra in family allowances and 2s. 6d. less in widowed mother's allowances, leaving her with an advantage from the changes of 2s. 6d. a week for the child. I can see why"—
      my constituent—
      "should feel that she is unfavourably treated in comparison with an ordinary working person who appears to get the full advantage of the 5s. increase in family allowances for a fourth (or subsequent) child."
      The Minister is able to see why she should feel aggrieved. I am delighted that we should have had this debate today, because, whatever the reason for family allowances—and I accept all that the Parliamentary Secretary said about them—the fact remains that the widowed mother is to be in a disadvantageous position, and that is intolerable.
      The Parliamentary Secretary suddenly shot off at a tangent to speak about school meals. They have nothing to do with the subject. The way in which free meals are allocated has been part of our policy for many years and does not affect the fact that the widowed mother is at a disadvantage compared with other working people in the matter of allowances for certain children.
      I feel strongly about this subject because I was the daughter of a widow and certainly my widowed mother never had a large income. I can speak without prejudice. The fact remains that the child of a widow does not have the
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      opportunities which would be provided by a father who by his own skill, whatever it might be, could rise up the salary scale and thus automatically raise his family's standard of life. The children of a widowed mother, unless she marries again, are always at a disadvantage, because her salary or social security, the income which accrues to the family, remains at roughly what it was when the father died. In normal circumstances, as the breadwinner gets older and gets more skilled and adds more years in the Civil Service or in his profession, the standard of life of the family automatically goes up. The family of a widow hardly ever moves from the static position it took up when the mother became a widow.
      It is therefore tremendously important that Parliament should always accept, as we have always tried to accept—I do not make any political points—that we have to do something special to protect the family of the widow. Having listened to so many promises and pledges, and attacks when my party was in office, I am bitterly disappointed that the Ministry of Social Security should have decided that it is right to refuse to widows the dependants' allowance in respect of some of their dependent children.
      The Parliamentary Secretary said that family allowances were introduced for something quite different a very long time ago. I remember Eleanor Rathbone, our late colleague, the individual who brought about the acceptance of family allowances in our legislation. It took a long time for her to get them accepted as a matter of policy, but I am certain that Eleanor Rathbone would not agree that family allowances should now be operated to the disadvantage of a widowed mother.
      I do not think that I need argue further, because the problems and difficulties and figures have already been explained. The explanation given by the Ministry in this long letter is quite unsatisfactory. It is very sad that widowed mothers should feel that they are being unfairly treated. Widows have enough sadness in life without having to feel that they are badly treated compared with families in work and with the opportunity of an ever-increasing standard of life. Psychologically, it is bad for them that they should do so.

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      I therefore very much regret this decision. I do not accept the Parliamentary Secretary's explanation. However, hon. Members opposite are in a majority, although it is extraordinary how few of them have contributed to these discussions on a very important Bill. That augurs badly for the Prime Minister's pledge when we consider the other problems which will be raised. I will say no more than that. I very much regret the decision not to accept the Amendments to give widowed mothers a better deal.
      7.0 p.m.
      Lord Balniel: I apologise for missing the first few moments or two of the Joint Parliamentary Secretary's speech but, having apologised to him, I am bound to say that, as I listened to him, I grew more and more disheartened, not because he had taken little trouble in replying—because he tried to reply to the satisfaction of the Committee—but because it was sad to hear him turning down a series of Amendments which we think are very reasonable and rather important. The whole Committee is indebted for the way in which these Amendments have been submitted by my hon. Friends the Members for Chelsea (Mr. Worsley) and the Member for Horncastle (Mr. Tapsell).
      We recognise that we are discussing, in these Amendments, probably the most complicated aspects of social welfare schemes, and the way in which my hon. Friends spoke has been of value to the Committee. May I say how much I also appreciated the speech of my hon. Friend the Member for Tynemouth (Dame Irene Ward), because she touched on something of great importance in human relations at the Ministry of Social Security.
      We all pay tribute to the way in which the Ministry answers letters, probably more carefully than any other Department of Government. But there must be many a Member of Parliament who looks at the length of the letters, gives a sigh of exhaustion, and passes it straight to the constituent. I suspect, and it is no more than a suspicion, that the complexity of the replies received from the Ministry is not only bewildering to Members, who on the whole are fairly conversant with the structure of social security, but extremely complicated for the great majority of constituents. I am making the point because it was said very effectively that a
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      simplification of replies from the Ministry would be widely appreciated by constituents who raised matters.
      Mr. Loughlin: The hon. Gentleman can rest assured that we have given very careful consideration to the nature of our replies, the degree of detail we think ought to go into them, and how we can make them convey the picture in its entirety. He may be interested to know that I have had more thanks given to me personally and in letters from Members opposite than I have from my hon. Friends. They have said that the letters we send out are fully detailed and couched in reasonably nice terms. We have looked at this. I am convinced that it is impossible for us to give the information required in complicated cases of this kind in any other way.
      Lord Balniel: Clearly the Parliamentary Secretary has looked into this matter, and it does not surprise me that he has received more "thank you letters" from this side of the Committee, which is noted for its courtesy, than from the other side. These Amendments are designed to help various groups of people in the community so as to ensure that, following the passing of this Bill, they receive the full benefit of allowances. The purpose of the Amendments, and they are multitudinous, is to ensure that certain groups of people should have the full benefit of the 7s. increase in the cash family allowances after taking account of the fact that under the Bill the National Insurance child dependants' allowance for the first child has been increased by 3s.
      The problem to which my hon. Friends have called attention arises for the second and subsequent children, because the National Insurance dependants' allowance has been reduced for the second and subsequent children. These Amendments are designed to bring additional help to three broad groups of people, whom we believe should be given a high priority in our social policies and who should get the full benefit of the 7s. increase. It is true that there are other groups of the community whom we feel should receive the full 7s. increase. The Amendments are on the Notice Paper and, as my hon. Friend the Member for Chelsea has said, they show our intentions although, alas, they are out of order under the Financial Resolution.

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      The groups that we are discussing fall into three separate categories. First, there are widows with children. Secondly, women drawing a child's special allowance. This is an allowance introduced in 1957. and is payable to a woman whose marriage has been dissolved or annulled. It is paid on the death of her former husband if she has a child towards whose support the former husband has been contributing. The third group for whom we are trying to obtain the full 7s. increase are the sick and the unemployed with children.
      During the Second Reading debate the Parliamentary Secretary and I had a certain dispute about various figures. I appreciate now that he was trying to be helpful, and that there was a misunderstanding between us as to what exactly we were discussing. I appreciate his helpful attitude, but it does not alter the fact that the principle which I was enunciating was absolutely sound. I concede that in detail the Parliamentary Secretary, with the full resources of the Civil Service behind him, as well as his great knowledge of the Bill, was correct, hut the principle that we are discussing in these Amendments is an important one and it is right that we should be debating it.
      I do not want to burden the Committee with more than a minimum of figures because they have already been given by my hon. Friends, but I would like to give an example of what happens under the Bill. First, the sick and the unemployed with children. Under this Bill the married man who is unemployed or ill, with two children, will benefit only to the extent of 6s. a week instead of a full 7s. increase in family allowances. This is because of the reduction in the National Insurance child dependants' allowance for the second and subsequent children. The same failure to give the full benefit of 7s. arises for the widowed mother and for the woman drawing a child's special allowance. The only other example I will give concerns the widowed mother for whom my hon. Friend the Member for Tynemouth made such an eloquent plea.
      This is an example of a widowed mother with three children. Under the Bill she gets, I believe, a total of £6 16 6s. This represents an increase of 9s. If she benefited to the full extent
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      of the 7s. family allowance increase she would be receiving, not an increase of 9s., but an increase of 14s. I welcome what the Government have done in this Bill in giving additional help to the first child.
      Mr. Loughlin: The hon. Gentleman has fallen into the same error about which I warned him before. He is using a lot of figures, but I want to ask him one simple question. Does he accept the complementary nature of dependency benefits and family allowances? Does he accept that at present the first qualifying child in a family gets a dependency benefit of 25s., and that that is a straight-through benefit? The second qualifying child gets National Insurance benefit of 17s. and then gets the 8s. for family allowances making a 25s. actual allowance. With the third and qualifying child, there are the two elements in the total allowance of 17s. in National Insurance plus the 10s. family allowance. If the hon. Gentleman does not accept this, why has he not been fighting it all along the line instead of trying to confuse the issue when we are simply accepting the same complementary principle as we have had in the past?
      Mr. Tapsell: May I make a point which is directly relevant to the question which I asked the Parliamentary Secretary to answer but which I do not think he answered, although he gave some explanations? We on this side accept that every social welfare benefit is, to some extent, complementary to every other one. The question which I asked him was: does he realise that he is introducing an entirely new principle by reducing National Insurance benefits when he increases family allowances?
      Lord Balniel: I was perfectly clear in my mind about this matter before the Parliamentary Secretary's intervention. His very prolonged intervention must have caused confusion, not only in my mind, but in the mind of all hon. Members. The answer, as given by my hon. Friend, is that we accept the complementary relationship between family allowances and the insurance dependency. All that I am saying is that there are certain groups of people—widowed mothers, the sick, the unemployed with children and the women drawing child dependency allowance—who are priority groups in the social welfare structure. But we are very

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      sorry that the Government have so arranged the structure of the Bill that these groups do not receive the full 7s. increase for their second and subsequent child. The whole point of these Amendments is that we believe that that group of people should receive the 7s. increase rather than the lesser amounts included in the Bill.
      It is clear that, regrettably, the Government do not accept these Amendments. All that I ask them is this: will they consider again, not just the sick, but the chronically sick, those who have been sick for longer than six months, because among this section of the community there is a concentration of financial hardship? Will they also look again sympathetically to the problems facing widowed mothers which have been advanced by my hon. Friends?
      Amendment negatived.
      The Temporary Chairman (Sir Harry Legge-Bourke): Does the hon. Member wish to move Amendment No. 4 separately?
      Mr. Worsley: No.
      Question proposed, That the Clause stand part of the Bill.
      Mrs. Knight: During the speech of the Parliamentary Secretary, there were one or two occasions when I thought that he was, tantalisingly, on the edge of a break-through to a great truth. In a sort of verbal minuet, he approached it and then retreated. While I was left gasping and wondering whether he would ever let the true light of it break upon him, he left the matter and went on to another subject altogether. It is essential to boil down the debate to the great truth which we face in this Clause, namely, that at this time there is extreme anger and acute irritation among the public that blanket increases are being granted to all families regardless of need.
      7.15 p.m.
      We are left in no doubt by speeches from right hon. Members opposite and from other quarters that Britain is in rags, ruin and penury and that we are deflated, devalued and in the hands of the money lenders. Therefore, surely this is a time when excess expenditure of the kind envisaged in the Clause should he considered with very great care. If it
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      were going merely to people who needed it, there would he no question about it and we could all support the Clause with great enthusiasm. But that is not the case.
      I do not know whether it is an underestimated truth that the people of this country are very ready to countenance extra expenditure if they feel that it is needed. Similarly, they are well able to bear suffering in the cause of getting Britain out of her difficulties. There is no question about that. What is occasioning extreme irritation is the fact that people feel that a large proportion of the money envisaged in the Bill will go to people who do not need it.
      We have heard various estimates of the precise amount about which we are speaking. It is estimated in the Explanatory and Financial Memorandum that the gross amount in the first full year will he about £124 million. The net amount was quoted earlier. But then are added the words—and they are rather sinister—"increasing steadily thereafter". Let us be in no doubt, therefore, that a large amount of extra expenditure is envisaged.
      Whenever we set our hand to Measures of this kind, it is important to recognise that we act, not in secret, but with the eyes of the world on us. When a man goes to his bank manager and asks for money to spend on a project which he cannot afford without assistance, the bank manager casts a very jaundiced eye afterwards if he sees that the man has spent a large amount of money on fitting out his children with new clothes. I would not argue, about fitting out children with new clothes if they needed them and if their existing raiment was in holes. I wish to voice what I believe is a very strong feeling of anger in this country that so much of this money is going to people who do not need it.
      There is talk about the famous fur-coated lady who goes to draw her family allowance. Just because a lady is fortunate enough to have a fur coat, I would not suggest that she is of necessity in the higher income group. But some people believe that people of this kind who draw the family allowance should not draw it. My hon. Friend the Member for Bournemouth, West (Sir J. Eden) touched on this point. He said something which I think was a little misleading. The fact is that even if a person

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      does not draw the family allowance, he is taxed on it as if he had drawn it.
      I had a letter from a constituent, from which I will read an excerpt. It says:
      "I am ready to do my share to help our country get back on its feet, but I must heartily condemn any increases in pensions, family allowances, sick pay etc. unless these terns are selective.
      There have been so many increases in the National Insurance over the past few years that it now becomes a major item from one's pay. When people are living alone, like I am, dependent upon my own efforts, through no fault of my own…constant rising of outgoings are drastically reducing my own standard of living. At 55 I pay single person's rates and do not get any other than the initial Income Tax relief, and whilst I would not grudge help to those truly needing it, I feel that many families getting large sums are not in need."
      This brings me straight to the point made by the hon. Member for Manchester, Exchange (Mr. Will Griffiths) and the Minister. Both seemed to imply that there was something morally wrong in seeking to curb expenditure on social services. The Committee should be absolutely clear on this there are social services and social services. The point about the lack of need is worrying many people. Many poor families are desperately in need, but it seems that they will not be much helped by the Bill.
      We have discussed Amendments covering widowed mothers, but other persons are in great need, divorced mothers and persons who look after elderly dependants. There are old persons who receive no pension. My hon. Friends have put forward suggestions for help to them. The Minister blew the trumpet of hope for people of this kind in a singularly muted fashion. There is no doubt that the expenditure here envisaged—such a large proportion of which will go to people who do not need it—could be restrained without any moral wrong, indeed with a great deal of moral right. This is something which the hon. Member for Manchester, Exchange and the Minister seemed to misunderstand.
      No one minds increases in expenditure of this sort, but we must recognise that this expenditure, which is very large, will puzzle some overseas friends very much. This is a matter on which we should dwell when we are able to do so. Does the Committee think that the proposal for this
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      vast extra expenditure is right? I do not think so.
      Mr. Fergus Montgomery: The Minister told us on Second Reading that this was a powerful attack on child poverty. The Clause deals with the amount of increase to be paid in family allowances. We have been told that the gross cost of this Measure will be about £124 million for the first year. Under the Clause as it stands the poor will be helped at exactly the same rate as the rich. Only slight help will be given to families in real need.
      I wonder whether the Minister is completely satisfied with the Clause as it stands and is satisfied that the amount of money to be distributed is being distributed in the best possible way. She said on Second Reading that there were about half a million children in families with resources below the supplementary benefit level, families affected by the wage stop. Their plight has been worsened by recent events, by devaluation, by which there will be a rise in the cost of living. Many of those families have a very difficult time.
      I have in mind a hard-working, decent family in my constituency. The father is not in the best of health. He has had to accept a job with a very small wage. There are three children at school, one in the sixth form of a grammar school. According to this Clause, that family will be helped by about 14s. a week. I am sure that they will be grateful, but I would have been much happier if there had been more for that type of family and less for those who can afford to provide for their children.
      There are the families of the unemployed, of widowed mothers, and the sick. Those families, living on the supplementary benefit level, will not get the full value from the 7s. per child. That is given with one hand and taken away by the other. I am sorry to labour the point and I know that the Parliamentary Secretary spent a great deal of time explaining it, but it is very difficult to explain it to constituents.
      I understand that the larger the family when on supplementary benefit, the less they will get of the 7s. per child. They get 3s. extra for the first child and the 3s. increase on present rates for the second and 1s. for each subsequent child. This

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      means that a family on supplementary benefit level with two children of school age will get 6s. instead of 7s. With three children of school age they will get 7s. instead of 14s. and with four children of school age they will get 8s. instead of 21s.
      The Parliamentary Secretary spent a great deal of time explaining this but it is still difficult to put it over to the families concerned. They read in the newspapers that family allowances are to be increased by 7s. per child after the first child, but when they do the arithmetic and get the actual amount they find it is a great deal less than they had expected.
      I am certain that the hon. Lady is as anxious to alleviate the poverty which exists as we are, but this Clause only skirts the question. Perhaps it is a holding operation. If so, how long is it to be a holding operation? There were peculiar circumstances earlier this afternoon when we were told that at some time in the future there is to be further legislation to try to eradicate some of the ill-effects among poor families of devaluation.
      It would have been much better if the whole thing had been embodied in this Bill so that we could give help to those people as quickly as possible. Under this Clause those families will not be helped until April next year. If we have to wait for further legislation, how soon will the benefits of that legislation be felt by families which really need them?
      I wonder whether hon. Members opposite remember that their Election Manifesto in 1964 said:
      "Labour will replace inadequate maintenance grants with reorganised family allowances, graduated according to the age of the child, with a particularly steep rise for those remaining at school after the statutory leaving age."
      It is rather significant that that pledge did not appear in the 1966 manifesto. It would be interesting to find from hon. Members opposite whether it is still part of their party policy. That pledge would be a great deal of help to a lot of people today, but this Clause does not go anything like as far as that pledge.
      7.30 p.m.
      I would ask the Minister, in thinking about this whole system, to bear in mind the great increase which we shall have in our population over the next few years and the fact that our working population
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      will not increase by anything like the same amount. In other words, we shall have a smaller percentage of people working to support a larger percentage of people having social benefits of one sort or another. Therefore, I wonder whether the right hon. Lady is satisfied that this money is being spent in the right way, and whether she will give thought in the future to trying to channel it where real poverty exists, and do something about it.
      I cannot vote against this Clause, because it is giving some assistance to some of the people, but I am afraid that it does not give nearly as much help as I would like given to the people I personally would like to help.
      Mr. J. T. Price: I think it would be very unfortunate if my right hon. Friend were left, as a result of this debate, with any impression that some of the views expressed from the opposite side of the Committee are peculiar to that side of the Committee. Lest any such view should be taken, I should like to make it quite clear, speaking entirely for myself, and not for any group or cabal of hon. Members, that I, too, am critical about the way in which this benefit is being put forward.
      I had the pleasure and advantage of listening to my right hon. Friend explaining the Bill on Second Reading. I listened most attentively to the arguments in support of this proposal to extend this benefit to improve these family allowances right across the board, to an extent estimated at £124 million in the first year, rising thereafter to some unspecified figure. Anyone who cares to look up the Minister's speech would scarcely find sufficient argument or evidence in that speech to support such a comprehensive method of dealing with this problem.
      I think it is common ground between all Members in this Committee that we have sufficient good will to extend generosity to the utmost limits of our resources to the 150,000 or so deprived families, the large families, with sickness, with unemployment, the kind of families who are living very much below the poverty line, and about whom a Committee has recently reported to the Minister. But, so far as the generality of the public are concerned, this country is living in very parlous times. We know there are many anxieties which beset the

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      minds of our constituents. Nevertheless, no one can say that a very large section of the 26 million or so insured contributors who pay to the social insurance fund are under present conditions having the sort of time which justifies this Measure. I am aware, of course, that many people are unemployed; I am aware that many people have large families and have not sufficient income to sustain them. This Bill is directed to raising their standard substantially beyond what it is at the moment.
      However, when I was a young man—which was some time ago now—and was taking my first maiden flights into social activities connected with the Labour Party, we early Socialists of those days—and I am not as ancient as all that, let me say, so that we do not get the context wrong—the people of my generation, had inscribed upon our banners, in putting forward the reforms we thought necessary, a slogan, as many parties bear slogans, and our slogan was: "From each according to his ability. To each according to his need." I think that was a fine ethical motto to put on any banner.
      Mrs. Knight: Es it still there?
      Mr. Price: I hope I may put this case in the way I wish to. I am putting it moderately and temperately and, I hope, logically.
      We have now, apparently, arrived at another situation, because of our industrial and social history. Anybody who lived during the early part of the century and through two world wars, saw what was, heaven knows, the horrible poverty which used to beset our people, mainly in the great cities, with which, I suppose, the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) was not familiar. As a Lancastrian living in the industrial north, I saw this kind of poverty on such a scale that I doubt whether the present generation, even my right hon. Friend the Minister, could possibly conceive it, because she has not seen it.
      Mrs. Hart: Will my hon. Friend allow me?
      Mr. Price: Certainly.
      Mrs. Hart: During the black years of the 'thirties I saw plenty of it.
      Mr. Price: I am glad to have that assurance. I am only making the point to come to the next point, because I think one needs a little historical perspective to get this argument right.
      During those black years we had a means test, which was dreaded by most working-class families suffering poverty, deprivation and unemployment. It was so severe, and so punitive in its effect upon the people who were seeking the very modest and tiny social benefits which at that time were available. In those days the family which had only one effective breadwinner and which sought public assistance from the old boards of guardians, as they were called in those days, had to put the whole income of the family into a pool and the family's income was taken as a whole before any member of the family was entitled to draw any assistance at all. That was the means test in its crudest form. It led, as my right hon. Friend knows, to the break up of families because a family's breadwinner, on whom the family mainly relied for a few shillings a week, would go to live somewhere else so that the public assistance authorities could not include his earnings in the family's income.
      We look back on those days with a good deal of nostalgia. A good many of my hon. Friends who remember those days still bear the brands of the damage done psychologically to our generation by the crude and coercive conditions of the means test under the Conservative Governments of those days—if I may make a small party point. I am glad to see that in this modern Parliament we have newer people coming along, who may be better educated, who may not have had to suffer such personal hardship. I am glad to see liberal instincts. of which we regarded ourselves in those days as the guardians, permeate this Committee, so that the Committee has become more liberal in its attitude to social problems. A generation ago it would have been impossible for anybody sitting on the Opposition side to make the sort of speech which was made by the hon. Lady the Member for Edgbaston tonight. I am all in favour of these benefits for those people who are in need. It would have been impossible a generation ago to give such benefits, but, thanks to the propagandists and pioneers of social

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      reform, the spirit of those reformers has permeated our modern society and we need no longer labour in vain in trying to get a more humane attitude to social problems.
      But, frankly, when I look at the scale of our commitment to expenditure of public money on all kinds of desirable social projects in our social services, on social insurance, on public health, on education, and all the other desirable things, I have got to be selective in what I regard as the priority charge on the rational Exchequer. I hope that that's not an unfair way of putting it. There fore, during this Committee stage of the Bill, which may be too late to make any impact upon the present policy, I say earnestly to my right hon. Friend that she would be mistaken if she assumed that the kind of criticism being ventilated from the other side of the Committee 's peculiar to that side. Many of my colleagues share my views, and I should not like it to go out from this Parliament that the Labour Party is so tooted to the old, traditional attitude towards the means test that some of its members do not realise that, if we are to help the worst hit members of our society who are below the poverty line, the argument cannot be sustained any longer that benefits should be extended right across the board to every family, regardless of social position or income. I hope that I shall not have spoken in vain tonight and that any hon. Member who shares my views will be generous enough to support what I have said.
      I represent a constituency in Lancashire, and Lancashire is probably one of the most earthy areas in the country, where people are more concerned with a common sense attitude towards problems than with sophisticated arguments put forward by polemical speakers. My constituents tell me that it would be folly to extend these benefits indefinitely, because they have an impact upon National Insurance contributions which are becoming increasingly oppressive on the wage envelopes of the lower-paid workers. That is a valid Socialist argument, and it is also a valid trade union argument.
      I do rot wish to detain the Committee any longer in listening to my rather discursive little speech. However, I felt strongly impelled to say that, when we propose to spend such a large sum of
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      money as £124 million on one single improvement in a social benefit which is so desirable to a large number of people, the Minister should be asked to give a more convicing reason for doing it than she has. I was christened Thomas. I hope that I have justified my name, because I am still a sceptic.
      Mr. Pardoe: I want to take up one or two of the points which have been made in the debate. First, I accept that there is a strong feeling in the country that we should not be giving blanket increases across the board. This is always the case. I have had the same sort of protests as the hon. Member for Birmingham, Edgbaston (Mrs. Knight) has had, and one does the best that one can to refute them.
      I have some sympathy with parts of the case made out against giving blanket increases, because I believe that we should try to redistribute the total sum of money which we allocate to the improvement of family conditions, and that is one of the reasons why the noble Lord the Member for Hertford (Lord Balniel) and I have had some altercation. I do not argue that we should take away all the money which we pay to middle and upper income group families. What I am saying is that we should not give the extra to those who do not need it, and that we can avoid giving it to them by rearranging our present tax allowances.
      To take my own case as an illustration, I have three children under 11 years of age. For the first child, I get a tax allowance of £47 10s. For the second child, I get a similar allowance and, under the provisions of the Bill, I shall get £39 from the Post Office, making a total of £86 10s. For the third child, I get the same tax allowance of £47 10s., and a further £44 4s. under the Bill, making a total of £91 14s. It means that, in one form or another, I shall get a total of £225 14s. from the State, which is an increase of £39 on what I get at present.
      7.45 p.m.
      My point is that the tax allowances for children could be rearranged to ensure that I do not get the extra £39. Let me say at once that I am not arguing that I do not want it. However, it is wrong that the money should be paid to those in the middle and upper income groups where it is not so badly needed. After all, we are trying to deal with

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      poverty in the Bill. It is for that reason that I say that we should rearrange our tax allowances, and I hope that the noble Lord and I will not fight about that.
      The hon. Member for Edgbaston rather implied that we are spending too much on social services, and she mentioned the reaction of other countries. She said that, in our present economic situation, some countries will be puzzled by these provisions—
      Mrs. Knight: At no stage did I say or suggest that there was anything wrong about expenditure on social measures. My whole speech was devoted to developing the point that the money should be spent where it is most needed, and that there was nothing wrong in avoiding spending it on the kind of people with whom the hon. Gentleman has just ranged himself. There is no case at all for giving more money to people who already are in receipt of sufficient to enable them to manage satisfactorily without an increase, and the money thereby saved should go to those who need it.
      Mr. Pardoe: I am glad that the hon. Lady has denied the allegation that she thought that we were spending too much on social services. Unfortunately, her view is not entirely shared by everyone, and hon. Members on both sides of the Committee have been subjected to complaints that we spend more than foreign countries on these matters, and that it is one of the reasons for the decline of the Empire, and the rest of it.
      However, it is interesting to point out to such people that we are lagging behind in our expenditure on social services compared with other countries in Europe. If one looks at the proposed family allowances under the Bill and compares them with those of other countries, one finds, for instance, that family allowances in France amount to about £5 a month for the first child, rising to £7s. 10s. for the third and subsequent children. That is rather higher than the figure we are discussing. In Germany, there is no allowance for the first child, but the allowance for the second child is £2 5s. a month, rising to £6 5s. for the sixth child and subsequent children. These are substantial sums—
      Mr. J. T. Price: I agree that those are fair comparisons, but, on the other side
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      of the coin, has the hon. Gentleman got the figures of the contributions paid in these countries?
      Mr. Pardoe: Unfortunately, I have not, but I was coming on to the point made by the hon. Member for Westhoughton (Mr. J. T. Price) when he said that undoubtedly there are people in the country who resent the contributions which they have to pay. Family allowances, of course, do not come out of National Insurance contributions, but other increases given in the past few months do. I am opposed to the contributory principle for pensions. Instead, I should prefer to see a social security tax introduced which could not be allocated to Suez follies or even to building motorways, and with contributions related to incomes, so that a person paid according to his ability. I hope that that answers the hon. Gentleman, and assures him that I am on the side of his angels.
      I think that a large number of us in this committee, whatever our political views, are in favour of the broad principle of giving more to those who need it, and less to those who do not, but what we are concerned about, even those who cannot go all the way on this, is just how, we do it. The administrative costs are sometimes very considerable, indeed. We know that in 1964, under the old National Assistance Board, administrative costs amounted to about 8 per cent. of the total benefits and this was twice or three times the amount under the National Insurance administration.
      Then there is the problem that if we practise selectivity and the means test, it is a disincentive to effort, just as much as progressive Income Tax is. If one believes that progressive Income Tax is a disincentive, one must also believe that selectivity, in the way in which many hon. Members discuss it in the House, is also a disincentive. I think that what we have to do is to come to a united front on what kind of selectivity we are arguing for, and I believe our social services should be linked to the Income Tax form. The disadvantage of this is that the Income Tax form is always out-of-date, and one is often dealing with poverty which arises week by week.
      The answer is that in such things as family allowances, and in many other kinds of social service, we should pay a

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      flat rate which is sufficient to bring everybody up to a decent level. We should then add a sufficient amount of the total taxable income to ensure that those who pay the standard rate of Income Tax pay the whole lot back to the Exchequer. This would be simple administratively.
      At the moment we have to include in our Income Tax returns the amount which we receive for family allowances. l am suggesting that this amount should De grossed up to such a figure that, when taxed at 8s. 3d. in the £, brings back o the Exchequer the amount that was originally paid out. Administratively this would be simpler than any of the other suggestions that have been put forward, and it would ensure that those in the middle and upper income brackets would have to pay back to the Exchequer what they really did not need in social services.
      I propose, finally, to talk about the future. I believe that a much greater part of this problem should be dealt with through occupational schemes. It is already true that the Armed Forces pay a marriage allowance. This is partly to compel-Bate for the additional cost of a wife and family, although it is not paid per child. I think that we might well look to solving our teacher pay problem—though I shall not get thanked for this—by going over to this kind of occupational scheme. A great Liberal, Beveridge, when he was at the London School of Economics, concocted a family endowment scheme which was an occupational scheme, but unfortunately it has not been extended through all the universities.
      I believe that the final answer to our problem is that the State should pay a sufficient basic level of family allowance so that nobody can fall below that net, and for the rest, income related to need, to be paid by occupational schemes established in the wages structure of this country.
      Mr. Hugh D. Brown: I want for a few minutes to add to the general confusion that exists in the Committee. I confess that I have not heard any brilliant ideas today, but I am modest enough to say in advance that nothing new will come from me either.
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      We are discussing an extremely complicated subject, and, with due respect to my hon. Friend the Joint Parliamentary Secretary, I must say that he did not help. I am not blaming him for that, but this subject is incredibly complicated, and there is a tendency for us all to indulge in a little propaganda.
      I am sorry that the hon. Member for Bournemouth, West (Sir J. Eden) is not here. I wish that I had more constituents whose only concern was whether they should draw their family allowance, or lose it by way of Income Tax.
      We have listened to some sickening hypocrisy from hon. Gentlemen opposite, who have asked why we have not introduced pensions for people who do not have them. I cannot personalise, but it was quite sickening to hear the hon. Member for Birmingham, Edgbaston (Mrs. Knight) talking about a subject which we are not even discussing tonight. Hon. Gentlemen opposite were in power for 13 years—and there is no harm it repeating this again and again—and they had plenty of time to do something for the very section of the community about whom this smokescreen is being raised. The idea of world financiers who are speculating in sterling trembling at the thought of our discussion tonight is quite amusing.
      I have made this plea before, and I make it again. I have a great admiration for my right hon. Friend's drive and ability. I am not trying to get anything out of her, I am merely saying what is true. This is an incredibly complicated issue. Why is it so complicated? Let us consider some of the things which have to be taken into account when deciding how to hand out money. We have earnings-related benefits, supplementary benefits, unemployment benefits, sickness benefits, with the amount paid being governed by whether it is paid for long-term sickness or not, the additional complication of school meals and welfare foods, should the increases be related to cost of living increases, should they be related to the increase in earnings among the rest of the community, and so on.
      Not enough attention has been paid to the point made by the hon. Member for Cornwall, North (Mr. Pardoe). We hear a lot about the lack of incentives for executives. What I am worried about is

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      the lack of examination into the level at which a disincentive might arise if we introduced some kind of selectivity. I do not think that anyone can afford to be dogmatic in his approach to this problem. I realise that we have to do something in the short term to make up for the effects of devaluation, but we ought to take a long, cool look at just where we are going.
      It is becoming impossible to convince the public that they are getting their rights. We are not even getting any political advantage out of many of the things that we are doing. This is because it is all so complicated. I am not blaming anybody. I think that we are all caught up in it. I support the Clause and the Bill, but I am pleading for a serious attempt to be made to simplify the method of making payments. We must make a serious attempt to enable the staff in local offices to try to attend to the public. We must try to give them more time to explain to people what is behind the increases, and in this way perhaps get across to the public that we are doing a good job.
      I wonder whether my hon. Friend can tell me something more about the person earning £100 a week, to whom one hon. Member opposite referred. I presume that the hon. Member is quite concerned about this individual. To what extent will he benefit under the proposed increase if he has two, three, or four children? It is obviously a good debating point, but we have been subjected to a curious argument by hon. Gentlemen opposite. They have taken one section of the community and tried to give the impression that they are getting more than the poor widow receives. I wish that I could find the widow about whom hon. Gentlemen opposite have been talking. I do not know where she is, but she is certainly not a very average widow.
      It is not fair of hon. Gentlemen opposite to say that we are giving less to the widow than we are to the man who earns £100 a week. There are many things to be taken into account. Is she a working widow? What does she earn? Does she receive supplementation? It is dishonest of hon. Gentlemen opposite to give the impression that we on this side
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      of the Committee are concerned only about the millionaire.
      Having made those points, and having made my plea for simplicity, I hope that we shall get some information from my hon. Friend.
      8.0 p.m.
      Mrs. Hart: The Committee will appreciate that we have ranged rather widely in our discussion, but probably quite usefully. I regard it as a pity that we keep having these nibbles at debates on selectivity without ever the chance fully to explore the matter and to go into all the arguments. I would welcome it very much if my hon. Friends or hon. Members opposite cared to find some way of giving us time to explore the issue. My hon. Friend read what I said on Second Reading, when I summarised the situation and made it clear that I did not have time to do more than that. I listed several strong reasons against developing the idea of selectivity further, certainly in family allowances.
      We are always limited to the fact that we almost stray out of order when we even refer to this matter, and we therefore cannot explore it in detail. I would welcome the chance to do so. I shall have to speak in a summary form again tonight, but I shall try to explain the situation more fully than I did on Second Reading. It is clearly the desire of the Committee that I should devote my remarks to the question of directing help to where it is most needed. That is the strand of the argument with which the Committee is most concerned.
      The last thing in the world that anyone on the Government side wishes to do in this Bill, or in any other Bill concerned with social expenditure, is to make the rich richer. When people talk about help going where it is most needed I ask them to consider the problem of cash benefits in the context of taxation, because the two cannot properly be divorced.
      The hon. Member for Cornwall, North (Mr. Pardoe) said that these increases would occur in April under the Bill. I would draw his attention and that of the Committee to two points which are related to the extent to which the Bill will give help to those who most need it. First, the Finance Bill also comes in April. Secondly, as I made clear on

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      Second Reading, any question of tax adjustment must be left to my right hon. Friend the Chancellor to consider in the context of his Budget proposals in general.
      It would be totally absurd and quite unrealistic to concentrate arguments upon this Bill or any other Bill that purported to further the idea of making sure that help went where it was most needed without setting those arguments right in the centre of the taxation system.
      I can put various possibilities that would be open to the Committee. One possibility—mentioned on Second Reading and today, and also in the debate last Friday—is a possible negative Income Tax, or Income Tax in reverse, at some time in the future. This proposition is full of the difficulties and complications that my hon. Friend outlined last Friday. It is equally exposed to the difficulty that, in so far as we are talking about negative Income Tax systems, of whatever kind, we are talking about a point which is necessarily pretty far in the future, because in order to carry out any of the systems we need pretty complete computerisation in the Inland Revenue and on the social security side, and however Cast we move on both fronts—and we are moving very fast—we cannot envisage that this would be a real issue for several years.
      Therefore, it people want to discuss the question not in realistic terms but in terms of what we should do nine or ten years hence, by all means let them discuss Income Tax in reverse, but it cannot be regarded as a way out, at this moment, in this Bill.
      Mr. Pardoe: I am sure that the right hon. Lady will agree that at present on our Income Tax return form we have a figure which states the amount that we receive, and that is included in the taxable income. I merely ask that that figure should be doubled or trebled, notionally. We do not need computers to do that. It is a simple mathematical calculation.
      Mrs. Hart: If the hon. Member had waited he would have seen that I was corning to that point. I was dealing first with possible machinery concerned with a system of Income Tax in reverse as a possible method of avoiding means-tested benefits and yet providing that the
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      money went from the rich to the poor. I am explaining why that is not on, in practical terms, for a good while ahead. It is not with us in terms of reality at the moment.
      A second possibility is the idea that the hon. Member for Cornwall, North has put forward, with which it is probably appropriate to take the various permutations of give and take, because most are based on the idea that as one gives out so one takes in, and this is in one operation, not related to income or benefit but solely to tax allowances on the one hand and family allowances and cash benefits on the other.
      This is an extremely attractive proposition and it deserves the most serious thought, it would solve many of our problems. I merely say that there are a number of ways in which tax adjustments can he made in order to achieve the net result that one does not give more to the rich but one does give more to the poor, and that the strict "give and take" solution is not the only one. These solutions follow the general slogan, "from each according to his ability, to each according to his need". I am delighted to know that so many Conservatives are adopting this as their new slogan for the 1970s. This would he a possible way through the dilemma.
      An individual means test of family allowances would create a great number of difficulties, and would not achieve the objects of those who put it forward. In the first place, there are the administrative implications. The burden it would place on an enlarged bureaucracy would he such that I am afraid that the hon. Member for Birmingham, Edgbaston (Mrs. Knight) would be the first to say. "How dare the Government increase the number of civil servants in local offices?"
      Mrs. Knight: Does not the right hon. Lady agree that all the way through we are facing means tests of one kind and another. Certainly in terms of children carrying on to further education or any kind of education it is means test, mean test, all the way. It is nonsense to suggest that there are no means tests at the moment. We are hedged around with them constantly. They are with us, and with us to stay.
      Mrs. Hart: I take it from what the hon. Lady has said that she would not have

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      any objection if she found that the number of civil servants employed in her local Ministry offices had been doubled overnight in order to deal with the means testing of family allowances. I take it, also, that she is still not clear about the fact that if we related a test of means, at the end where a person pays in through taxation, to universal benefits paid out, we could achieve the same result—that is, of getting money to where it is most need—as if we had a less progressive system of taxation with means tests for the benefits being paid out. She must understand that point. We are talking essentially about a redistribution of purchasing power and wealth. The hon. Lady and other hon. Members, including my hon. Friend, are talking about it so as to restrict themselves to considering only the cash benefit as it is paid out and are depriving themselves of the opportunity of relating that to the taxation end and to how taxation is raised—
      Mr. J. T. Price: My right hon. Friend is pursuing a very illusive argument, although valiantly. She is trying to defend using a steam-hammer to crack a nut. I can put it simply with a simple question. How much—if her Department has made any estimate—will be clawed back from the benefit's global cost of £124 million in the first year by the taxation machine? In other words, what do we finish up with?
      Mrs. Hart: I am glad to see my hon. Friend allying himself with those hon. Members opposite who have pressed me to say more than I can in anticipation of the Chancellor's Budget in April. I cannot at this stage, any more than the Chancellor himself can. I ask my hon. Friend to accept from me that taxation adjustments must be in the context of the general Budget proposals, and that, as my right hon. Friend the former Chancellor said last week, a redistribution of purchasing power will have to be related to the methods which we use to carry through these Measures. My hon. Friend has been long enough in the House to know that he cannot get more than that from me in advance of April—
      Mr. Price: Since my right hon. Friend has been good enough to put it so nicely, perhaps I may say that I am still sceptical
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      about her proposal and that she has not justified her case.
      Mrs. Hart: In that case, I invite my hon. Friend to put down a Motion at the next opportunity for a Friday debate on this point when we can have a whole afternoon and I can deal with every point he has raised and make a speech long enough to explain to him what I have in mind.
      We are making a considerable contribution by this Clause to the relief of the poverty which concerns us. Under the Clause, some money will go to better-off people who are not in poverty, but this must be seen in relation to whatever taxation adjustments are made in the Budget. Only in that context can it be understood that cash benefits, when they are universal and across the board—even though, when taken by themselves, they can be seen as giving money sometimes to people who need it and sometimes to those who do not—nevertheless cannot be divorced from the tax structure and the kind of progressive taxation system in which we on this side believe.
      Question put and agreed to.
      Clause ordered to stand part of the Bill.
      Clauses 2 to 4 ordered to stand part of the Bill.
      Schedules agreed to.
      Bill reported, without Amendment.
      Motion made, and Question proposed, That the Bill be now read the Third time.
      8.16 p.m.
      Lord Balniel: The Third Reading of this Bill achieves a small niche in Parliamentary history, because this is the first time in the history of the House of Commons that the Third Reading is not an automatic process of law making. It has been demanded by the Opposition that we should have the opportunity to debate this important Bill on Third Reading.
      While it achieves a small niche in Parliamentary history, however, I doubt whether the Government can look on it as achieving any mark at all in the history of their thinking on social policies. It is as if they had put the needle back on a record which played in 1947, to give

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      us the old, old tune. It is true that we have a new and energetic Minister, but the tune is old and out of date. The thinking behind the Bill is fossilised. The Bill itself is rigid and inadequate, as has been clearly shown by the inability to amend it to take into account the very serious economic situation which has developed since Second Reading.
      I should like to say this to the Minister with all friendship but with great firmness, and, I hope, without presumption. She earlier undertook what my hon. Friend the Member for Aylesbury (Sir S. Summers) referred to as an auction in compassion and she complained that the Conservative Party were shedding crocodile tears about the problems of those in poverty. As my hon. Friend said, she herself is in a vulnerable position. She has taken over a Ministry from which the previous Minister resigned because she was not satisfied that the Government were taking adequate steps to help those in the poorest section of the community.
      She complained that few Conservative Members last week attended the debate on the minimum wage, which is nothing to do, incidentally, with her Department, but comes under the Ministry of Labour—
      Mr. Loughlin: The hon. Member is wrong.
      Mrs. Hart rose—
      Lord Balniel: Let me go on.
      It is fair for me to point out that only two hon. Members, I think, of her party have taken part in the Committee debates this afternoon and that every Amendment and new Clause—there are several pages of them—has been put down by Liberal and Conservative Members. Not one is in the name of an hon. Member opposite.
      I accept the right hon. Lady's compassion and sincerity, although not the political thinking behind the Bill. I have no doubt that we will have many arguments on political matters, but I ask her, if we accept her sincerity and compassion, as we must, to do the same for us. This is the very minimum of dignity with which we can conduct our debates in trying to help those who are less fortunate than most of us.
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      Now, on Third Reading, the Bill stands exactly as it did when it was introduced. It is an indiscriminate Measure designed, through increased taxation, to pay increased family allowances for rich and poor families alike. It involves a substantial increase in taxation, about £124 million. As my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) said, not only will there be an annual bill of £124 million but, as the financial memorandum makes clear, there will be an increasing burden on the taxpayer in following years.
      The Bill remains, as on Second Reading, one which, because it is indiscriminate and vastly expensive, can only give inadequate help to those in the greatest need. None of the arguments which we advanced on Second Reading have been heeded. No Amendments which we have put forward today have been accepted and, in spite of what we were led to believe the Government would do, no Amendments have been put down by the Government. However, one major change has taken place since the Second Reading. The £ has been devalued. The Prime Minister told the people of the country that the £ in their pockets has not been devalued. He strained credulity much too far. That was a most misleading statement. Every family with children, every family affected by this Bill, will find that as the weeks go by the £ in their pockets or in their purses has been devalued. It will buy less. For every £1 which they earn and for every £1 which they receive in family allowances—
      Mr. Loughlin: This is not in the Bill.
      Mr. Deputy Speaker (Sir Eric Fletcher): Order.
      Lord Balniel: I have no doubt, Mr. Deputy Speaker—
      Mr. Loughlin: On a point of order, Mr. Deputy Speaker. Would you give me your guidance? Does the Bill include any reference to devaluation and to the Prime Minister's statement? Is it not true to say that we can debate only what is in the Bill and not other matters?
      Mr. Deputy Speaker: In my opinion, everything that the noble Lord has said so far is perfectly in order. If it had not been, I would have stopped him.
      Lord Balniel: Thank you, Mr. Deputy Speaker.
      As I said, every which people earn and every £ which they will receive under this Bill in family allowances will buy less food, less clothing and less warmth. By so much has the Bill been devalued even while it was passing through the House of Commons.
      I was astonished by the statement of the Ministry of Social Security earlier in our proceedings today when we were informed of the steps that the Government were taking to implement the Prime Minister's pledge to protect the weakest sections of the community. There was the refusal to amend this Bill. There was no indication of how or when help would be given. All we know is that this Bill is to be implemented in April of next year. Even before devaluation, this Bill, because of its indiscriminate, rigid and in some respects wasteful methods, left 250,000 children living in families below the poverty line. Now, with rising prices which will follow devaluation, these families will fall deeper into poverty. The struggle which they will have to face in everyday life will be that much harder.
      Most of these children will not be helped by any increase in supplementary benefit, because most of these children are in families where their fathers are in work and are, therefore, not eligible for supplementary benefits. I think the theme which has run through almost every speech, be they from these benches or from the benches opposite, at every stage of this Bill has been one of criticism that no effort has been made by the Government to concentrate help where it is most needed. It is right on Third Reading—I am sure that I am in order to do this—to re-emphasise the failure of this Bill to concentrate resources and to point out what it actually means in terms of people. The Report of the Minister of Social Security on the circumstances of families showed that something like 500,000 children—
      Mr. Loughlin: On a point of order, Mr. Deputy Speaker. Would you give me some guidance? Could you tell me when there was a change in the rules of this House which enabled hon. Members to speak on matters that are not
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      actually in the Bill when the Bill is debated on Third Reading?
      Mr. Deputy Speaker: In answer to that point of order, there has been no change of ruling. It is perfectly in order on Third Reading, even under the new Standing Orders, to discuss the merits of the Bill and the contents of the Bill—
      Mr. Loughlin: The contents of the Bill, yes.
      Mr. Deputy Speaker:—and any matters relating to the contents of the Bill. It is in order to give reasons why the Third Reading should either be supported or opposed. Every argument that is relevant to the merits and the contents of the Bill is in order. What is out of order is anything that is extraneous to the Bill. It is out of order to argue that things ought to be in the Bill which are not in the Bill.
      Lord Balniel: I am grateful to you Mr. Deputy Speaker, for explaining to the Parliamentary Secretary the proceedures of the House. I am quite sure that you will call me to order when I stray from the procedures of the House. I am being very careful not to refer to matters which are outside this Bill.
      What I am explaining to the House, although it seems to cause a great deal of mirth to the Parliamentary Secretary. is that there are sections of the community who are affected by this Bill in such a way that they will be left below the poverty line as defined by the Supplementary Benefit Commission. This seems to me to be serious and completely relevant to the Third Reading of this Bill.
      As I was explaining, the Report of the Ministry of Social Security on the circumstances of families showed that something like 500,000 children in 160,000 families are living below the poverty line as defined by the Supplementary Benefit Commission—that which used to be called the National Assistance Board. I quite accept that this marker of poverty is not something which is static. It is not an absolute standard of poverty. For instance, the National Assistance levels rose by 50 per cent. during the period in which we were in office. So, using this definition of poverty, I accept that we are

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      using a different definition of poverty from that which was used several years ago.
      Nonetheless I think the Minister will agree that the supplementary benefit level k a fairly rough marker as to where poverty lies. As the Minister herself said oh Second Reading, social researchers take it as their yardstick. She said that if one is above the supplementary benefit level one is out of poverty if one s below it one is in poverty. think everyone will agree that any family today living at supplementary benefit levels is living an extremely uncomfortable life, but any family living below these levels is living in really extremely unhappy circumstances. I think every lion. Member will agree that this is the case.
      What the Bill does for families living below the supplementary benefit line is twofold. I quite accept that it helps to a certain degree. Firstly, after increasing taxation by£120 million, the Bill will leave a quarter of a million children living in families below the supplementary benefit level. This is because the help in the Bill is being given indiscriminately and wastefully. A thin layer of help is being given to everybody, whether or not they need it. As my right hon. Friend the Member for Enfield, West (Mr. lain Macleod) graphically pointed out, we cannot give extra help to girls like Cathy because equal help must he given to every Tom, Dick and Harry, whether or not he needs it.
      This sums up the argument against the method which the Government have chosen. The condemnation of the method is that a quarter of a million children are being left—even when the Bill is enacted—below the poverty line. The second aspect is that many of these children are living in families in which the breadwinner is unemployed and so is receiving supplementary benefit. However, because of his previously low earnings, his supplementary benefit is wage stopped. One-eighth of these quarter of a million children are living in wage stopped families.
      The whole House is disturbed at the way in -which the number of children living in wage stopped families is increasing rapidly. Earlier this week the Minister for Social Security said that the number of such children in September,
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      1966, was 52,000, whereas the number in September, 1967, had increased to 80,000. I regret that the Minister has not found it possible to amend the Bill—I appreciate that now I am straying out of order for a fraction of a second—to take into account all the recommendations of the Supplementary Benefits Commission in this connection. I hope that at a later stage, perhaps in another place, she will make the necessary Amendments.
      We naturally welcome additional help being given to those in need. However, we fear that this tremendous increase of taxation under the Bill, £120 million, is directly contrary to what this country needs, which is not an increase but a decrease in direct taxation. We also regret that this opportunity has not been taken to concentrate our resources to where they are most needed but that, instead, they are being wastefully and indiscriminately distributed under an old-fashioned and worn out system.
      8.33 p.m.
      Mr. Frank Hooky: I regret that hon. Gentlemen opposite have not taken advantage of the changes in our rules of procedure to permit a formal Third Reading. I cannot understand why the Opposition chose to oppose this technique since nothing said by the noble Lord the Member for Hertford (Lord Balniel) was particularly new or had not emerged in our debates on Second Reading and in Committee. The Opposition did not even take the trouble to take up the full amount of time available on Second Reading to exploit their arguments, such as they were. I therefore cannot see why they have obstructed what I regard as a useful improvement in our procedure.
      It is simply not true to say that this is an across-the-board increase. As the Minister pointed out earlier, taking into account the taxation that is payable, there is a sharp distinction between the amounts which the poorest and richest people will receive. Having made a rough calculation, I reckon that people who pay no tax at all will receive an increase per qualifying child of £18 4s. a year; that those who pay at the reduced rate of tax will receive an increase per qualifying child of £14 12s. a year and that those who pay tax at the standard rate will get an increase per qualifying child of

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      £10 15s. 6d. a year. For families with four children that is the difference between an annual increase in income of £54, £43 and £32, which is scarcely an across-the-board increase for everybody.
      Although I suppose I should not be, I am staggered by the hypocrisy of the argument of hon. Members opposite. For eight years from 1956 to 1964 they did not increase the allowances and thereby bring help to the poor families. Instead, they deliberately arranged the tax system to bring extra benefits to the wealthiest families, by stepping up the tax allowances for children in such a way that the wealthiest families received the greatest benefit. Yet they now accuse us of not helping the poor families. They also gave an extra premium for children over 16. That is not unreasonable in itself, but they did it in the full knowledge that it was in the richer income group that children over 16 stayed on at school, and therefore got the benefit of the allowances.
      There are arguments for such tax arrangements, but there is no justification for hon. Members opposite waxing self-righteous about our not helping the poorest families when they not only failed to do that but deliberately handed out substantial sums to—as they thought—their own supporters in the richest echelons of society. If that is not hypocrisy I should like to know what it is.
      Finally, there is the question of the wage-stop. Although I recognise that possibly the Bill was not the place to deal with it, I am genuinely concerned about it. I know that my right hon. Friend is also very much concerned about its principle. I hope that her concern will continue, and that in the not too distant future we shall have substantial and positive action to deal with what I regard as a blot on our social security system.
      8.37 p.m.
      Mrs. Hart: I agree with my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that we have had ample discussion on Second Reading and in Committee, and most of the speech of the noble Lord the Member for Hertford (Lord Balniel) was singularly repetitious. However, there are one or two points to which I wish to reply.
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      The first concerns the wage-stop. I am not sure what the noble Lord was implying. It seemed that he wished legislation to be introduced to end the wage-stop. I do not know whether that is what he wants, because the Supplementary Benefit Commission has been looking at the operation of the wage-stop, and there is no need for legislation to carry out its conclusions. I take it, therefore, that he, like my hon. Friend and many others, would like to abolish it completely.
      Lord Balniel: No. The right hon. Lady is mistaken. The Supplementary Benefit Commission's report on the wage-stop was in her hands nine days ago. We asked that a copy should be placed in the Library to facilitate today's debate, but the right hon. Lady has found that impossible, for reasons which I do not understand. If the Amendments to the Bill which I suggested on Second Reading can instead be done by administrative means, I am only too delighted. My point was that if legislation was required I hoped that she would introduce it later in another place.
      Mrs. Hart: I am grateful to the noble Lord. I did not misunderstand him. As he knows, because I said so on Monday, the Commission's Report is being published extremely quickly, and it will be in the hands of hon. Members very soon.
      My hon. Friend has dealt very effectively with the noble Lord's basic argument about concentrating help where it is most needed. On Second Reading the noble Lord made his generalised demand for concentrating help where it was most needed and his generalised criticism of what he described as indiscriminate relief. He put forward suggestions about how this might be achieved—suggestions about bigger family allowances for the largest families, bigger family allowances for the older childen, and Income Tax in reverse—and said that the whole thing could be solved by major reconstruction of the whole system of Government as it affects the social services.
      What is interesting is that, despite the temptation presented to him by his hon. Friends, the noble Lord has at no point during the proceedings on the Bill committed the Opposition Front Bench into a belief in means-tested family allowances. Some of his hon. Friends would have done so, but he has been wise

      541
      enough—I congratulate him—to refrain from totally committing his party to a concept of this kind. I believe that this is because he knows it to be totally unrealistic and incapable of giving any assistance to our main objective of ensuring the right kind of redistribution of purchasing power and wealth. I congratulate the noble Lord on refraining from succumbing to the temptations with which he had been presented on all sides—by one or two of my hon. Friends and many of his hon. Friends.
      The Bill, as I said on Second Reading, makes a real contribution to helping those who are in the greatest need, the families defined in the Ministry's survey as living in poverty. It cannot go the whole way. It cannot pretend to be anything more than a serious and helpful contribution to the ending of poverty. I wish that I would not be out of order if I were to follow the noble Lord along the avenues that he opened up. I should like very much to know what the Conservative Party thinks about the way to end the low wage structure which is the underlying root cause of the poverty about which we are talking. Would the Conservative Party, as I rather suspect from one or two of the things the noble Lord has said this evening, favour a direct State subsidy to low wages?
      Lord Balniel: No.
      Mrs. Hart: Then, would the Conservative Party favour deliberate action to create a minimum wage? Perhaps that is what they would favour. On the other hand, perhaps they have no policy at all for dealing with the problem of low wages. To the extent that they offer us no constructive thoughts on the basic problem of low wages that was being explored by my hon. Friends in the social security debate on Friday, no solution beyond vague suggestions of means testing, hon. and right hon. Members opposite cannot claim that they are taking the thinking of the country any further forward in the attack that we are seeking to make on the remaining poverty.
      The Bill raises issues on which there are many divisions of opinion. However, the one thing about which we are in agreement is, I think, that in what it does for the people who need the help that it offers them it is an extremely useful Bill. I
      542
      hope that it will speedily pass through its remaining stages.
      Question put and agreed to.
      Bill accordingly read the Third time and passed.

  WAYS AND MEANS

    NATIONAL LOANS
    Motion made, and Question proposed,
    That it is expedient—

    (a) to establish a National Loans Fund and to prescribe its relationship with the Consolidated Fund,

    (b) to substitute, or to take power to substitute, the National Loans Fund for the Consolidated Fund in certain enactments, including enactments relating to Government lending and advances and to the Exchange Equalisation Account,

    (c) to make further provision as to the rate of interest on Government lending and advances,

    (d) to confer new powers of raising money, of creating securities and unsecured liabilities and of entering into arrangements or agreements for varying the terms on which money has been borrowed or securities have been issued,

    (e) to pay into the National Loans Fund any money raised or otherwise obtained in exercise of the new powers,

    (f) to charge on the National Loans Fund with recourse to the Consolidated Fund—

    (i) the principal and interest on any money borrowed under the new powers, or due under securities issued, or liabilities created, under the new powers, any sums required for the purpose of a sinking fund and any other sums to be paid in accordance with the terms on which money is borrowed,

    (ii) all existing national debt,

    (iii) any expenses incurred, in the past or future, in connection with the raising of money, the issue, repayment, redemption, surrender or exchange of securities, or the management of securities,

    (g) to amend in other respects the law about Government borrowing,

    (h) to direct that profits in the Issue Department of the Bank of England shall be paid into the National Loans Fund or applied in meeting any liability of the Treasury to that Department created under the new powers,

    (i) to make payable out of money provided by Parliament certain payments now charged on the Consolidated Fund, and

    (j) generally to make provision for the management of the Government's financial business.—[Mr. Harold Lever.]

    8.45 p.m.
    Mr. Terence L. Higgins: This is an extremely complicated Resolution. I think that it would be convenient to take the Money Resolution with this Resolution.
    Mr. Deputy Speaker (Sir Eric Fletcher): I do not think that the House can take both Resolutions together. I think that we must first discuss the Ways and Means Resolution and then take the Money Resolution separately. It may well be that the debate on the first Resolution will make a second debate unnecessary.
    Mr. Higgins: By all means. Mr. Deputy Speaker, if that is for the convenience of the House.
    I was saying that this Resolution is extremely complicated and very technical. I gather that the reason why we have to debate it is that it effectively asks for new powers to raise money. As I understand the business which we are now discussing, this will be its effect in the matter of extending the borrowing powers of the Public Works Loan Board. This Resolution and the Money Resolution also make some radical changes in the whole system of our national accounts.
    This is a story which has been unfolding gradually. We were first given some indication of it when the Chancellor of the Exchequer said this in his Budget Statement:
    "The present arrangements have grown up as a series of ad hoc responses to particular situations over a long period of years. I think that the time has come to take stock of the suitability of the present arrangements in the contemporary world".—[OFFICIAL REPORT, 11th April. 1967 Vol. 744. c. 999.]
    In the debate on the Loyal Address the Chancellor made some remarks about the form of the national accounts which I hall turn to in a few moments.
    In essence, the Resolution covers the establishment of a new National Loans Fund. There are a series of questions which I ought to ask the Financial Secretary so that we can have a clearer idea of what the Government's intentions are before we debate the Second Reading of the Bill on a later date. The first question is a simple one, but perhaps it
    544
    ought to be asked, in view of the changes which are proposed. It is a fine tradition of the House that in the debate on the Consolidated Fund Bill we are able to raise matters of particular concern to our constituents. I assume that the changes which the Government now propose to make under the Resolution and subsequent legislation will in no way affect the procedures of the House. I assume also that when the National Loans Fund question comes before the House it will not, alas, give back benchers the right to raise their constituents' problems.
    I come now to the Resolution and to the relationship, referred to in its earlier paragraphs, between the Consolidated Fund and the proposed National Loans Fund. As I understand it, the Government's intention is to distinguish clearly the Loans Fund from the Consolidated Fund, which, if the proposed legislation is enacted, will be merely concerned with the Government's revenue coming in from taxation and, in turn, with the expenditure which the Government make out of that taxation on both current account and capital account.
    The Loans Fund will be concerned with the funds which the Government obtain from borrowing and, again, the expenditure which the Government undertake out of that borrowing, some of it presumably going to finance current expenditure and some to finance capital expenditure. The new proposals will help to simplify our accounts in the sense that one fund, the Consolidated Fund, will be concerned with taxation and the other, the Loans Fund, will be concerned with borrowing, but we shall still have both funds used to finance current expenditure and capital expenditure, so that particular confusion will not be eliminated.
    There are one or two specific questions about the actual projects likely to be financed out of the Loans Fund. What will be the position of the nationalised industries? If I understand it correctly, the proposal is that all the borrowing by the nationalised industries is to be financed out of the Loans Fund. Perhaps the Financial Secretary can clarify that the nationalised industries would not be borrowing from any source other than the Loans Fund.

    545
    I should be grateful if' he would tell us, in view of paragraph 1(c) of the Resolution which says:
    "to make further provision as to the rate of interest on Government lending and advances"
    whether it is the Government's intention that all the money lent to the nationalised industries out of this Fund will be, if in loans of a comparable kind, at the same rates of interest and on the same terms. This has a considerable bearing on the recent White Paper on the review of the economic and financial objectives of the nationalised industries, Cmnd. 3437. We should like to be clear whether it is proposed that all the nationalised industries should make interest payments on the same basis.
    Is it proposed to revise the rates of interest from the Fund as the costs of money going into the Fund rise or fall? I understand the proposal to be that the Fund will not be a profit or loss-making institution, that it will seek to lend to the various bodies which it finances at a rate which covers the cost which it incurs borrowing from the various sources available to it. In terms of our national accounts this is something which we want to establish.
    The position of the local authorities arose in the debate on the Gracious Speech when on 7th November my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) intervened in the speech of the Chancellor to ask what was the position about borrowing by local authorities and when the Chancellor replied that the intention was that local authorities would be able to borrow at a rather cheaper rate of interest than otherwise.
    Perhaps the hon. Gentleman will make it clear whether the position of local authorities, who can now choose between borrowing on the open market and obtaining a loan from the Government, will alter and whether the lower rate of interest of which the Chancellor spoke with such enthusiasm on 7th November will reflect merely the difference in the credit rating of the Government and local authorities, or whether there will be some element of subsidy in the lower rates of interest which an individual local authority is charged when borrowing from the Loans Fund.
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    Thirdly, I want to turn to a rather technical point. As I understand it, the intention is that the Loan Board will cover virtually all the various organisations upon whose behalf the Government are borrowing, and this will include, not only nationalised industries, local authorities and so on, but also a number of international institutions. I understand, for example, that our subscriptions to say, the International Monetary Fund, will be paid out of this National Loans Fund. I am not entirely clear what the position is about the drawing rights under the International Monetary Fund. If we exercise our drawing rights on the International Monetary Fund are we to find that the money raised under these rights passes into this Loans Fund and thence into various Government agencies, or are we to understand that it goes instead straight into the Exchequer Equalisation Account?
    From the point of view of being able to follow this transaction, it may be that this is not merely a matter of procedure, but that it also may have some effect on the way in which we can understand precisely what is happening to the state of the economy. In his speech on 7th November the Chancellor said:
    "By themselves, these changes"—
    which the Chancellor was proposing to make and which are covered by this Motion—
    "will not affect the present arrangements under which local authorities are able to borrow from the Public Works Loan Board and the market. Nor will they affect borrowings by nationalised industries. But it will make it easier to make these changes in future if they are thought to be desirable."—[OFFICIAL REPORT. 7th November, 1967; Vol. 753. c. 866.]
    I should like some clarification on this point. The Chancellor appears to be referring to some other change with regard to the Public Works Loan Board and the market. Even if we cannot get a clear reply this evening, because I realise I am asking a number of complicated questions, it would be worth while spelling out what the other changes are which the Chancellor mentioned in his speech and to which he apparently does not later return explicitly, as far as I know, at any subsequent stage.
    I have a few questions to ask about the presentation of the accounts, at a technical level. The way in which our

    547
    national accounts are presented has been a matter of controversy for a great many years. A White Paper was entirely devoted to this in 1963. A lot of the trouble, then and since, turned upon the question of the debateable line, and the idea that accounts were divided into those which were above the line and those below.
    The Economist at that time, in May, 1966, pointed out that:
    "The present line is admittedly annoying to any logician: it separates expenditure for which there is merely a general power to borrow from expenditure for which there is (largely by historical accident) a specific power to borrow, a legalistic distinction that has little significance."
    As I understand it, the effect which the Government are covering by this Resolution will be to adjust our accounts in the way I have described. I am not entirely clear whether this will effectively eliminate the line and the idea of dividing general from specific borrowing rights. Perhaps the hon. Gentleman would consider whether it would be helpful at this stage to spell out exactly how that controversial object will be affected and whether there will be a radical change in the form of our accounts.
    Despite the reconciliation which takes place each year when we have a financial statement between the purely accounting concepts and the national income concepts, there is no doubt that anything which enables us to reconcile those two sets of figures and, as far as possible, to put the national accounts of an accounting sort on the same basis as the national income statistics is likely to be advantageous. I hope that it will be possible, if the Bill is passed and comes into operation, to formulate the accounts in such a way that it is easy to establish precisely what the Government surplus or deficit is for any year in national income terms or in Keynesian terms, because this is an important concept if we are to ascertain whether the economy is in such a situation that the Government should take inflationary or deflationary measures.
    It may well be that the measures which the Government are initiating tonight will eventually make it easier to understand precisely what action they are taking at Budget time, although I suspect that it will be necessary to add one or two tables concerning that borrowing, such
    548
    as local authority borrowing, which will still take place, to some extent, outside the new National Loans Fund.
    We do not at this stage wish to prejudge the Government's Bill, which we have not yet had an opportunity of seeing. For that reason, we do not propose to vote on this Motion or the Money Resolution. This is a matter which we must leave open until we see the Bill. However, it would be helpful if the Financial Secretary could give an indication of the answers to some of the questions which I have asked.
    9.2 p.m.
    The Financial Secretary to the Treasury (Mr. Harold Lever): I am very grateful to the hon. Member for Worthing (Mr. Higgins) for raising these points, because although it would be improper for me, Mr. Irving—
    Mr. Deputy Speaker (Mr. Sydney Irving): May I remind the hon. Gentleman that we are now in the House and that I wear a different hat.
    Mr. Lever: I beg your pardon, Mr. Deputy Speaker. I was about to say, especially having regard to the rank to which you have drawn my attention—and it is quite inappropriate that it should have been necessary for you to do so. Mr. Deputy Speaker—that I must not allow my passion for the aesthetic and financial attractions of the Bill to carry me over the narrow line of explanation and exposition appropriate at this stage. I must reserve the full flower of passion and feeling for the Second Reading debate when the hon. Gentleman and his colleagues will have considered the controversial implications of the Bill.
    I have been asked whether the debates on the Consolidated Fund Bill will be affected by this Motion or by the Bill to follow. Hon. Members on both sides of the House will remain in the same unfettered enjoyment of all privileges, ancient and modern, relevant and irrelevant, necessary and unnecessary, which they at present enjoy during those exhilarating debates. No one need fear that any changes will result from the Bill.
    I have been asked whether these proposals will clear up the question of Government spending so that the accounts take on a modern or Keynesian

    549
    look. We cannot undertake to draw our accounts to fit any particular economist's ideal, but the effect of these changes will be to make it clear what the Government have been up to financially, because from now on the Exchequer accounts will simply show what the Government have received in taxation and what they have spent on both capital and current account. As long as they keep their expenditure below the sum they have received from taxation, there will be a surplus which will pass to the National Loans Fund.
    If however, the Government spend more than they get in taxation, they will have to resort to borrowing from the National Loans Fund to cover the deficit. All the Exchequer grants in future will record what the Government have collected from an enthusiastic citizenry and the fine work they have done—I am sure this is intended by both parties in Government—with the money. They will also show the citizenry whether or not they have spent more than they have got in taxation. If it is more, they will have a borrowing from the National Loans Fund. On those happy occasions when they spend less, they will have a surplus which they will pay over to the National Loans Fund.
    I was asked, will the nationalised industries borrow only here? Yes, all their long-term borrowing will go on as now from the Government and they will borrow from the National Loans Fund. But from time to time some of the nationalised industries have borrowed short-terms from banks. That kind of borrowing and their credits will continue as before.
    Interest rates—I am asked, will they be the same for the different nationalised industries? The Government observe strict impartiality in charges to the various nationalised industries because they are all solvent and the Government are responsible for their solvency. It would not be right to make a differential rate between one industry and another.
    Will rates to the nationalised industries and local authorities when they borrow from the National Loans Fund rise or fall from time to time? The answer is that they will rise and fall according to the cost to the Government and it is the cost to the Government at the time the loans are made that will be relevant.
    550
    Without going to the nearest fraction of an interest rate, the Government will lend to a nationalised industry or a local authority at their own cost of borrowing at the time that they are lending—plus certain expenses. If the Government have been prudent and borrowed earlier at a cheaper rate, there is no reason why the cheaper rate should not be available for the customer. If the Government have borrowed sums of money at a higher rate earlier, there is no reason why the borrower should not pay the higher rate.* The borrower will in each case pay the going cost at the time of borrowing on the borrowed money.
    Mr. Higgins: Do I understand from what the hon. Gentleman said that the rate will not subsequently be changed on loans to the nationalised industries if the rate was negotiated in some future period?
    Mr. Lever: I am puzzled to hear about the loans that have been negotiated in some future period. Does the hon. Member mean in respect of borrowings already contracted for at present by the nationalised industries with the Government?
    Mr. Higgins: I am sorry that I did not make myself clear. Suppose they borrow next April at a certain rate and then a year later the rate has changed, the loan which they took next April will not then have its rate altered in the light of current circumstances? Is that correct? The rate they are actually charged is the rate at the time they take the loan from the National Loans Board and they will continue to be charged that rate until such time as they repay the loan?
    Mr. Lever: The short answer is yes. The longer answer is that when we lend from the National Loans Fund to any of the borrowers, a local authority or the nationalised industry, the loan will have a term on it and the rate of interest fixed will be the rate appropriate for that term at the time of borrowing.
    I was asked why we expect that local authorities will be able to borrow more cheaply from us than in the market. This is because the Government are a very large borrower and have considerable credit and considerable marketability for their stocks which are probably the most marketable stocks in the world The
    *[Note: For correction, see Vol 756, col. 88.]

    551
    great attractions to lenders make it worth their while to suffer the fractionally lower rate of interest at which we are able to borrow than are smaller local authorities, and for this reason we can relend rather more cheaply, if we are able or think it right to. On the other hand, if a local authority prefers, or thinks it can do better, it can always go elsewhere and try to get money cheaper. We have no restrictive monopoly on local authorities' power to borrow, which will continue in other respects exactly as now.
    I am asked to explain about the Exchange Equalisation Account. This is simplicity itself. What will happen is that the Exchange Equalisation Account will borrow foreign currencies from the International Monetary Fund. In order to do so the Account will have to pay out sterling, because it will be receiving foreign currencies in the first stage of this matter, which it will then pay to the International Monetary Fund. The result, in short, is this. The Exchange Equalisation Account always has a fairly large sum of sterling in the form of Treasury Bills. It will cash in the Treasury Bills and will hand on the sterling to the International Monetary Fund. So we get the position that the indebtedness of the Government will reveal itself, strangely enough, by the credit they have in sterling with the International Monetary Fund. This only occurs when drawings are made the Fund will draw funds in sterling from the International Monetary Fund. The foreign currencies will be held in the Exchange Equalisation Account where, I am told, they are rather fond of foreign currencies from time to time. I hope that that covers that point raised by the hon. Gentleman.
    I am asked what future changes we contemplate in local authority borrowing. I think that it would be preferable not to give a fuller, more interesting answer to the hon. Gentleman and to the House and that we should leave that question to the Second Reading of the Bill itself.
    Will the line go, I am asked. It must be announced with some gravity that this line, which came into being in 1875, and thereafter has always baffled new hon. Members of the House, hearing learned and ancient Members talk about below
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    the line and above the line expenditure, with which older Members have sometimes baffled by-election arrivals—they will have to think of something more ingenious—will go as soon as the Bill becomes law.
    I hope I have dealt with the point, raised by the hon. Gentleman to the sati,- faction of the House.
    Question put and agreed to.
    Resolved,
    That it is expedient—

    (a) to establish a National Loans Fund and to prescribe its relationship with the Consolidated Fund,

    (b) to substitute, or to take power to substitute, the National Loans Fund for the Consolidated Fund in certain enactments, including enactments relating to Government lending and advances and to the Exchange Equalisation Account,

    (c) to make further provision as to the rate of interest on Government lending and advances,

    (d) to confer new powers of raising money, of creating securities and unsecured liabilities and of entering into arrangements or agreements for varying the terms on which money has been borrowed or securities have been issued,

    (e) to pay into the National Loans Fund any money raised or otherwise obtained in exercise of the new powers,

    (f) to charge on the National Loans Fund with recourse to the Consolidated Fund—

    (i) the principal and interest on any money borrowed under the new powers, or due under securities issued, or liabilities created, under the new powers, any sums required for the purpose of a sinking fund and any other sums to be paid in accordance with the terms on which money is borrowed,

    (ii) all existing national debt,

    (iii) any expenses incurred, in the past or future, in connection with the raising of money, the issue, repayment, redemption, surrender or exchange of securities, or the management of securities,

    (g) to amend in other respects the lass about Government borrowing,

    (h) to direct that profits in the Issue Department of the Bank of England shall be paid into the National Loans Fund or applied in meeting any liability of the Treasury to that Department created under the new powers,

    (i) to make payable out of money provided by Parliament certain payments now charged on the Consolidated Fund, and

    (j) generally to make provision for the management of the Government's financial business.

    NATIONAL LOANS [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of the present Session to establish a National Loans Fund, it is expedient—

    (a) to authorise the issue of money out of the National Loans Fund to the Public Works Loan Commissioners for the purposes of making loans subject to a limit which—

    (i) in the first instance shall be one thousand million pounds,

    (ii) but which may be increased by Treasury orders up to four thousand million pounds,

    (b) to authorise the payment into the National Loans Fund of all sums paid or applicable in or towards the discharge of the principal or interest of any loan made by the said Commissioners before or after the passing of this resolution, and of any other sums now payable into the Local Loans Fund,

    (c) to authorise the remission of unpaid balances of principal and arrears of interest due to the said Commissioners in respect of any loans specified for that purpose in the said Act.

    (d) to wind up the Local Loans Fund and—

    (i) extinguish all its liabilities to the Consolidated Fund, and

    (ii) pay into the National Loans Fund any cash balance standing to the credit of the Local Loans Fund,

    (e) to amend the law about the making of loans by the Public Works Loan Commissioners,

    (f) to pay out of money provided by Parliament any additional sums so payable under section 194(2) of the Town and Country Planning Act 1962 or section 64(3) of the Town and Country Planning (Scotland) Act 1954 (repayment by instalments out of money provided by Parliament of sums payable out of the Consolidated Fund under Part I or Part V of the Town and Country Planning Act 1954 or the Town and Country Planning (Scotland) Act 1954 or Part VI of the Town and Country Planning Act 1962).
    —[Mr. Harold Lever.]

    Bill ordered to be brought in by the Chairman of Ways and Means, The Chancellor of the Exchequer, Mr. John Diamond, and Mr. Harold Lever upon the Resolution and upon the Ways and Means Resolution come to this day.

    NATION AL LOANS
    Bill to establish a National Loans Fund, to substitute the National Loans Fund for the Consolidated Fund in certain enactments, including enactments relating to Government lending and advances, the Exchange Equalisation Account and government annuities, to make profits of the Issue Department of the Bank of England payable into the National Loans Fund and to make other provision as to the said Department, to charge the whole of the national debt on the National Loans Fund, and to amend the law about Government borrowing: to make future provision for loans by the Public Works Loan Commissioners, and to authorise advances out of the National Loans Fund for the purpose of such loans; to transfer to Votes certain payments charged on the Consolidated Fund; and generally to make provision for the management of the Government's financial business, presented accordingly and read the First time: to be read a Second time Tomorrow and to be printed. [Bill 42.]

  DOCK WORKERS (REGULATION OF EMPLOYMENT)
  9.15 p.m.
  Mr. Nicholas Scott: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Dock Workers (Regulation of Employment) (Amendment) Order 1967 (S.I., 1967, No. 1252), dated 18th August, 1967, a copy of which was laid before this House on 22nd August, in the last session of Parliament, be annulled.
  This Order amends the Dock Labour Scheme to give effect to the 1965 Devlin Report and, in particular, to decasualise the system of dock labour and give permanent employment to dock workers.
  First, I want to make it clear that we on this side have no intention of dividing the House on the Order. We do not oppose it, and we think that decasualisation marks an important step forward in the labour situation in our docks. Nevertheless, we feel that there are several points on a very complex Order which need airing, and we have several questions to put to the Parliamentary Secretary. Moreover, we believe that, depending on the answers which he gives, there

  555
  may need to be some Amendment to the Order in the very near future.
  One recognises that the Order, which embodies a scheme for the complete reorganisation of the Dock Labour Scheme, is the result of compromise and negotiation between the unions and the port employers. By definition, therefore, it cannot be ideal. However, I am delighted that it is at least to be given a fair try and will not be strangled at birth by the activities of unofficial agitators in the docks.
  I want for a moment to refer to the events of the last eight weeks, because they are very much concerned with the context of the Order. The most important lesson which can be drawn from our experience is that, while the Minister of Labour has been resisting suggestions in the House that he should take emergency powers to deal with unofficial action in the docks, and while the country has been fuming at the lack of action and anxious to see the dispute resolved, there is a need for some path open to the Minister of Labour between inaction or cajolery and emergency powers and putting in troops.
  If the Minister had the power to order a cooling-off period, it would be a useful weapon to help in bringing the parties together. It would save great economic damage to the country and achieve some sort of solution much sooner than otherwise would be the case.
  I am disappointed that the Order makes no special provision to deal with unofficial strikes. The Devlin Report, which gave birth to the scheme, said of the Transport and General Workers Union in paragraph 283:
  "To start with, the T. & G. must re-establish its power and authority in the three major ports…It must fight the dissidents on their own ground. This will entail a great campaign in which the Union concentrates all its available resources in the docks."
  One of the most disappointing features of the unofficial dispute over recent weeks has been the fact that the General Secretary of the Transport and General Workers Union has been conspicuous by his absence. He has been extremely equivocal in his attitude and has refused absolutely to fight the dissidents on their own ground or wage any great campaign to break their authority and assert the authority of his Union.
  Mr. John Ellis: I do not think that what the hon. Gentleman says is true. The General Secretary of the union has spoken up during the dispute. This has been a huge reorganisation in an industry where relations have been notably bad. I hope that the hon. Gentleman will withdraw his remarks about the General Secretary.
  Mr. Scott: The House must make its judgment. It is precisely because it is such a major reorganisation that the General Secretary of the union should have played a more prominent part in persuading his members to accept the scheme than he has done. My reading of his attitude is that he has been extremely equivocal and damaging to the case of his union.
  I welcome the scheme to build up a better system of communications in the docks, and in particular a system of shop stewards, but I wonder whether, if agreements had been enforceable, as we on this side of the House have suggested, the general secretary of a union whose funds were at risk would have been quite so careless with his authority, and quite so indifferent to the breakdown in communications between the union and its members as we have seen during this dispute.
  I think that there is a case for the special treatment of unofficial strikes in this Order, not only because of the weakness of the union leadership—although we look for an improvement in that regard—not only because there is provision for a "fire brigade" committee to go in immediately when any dispute is threatened, and to settle it—although we believe that the establishment of this group will make unofficial strikes even less excusable in the future than they have been in the past—not only because there is no provision within the Dock Labour Scheme for workers who are made idle as a result of the action of other unofficial strikers to be laid off, but surely because, when a new deal like this has been negotiated, there is a case for giving special treatment to the matter of unofficial strikes, and to those who are trying to wreck the scheme.
  I want to refer to the Order, and particularly to the disciplinary procedure relating to dock workers. At the moment, if a worker is guilty of misconduct such

  557
  as to justify his summary dismissal, the employer may terminate his contract of employment without notice. He thereupon becomes a temporary unattached worker in the employment of the National Board, and then the Board has to take certain action. It can dismiss him summarily, or it can take various other actions.
  I think that when a worker has been involved in an unofficial strike, we ought to shift the emphasis. Power ought to be given to the employer to dismiss him summarily, and the onus should then be on the union to ask the Board to negotiate the re-entry of the worker into the scheme. This would strengthen the union's hand considerably, because it could say to those who were taking a leading rôle in unofficial action that, while it would be prepared to negotiate re-entry to the scheme, it would require undertakings about future observations of the contracts and procedures which have been agreed.
  Mr. Ellis: Will the hon. Gentleman instance any country in which this kind of legislation exists, which enables men to be dismissed summarily for taking action in this way?
  Mr. Speaker: Order. The hon. Member for Paddington, South (Mr. Scott) knows that he cannot amend the Order.
  Mr. Scott: I am trying to show that there are certain shortcomings in the Order, and I hope that when the Parliamentary Secretary replies he will be able to allay some of our doubts about these, and possibly even say something about future action, subject, of course, Mr. Speaker, to your ruling on that.
  I think that there is a case for a shift in emphasis to give power summarily to dismiss workers, and then putting the onus on the union to apply for their re-entry into the scheme. This would strengthen the union's hand, and give it some of the power and authority which it lacks, and has been shown to lack in recent weeks.
  This Order was due to come into force in conjunction with a national agreement to abolish certain restrictive practices, but whether it is coincidence or not—and perhaps the hon. Gentleman can tell us—once the Minister at the Press Conference on 22nd August announced a firm date for the introduction of the
  558
  scheme, the prospects of getting a signature from the union side to that agreement seemed significantly to recede.
  I understand that there have been local agreements and that considerable progress has been made in getting rid of the restrictive practices which resulted from the casual employment of labour. On the other hand, one hears that in Leith output is running at only 60 per cent. of the output achieved before decasualisation. We would like an assurance from the Parliamentary Secretary that both the letter and the spirit of the agreement to abolish restrictive practices consequent upon the casual system of labour have been removed following decasualisation.
  Mr. Simon Mahon: I am sure that the hon. Member wants to be eminently fair. Will he point out that since the strike in the great port of Liverpool there has been considerable progress both in productivity and in the abolition of restrictive practices?
  Mr. Scott: I am delighted to see that perhaps the most damaging restrictive practice—welting in Liverpool or spelling in Scotland, which are the same—has disappeared. But I should like to hear from the Minister about the general progress made and to have his assurance that both the spirit and the letter of the agreement are being observed generally.
  The security which the dockers will enjoy under the scheme is greater than that which is enjoyed by any other industrial worker. I do not complain about that, but a question arises from it. At the moment the Order gives the Board power, after a worker has been suspended, to reinstate him with his former employer. This does not seem to be conducive to good industrial relations. It would be very much better to have power to award damages, through the appeals tribunal, or—if the Government were wise enough to adopt our suggestion of a system of industrial court—to allow damages to be given and for the worker to be reinstated with another employer. The scheme outlined in the Order does not seem conducive to good industrial relations if a worker can be reinstated with the employer who dismissed him.
  I now turn to the question of the level of manpower in the docks and questions of productivity raised by the Order.

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  Paragraph 3 of the scheme aims at ensuring
  "the full and proper utilisation of dock labour"
  and therefore not only to give the docker security of employment but also to give the nation an efficient dock labour system. The Press release of the Minister's on 22nd August—
  Mr. Ellis: Perhaps I have been misled. I am looking at paragraph 3 of the Order. Is it page 19?
  Mr. Scott: It is page 18—paragraph 3(1,a). The Minister's Press release said that
  "the improvements in efficiency and industrial relations which the decasualised system will bring, will enable substantial improvements in the productivity of dock labour to be achieved. Because of the 'no redundancy' pledge accepted by all the parties as the basis for the introduction of decasualisation, the resulting manpower savings will need to be realised through normal wastage or agreed or voluntary severance schemes. The independent members indicated that the cost of the settlement could be offset by those means within two years. The Minister of Labour has asked the two sides to report to him by mid-October on their plans to achieve this, and in particular on the future recruitment and retirement policies of the industry."
  These are central to the Order and its efficient working, and we would like a progress report from the Minister about the talks announced in the Press release.
  The present labour force of the ports within the scheme covered by the Order is about 60,000 and it is estimated that the requirement for the early 1970s will be about 40,000. The Order makes certain provisions and mentions schemes for voluntary retirement and severance pay. Naturally, wastage will make some reduction in these numbers, but it certainly cannot bridge the gap between 40,000 and 60,000.
  One lack in the Order is that the retirement age for dockers is not reduced from 68 to 65. It is ludicrous that a retirement age three years above the normal should apply in an industry involving heavy manual work. It is clear that a voluntary severance pay scheme will be needed, and we would like to hear that the Government will be prepared to give help for its establishment. Otherwise, I do not see how we can effect the necessary reduction in manpower to enable the
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  Order to contribute to the efficient working of the docks and an increase in productivity.
  Turning to the individual employer rather than the general scheme, we see that Clause 17 of the Scheme lays down the procedure when an employer wants to vary his work force. The Order lacks a firm procedure with an in-built time-scale to get a quick decision from the Board on an appeal by an employer. If an employer loses half his business for an indefinite period, he may be required to go on employing the same number of dockers. This can lead only to the bankruptcy court and to the need to re-employ his old force with other employers.
  Surely some time-scale should be: built in or a new Order introduced so that a decision in 14 or 21 days can be achieved. Otherwise, particularly in a port whose business was declining, a vicious circle could build up, with redundant dockers being shifted from one employer to another and employer after employer being driven into bankruptcy.
  We give a general welcome to the Order, although we have some reservations on which we look forward to hearing the Parliamentary Secretary's comments. All in all, we believe that decasualisation will mark a great step forward in the docks. We only hope that the Parliamentary Secretary can also say that the Government have abandoned their plans for nationalisation, which would be another great step forward.
  9.34 p.m.
  Mr. John Ellis: The Opposition are praying against an Order which is consequential on certain Acts like the Docks and Harbour Act which made it possible to put the decasualisation into effect. The speech of the hon. Member for Paddington, South (Mr. Scott) was reasonably general and. as the Order covers many aspects, I intend to deal with Articles 6, 9 and 17, which cover issues of discipline and manning in individual firms.
  The hon. Gentleman, in criticising this Order, seemed to feel that some of the disciplinary provisions do not go far enough. That is a completely wrong attitude to adopt. We are dealing with men who over the years have had to fight to improve their conditions. In my

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  port at Bristol men were recruited into what were called the pens because they gathered there like cattle waiting to be picked out. When hon. Members talk of strikes in the docks, be they official or unofficial, they miss the fundamental point that no man voluntarily goes out of work unless he has been brought up in an iron school of injustice.
  I would have thought that hon. Members in all parts of the House would welcome the action that the Government have taken in having produced this Order, because unless we are careful we shall get back to the old cry of "Bring in more discipline", which is what led to these hostile relationships in the industry when men were embittered.
  Let us deal with the conditions which make men react in this way. We ought to have learned our lesson from the situation in the docks in the past. I pay tribute to the Minister for the understanding that he has shown and for his resistance to the suggestion that he should show the iron fist—although perhaps he has not done so in the railway dispute. I do not agree with his attitude there. However, he is adopting the right attitude to the dockers.
  Article 9 of the Order is designed to improve the lot of the individual docker. As we read through the various provisions we find that this Order is designed to give the docker the thing which he has never had before, security of employment. He knows that he has a job and that he will receive proper financial reward. When we are told that these men have conditions which are operative nowhere else in industry, I ask hon. Member, to remember that dockers need security of employment because over the years they have had to go for long periods without work.
  The hon. Member spoke of there being too many men in the industry. The employers bear a great share of the blame here, because it has suited them to have a great pool of men from whom they can choose, thus depressing conditions. Now the birds have come home to roost. I am satisfied that we shall get out of these difficulties as time goes on.
  I have been in consultation with the Transport and General Workers Union on the proposal to reduce the retirement
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  age from 68 to 65. This is a heavy industry; it is a hard industry, and the thought of employing men till they are 68 is an abomination to my hon. Friends, as it should be to hon. Members on the other side of the House.
  I am empowered to say that the unions are willing to talk on this issue. They will be only too pleased to discuss the retirement of men at the age of 65 or even at 60. In the joint negotiations that will go on about this with my right hon. Friend—and, of course, the employers will also be represented—all these matters will be thrashed out. However, the unions insist that the conditions and pensions that the men receive must be adequate for their needs.
  As things stand at present, the system appears to be that after a great many years' service, a pension of £5 a week will be paid, plus £100 severance pay. However, that is after a lifetime's service in the docks. I also understand that although a man may have spent a considerable length of time in the docks, his pension may be as low as 25s. a week. The men's representatives are extremely concerned about this problem. They require proof that something will be done to overcome these difficulties and cure the poor conditions affecting men leaving the industry after a number of years.
  Reference has been made to overmanning and I have explained how this can come about. However, this and other problems can be solved when carrying through the sort of major social revolution in this industry that the Government are undertaking. When such a revolution is taking place, there is bound to be considerable upheaval, but, by sensible recruitment policies, I am sure that these difficulties can be overcome.
  We pledged that all the men on the registers would be allocated, and that pledge has been kept. The various firms have taken up these men. Nevertheless—and I speak from experience in the Port of Bristol—I would like to see figures to prove how this allocation of men has been carried out.
  It is understandable that when someone must opt for 20 men or 200 men to do a certain amount of work, it will be natural for him to opt for the lowest number he can use. Perhaps he needs 200 men but will ask for only 180. This

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  presents a problem which must be carefully examined. Otherwise, in a week when there is not continuity of work, the person opting for the men may take 180 men instead of 200, thereby saving the wages of 20 men. And 20 times £15 results in a saving of £300 a week. At the end of the first trial period we will be looking at this problem to see exactly how transferability has been working.
  We will be interested to know how many men were allocated in ports where the stevedoring firms were sharing as the sole general employers. In Bristol, on the other hand, we are in the unusual position of having the dock municipally owned. There, one of the employers is the Port of Bristol, so that besides the stevedoring firms taking up labour, also competing in the general pool for labour and taking up its share of men was the Port of Bristol Authority, which is owned by the local council.
  I will, therefore, be interested to see the final figures that are resolved. The problem in Bristol was an easier one because a great many men could be employed by the local authority. The figures will be interesting because the rules that apply in Bristol are the same as those that apply in other ports. However, in ports which are not municipally owned the people employing labour must take up their share of the general availability of labour, and I am not sure that that has happened in Bristol.
  I suggest that there may have been a tendency to keep down the number of men permanently on the stevedoring firms' books and put them on to the Port of Bristol Authority's books. One reason for my suspicion in this matter is that the Port of Bristol Authority is wholly controlled by the local council and the Docks Committee, but on the Docks Committee, which is controlled by the Conservative Party, sit some stevedoring employers, one of whom is the chairman of the Committee and is associated with the employers. It can be seen why I have some fears. I shall look at the figures very carefully.
  We shall need to keep a careful watch to see that the Port of Bristol Authority does not once more provide services and facilities for another section that uses the
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  docks to take the profit, that the municipally-owned body is not doing all the donkey work for the stevedoring employers to take all the profits, as has happened in the past.
  It was a mistake for hon. Members opposite to pray against the Order. I think that both sides of the House concede that the conditions of the dockers over the years have been as bad as those of any section of workers. The dockers' militancy today has been formed over long years of oppression, of being at the employers' beck and call, with the numbers kept in so that the employers could try any one of any number. For the first time decasualisation, for which we have worked in the industry and which the Order is all about, has been achieved. For the first time, thousands of men know what it is to have security in their job and to know that they will receive recompense at the end of the week. It is because of the way the bargaining has been carried out that we have had troubles in the past.
  Mr. Scott: May I make it clear, as I did in moving the Prayer, that we on this side of the House welcome decasualisation? It is not our intention to divide the House against it, but the only way in which we can debate such an historic matter is for the Opposition to move such a Prayer.
  Mr. Ellis: I am glad that the hon. Gentleman has said so, but it was apparent to me from some of his opening remarks that he was complaining that the Order was not strong enough on the disciplinary side to deal with various actions that might occur in the docks. The hon. Gentleman seeks to tack his remarks on to something that is not particularly relevant to what the Order tries to do.
  The Order tries to give men oppressed in the past the security of job tenure that they have never known before. Those men have a memory; that oppression was not generations ago but only months ago. To attempt to resort to a kind of mass discipline in the Order would be a totally wrong way to solve the problem. It was because we involved ourselves with that kind of philosophy that we have the trouble in the docks today. It was largely because of the forebears of the present generation of right hon. and hon. Members opposite that we find ourselves

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  in this position. The Order is a courageous attempt to put the matter right. I wish it God-speed, because I believe that we are seeing a social revolution in the docks.
  9.50 p.m.
  Mr. Ian Lloyd: It is surprising that the hon. Member for Bristol, North-West (Mr. Ellis) should have chosen to accuse the Opposition of making a mistake in moving the Prayer. For any hon. Member on the Government side to use, other than in bated breath, the word "mistake" at this stage of our nation's affairs implies the most staggering temerity.
  I take up the point that the hon. Member made, the serious economic point that many of the conditions in the docks are due entirely in a sense to the whim of employers who desire to have large number of men available. Certainly there is an element of this in the situation.
  Mr. Ellis: In the past.
  Mr. Lloyd: In the past, and even now.
  Mr. Ellis: Yes.
  Mr. Lloyd: I ask the hon. Gentleman to accept that one of the fundamental economic factors that we cannot escape in dealing with the random arrival of ships in ports is the need for a fluctuating supply of the resources available to discharge them. There are many ways in which it can be organised and many solutions and techniques which can be used, but the problem is fundamental. It remains. It is a human one as well as technical.
  Mr. Ellis: I know that this is a difficult problem, but the hon. Gentleman is surely not really suggesting that the only way out is to keep a huge labour force and perhaps employ the men for one week as they are needed and then fire them. I am sure he did not mean that.
  Mr. Lloyd: By no means am I suggesting that. I am simply suggesting that if we are seeking to attribute blame in situations of this type which have long historical trends we should attribute it fairly as between human beings with all their frailties and the realities of economic life, which are sometimes beyond human beings.
  I turn to the main case put by my hon. Friend the Member for Paddington,
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  South (Mr. Scott). He has been absolutely right to emphasise some of the serious technical weaknesses of the Order. All his criticisms are justified, though they did not in any way weaken the general support for the aims of decasualisation which the Opposition support. But I detect in the timing of the Order, which is perhaps of more crucial importance than we might consider, a certain whiff of one of Parkinson's Laws. Parkinson once said that the great establishments and buildings appeared at the time when the organisations they represented began to decline in power. In this case it seems that arrangements, however desirable, are beginning to appear to offer permanence of employment to dock workers when in a sense permanence for the industry as a whole is certainly, for a given or static number of dockworkers, in its present form a pious hope.
  The whole of the marine and port industry is now aware of what the modern conception of unit loads, particularly containers, means for the industry. But containers are the means developed by technology to reduce drastically the whole of the old-fashioned operation of heaving and shoving cargoes out of the ships in much the same way as the Phoenicians did 2,000 years ago. It is wrong to suggest that even with the most rapid rate of introduction of containers dock work will disappear, but permanence of employment in dock work is now understood as something which the State, employers, trade unions, the Government or Mr. Jack Dash cannot possibly in any circumstances guarantee. It is certain that over the next 20 years the face of the port industry will change dramatically, much more dramatically than most people realise.
  To illustrate briefly with a most descriptive example, the other day there was published a photograph of a ship lying six miles offshore in Vietnam. It was a modern tanker ship being discharged by a large Sikorski crane helicopter, which obviously took the containers several miles inland. No port was used. This is a very small cloud on the horizon and not, I suggest, in any way an economic likelihood in the near future, but it suggests the shape of things to come, and we must watch it very closely.

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  The Order is intended to facilitate a peaceful and economic redeployment of resources. We are entitled to ask—this is all we are doing—whether it is likely to achieve its purpose. Communication is surely the basis of any measure intended to secure the co-operation of large numbers of men. Good communication is the essence of the success of this Order and of any Order intended to achieve the same result.
  May I refer to a summary of the communications problem, in the context of which the Order is perhaps an example, which has given rise to the present series of unofficial strikes. In a recent copy of the Liverpool Journal of Commerce, a paper which deals particularly with this problem, a special correspondent wrote as follows:
  "London dockers, through their union branch meetings and divisional committees and joint committees with members of the National Amalgamated Stevedores and Dockers Union, had a major say in moulding the decasualisation agreement.
  Every clause was referred down the line to branch level. The controversial continuity of work rule that finally crippled the Royal group of docks was almost the last clause to be agreed. It was debated at branch level when Mr. Jack Dash, leader of the London Portworkers Unofficial Liaison Committee, queried various aspects of it, but was finally in favour of it being included in ' the little grey book '—the agreement drawn up between the unions and the enclosed docks employers.
  Any branch had power to refuse the rule, have it amended or referred for further consideration. Nobody did. This is why the strikers got very little sympathy from the union leaders, one of whom commented: ' If Mr. Jack Dash and his committee cannot find a fight on one point they will soon find another'."
  It is obvious from what I have read out that this was a very serious effort at communication. If it failed as seriously as it did, the House is entitled to ask why. One obvious reason is the sheer complexity, the intricacy, and the detail of these provisions and arrangements. No wonder it took two years to explain them. What the Treasury, in another context has described as algorithm procedures, procedures for simplifying public documents and procedures for simplifying a public explanation of what is required by public measures, are most drastically needed in this industry. If they are needed in telephone booths, they are certainly needed in the docks.
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  Is there not a more important conclusion? If the Order is a typical example of the over-regulation, over-prescription, over-definition, which is strangling the country, should we not look at this type of thing very much more closely? Must every contingency be foreseen and covered by legislation or Orders in Council? How many people will really know what this Order contains? How many people will understand its provisions? How many people will apply it correctly? How many Members of the House have read it? How many dockers are likely to read it? How many directors of port employer companies are likely to read it in full from cover to cover? Perhaps the crucial question is—how many will begin to understand it?
  I come to the question of morale. I ask these questions because the Order will be worth nothing at all, unless it has a significant impact on morale, the morale of both employers and employees in the dock industry, and unless it stimulates enterprise, which the whole House will agree is necessary, and co-operation, which again the whole House will agree is necessary.
  There are three types of failure which will completely nullify the purpose and aim of the Order. The first failure is if the employers are unwilling to make the enormous communication effort which it requires. The second type of failure will be if there is, in consequence of the Order, little impact on official or unofficial strikes. I most earnestly emphasise both these, because I am sure the Government are fully aware that we must find solutions in both fields. The third condition for the success of the Order is that the technical adaptation of the ports to the requirements of the second half of the 20th century is not impeded.
  An hon. Member said that productivity was rising in the Port of Liverpool. It was only this morning in Lloyds List that Mr. Kentish Barnes, Chairman of the Waterfront Committee in that port, said that master porterage charges in Liverpool had gone up from 157½ per cent. to 196 per cent. to pay for this measure, but there had been no increase in productivity in Liverpool whatever. I cannot dispute the authority of Mr. Kentish Barnes and doubtless others will

  569
  have other views, but this is an authoritative view of the situation and it is one which frightens me desperately, because, unless the measures which are to cost the country a great deal are paid for by higher productivity in the ports, we may as well wash them all out.
  Mr. Roy Hughes: Does not the hon. Gentleman think that the fact that Liverpool is an employer-dominated port is a very good reason for the dock industry generally being taken into public ownership in order that the improvements which h e suggests can be made?
  Mr. Speaker: The hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) must resist the temptation to answer that.
  Mr. Lloyd: I must resist the temptation to answer that, Mr. Speaker.
  Communication is the essential basis, the communication which the Order implies, needs and requires, for communication is the essential basis of such rationality as human beings can achieve. The facts, the arguments, the real patterns of self-interest must be honestly and effectively displayed and communicated. This must be done often against the hostility of those whose power rests on a basic denial of reality, for good communication breeds security and confidence and those are indispensable lubricants of industrial change. Uncertainty and ignorance are the natural weapons of reaction.
  What chance is there of achieving these conditions? When the maximum cooperation is called for from them, requiring investment on a significant scale, the employers are threatened with creeping nationalisation, a sort of multiple sclerosis of the nerve ends of the economy. I refer to a statement made within the last week by the President of the Chamber of Shipping. I am sure that the Government and all hon. Members opposite will realise that ship owners throughout the country are one of the key groups who have to support the implementation of and who will have to help to make this measure successful. This is what was said:
  "…what incentive is there for port employers to go ahead with their plans to develop personnel and welfare arrangements, which are so essential to the well-being of the docks, when the Government is standing over them and threatening to run them out of business by nationalisation? How can you expect em-
  570
  ployers to give of their best when such a situation exists?"
  He concluded his speech as follows, and I hope that the Government will heed this request:
  "I therefore make this direct and immediate appeal to the Government—call off your nationalisation proposals for the docks industry of this country."
  Mr. Speaker: This is a wide debate, but not as wide as that.
  Mr. Lloyd: I return to the second condition of success; that was one, but we must let it be. If we are to achieve something, it must clearly have a direct impact on official strikes. A tremendous effort must be made via all media of communication to make sure that this thing is understood—the Press, TV, radio, direct means of communication, pamphlets, lectures and talks. All must be employed to simplify the presentation of the Order to those affected by it.
  Secondly, if unofficial strikes are to be avoided, and this is perhaps the key to the question, there must be powerful disincentives built into this—and it does not exist at the moment—and all similar and subsequent legislation, because the nation is fed up to the back teeth with organised mass stupidity.
  As I understand it, there are only two answers: first, the inoculation of the affected population with good information, with reasoned arguments, and with positive incentives; secondly, stringent measures against the microbes of industrial anarchy. The Order provides neither of those.
  I conclude my observations with one remark by the chairman of a company which is closely involved in the introduction of containerisation, which, in a sense, will have to take place within the context of the Order over the next 20 years.
  Sir Basil Smallpeice, Chairman of Associated Containers, said this morning that there were two groups to beware of in achieving this technological revolution for Britain. I will refer to only one. He said:
  "First there are the Governments—and I mean any Government—and particularly their transportation planners, who believe that they can foretell the future with precision and establish rigid patterns for controlling it."
  10.5 p.m.
  Mr. Simon Mahon: Having been involved in the Liverpool dock strike

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  for the whole of the six weeks, I would not wish to participate in any debate on the docks at this time—I have had a surfeit of interest over the last couple of months. The Opposition have decided to pray against this Order. It is not the only way that they could have raised these very important matters—there are other avenues, open to them, as they very well know. Nevertheless, they say that they want to ventilate the position and I am going to take as much advantage of that as anyone.
  To me this Order, and all that it means, is quite historic. I started on the Liverpool dockside as a boy of 14, 40 years ago next May. I can well remember what I thought then. People are talking about Communists and Trotskyists on the dockside. I was always told to appreciate something that I said in this House when I was a new Member. I said that men were not ciphers, they were not units of production, but were entitled to dignity, a dignity that I feel this Order brings to them.
  I said, in my presumption at that time, that the men were entitled to this sort of dignity because they were not just pieces of material, they were spiritual beings. They were entitled to dignity, not because of the Labour Party or the Labour Government, not because of the Conservative Government which was in office at that time, and not because of the Liberals, but by virtue of their very makeup. Men are entitled to the dignity that Almight God intended them to have.
  There are thousands of men on the Liverpool dockside who think as I do. They have felt all their lives that the conditions that this Order now offsets were a complete affront to their dignity. That is why we have had so much upset in the docks. All my life I have worked for the dockers, and I am in the happy position tonight to be able to pay testimony to two other hon. Members who have done likewise, my hon. Friend the Member for Liverpool, Scotland (Mr. Alldritt), who was chairman of the Liverpool Trades Council at one time, and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer).
  This was not the first strike in which I have participated and I am a fairly reasonable man. We were responsible
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  for the settlement of the unofficial seamen's strike in 1950. Above all we want dignity and peace and security in our industry. That is all that we have asked for and I would not be any sort of politician at all, and I would certainly not be any sort of Liverpudlian, if I did not take up the remarks made by the hon. Member for Portsmouth, Lang-stone (Mr. Ian Lloyd). The Conservative Party had a lifetime of opportunity to do something for us.
  I can remember my first day at the docks on a ship called the "Somerset". I looked through a shed, as a boy of 14 years of age—a massive empty Liverpool dock shed. I saw 500 or 600 men in the teeming rain waiting to be picked on. I said to my father, who was my own boss at that time, "Why do not the men stand inside the shed out of the rain?"—because they have to work all day. They were left out in the rain when there was an empty shed. That was where we had to start from. These men had to work diligently all day. What happened then if the bosses at that time did not pick what they thought were the best gangs? They broke them at 12 noon, and had what was called a "fresh pick". This is where we started and this is where we have got to. I want to pay testimony to the excellent work that my right hon. Friend the Minister of Labour has done. He is following—and he will take no exception to this—in the tradition set by the finest Minister of Labour and probably the best Foreign Secretary this country has ever had who is buried at Westminster Abbey under the proud title of "Trade Unionist and Foreign Secretary"—the late Ernest Bevin. He dreamt of decasualisation for dockers. When he appeared at the Dockers' Inquiry, which resulted in the Shaw Award, he earned for himself in 1924, the wonderful title of "The Dockers' K.C.".
  When hon. Members opposite talk about the interests of management, why do they not say a word about the people who have done so much in trying to bring a rational and reasonable approach into this jungle of dockland? We have had many disappointments in the past. Sometimes we thought that we had obtained the pearl of great price in dockland. It turned out to be not quite that. I want decasualisation to be a success. The men employed in dockland have suffered the

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  vicissitudes of bad industrial conditions and have had to contend with bad industrial relations. The travesty and tragedy was that they were also the men in the great ports like Liverpool who had the worst possible social conditions to put up with.
  I say to the members at present on the Opposition Front Bench—and they are reasonable men—that when these men go to work they are more conditioned, not by the conditions of work, but by the bad social environment in which many of them have to live. I say as a man who has fought Communism all his life that they are a nuisance and that they take advantage of things, but the conditions had to be there for them to take advantage of. Do not let anyone, even the Prime Minister or the Minister of Labour, point the finger particularly to the men in Liverpool and attribute the recent strike to Trotsky or Communist elements. That is not true. If it were true, I should be the first to say so.
  I can be light-hearted about this. When I stood among the Liverpool men at the end of the strike, to my amazement I found among my ex-Army colleagues from the Irish Guards and other regiments and members of the Royal Navy that five of us went to the same Catholic school. We took an active part in the settlement of that strike. I find it a bit trying when I hear only the famous establishments, such as Eton and Harrow, mentioned in the House. It will do no harm to mention St. James's Elementary School, Marsh Lane, Bootle, as having produced some men who have not fallen for the blandishments of Communism but have applied their Christian faith and Christian standards in the docks against some tough opposition.
  I hope that all this is in the past. By virtue of this Order, the men in Liverpool have the chance of participating in the high-wage industry for which they have been looking for a long time. If my observations are correct, the men appear to be happier because of this Order and its implications, in spite of a bad start, than they have ever been in their lives.
  This is absolutely essential because we are now, in one port alone, spending £15 million on new docks. Modernisation has been accepted. It was never resisted by the Liverpool men, but it has to be accepted with more alacrity. We have
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  to have new approaches if we are to take advantage of containerisation and palletisation which can bring prosperity to our great ports. This could have been achieved far more easily if there had been one employer. I shall not be churlish about this for we have made tremendous progress.
  The hon. Member for Portsmouth, Langstone mentioned a gentleman called Kentish Barnes. I hope that no one will take Kentish Barnes as the voice of Liverpool. I doubt whether even his own colleagues and management would support him in some of the outlandish views he expresses from time to time. In the spirit of sweet reasonableness I appear to be showing, may I say that the chairman of the Liverpool employers made a catastrophic error two weeks after the strike had finished. We had worked hard to finish it, but he made that error in the words he used in front of the Prime Minister and Mr. Frank Cousins. He said enough to drive any reasonable man out on strike again but for the attitude of the men advised by people like me to take no notice and to understand they had become part and parcel of the scheme.
  The men look on this situation, not as something to give them a high wage but as something which must be understood. Dockers are getting new houses and we are raising their whole social vista. Their children go to university. They will not put up with the old nonsense of years ago. They have no intention of doing that. If anyone tries to work the oracle and bring back the anachronisms of other days, he will find that the men will not have it. They have achieved standards by virtue of their action, their children have better opportunities and they are living in better homes.
  People are demanding these new standards and it is impossible to go back. I appeal to those on both sides of the industry. Trade unions have been remiss in many ways. I do not want to say much about that; I appeal to both sides to go forward together. This has been a difficult industry for the trade unions and for the employers, but these are new days. The employers did not try hard enough in the past, but there is a great opportunity for them and for the unions now. In Liverpool I want to see one union now that this chance has come.

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  For the men to be split in their endeavours is bad for the industry and bad for the men. I know that the men are thinking on these lines and, given the conditions provided by this Order, I am sure that this will come about.
  Mr. Ian Lloyd: We are not so far apart as the hon. Member suggests, but I should like to have his reaction to one point. He suggested that the men are demanding this higher standard of living. Would it not be right to send forth a message from this House that it is something which we must all achieve, not demand? Demanding by itself is no good; achieving is what is required.
  Mr. Mahon: Any person who has worked in the docks knows that he never got anything for nothing and that he must achieve it by his own efforts. To get rid of the welting system in Liverpool was a fantastic achievement. The welt, to my mind, was justified in many, many cases—justified when men had to work in horrible conditions, when men had to work on frozen cargoes, justified in refrigerated ships, justified in working with carbon black, and with many other of those obnoxious cargoes. I remember coming to this House on one occasion to complain about an Egyptian cargo which was most objectionable, an affront not only to the dockers but to the dockers' wives, a cargo of poisoned rags from Egypt and other places, and being imported in the port of Liverpool. The men, quite rightly, refused to do that objectionable job.
  That, again, was an affront to their dignity. If ever there has been a set of men conscious of their dignity, then it is the Liverpool dockers—and it is impossible for anyone to succeed who tries to pool them into a mass, for they are the most individualistic men I have ever met in a not inconsiderable industrial experience.
  On an occasion like this there is just a chance that one can pay compliments, and there are two men who have contributed much of great value to the port of Liverpool. Mr. Jack Scamp did a remarkable job when he was sent there by the Minister of Labour and I would thank the Minister of Labour for sending him. He, and Mr. Jack Jones of the Transport and General Workers' Union,
  576
  could not have tried harder or with more success to bring a satisfactory end to the dispute. The whole of the men on Merseyside would like me as a dockside representative to say to the Government and anyone else concerned, that we are appreciative of their efforts. People very often do valuable work but are never appreciated, but we are highly appreciative of the attitude taken by those two gentlemen when they came to Liverpool.
  One other thing. A strike occurs and we have difficulty, but I would like to pay testimony to the Minister of Social Security for all that she did to try to bring the strike to a quick and successful conclusion. She did her job according to Act of Parliament, and she did it in the best possible manner, in a just way, in an adequate way, and she helped those men to an attitude of reason. Some people say that men should never be assisted when they are in industrial conflict. I could enlarge on this by saying it is a most astounding thing that the Russian people could never understand why we help our people when they are in industrial conflict, but I should be out of order if I were to proceed with that any further. However, I am glad to pay that testimony.
  I think I have said almost all that I really wished to say. I had no speech prepared when I came into the Chamber. There are just one or two other things. Age is important in this industry, and there are many old men in it. The hon. Gentleman was perfectly right. The "no redundancy" undertaking given by the Ministry of Labour helped tremendously to bring the strike to an end in Liverpool. That is the undertaking he gave that there would be no redundancy. It helped, because we all know that in an industry like this the first men to go out are often the sick men, the older men. I support my hon. Friends who say that 60 is the age limit. It is hard for a man of that age to have to go up and down a 40 ft. ladder every morning and every afternoon, whether he has been sick, whether he has had operations, whether he has been wounded in the war. We have seen all these things happen throughout our lifetime in peace and in war.
  What we want is understanding, an understanding that men cannot afford to go out of the industry unless they are

  577
  offered an adequate reward. I have often thought, having been in local government so long, that people in local government jobs have much easier jobs in many ways, certainly physically. They can go at 60. Policemen work hard, but they can go after 25 years' service, and after 30 years' service are quite handsomely rewarded in some ways. Dockers have never been adequately rewarded, and, to my mind, are still not going to be adequately rewarded. So I hope that everyone, in the Opposition, trade unionists, and industrialists, will do all that they possibly can to see that the men are given proper pensions—at least, at this stage, at 65 and not 68, and I would hope that the age could be got down to 60.
  I hope that there will be no pressurised wastage in the industry. Certainly there should be normal redundancy and a severance scheme, if necessary, but there should be no artificial reduction in numbers. The men know that there must eventually be a reduction because of the introduction of modern appliances, but they want an undertaking that social justice will prevail at all times no matter whether they go out of the industry by virtue of a severance scheme or because of sickness or old age. Let us have no pressurised wastage.
  Employers can lay themselves out to get rid of men without applying severance or normal redundancy. However,
  578
  if the job opportunity in a place like Liverpool is reduced, there must be a continuation of diversification of industry to replace the lost jobs. Hon. Gentlemen opposite will remember that in the days of a Conservative Government, when there were difficulties, the right hon. Gentleman who is now Opposition Chief Whip and another Parliamentary Secretary to the President of the Board of Trade sent officers into my constituency. That trend has been continued, and I am grateful for it. Now we have the Giro, with 5,000 jobs to be created in my constituency—
  Mr. Speaker: Order. With respect, we cannot go as wide as this.
  Mr. Mahon: Mr. Speaker, I apologise. I know that I am straying far from the point. I wanted to indicate briefly that, if one gets rid of one set of jobs in the docks, the continuation of diversification of industry is very important in order to provide other employment.
  I am grateful for being able to say a few words in support of the Order. No one appreciates what has been done more than the dock workers of Liverpool, and I hope that we shall go on to a more prosperous society and get rid of the anachronism of strikes, both unofficial and official.
  10.27 p.m.
  Dr. M. P. Winstanley: Were I to endeavour to make a speech on this subject, I should probably follow many of the points made by the hon. Member for Bootle (Mr. Simon Mahon). However, I have no wish to weary the House with a long repetitive contribution. I intervene merely to indicate the general support of my Party to the whole scheme of decasualisation. Everyone is hastening to support the arrangement, and I am delighted about it, because my party has been in favour of decasualisation for a very long time.
  Since we have been given an opportunity to ventilate points and ask questions, to which we may even get replies in the course of time, it occurs to me that I might put forward one matter about which I have some concern. Obviously there are others, but there are important negotiations proceeding at the moment, and we are all waiting with interest to see how they turn out. We hope that they turn out the right way, and perhaps it would not be altogether helpful to explore all the various doubts which we have in our minds.
  The one point to which I would like an answer is this. I have had many talks with dockers in both Liverpool and Manchester. From what they said it appeared that trade union relationships had broken down. Every one to whom I spoke expressed the view that he had grievances, which he explained sometimes more clearly than others, but fundamentally his fear was that his grievances were not understood even by his own union leaders. The point was made over and over again. It was my view that an immense amount of frustration seemed to have arisen merely because the dockers of Liverpool felt that their own union leaders who were conducting negotiations on their behalf were not fully aware of their various points, and they themselves had not had an adequate opportunity to make their position clear.
  I do not need to remind hon. Members that the position is different in the various docks, as was pointed out to me by many of the dock workers. In the smaller ports, where work tends to be seasonal, and therefore rather spasmodic, the workers would necessarily take a different view of the whole question of decasualisation and of basic pay
  580
  from that which would be taken in a port like Liverpool, where the question of full-back pay has not really arisen in recent years, since there has been virtual continuity of employment. It was also true that Liverpool people could not clearly understand, and neither could I, why their sick pay should be £4 a week less than that of their colleagues in London, Hull, and elsewhere.
  I do not want to labour these points, but their existence, and the fact that they have led to a tragedy which has had a serious effect on us all, and indeed on the dockers themselves, must underline the importance of establishing a structure in which there is effective local representation of the worker's point of view. The need is for effective local negotiation and consultation, and for direct representation of dock workers on the bodies making the decisions which will affect them. It seems to me that once we have experience of a proper industrial relationship based on decasualisation, the need for the dock labour boards at present envisaged will disappear.
  I am concerned about the constitution of the dock labour boards. It appears that their constitution, centrally and locally, is to be 50 per cent. employer representation, and 50 per cent. trade union representation. If the need is for local representation in order effectively to ventilate local grievances—and all hon. Members here tonight must be clear that the grievances are local, and vary very much from one dock to another—we have to provide for this in the new scheme.
  I welcome what was said by the hon. Gentleman about the kind of industrial relationship which he envisages in these areas, but how does he envisage overcoming the immense difficulties which exist, such as a docker in Liverpool being represented by a trade union which is not concerned merely with dockers? Not only is it not concerned merely with dockers; it is not concerned merely with Liverpool dockers. I therefore feel that we need some further explanation about those parts of the Order which relate to the appointment of workers' representatives on the dock boards.
  Mr. Simon Mahon: Would not the hon. Gentleman agree that the proviso for a new shop steward system in the docks will permit more industrial democracy in the industry?
  Dr. Winstanley: I have asked the Minister to explain more clearly precisely how this will work. I am endeavouring to make the point that this is fundamental to the working of the whole scheme. We all hope that the scheme will be a success, as I am sure the dockers hope it will be, but it will stand or fall on this kind of representation. I therefore ask the hon. Gentleman to give us some further explanation of this matter, which I regard as crucial to the whale business.
  10.34 p.m.
  Mr. Eric S. Heffer: The Order is an amendment of a series of Orders which have been coming into existence since 1947. This is very important, because 1947 was the milestone in the docks industry. At that time the National Dock Labour Board was established, and we found that this was the first towards the decasualisation scheme that we are discussing tonight.
  Over the years we have seen how, step by step, dock workers have made some small progress. It is interesting to note that the 1947 Order was introduced by a Labour Government, and this is not unnoticed by the dockers in Liverpool, London and other ports in the country. Before 1947, the conditions of the dockers were simply chaotic. The only time when there was any sort of order at all was during the war, when order was introduced into the ports precisely because we were engaged in a great war and there had to be some sort of order and decent conditions. But even they were only a small step forward.
  Now we have what my hon. Friend the Member for Bootle (Mr. Simon Mahon) calls an historic document. I think this is an historic document. I am not ungrateful to those hon. Members opposite who have moved this Motion and have given us an opportunity to discuss the question and to declare our full support for the Government on this Order. It gives us the chance fully to explore and probe the Order, the difficulties which will undoubtedly arise and the solutions to those difficulties.
  When we discuss this Order we ought not to allow our minds to be clouded by the fact that unfortunately two disputes arose, in Liverpool and in London, when
  582
  the Order was introduced. I am not an authority on the London dispute, but my hon. Friend the Member for Bootle has clearly outlined the basic factors concerning the Liverpool dispute. However, I believe that when the Order was introduced certain mistakes were made, particularly in connection with communications. One of the problems which the Liverpool dockers brought home to us very clearly was the fact that they did not see the rule book until they had been in dispute for about 10 days. In a sense, therefore, they were being asked to buy a pig in a poke, and nobody does that. It was most unfortunate that the rule book was not brought out some time before the operation of the scheme so that the dockers could have discussed it in detail and made their recommendations before the dispute took place.
  The dispute in Liverpool was not led by a group of Communists or Trotskyists, or any other "ists". There are not 9,500 dockers, in Liverpool, all members of the Communist Party or Trotskyist group. I can assure the House of that, without any doubt. Of course, there were one or two Communists and Trotskyists involved around the fringes, as there are in any industrial dispute.
  Jack Scamp's report, in my opinion, vindicated the dockers of Liverpool, because it brought out very clearly that they had genuine grievances which ought to have been settled before the actual vesting day, as it were, when the new Order came into operation. This was the great scandal and problem in Liverpool. I do not want to go too deeply into the dispute. We are not discussing that particular dispute now, but we know that those dockers had legitimate grievances, which are now partially settled, although there is still room for negotiation over certain outstanding problems.
  One of the great problems was that the average wages in Liverpool were £3 or £4 a week lower than the rest of the industry, and the dockers had to work far more overtime to earn them. My hon. Friend the Member for Bootle mentioned the social and housing conditions in Liverpool and the lack of amenities and welfare provision. The Order is a step forward to eliminate these bad conditions: it is not the end but the beginning.

  583
  I agree with my hon. Friend that one union along the line of docks in Liverpool would be better than two, but I am not sure, because they are in the Transport and General Workers' Union, with a trade section covering their industry, and there is nothing wrong with that, provided that the workers have their own body for their particular problems. We should not split hairs.
  What will the new agreement do? More than anything else, I welcome the fact that a system of shop stewards is being instituted. The shop steward can sometimes be the nightmare of the union official or the employer, but, if they are honest, most employers, and certainly all union officials, will agree that the organising basis of any union is the shop steward system, because he is the transmission belt from the worker to the official and from the official right up to managerial level, and that he helps to solve problems.
  We hear many stories about wicked shop stewards leading workers out on strike, but the actual number of strikes led by shop stewards is very small. What about the hundreds of thousands of shop stewards who every day solve difficulties before they reach dispute stage? It is one of the most important developments for years that we shall now have an organised shop steward system as in any other section of workers, like, for instance, the building industry.
  Permanency is vital. The Liverpool workers did not strike because they opposed the introduction of permanent work. One of my hon. Friends who wrote in the Mirror that this was the issue did not have a clue about it. They had grievances which they wanted settled and were not arguing about permanent work. They have always wanted that.
  The dignity of the workers is important. I ask hon. Members to imagine themselves being lined up in a "pen". That word in itself suggests a cattle or sheep pen. The boss examines the workers, decides that one is not a bad sort of fellow and that he will have him, but not another who is too old or almost dying, and so passes to the next man. What a humiliating experience for any human being. The Order will eliminate that once and for all, and this is wel-
  584
  comed by the dockers, by their wives and families and by anyone else with anything to do with the industry.
  Mr. Simon Mahon: My hon. Friend alluded to a Press report in one of the national dailies. I think it was my hon. Friend the Member for Bosworth (Mr. Wyatt), who had something derogatory to say about the dock labour force. I said earlier that no one would take what Mr. Kentish Barnes said as coming with authority from the employers. Equally, no one in the Labour Party will take those remarks of my hon. Friend the Member for Bosworth seriously.
  Mr. Heffer: I am sure that my hon. Friend is right. He understands the industrial scene and certainly knows the position in the Liverpool docks.
  I was saying that the dock workers do not argue with the idea of permanency of employment. They want to get rid of the indignity which I have seen but which I have not experienced as a docker. However, I did experience it as a ship repair worker when I first went to Liverpool. I had to queue in the "stand"—itself a humiliating experience—while the boss came along and decided, according to his whim, whether or not to employ me and others. The Government's new scheme represents a new era for dock workers, and this is to be welcomed.
  I agree that the relationship between the needs of human beings and the needs of the industry must be balanced. In the past, the human being has been sacrificed in the interest of the industry. He has been discarded, and this must never happen again. Neither do we want to see the employers in Liverpool and elsewhere going bankrupt, although I hope that eventually there will be only one employer; but that is another story. Under the new arrangements, we have a reduced number of employers, and this, in itself, presents a real problem.
  We should not think that the problems we are experiencing have not been faced elsewhere. In San Francisco, the employers were prepared, so to speak, to buy the entire rule book, and at enormous price they did so, with the result that when workers were retired they found themselves handsomely rewarded. I agree that our workers should retire

  585
  earlier, but I hope that their pensions and other payments will be better than at present suggested.
  A lump sum of £100 with a pension of perhaps 25s. a week—with a bit of luck, after a lifetime's service, it might be £5 a week—is not good enough. We want better pensions and a better severance pay agreement. It is not just a question of employers not going bankrupt. I do not want the workers to become bankrupt when they retire after years of hard service in a rotten industry.
  An immense revolution is going on in the docks, with modernisation, mechanisation and the introduction of the container system and so on. It is of immense importance to the country, to the people living in the ports and to the dockers themselves. As in any industrial revolution, we must take care. We do not want to repeat what happened in the last industrial revolution, when the worker got the bad end of the stick and the employers made enormous profits.
  The workers must share to the full in this technological revolution and that is why, with the introduction of this new scheme, we must have better conditions, better wages, increased productivity, with the dockers having not only greater dignity but greater material benefits. In a sense, this is quite a historic debate.
  I wish to end by making one or two comments on the idea of disciplining workers. When people raise the question, I sometimes wonder whether they really understand the life and conditions of the workers and what causes a man to go on strike. Does anybody seriously believe that either in Liverpool or London one or two men can keep thousands out on strike unless there are justified grievances over which they are prepared to stay out? Would the hon. Gentleman opposite who raised the question of discipline, with its industrial court basis, suggest that we put 9,500 Liverpool dockers in prison? If that happened, we would not have a labour force. Perhaps it is suggested that we might pick out one or two of the leaders and put them in gaol. That was unfortunately done under a Labour Government, and all it did was to keep the dockers out for much longer than they should have been out.
  586
  We must be careful when we talk about discipline of the workers. The important point is that in order to get rid of unofficial or official disputes we must understand the workers' grievances and make certain that there is machinery, both through the trade unions and the Ministry of Labour, to deal with them quickly, so that they do not fester and ultimately lead to strikes.
  Mr. Robert Carr: The only suggestion in this debate from this side of the House about discipline was to give the union—not the employer—more power over its members who flagrantly break agreements which the union has made on behalf of its members.
  Mr. Heffer: I understand that there is a sophisticated argument on the Front Bench opposite and an unsophisticated argument on the back benches. I heard an hon. Gentleman who has left the Chamber talk about organised mass stupidity and the need for discipline to deal with organised mass stupid people. I can only think that he really wanted to put them in gaol. I admit that this is not the argument used by the Front Bench opposite.
  Mr. T. L. Iremonger: The hon. Gentleman would not want to be unfair to my hon. Friend the Member for Portsmouth, Langstone (Mr. Ian Lloyd). What my hon. Friend was saying about organised mass stupidity, or whatever it was, was that the provisions of the Order and the nature of the scheme had to be explained to those whom it was intended to benefit, so that it would not be possible to organise mass stupidity. [Interruption.] The hon. Gentleman is not right to laugh. That is true. My hon. Friend is not here to defend himself, and it is not right that he should be misrepresented.
  Mr. Heffer: There is a contradiction in that. It would be very difficult to communicate and get people to understand things if they were stupid in the mass. I agree about the importance of communications. I have made the point before that it is absolutely right that there should be better communication between the dockers at ship level right through to the top. That is acceptable, and the

  587
  shop stewards' movement will help to improve that communication.
  I want to take up the point about the discipline of the unions over the workers. It is a very interesting concept that we ought to dwell on for a moment. What constitutes a trade union? The general secretary of a trade union is an equal member with the member on the shop floor. A union is made up of its entire membership. What is wrong is that, unfortunately, sometimes decisions are made by the executives without actual reference to the bottom level, and sometimes this leads to a revolt from the lower ranks against the national executives, and there one gets a break in communications. This sometimes happens; I am not denying it for a moment.
  That is why I think it is important that at all times before an agreement is finally reached it should be discussed at mass meetings right down to the bottom level, and there must be a right for the workers to revise the agreement before it is finally accepted. That is what is important. This is how it used to be. Unfortunately, there has been in certain cases a tendency to move away from this. But that is not a fundamental mistake. It is a weakness in some organisations which is being corrected at present by the workers themselves.
  So when we talk about discipline it should be remembered that the answer is not to give more power to the executives over the rank and file. It is a question of getting the rank and file actually to participate in decision making in the organisation. If that is done, then that problem is solved and there is no contradiction between the executives, the district officials and the rank and file.
  I have digressed somewhat, but I thought it very important to deal with the question of discipline. It would be fundamentally wrong if we had a position where it was suggested that the executives should have increased power at the expense of workers at the bottom level.
  The Order is a historic document. It opens a new era. It means that we have the greatest opportunity that we have ever had in the docks industry. It is an opportunity that we should all grasp with both hands. It will not solve all the problems in the industry, but it is one further step
  588
  on the long road along which the dockers have been fighting since the days of James Sexton, in Liverpool, who formed the dockers' union. It is a long, hard road that has been travelled, and this is a very important milestone on it, though it is not the end of it.
  I am very glad, on a very rare occasion, at this hour of the night to be able to support an Order which the Government have introduced rather than, as I have done in the past, criticise one.
  10.59 p.m.
  Mr. John Page: Until he lost his way just at the end, the hon. Member for Liverpool, Walton (Mr. Heffer) had made an excellent speech, with most of which I agreed. I also felt that the speech by the hon. Member for Bootle (Mr. Simon Mahon) was most moving and most important. It is a tragedy that this historic Order should be debated in the aftermath of two strikes.
  The hon. Member for Walton examined the Liverpool strike. I turn to examine the London strike. We must examine it and see where the blame for it lies and what lessons we can learn from it. First, we must place the blame fairly and squarely on the shoulders of the Minister, who allowed himself to be bounced by the tally clerks into announcing the operation of the Order far too quickly. The hon. Member for Walton called the speed with which it was introduced a scandal. He was absolutely right. There were so many loose ends at the time of introduction—
  Mr. Heffer rose—
  Mr. Page: No. I listened for a long time. I cannot give way now.
  We must face the fact that the Minister suddenly made the decision to introduce it on 18th September though initially he announced that it would start on Friday, 15th September. So he appears to have taken a little advice on this.
  Then, in the exercise of allocating the blame and learning the lessons, we must look at the London Joint Negotiating Committee because of the new minimum wage scale which it introduced to come into force at the time of the Order. Before decasualisation the tally clerks, the

  589
  lightermen and the dockers and stevedores all had the same minimum wage. Suddenly one day the dockers woke up and discovered that the tally clerks had a minimum wage of £21, the lightermen a minimum wage of £18, and the dockers and stevedores a minimum wage of £16. That was produced without real discussion and real understanding.
  It leads me to the third party to blame—the London port employers, because it was not until the eleventh and three-quarter hour of the negotiations that the trade union negotiators realised that the minimum wage for dockers would be £16 and not £17. All along the discussions had been on the basis of £17. The union representatives signed the agreement on the understanding that it would be a minimum of £17. Suddenly the London port employers, under pressure from the national port employers, fully supportad by the Minister on this, said, "Sorry, boys. It is not £17, after all. It is £16, otherwise we will get out of step with the dockers in the rest of the country". I believe that in Liverpool they are negotiating for £17 a week. What will happen in London if it is a mere plusage of £1, which will take the London dockers up to £18? No wonder they were bewildered. Because they were bewildered there was this strike.
  Though there was little time, I believe that the leadership displayed by the docks officers of the Transport and General Workers' Union was abysmal. They appeared to be right out of touch with the dockers. It has been said that better communications were needed, that much stronger leadership should have been exerted, and that it appeared to people close to the dispute that the officials of the Transport and General Workers' Union were sitting back in their offices waiting for the initiative to be taken by Mr. Dash.
  I also think that the leaders of that union—Mr. Cousins, Mr. Jones and others—can be indicted for not going to the docks themselves, for not arranging meetings at which they themselves, with their authority, with their drive and with their power, could have addressed their own members and explained to them why they thought that the members were being misled by Mr. Dash. It should have been done.
  590
  Mr. Dash used the continuity rule to bring the dockers out on strike. It was an absurd reason. The continuity rule is a sensible rule, and most dockers agree that it is a sensible rule. In fact, there was the threat of a strike in another part of the London docks when the dockers heard that the continuity rule might be excluded from the grey book. There was not sufficient understanding of this rule or sufficient understanding of the meaning of the whole decasualisation scheme.
  Mr. Dash played on the fears and the resentment of the dockers because they felt that they were being sold a pup. They felt that their wages would be reduced. They did not understand the way in which decasualisation would operate. I believe that there is still a festering wound in the minds of the dockers in London about the minimum wage and about the way that decasualisation has been introduced. There are fears because of redundancy, fears because the Government's redundancy scheme is less advantageous than that which has already been instituted by the port employers and by the Port of London Authority.
  I beg the port employers, the Minister of Labour, the Transport and General Workers' Union and the other unions to use the few days they have left until January, by issuing pamphlets, by speeches, by advertisements in newspapers, by persuading newspapers to carry editorials, to explain to the dockers what a vital, dignified and worthwhile Order this is, one which can bring security and a better standard of living to all of them.
  11.5 p.m.
  The Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): The hon. Member for Paddington, South (Mr. Scott) began by dealing with some general matters affecting unofficial strikes and industrial discipline; general in that they related to workers covered by the Order and workers extra to the Order. I am sure he knows very well that my right hon. Friend dealt with matters pertaining to this in a characteristically forthright speech at Wakefield on Saturday, and that he will know that the conclusion of that characteristically forthright speech was that these general matters should

  591
  await the findings of the Royal Commission. Certainly that is as far as the Government can or should go in dealing with matters as general as that. I believe that the organisation and setting up of a Royal Commission places some obligation on the Government to listen to its conclusions. The hon. Member and the House will have to await the good tidings of the spring, as my right hon. Friend described them, and see what the Government's reactions to the proposals are.
  I turn now to the more specific matters affecting the Order and the workers covered by it. Of course, I accept entirely that, in moving the Prayer against the Order, the hon. Gentleman and his party were not seeking to set the clock back. It is clearly not their intention to destroy the scheme, or to "recasualise" the docks. I am perfectly prepared to judge their views on the docks by what they have said today, but I must make it absolutely clear and will reiterate that, despite their enthusiasm for the general principle of decasualisation, some of the proposals which they have put forward this evening, which, I am sure, they believed to be improvements, would certainly erode the principles on which the scheme is based, would certainly undermine the confidence on which the scheme depends and would certainly dissipate the good will which the scheme already enjoys.
  I will explain why I believe that by setting out the principles on which the Order is based. Clearly, the Order has two objects. One is social. It is simply the desire to create a better deal for the docker. I wish that the hon. Member for Paddington, South had spent a little more time dealing with that fundamental aspect of the Order, for many of my hon. Friends will agree with me that perhaps the primary intent of the Order was to bring about dignity of employment for the docker and the social requirements which dockers have demanded and deserved and wanted for half a century.
  The second object is economic. It is to bring about more efficient docks, to run in double harness with the Docks and Harbours Act, and to bring about a more efficient ports system. Efficiency must be created as a result of better
  592
  relationships between official trade unions and the men they represent, by the extension of the shop steward system and by men accepting that their best interests are to be served by following the leadership of their elected trade union officials; the leadership of the people who best represent their views.
  But if the hon. Member for Paddington, South believes that, as I think he does, I must ask him whether he thinks that course is likely to be served by a campaign of denigration of the general secretary of the Transport and General Workers' Union. It is difficult for the hon. Member to say to the men that they must rely on their trade unions more and to be embarrassingly supported by his hon. Friends crying out that that general secretary is not doing his job.
  Mr. Scott: It is clear that the men do not rely on their unions, and it appears that the unions were not representing their local interests. I was arguing that the general secretary concerned should identify himself more and keep more in touch with the men at local level.
  Mr. Hattersley: I will deal with the matter of local interest, a subject raised by the hon. Member for Cheadle (Dr. Winstanley).
  I accept that there are differences in the needs and demands of dockers in different ports. One of the reasons why the scheme builds in special local arrangements is because the Ministry and the Government accept that the local boards must be composed, in part, of local nominees, men nominated locally by the local trade union. These are men representing local views, and there is the absolute necessity to convince members of the union that their interests and views are being represented.
  I reiterate that the creation of a lively shop steward system, with permanent employment as opposed to casual employment, is bound to facilitate a much more rewarding, genuine and practical relationship between the official trade union and the men it seeks to represent.
  The two objectives of the scheme, social and economic, are dependent on one fundamental point which appears time after time in the Order. That is the security which the Order provides. The social objectives are facilitated by the readiness to accept change that

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  security brings. What I take exception to, in the most objective sort of way, are those parts of the hon. Gentleman's speech which are likely to undermine the main idea of the security offered by the scheme.
  That does not mean that the Government have automatically closed their mind to the possibility of changing details of the Order. We understand that a scheme as revolutionary as this, which at one stroke makes a fundamental change in the nature of employment in the docks and, yet, must do it by a series of detailed amendments, is unlikely to be ideal at the very beginning. Despite the very long process of consultation and negotiation which took place, there is clearly a possibility that the Government might want to make some marginal alterations in the scheme.
  Some of the specific suggestions made this evening do not commend themselves to the Government, because they have the fundamental weakness of undermining the self-confidence which we hope the scheme has already created. I turn specifically to what the hon. Gentleman for Paddington, South said about summary dismissal. His right hon. Friend the Member for Mitcham (Mr. Carr) interrupted one of my hon. Friends to say that no suggestion had been made from that side of the House which would give any power over the unofficial striker other than the enhanced power that should go to the unions and was appropriate to them. That is not, as I understand it, the suggestion of the hon. Member for Paddington, South. He went in great detail and with great accuracy, into the provisions of Clause 14A(2) and 14A(3). Those provisions enable the individual port employer to take disciplinary procedures against one of his employees. He reminded the House of the new provision under Clause 14 whereby a man was suspended but, finally, arbitration was in the hands of the Dock Labour Board. As I understand it, he was suggesting that the power of dismissal under those conditions would be more appropriately vested in the individual employer. That seems to be a very substantial extension of the disciplinary powers as advocated by hon. Gentlemen opposite. I have the greatest doubts about the practicability and propriety of that suggestion, about the prac-
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  ticability and propriety of allowing a unilateral system of dismissal.
  The Ministry and the National Joint Advisory Committee of my Ministry regards the disciplinary and dismissal procedures of this industry in many ways as a model. They embody the essential feature of dual control. They enable the man to feel that if he has been disciplined, if action is to be taken against him, it will be taken after proper consideration, and by people who will look upon his misdemeanour objectively and decide what is the best course for him and the industry.
  Mr. Scott: What I sought to put forward was that there should be a difference in emphasis in procedure relating to unofficial strikes and constitutional action. I quite accept the provisions for all the aspects other than unofficial strikes. This is a new scheme and dispute procedures are agreed and built in. They should be followed. If one goes outside the scheme, there is a case for shifting the emphasis and putting it on the union for reapplying for entry.
  Mr. Hattersley: The scheme, in Clause 14, is essentially laid down for individual acts of indiscipline appropriate for individual misdemeanour but is totally inappropriate for mass acts of indiscipline. While the clauses operate satisfactorily in terms of industrial misdemeanours, it would be wrong to extend them in such a way as to give an individual employer the right to remove a man from the register and black list him in the industry because he had taken part in a dispute. The difference between us is that in our view, this is not the way to deal with the problem. In our view this would encourage and stimulate industrial unrest.
  I will now deal with some of the other points raised this evening, particularly the suggestion by the hon. Member for Harrow, West (Mr. John Page) that my right hon. Friend had not made the Order at the right time and that if it had been made at a different time and in a different way many of these troubles might have been avoided. I remind the hon. Member of the process of consultation which preceded the Order. The first Devlin Report was published in August 1965. As a result of two recommendations of that Report—that there

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  should be a revised national directive and a small negotiating committee to consider the implementation of that directive—the National Modernisation Committee was set up. The National Joint Council then had two years consultation and negotiation with both sides of the industry. Both sides were represented on it and lay members not representative of the industry gave their objective opinions.
  As a result of two years' consultation, a draft Order was produced subject to normal statutory procedure. A public inquiry was held and objections heard. After that process, the National Joint Council Modernisation Committee considered other alternatives and improvements. Only at the end of that time was my right hon. Friend of the opinion that he was ready to make an Order and knew what it would contain. If the hon. Member suggests that the timing was wrong, I hope that he does not suggest that there was inadequate consultation because that kind of representation was made.
  He might have suggested it on the basis that although the consultation was right the docks were not ready for the outcome of that consultation, no matter how accurate it had been and how appropriate it was. By the time the Order came into operation only 300 men—about 0·5 per cent. of the whole industry of 60,000—were not allocated to one employer or another. By the time the Order came into operation there were certainly some outstanding problems, but it is the view of my right hon. Friend, and I hope the view of the House, that by the simple act of making an Order in some ways those problems were either solved, or the parties were encouraged to solve them. Within a few days of the Order coming into operation the Transport and General Workers' Union and the National Amalgamated Stevedores and Dockers had agreed to the establishment of a common register. At some point my right hon. Friend had to make the Order as a stimulus to getting the outstanding difficulties dealt with and the problems solved. That is what happened.
  Dr. Winstanley: Notwithstanding what the hon. Gentleman has just said, he would agree, I am sure, that the Devlin
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  Report laid down as a precondition of the introduction of decasualisation that the unions should inform their members, yet we have heard the observation of the hon. Member for Liverpool, Walton (Mr. Heffer) that the members in Liverpool were not in possession of the book until after the date when the business should have started. Surely, this is the precipitancy about which one is concerned?
  Mr. Hattersley: I am conscious of the point the hon. Gentleman has made, and I hope in a moment to deal with the publicity, if that is the word, we tried to bring to the scheme. But let me turn, before coming to that, as I certainly will in the ten minutes left to me, to deal with another point of great substance which was raised on both sides of the House, the point about the number of men in the industry and whether, therefore, the Order is doomed to failure because of the structural imbalance between the demand for men and the number of men available for and determined to work in the docks.
  Clearly, the compulsory retirement age is a matter which remains subject to negotiation. Clearly, hon. Gentlemen would not want me to say anything which might prejudice those negotiations by simply thinking aloud what the age ought to be, either in terms of the efficiency of the industry or in terms of the individual welfare of the men. But I think some things must be said now.
  One is, of course, that the pension scheme, which is an essential part of this Order, and which for all its inadequacy—I accept some of the reservations about the pension scheme expressed by my hon. Friend the Member for Walton—provides a better scheme than the industry had before, and therefore is likely to encourage a man to give up the job when his health and age should prompt him to give it up. A great deal of progress has been made in reducing the age at which a man working in the docks should be able to go. In 1961 an agreement that the retirement age should be reduced to 65 was accepted. Since then it has gone down from 70 to 68. During the month after 18th September, a month after the Order was instituted, the offer that the National Joint Council made to men between 65 and 68 to leave

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  the industry voluntarily with some financial inducement, some financial assistance, was taken up—in no small degree; 1,700 men out of a possible 1,900 took advantage of that scheme.
  Therefore, whilst the promise of no redundancy is essential to the smooth working of the scheme and the smooth operation of this Order, the Government know very well that there are some problems which arise in terms of manning and they know perfectly well they have an obligation to solve them in a humane but at the same time an efficient way. The National Board, of course, has some very specific functions in terms of manning the industry. Clause 3 (1,b and d)—I was going to say enable—indeed charge the Board to regulate recruitment and discharge from the industry. It charges the Board to keep a register under review. We should be applauding that, because of the Order before the House tonight, there is a national authority charged with the obligation of trying to get the labour position right.
  I reiterate that there are difficulties. I reiterate that those difficulties can only be solved within the terms of the Government's promise of no redundancy and within the terms or our insistence that it must be organised in a compassionate as well as an efficient way. But the Government are seized of the problem and are negotiating about it at this very moment. [Interruption.] I cannot give way now as I have only four minutes left and some very detailed and complicated questions to answer, and I should like to do the House the courtesy of trying to answer them.
  I was asked a particularly detailed question about the productivity assurances. I have to tell the House that of the Leith position, about which I was asked a precise question, I have no information, but I will certainly let the hon. Gentleman know what the position is. I may add, wryly, that my suspicion is that if things were bad we would have heard about it. It is the invariable rule in the Ministry of Labour that if we do not know, then it is all right. I will try to confirm that optimistic assumption, and I will let the hon. Gentleman know.
  About Liverpool, I do know, and I know there is a great programme of re-
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  vision of the incentive scheme designed to overcome the incentive scheme difficulties which have characterised working in Liverpool for a very long time. The scheme envisaged would do away with excessive overtime worked at that port. The scheme should bring about more productivity, which is absolutely essential for the working of the scheme.
  I was asked about the complication of the Order. I would be the last to deny that it is a complicated Order to understand, and it is even more complicated to debate. We are tied by a number of factors. The first is that it must be an amending Order, which must be related to its predecessors. For the benefit of the House and others, we have tried to make it more clear to the lay mind by publishing the Second Schedule. But, clearly, that will not help many men in the docks.
  To try to remedy that deficiency the National Modernisation Committee prepared a Docks Bulletin, which went to every man in the docks, explaining what the scheme had to offer him, what the advantages were, and what benefits the Government proposed to offer the dock industry as a result of this Order. It is almost certainly an unprecedented step in terms of industrial public relations, and one which the House should applaud. I hope that it will be conveyed to the people who thought of it—people outside my Ministry, incidentally—that the House regards it as an admirable example of what should be done.
  Finally, I return to the principles on which the Order is based. It is intended to be a Measure by which both social justice and economic efficiency will improve in the docks. It is intended to be a Measure by which, simultaneously, the social aspirations and needs of the dock workers are married to the nation's wish that the docks should be organised more efficiently.
  I reiterate that, if those two aims are to be achieved, the Ministry and the Government must have the confidence of the men in the docks. Arrangements which make it more easy for them to be dismissed in an arbitrary fashion, and criticisms, not of their unofficial leaders, but of their official leaders who for some weeks have done their best to reassert their authority over dock working members, are not conducive to that process.

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  The Order which I ask the House to approve is almost unique in the Government's experience in that, at one blow, we are able to advance something which is both morally right and economically expedient. Those two go together all too infrequently. It is a fortunate Government who have the opportunity to advance on both fronts simultaneously, and an unwise Opposition who choose to pray against it.
  Mr. Iremonger: Before the hon. Gentleman sits down, will he offer a word of advice or assurance to employers who are suffering great anxiety in this respect? There are many small lighterage companies making, say, £30,000 a year which are obliged to carry on their books and pay men whom they cannot employ and who are costing them just exactly that sum.
  Mr. Hattersley: I was waiting for that point to be raised throughout the debate. The Order is specific, in that it offers special assistance to those companies, particularly small ones, which have a temporary structural surplus of labour. The levy under Clause 21 of Schedule 2, which can be as much as 10 per cent. of the wage bill of the entire permanent work force, can be used under Clause 3(2,f) to help meet the immediate running costs of those small firms who have men surplus to requirements. By helping firms financially in this way with their immediate surpluses, we are meeting both the points which I tried to raise. We are helping them stave off bankruptcy and to remain an efficient part of the industry. We are preserving the continuity of employment and the security of the men who might otherwise be laid off casually because of a temporary shortage of work. The point raised under the levy and surplus wage payment issue exemplifies perfectly the dual rôle I have mentioned.
  Question put and negatived.

  TEACHERS (SALARIES)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. McBride.]
  11.30 p.m.
  Mr. Christopher Price: I wish to raise the question of the teachers who, until very recently—indeed until a day or two ago—were on the verge of the most serious dispute since the Second World War, if not this century, between the teaching profession and those who employ them. Happily, much of the topicality which might have surrounded this debate has been dissipated by the agreement which was reached yesterday between the teachers and the local education authorities, and it now looks as though we shall not have the mass dismissals of teachers which appeared almost inevitable only last week when I applied to initiate this debate.
  However, I think that on this occasion it is useful to air some of the origins of this dispute, and to have a debate about them, because in my view it is most important that the Department of Education and Science should give a real lead in the future to make sure that the situation which has existed for the past two months, the uncertainty which has existed, and the real bitterness which has grown up, does not occur again. If the Department gave that lead, it could go a long way to achieving this.
  What has been gained by this dispute? I agree with what I imagine my right hon. Friend will say, "Not a great deal", but I can list two things. One is the commitment on the local authorities' side, and, indeed, I suppose also on the Government's side, that the idea that teachers are compelled to supervise school meals is now finished. I wholly welcome this, and I shall say something more about it later.
  Secondly, there is almost a commitment—I might almost call it a total commitment—that the primary-secondary differential, that is the de facto situation whereby the average salary of secondary school teachers is a great deal higher than that of primary school teachers, will be radically modified when the next Burnham negotiations take place in 1969. These are two great gains on which the National Union of Teachers, although

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  it has made mistakes, and has come under a certain amount of odium over the past few weeks, can look back.
  I think that the present situation holds lessons for the Government, for the local education authorities, and for the teachers. I think that the events of the last six weeks must be looked at in the context of growing militancy among teachers, not only in this country, but all over the world. In New York we have seen the end of a bitter teachers' strike which lasted for many weeks, and was only solved by, as it were, going above the local education authority, and the Mayor of New York stepping in to solve it. I think that it is this sort of solution that we have to look for nowadays in Britain.
  In the short time available to me, I want to talk about four things. The first is the excuse for the dispute, not the real cause of it, the supervision of school meals by teachers. I am in the happy position of having been in both situations. Before I came to this House, I was a teacher for 10 years, and for about half that time I was subjected to the compulsory supervision of school meals. I did it because I was so badly paid that I welcomed it because I did not have to pay for my lunch every day. I then moved to a rather more enlightened local authority in the West Riding of Yorkshire where a fully-staffed ancillary service was in existence and I ceased to supervise school meals in any way at all. The one lesson that I drew from that was that when I had my dinner hours free to prepare for lessons, free to think about teaching instead of thinking about supervising the school meals, I was a marginally better teacher than I had been before. I think this is the great lesson.
  The whole effort of the teaching profession in the next few years must be in one way or another to relieve teachers of the burden of work in order that they can use spare time to improve themselves as teachers. There is this enormous difference between the infants teacher who has no free periods, who works right through the day from when she arrives at school, supervising the school meals, until the school day finishes, and for example the university lecturer who gives three or four lectures a week with one
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  or two classes in addition. The great aim, particularly for primary school teachers, must be to give them more time off. Relieving them of school meal supervision will give them more time off in order to become better teachers. Inasmuch as they will have more time off in the future, I feel that a real victory has been obtained.
  I wish to ask three questions. In many of the 17 areas where the National Union of Teachers invoked sanctions, a fully-staffed ancillary service has been set up within weeks, and the local authorities have now pledged themselves to continue that service. The obvious question now is, when are we to have a fully-staffed ancillary service to supervise school meals all over the country? When does the Department envisage that we shall have this fully-staffed ancillary service?
  Secondly, what advice are the Government giving local authorities now that we are in this new situation and the local authorities in all areas have promised to move towards a fully-staffed ancillary service to supervise school meals?
  Thirdly—and here comes the crunch—how are local authorities to pay for this ancillary service? Where is the money coming from? Is there machinery by which this extra money can be found through the general grant? It is very difficult to pay extra little bits of money through the general grant. Yet local authorities have complained, quite rightly, that they cannot be expected to set up a new service unless they are given the money to pay for it.
  This is vital to the future industrial peace of the teaching movement. Although this dispute has been settled for the time being, if there are difficulties in some of the more explosive areas of the country, it could flare up again. It is vital that answers should be given to these questions.
  On the question of ancillaries generally, it is worth stating that the National Union of Teachers has constantly been blamed for not accepting ancillaries. The truth is that the local authorities will not appoint ancillaries, and the truth behind that is the fact that the local authorities are so squeezed for current expenditure that they have not got the money to appoint ancillaries. What is

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  the Department's views about encouraging local authorities to appoint ancillaries, particularly to supervise school meals?
  Second, the question of unqualified teachers is the least important topic in this debate. We should distinguish two sorts—first, those who are perhaps mature students and who want to do some teaching before going on to training college. They should be given every encouragement to do one or two years as temporary teachers, as laid down by the Burnham Committee. The Ministry has a right to be adamant about this, but the union has a real complaint because, in many areas, temporary teachers, who, according to the Burnham Committee, should teach for only one or two years before going on to training college are in fact teaching for ten, 15 or 20 years simply because no replacements can be accepted. Because they do not want dilution by the back door, they have started the campaign against unqualified teachers. If the Department said clearly that temporary teachers should only teach for two years, much of this bitterness would disappear.
  Third, the primary-secondary differential is at the heart of this dispute. Local authorities and the Department commonly say that all teachers receive the same basic salary, and this is true, but the average salary of the secondary school teacher is far higher—I do not know the exact figure, but perhaps my right hon. Friend could provide it—than to a primary school teacher, because the payments above the Burnham scale are so much greater.
  The Ministry is very proud of the Plowden Report, as it said at a Press conference the other day, adding how much it was doing to implement it. This Report said that the primary-secondary differential was a fundamental obstacle to giving primary schools a square deal. I am glad that one thing which has come out of the dispute is the recognition by local authorities that this is a problem. Hitherto, throughout the dispute, they have refused to do this. Now, a working party has been set up, for which I am grateful.
  The dispute about the differential is not about salaries alone. It is partly that the teachers want it lessened and the two
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  blocks of salaries brought together, but it simply reflects the basic dissatisfaction of many primary school teachers about the schools in which they teach. It is a genuine feeling which has taken the Department and local authorities by surprise, and I hope that it will never be ignored again. This was a strong feeling during the Burnham negotiations and because those negotiations did not consider it, all this bitterness arose. I would like to know what action the Government see the new working party taking. There is no reason why it should not reach agreement about the differential long before the 1969 date for the new Burnham agreement, and I hope that the Department will do what it can to see that the agreement comes quickly, since it will remove much of the bitterness.
  The Department's rôle in the education service is at the bottom of much of the unhappiness and bitterness. The Department is just one of the partners in the management panel. However, the bitterness of the teachers about the salary structure and the intransigence of the management panel at the last Burnham negotiations about the primary differential—for which, I believe, the local education authorities were primarily responsible—has rubbed off on the Secretary of State for Education and Science; the Ministry is blamed for whatever goes wrong.
  All the evidence throughout the dispute has been to the effect that if only the management had been willing to recognise the existence of the problem, the dispute would have been quite quickly settled. I remind my right hon. Friend that the 1944 Act, which has been amended, states that the Secretary of State must
  "… secure the effective execution by local authorities under his control and direction, of the national policy of providing a comprehensive educational service in every area."
  I do not believe that nearly enough of a firm hand has been placed on the local education authorities in the past and I ask for the words of the Act to be properly adhered to in future so that the Minister can take real responsibility for assuaging all the bitterness that has arisen in the past and make sure that it never arises again. There are dangers unless the Ministry makes it clear to the teachers that it really wants to see these

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  difficulties of the difference between primary and secondary teachers solved once and for all. Otherwise these difficulties will arise again.
  11.46 p.m.
  The Minister of State, Department of Education and Science (Miss Alice Bacon): My hon. Friend the Member for Birmingham, Perry Barr (Mr. Christopher Price) and I have at least one thing in common. We have both supervised school meals. I can, therefore, claim to know from experience what I am talking about, just as my hon. Friend claimed precisely that.
  As my hon. Friend said, when he first gave notice to raise this subject the position looked very serious. The House will be pleased to hear that there was a settlement yesterday. It is very important that nothing is said tonight that might in any way exacerbate the position. My hon. Friend will agree, on reflection, that if I were to answer all his questions I would be prejudging the work of the working parties which are due to be set up and which will start work very soon.
  I am glad that this debate has taken place because it gives me an opportunity to try to make clear the issues which are in dispute. Certainly there is a need for clarification, because rarely can the issues have been so mixed up or ends so confused with means. When the sanctions campaign of the National Union of Teachers was introduced, the impression was abroad that it was about the supervision of school meals and the employment of unqualified teachers.
  There is undoubtedly still an impression in the country that if teachers could be relieved of the supervision of school meals, all would be well. Certainly the teachers have strong feelings on these matters. Equally certainly, these alone would not have led the N.U.T. to the extreme measures it has taken. Opposition to the supervision of school meals and the employment of unqualified teachers was an expression of secondary grievances.
  The real argument, as my hon. Friend said, has been about salaries. The campaign started as an attempt to overturn the recent Burnham pay settlement, which was determined by independent arbitrators after discussions in the Burnham Committee had broken down. The real
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  grievances—and I know that they are strongly and sincerely felt—are still about salaries.
  Between 22nd September and 7th November, after the N.U.T. had failed to respond to offers by the local authority associations to discuss the issues of school meals and unqualified teachers, my right hon. Friend had four meetings with representatives of the union. They were not easy meetings, because those who came were, understandably, not in a position to commit the union, and almost invariably what seemed promising ideas for settlement in a meeting were amended afterwards, and discussion had to begin again. Nevertheless, they were useful because they defined more closely than before the causes of dispute, and they went a long way towards finding the formula for a settlement. The agreement which was reached yesterday between the local authority associations and the N.U.T. had its origin in those meetings.
  One thing which was very early apparent in the meetings was that the issue of the employment of unqualified teachers was not an issue which in itself would have led to a crisis. That there is a problem is recognised by all concerned, and that it could be dealt with adequately in a working party was equally apparent. There has been only a little discussion about it, and it has never been a reason for major conflict.
  The school meals issue is more complicated. The union has always said that it was in favour of school meals, but it objected to the local education authorities' powers to compel teachers to undertake supervision. The powers of compulsion were rarely used, although they were always in the background. My right hon. Friend pointed out that although some local education authorities would be reluctant to see compulsion go, for fear that the school meals service would break down in their areas, he had an open mind and was prepared to initiate talks on the problem with the teachers and the local authorities, provided the union lifted its sanctions. He suggested that a working party might be appointed with the intention of reaching conclusions within a month.
  That suggestion, too, is reflected in the settlement which has now been reached. It may seem to some hon. Members that

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  an easier solution might have been possible, but this is not a simple matter. It is not, as some people think, an argument about serving meals. It relates to the whole question of supervision and discipline in the school at lunch time. The head teacher in any school is responsible when children are in the school.
  But the main issue has been over salaries, and in particular the system under which the salaries of heads and deputy heads, and the number of graded posts in a school, are determined in accordance with the number of pupils, weighted by age—the "unit total system", as it is known. My right hon. Friend made it plain to the union that under no circumstances was he prepared to entertain an alteration to the arbitrators' award within the period of its currency. He realised, however, how strongly the teachers felt about the effect of this system on primary school teachers, and he therefore said that he would be very happy to consider with the authorities how the teachers' salary grievances might be explored, in order that there might be an easier approach to the more controversial matters in the next salary settlement, which is expected to operate from 1st April, 1969.
  I do not think that we do any good service to either the teachers or their employers if we suggest that a revision of the unit total system presents an easy problem. The arbitrators listened to argument on the subject and obviously did not find it easy. What is needed is a cool look at what should be recognised to be a difficult problem. In order that this might be done my right hon. Friend suggested that either he or the Burnham Committee might invite three or four persons experienced in educational matters to give advice on the problem. Alternatively, he suggested to the union that it might be of advantage to refer the structure of teachers' salaries to the National Board for Prices and Incomes. The union indicated that it preferred to keep consideration of the matter within the Burnham machine, but, again, the seed of the final agreement on this matter had been sown.
  There have since been patient and detailed talks between the union and the local authority associations, and I do not think it would be helpful at this stage
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  to summarise them in detail or to elaborate the difficulties which arose. Suffice it to say that agreement was reached yesterday. It is a fairly long and complicated agreement in which the words have been weighed carefully by both parties. Essentially it provides for working parties to be appointed to consider promptly the issues relating to school meals and unqualified teachers, the former to do its utmost to report within a month of its first meeting and the second within six months.
  On the salary issues the Burnham Committee is recommended to set up a working party to examine the principles underlying the structure of the basic salary scale and to review the arrangements relating to the unit total system with a view to making recommendations in time for negotiations for the next salary settlement. I know that here my hon. Friend has asked me various questions, but I think it would be utterly wrong for me tonight to go into details as to how these working parties should go about their business or to make comments on what might come out of them. We all hope that the working parties will produce very good reports which will form a basis for a permanent settlement of these issues.
  Mr. Christopher Price rose—
  Miss Bacon: No. I am sorry. I cannot give way. I have only three minutes left. If I do I shall not finish what I have to say. My hon. Friend did not allow me a lot of time.
  It is part of the agreement that the local authority associations will draw the attention of their members to the fact that they are free to make appropriate provision of supervisory assistance and will advise those affected by sanctions which have not appointed additional supervisory staff to review the scale of provision and consider the need for the immediate appointment of additional supervisors in primary and secondary schools.
  The National Union of Teachers, for its part, will authorise the members in the 18 areas affected by sanctions prior to 1st November to co-operate in the meantime on a strictly voluntary basis in maintaining or restoring the normal provision of midday meals. This will be without prejudice to the work of the

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  working party and in the light of the response to the advice given by the associations to their members.
  In the six additional sanctions areas the N.U.T. agreed to withdraw its instructions to its members not to participate in school meals supervision, and the associations agreed to request the authorities to withdraw, or refrain from taking, counter-measures.
  Pleased as I am that it has been possible to reach this agreement, I am saddened that it has been achieved so late and after so much bitterness has been caused. I think it was within the grasp of the teachers when they talked with the Secretary of State on 7th November and again when they considered the matter further with the local authority associations on 10th November. I understand that both parties have now conveyed the agreement to their
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  members. The extension of sanctions which the union announced on 8th November and the counter-measures which the authorities felt compelled to take undoubtedly worsened the atmosphere.
  When hard feelings have been aroused on both sides there is clearly a risk that misunderstandings will arise. We now have an opportunity to put an end to the unfortunate events of the last few months. Not all the damage that has been done will be immediately repaired. But I believe that given good will and a recognition by each side of the other's difficulties we can yet achieve an agreement which might be the basis of a better understanding for the future.
  Question put and agreed to.
  Adjourned accordingly at one minute to Twelve o'clock.