Commons Sitting of 4 April 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  MESSAGES FROM THE QUEEN

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Shipping and Air Transport Profits) (Brazil) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Virgin Islands) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (British Solomon Islands Protectorate) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (British Honduras) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

    INCOME TAX
    The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Montserrat) Order 1968 be made in the form of the Draft laid before your House.
    I will comply with your request.

  PRIVATE BUSINESS
    COVENT GARDEN MARKET BILL (By Order)
    Second Reading deferred till Tuesday 23rd April.
ORAL ANSWERS TO QUESTIONS
  ECONOMIC AFFAIRS

    South-East Regional Economic Planning Council
    Mr. Costainasked the Secretary of State for Economic Affairs when he expects to announce his decisions on the report and study for the South-East Economic Planning Council.
    Mr. Juddasked the Secretary of State for Economic Affairs what decisions he has now made on the proposals of the South-East Regional Council in the light

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    of the Government's economic measures outlined in the budget.
    The Secretary of State for Economic Affairs (Mr. Peter Shore): I have nothing to add to the reply I gave to my hon. Friend, the Member for Portsmouth, West (Mr. Judd) on 20th March.—Vol. 761, c 111–113.]
    Mr. Costain: Does not the right hon. Gentleman appreciate that, in the seaside areas, where there is a fall off in employment, we need a policy? What do the Government propose to do about industrial development certificates? Cannot he make a statement so that we may get the economy going again?
    Mr. Shore: We have yet to give our response to the Report of the South-East Regional Economic Planning Council but hope to be able to do so before very long.
    Mr. Ridsdale: May I reinforce what my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) has said? Does not the right hon. Gentleman realise that the South-East Study is vitiating ha rd against some seaside areas?
    Mr. Shore: The Study drew attention to some of the problems of these areas. The Ministers concerned will be considering it further when we come to reply to the Economic Planning Council's strategy.

    National Plan
    Mr. Costainasked the Secretary of State for Economic Affairs when he now intends publishing the Government's proposed national plan; and whether he will make a statement.
    Mr. David Howellasked the Secretary of State for Economic Affairs, what effect the recent Budget proposals will have on the National Plan.
    Mr. Hordernasked the Secretary of State for Economic Affairs when he will publish a new national plan.
    Mr. Shore: We aim to publish a substantial planning document in the autumn describing the economic and industrial prospects over the next four to five years. This could serve as a basis for further planning work next year. It will take account of all the relevant factors including those referred to by the hon.
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    Member for Guildford (Mr. David Howell).
    Mr. Costain: Does not the right hon. Gentleman appreciate that the stationery bill has gone up by £6·5 million this year? Is not publication of these plans, which never seem to work, a further waste of money? Would it not be better to abolish the whole idea?
    Mr. Shore: I do not think that the hon. Gentleman's view is shared by those engaged in planning and certainly not by the N.E.D.C., or by the large number of firms anxious that the Government should carry on their planning work.
    Mr. Howell: Will the right hon. Gentleman ensure that this time the new national plan is put together more intelligently than the last one? Will not he concede that the last National Plan had certain weaknesses, particularly its failure to take account of that most obvious contingency, the balance of payments crisis?
    Mr. Shore: This document will make the best possible use of the available information, but I need hardly remind the House that one of the problems with the 1965 Plan was the great shortage of statistical material available to the planners and forecasters.
    Sir R. Cary: What happened to the first National Plan? Has it been pulped?
    Mr. Shore: The forecasts and assumptions on which it was based were invalidated by events in 1966.
    Mr. George Jeger: While appreciating that there is no shortage of planning, particularly with regard to Humberside and South Yorkshire, may I ask my right hon. Friend whether he does not agree that what we require there is a little less planning and a little more action?
    Mr. Shore: My hon. Friend will know that we have already given our response to the very excellent report on preliminary strategy produced by the Yorkshire and Humberside Economic Planning Council.
    Mr. Martenasked the Secretary of State for Economic Affairs if he will publish the preliminary paper on the economy since devaluation prepared in

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    connection with the new planning exercise for the second national plan.
    The Joint Under-Secretary of State for Economic Affairs (Mr. Edmund Dell): No, Sir.
    Mr. Marten: If the Ministry will not publish this report, could the hon. Gentleman tell us the estimated growth of the gross national product over the six years 1964–70? Is it the 15½ per cent. we have been led to believe, or the full 25 per cent. proposed in the National Plan?
    Mr. Dell: As the hon. Gentleman has just heard, my right hon. Friend expects to publish a substantial planning document in the autumn. I hope that it will go some way to meeting the hon. Gentleman's requirements. Meanwhile, a very informative Financial Statement has been published by the Chancellor of the Exchequer.
    Mr. Higgins: Will the paper give any indication of how the forecasts of the Chancellor of the Exchequer last year totally differ from the forecasts of the Chancellor of the Exchequer this year? Will it analyse how Government economic policy has completely broken down?
    Mr. Dell: I cannot accept that. This Government have gone a great deal further in publishing economic forecasts than was ever done in the past.
    Mr. Fletcher-Cooke: When the Minister devises the second national plan, would he make it clear, which was not made clear in the first National Plan, whether it is a forecast or a target, because it cannot be both?
    Mr. Dell: Obviously the plan will have elements of a forecast and a target in it. After all, the Government, in publishing this planning document, are responding to a great deal of pressure placed on them by industry as well as to their own need for a basis for their own public expenditure proposals.
    Mr. Ridleyasked the Secretary of State for Economic Affairs how many people are engaged upon studies for a new national plan.
    Mr. Dell: No Government servant is engaged solely on work of this kind, which enters into the work of all those
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    concerned with economic policy and forecasting.
    Mr. Ridley: Will the hon. Gentleman consider referring this activity to the National Board for Prices and Incomes to see whether it thinks we are getting value for money with all this national planning?
    Mr. Dell: The hon. Gentleman is clearly completely out of touch with the needs expressed by industry of this country for Government planning, and also equally out of touch with the Government's own requirement to make a basis for public expenditure which his party continually insists we should keep under control.

    South-West Economic Planning Council
    Mr. Peter Millsasked the Secretary of State for Economic Affairs if he will appoint a member on the South-West Economic Planning Council to represent the agricultural industry and the family farmer.
    The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): My right hon. Friend announced on 1st April the names of the members of the South-West Council who he has appointed for a further period.
    Mr. Mills: But the failure to appoint someone who knows about the problems of agriculture in the South-West is an insult to the farming community in the South-West. Would the hon. Gentleman think again and appoint someone who really understands the problems of agriculture in the South-West?
    Mr. Williams: The hon. Member will appreciate that there are on the Council two members of local authorities, one trade unionist and one independent member, all of whom have close links with the agricultural industry.

    South-West
    Mr. Peter Millsasked the Secretary of State for Economic Affairs what action he has taken to deal with the economic problems of the South-West as expressed in the Tress Report.
    Mr. Deanasked the Secretary of State for Economic Affairs what immediate plans he has to deal with the

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    economic problems of the South-West as expressed in the Tress Report.
    Mr. Nottasked the Secretary of State for Economic Affairs what immediate plans he has to deal with the grey areas of the South-West as expressed in the Tress Report.
    Mr. Shore: The Government's response to the economic problems of the South-West are fully set out in their reply to the report of the South-West Economic Planning Council. The Government will be able to give further consideration to the needs of the region in the context of the findings of the Hunt Committee, whose report is expected in the autumn.
    Mr. Mills: Would the right hon. Gentleman bear in mind that we in the South-West are just not prepared to accept the situation which he has brought about? We want action. Will he look it this matter again and ensure that we have something positive in the near future?
    Mr. Shore: I think that we have given a positive response to the Tress Report. In particular, we have accepted the crucial importance of the spine road, which is the central part of the Tress Report's strategy.
    Mr. Dean: What comment has the right hon. Gentleman to make on the undoubted fact that the 50 per cent. increase in Selective Employment Tax will enormously increase the economic problems of the South-West?
    Mr. Shore: That is a different Question, but the announcement made by my right hon. Friend the Chancellor of the Exchequer that we were considering the remission of Selective Employment Tax to hotels in the rural parts of development areas could have some promise for parts of the South-West.
    Mr. Nott: Would the right hon. Gentleman give consideration to a report which might be prepared on the Hunt Report, which is due in the autumn, which is reporting on the Report of the Tress Committee, which has now reported, because we should like to know that eventually these Reports, which we have been reading and studying for many years, will lead to some action by some body?
    Mr. Shore: The document to which the hon. Gentleman refers is, I think, the evidence which has been submitted by the South-West Regional Council to the Hunt Committee. This evidence was prepared probably only in the last few weeks, and it will be considered by the Hunt Committee which, I gather, is to visit the area soon.
    Dr. John Dunwoody: I assure my right hon. Friend that there is bound to be disappointment in the South-West at the Government's response to the Economic Planning Council's Report. I welcome his assurance that he will give further consideration to those parts of the Report related to the Hunt Committee's finding. Would he go a little further and assure the House that he will give further consideration to other parts of the Report which appear to have been rejected out of hand?
    Mr. Shore: Regional planning, and particularly long-term regional planning, of the kind which the regional councils are doing does not lead to total acceptance or refusal at a particular point of time. There is a continuing exchange of views between the councils and the Government.
    Mr. Deanasked the Secretary of State for Economic Affairs what studies he has made into the significance of road communications for the economy of the South-West.
    Mr. Alan Williams: Regional economic planning implications are taken into account in the consideration of road programmes for the South-West, as for other regions. The Government's decision to give high priority to the provision of the spine road reflects recognition of the key rôle of this route for the future development of the region.
    Mr. Dean: Does not the hon. Gentleman realise that the Government's refusal to give a definite date for the No. 1 priority in the Tress Report has caused widespread disappointment in the South-West?
    Mr. Williams: Surely the hon. Gentleman accepts that this matter must be seen in the context of the full 1970 programme which has yet to be announced. Surely he equally welcomes the fact that this has now been put into the preparation pool.
    Dr. Dunwoody: I welcome the assurance that the spine road concept is accepted, but does not my hon. Friend think it a little disappointing that the part of the spine road proposed in the development area was not accepted in the Government's reply? Would not he agree that road communications become more and more important the further away parts of the country are from the centres of population?
    Mr. Williams: I appreciate my hon. Friend's point. But the Council, in its Press statement, recognised that the programme announced by the Government was all that could be expected within the time span up to the mid-1970s. In addition to the spine road, we have agreed on five bypasses in the Cornwall area.
    Mr. Nottasked the Secretary of State for Economic Affairs when he expects to receive the Report of the Exeter University research study, commissioned by his Department, of tourism in the South-West.
    Mr. Alan Williams: By early summer, 1969.
    Mr. Nott: While the South-West is glad to know that this Report will be available in the summer of 1969, may I ask whether the hon. Gentleman is aware that we already have at least 10 reports on the tourist industry in the South-West? Would it not be rather more simple and quicker to abolish S.E.T. for the tourist industry straight away, and save all these reports'?
    Mr. Williams: The value of the reports is shown in the fact that we have had modifications of S.E.T., and investment grants have been introduced for hotels.
    Mr. Patrick Jenkin: Is the hon. Gentleman aware that the President of the Board of Trade said the other day that there would be no provision made in the Estimates for the year 1968–69 for any additional help to the hotel industry except the modification of S.E.T., about which we await to hear?
    Mr. Williams: I can only repeat that the information, as I understand it, is that there are to be investment grants for hotels differentiating between development areas and non-development areas.

    North-East Coast
    Dame Irene Wardasked the Secretary of State for Economic Affairs if he will make a statement on the economic progress of the North-East Coast since 12th March.
    The Chancellor of the Duchy of Lancaster (Mr. Frederick Lee): Regional development is a continuing, long-term process, and it is difficult to gauge progress on the basis of a four-weeks period taken in isolation. What can be said is that on Tyneside and in the region as a whole unemployment is falling while the number of jobs vacancies continues to rise.
    Dame Irene Ward: But is the right hon. Gentleman aware that the way in which the investments grants are dealt with in our region is to the detriment of large-scale industry being attracted there and to the industries already there? Will he fight the Chancellor of the Exchequer until he comes out on top?
    Mr. Lee: It would be interesting to know the basis of the hon. Lady's analysis. My knowledge of what is going on in the region is entirely to the contrary. These grants, plus the regional employment premium, plus £5 million in Selective Employment Tax, are a great advantage to the region.
    Mr. R. W. Elliott: Does the right hon. Gentleman recall that before he took up his present appointment, and in days of Conservative Government, we were told that we did not know how to plan? Now the Labour Government are reverting to our development district principle, which was always right.
    Mr. Lee: The Conservatives showed us how not to plan. The analysis which I have made, showing increases in job vacancies and falling unemployment, rather shows that we are a bit better at it than they were.
    Dame Irene Wardasked the Secretary of State for Economic Affairs if he will arrange for Ministers of departments who are responsible for implementing the recommendations of the Council to receive a deputation from Members of Parliament whose constituencies fall within the boundaries of the Economic Planning Council,

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    with a view to improving the economic progress of the region.
    Mr. Frederick Lee: There have been a number of recent opportunities for M.P.s from the region to make their views known, for example, the debate on the Northern Economic Planning Region on 8th March, in which the hon. Lady took part. Although there does not seem to be a case for the meeting proposed, I am always prepared to discuss with hon. Members any further points they have to make on the recommendations.
    Dame Irene Ward: In view of the fact that the right hon. Gentleman does not seem able to ensure that public investment in the North-East is comparable to that in Scotland and Wales, is he aware that I should like to see the Chancellor of the Exchequer face to face so that I can tell him what I think about this?
    Mr. Lee: As I pointed out in the debate to which I have referred, public investment is rising pretty rapidly in the North. While, as yet, it is not the size of that in Scotland, I believe that we are now on a rising curve which is showing results.
    Mr. Shinwell: Is my right hon. Friend aware that Labour hon. Members have had no difficulty in seeing Ministers and have always been satisfied? Is he further aware that the trouble with the hon. Lady is that she has been frustrated ever since she entered this House?
    Mr. Lee: My right hon. Friend may be a better authority on that than I. I prefer not to venture into it.

    Prices and Incomes Policy
    Mr. David Howellasked the Secretary of State for Economic Affairs whether, in view of the increase in average weekly wage rates in the 18 months July, 1966 to January, 1968 of 8·1 per cent. as against 7·4 per cent. for the 18 months before that he now proposes to proceed with a policy to direct restraint on wage rates as the main weapon against inflation.
    Mr. Shore: The Government's economic strategy was set out in the Budget statement. The Government have now published a White Paper in which the purposes of the policy for productivity, prices and incomes are explained.
    Mr. Howell: Is the Minister aware that these figures show, at best, that the Government's present statutory policy will be useless and, at worst, will bring legislation into disrepute? Is it worth all the cost and bother and agony to his hon. Friends to make this kind of policy the centre of his economic planning?
    Mr. Shore: The answer to the second part of the hon. Gentleman's question is "Yes". The answer to the first part is that he is misinterpreting the figures here. It is true that incomes rose very sharply during the first 18-month period and rose almost as much again during the second 18-month period. However, during the second 18 months, a good deal of the increase was a carry-over from the pipeline increases that were there in July, 1966.
    Mr. Rose: Will my right hon. Friend consider the probability that, in spite of the economic justification for wage restraint, the dissension and strife which will be caused in industry may well outweigh any advantage derived from it?
    Mr. Shore: This is a very serious matter which we have considered most carefully. Against that, we have had to consider the very great dangers to the British economy which would follow from a failure of incomes policy during the coming 18 months.
    Mr. Iain Macleod: The Secretary of State has referred to the White Paper. Is he aware that, when both his predecessors produced White Papers on these matters, they made statements to the House and faced full questioning on them? Why did he run away from the House yesterday?
    Mr. Shore: First of all, I made a long speech during the Budget debate, which very closely foreshadowed the White Paper. Secondly, I was aware of the fact that I should be answering Questions on incomes policy today.
    Sir G. Nabarro: But is the Minister not aware of the fact that in his own White Paper he puts a maximum increase on incomes of 3½ per cent. during the coming year and in ensuing years, whereas manifestly the cost of living increases in this year will be two or three times that amount? Would he not agree with his hon. Friend the Member for

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    Manchester, Blackley (Mr. Rose) now that there will be grave industrial unrest as a result of his policy?
    Mr. Shore: It is perfectly clear and has been to everyone that, during the first year following devaluation, 1968, prices would rise more than incomes. That is part of the penalty to be paid for devaluation. But it must be balanced against the very great advantages to the future of the British economy that devaluation will bring.
    Mr. Edwin Wainwright: Is my right hon. Friend aware that the Government's determination to restrict wages makes the workers more than ever determined to go forward for increases of wages? Would he not look again at the problem of productivity as a possible means of achieving the desired objective, rather than restricting wages?
    Mr. Shore: The second part of my hon. Friend's question is the important one, when he turns to productivity. While it is true that the 3½ per cent. ceiling is meant to be a ceiling, there is a hole for genuine productivity bargains, and that policy will be applied.
    Mr. Boyd-Carpenter: Will the right hon. Gentleman recall that the long speech to which he has referred was made when no questions could be asked or answered? Was his failure to make a statement yesterday on the White Paper due to his belief that it was too trivial or too unpopular?
    Mr. Shore: If the right hon. Gentleman looks at the report of my speech in HANSARD, he will see that I gave way at least 10 times.
    Mr. Dickens: Will not my right hon. Friend agree, firstly, that we need no advice from right hon. and hon. Gentlemen opposite about freezing wages, because they would freeze wages by creating large-scale unemployment? Secondly, can he now say whether the Government will continue their consultations with the T.U.C. along the lines of the rather more rapid economic growth foreshadowed in the T.U.C.'s recent economic review?
    Mr. Shore: I can assure my hon. Friend that we are prepared to consider with the T.U.C. and with industry all
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    measures which will lead to a more rapid rate of growth. That is what the planning consultations that we are having and have had with them are about. As to the first part of his remarks, my hon. Friend is quite right. The alternative being urged upon us from right hon. and hon. Gentlemen opposite is the simple one of large-scale unemployment and deflation.

    Sunderland and Wearside
    Mr. Wileyasked the Secretary of State for Economic Affairs whether he will make a further statement on the action he has taken pursuant to the visit of the Chancellor of the Duchy of Lancaster to Sunderland.
    Mr. Frederick Lee: Action has been taken on all the points raised. The most important point was that of the Pennywell site, and as my hon. Friend the Parliamentary Secretary to the Board of Trade announced on 22nd February, the Board of Trade has entered into negotiation to acquire the site.
    Mr. Willeyasked the Secretary of State for Economic Affairs what recommendations the Northern Economic Planning Council has made to improve the prospects of employment in the Sunderland and Wearside area.
    Mr. Frederick Lee: The Northern Economic Planning Council has made no specific recommendation about Sunderland and Wearside. The Council is, however, concerned at the high level of unemployment in this area and supports the Government's efforts to bring new industries to Wearside and to encourage the formation of a shipbuilding group on the Wear.
    Mr. Willey: While appreciating what my right hon. Friend has done, may I ask whether he realises that these Answers are not really satisfactory and that what we want is to have prompt and concerted action about the problems of Sunderland? Above everything else, we want a more ambitious provision of employment.
    Mr. Lee: Yes, Sir. That is why I mentioned the Pennywell Estate, which will add considerably to the amount of industrial land available. In addition, I know that my right hon. Friend will rejoice, as I did when I heard on Monday,

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    about the £10 million of orders which have now been placed on the Wear with shipbuilders there.
    Mr. R. W. Elliott: Has the right hon. Gentleman been advised by the Economic Planning Council of the detrimental effect on employment on Wearside of the Government's decision not to take up the South African arms order?
    Mr. Lee: No, Sir. I have not been informed of that.

    Economic Planning Councils (Recommendations)
    Sir G. Nabarroasked the Secretary of State for Economic Affairs whether he will introduce legislation to facilitate appeals by economic development councils in event of disagreement between them and himself on the recommendations of such councils.
    Mr. Alan Williams: No, Sir.
    Sir G. Nabarro: Is it not a fact that these development councils are Ministerial creatures of the right hon. Gentleman, and that he appoints them? As the majority of them now are making recommendations which are totally contrary to Ministerial policy, who is to arbitrate in the matter, or is the Minister finally arrogating to himself the position or an economic gauleiter without any regard to the recommendations of his Midlands Council?
    Mr. Williams: I assume that the hon. Gentleman means economic planning councils, not development councils. He should bear in mind that there is no such body as the one to which he refers in his Question. These are advisory bodies, and the Government, in the last resort, have to make decisions in the light of the interests of the whole country, not just the self-interest of individual localities, which is what the hon. Gentleman is pursuing.
    Sir G. Nabarro: In view of that very unsatisfactory reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Wages
    Mr. Ridleyasked the Secretary of State for Economic Affairs by what percentage wages have risen since the sign
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    ing of the Declaration of Intent on prices and incomes; and by how much it was estimated they would rise, during the same period, before the declaration was signed.
    Mr. Shore—
    Hon. Members: Hurry up.
    Mr. Shore: I apologise to you, Mr. Speaker, to the House, and to the hon. Member, for the delay.
    From December, 1964, until February, 1968, the Ministry of Labour weekly wage rate index rose by 17·3 per cent., and the hourly wage rate index—which reflects changes in the standard working week—rose by 21·4 per cent.
    No estimate of wage movements covering this period was made at the time of the Declaration of Intent.
    Mr. Ridley: I thought that the Government believed in planning. Is the right hon. Gentleman saying that he brought in the Declaration of Intent without having made any plans for the growth of incomes during the next three years?
    Mr. Shore: I did not bring in the Declaration of Intent, but I think the hon. Gentleman will be aware that it was the first step in the evolution of a prices and incomes policy, and that it was what its title suggests, a declaration of intent.
    Mr. Dickens: Would not my right hon. Friend agree that the increase in money wages in Britain since 1964 has been one of the lowest in any West European country? Would he also confirm that the rate of increase in unearned incomes in this country since 1961 has been among the highest?
    Mr. Shore: I am not sure about the answer to the second part of my hon. Friend's question about unearned incomes, but if he puts down a Question I shall try to deal with it. As regards increases in earnings, I think that the increase in Britain during this period is not out of line with increases in incomes in comparable European countries. Where we have fallen behind is in the increase in output which should go with it.
    Mr. Higgins: Is the right hon. Gentleman aware that if he takes that long to find Answers to Questions we shall need

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    injury time added on? Can he say why the original object of the Government's policy, which was to keep incomes in line with increases in real output, has been changed to merely keeping increases in incomes at a somewhat slower rate than the increase in the cost of living, which is what the White Paper now does?
    Mr. Shore: I do not accept that there has been the change suggested by the hon. Gentleman.

    Productivity, Prices and Incomes Policy
    Mr. Barnettasked the Secretary of State for Economic Affairs if he will make a statement on the Government's policy for prices, incomes and productivity.
    Mr. Iain Macleod: On a point of order. In view of the great importance of this Question, and so that we may have more than the minute or two that we will otherwise have, I wonder whether the Minister will agree to answer this Question at the end of Question Time?
    Mr. Speaker: That is a matter for the Minister.
    Mr. Shore: I think that we have substantial time in which to deal with this Question—[HON. MEMBERS: "Windy."] It is for Mr. Speaker to decide how long he wishes this Question to go on, but we have at least 10 minutes in which to deal with it, and I start by saying that the White Paper on Productivity, Prices and Incomes Policy in 1968 and 1969 was, as my hon. Friend the Member for Heywood and Royton (Mr. Barnett) knows, published yesterday.
    Mr. Biffen: On a point of order. As I am particularly anxious to reach Question No. 24, and do not want 10 minutes spent on this Question, may I ask whether it is true that I can terminate answers to this Question by merely saying that I shall seek to raise the matter on the Adjournment in view of the unsatisfactory nature of the reply?
    Mr. Speaker: That is so.
    Mr. Barnett: Does not my right hon. Friend think that he may avoid considerable industrial disruption if he concen
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    trates on the basic voluntary part of the statement in paragraph 11? In this way he will use his compulsory powers only in the last resort, indeed if at all.
    Mr. Shore: I am clear, as are the Government, that there has to be a tremendous reliance on voluntary cooperation if this policy is to work. We look on these powers which we foreshadow in the White Paper as being the buttress to what is still essentially a voluntary policy.
    Mr. Richard Wainwright: Will the right hon. Gentleman explain how he proposes to keep the net result of wage negotiations at four separate levels, as indicated in the White Paper, within one ceiling?
    Mr. Shore: This is basically a problem for those who are concerned with direct negotiations, but I have no doubt that this will prove practicable.
    Mr. Heffer: Is my right hon. Friend aware that this is an ill-thought-out piece of work, with very confused ideas indeed? As this is bound to lead to industrial antagonism among trade unions and workers, I appeal to my right hon. Friend—and I mean genuinely appeal—to take this back and drop the whole concept of a policy of compulsory wage legislation.
    Mr. Shore: I always listen with great care to my hon. Friend, but I am afraid that I cannot give him the assurance for which he asks. There are problems in a policy of this kind, but I think that he is exaggerating the difficulties we will encounter.
    Mr. Kenneth Lewis: Is the right hon. Gentleman aware that in his White Paper he is trying to restrict all incomes to a certain level, including individual incomes, while the Chancellor of the Exchequer, under the close company regulations issued under the 1965 Finance Act, is at this time instructing the Inland Revenue that close company directors must take more income during this year and next, whether they like it or not?
    Mr. Shore: The hon. Gentleman has pointed to a well-known contradiction in policy. It has existed ever since 1945. The reason why my right hon. Friend wants close companies to distribute more of their profits is so that he can tax

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    them all the more, whereas they would avoid taxation if they simply ploughed back profits.
    Mr. Arthur Lewis: As the White Paper allows for increases above the 3½ per cent. norm if there is an increase in production and output, may we take it that if professional agitators cause more strikes, and foster more strikes, they will be entitled to claim increases for this work?
    Mr. Shore: That is rather difficult to foresee, but no doubt if a serious claim were made on behalf of agitators for pay increases above 3½ per cent. I would have to refer it to the National Board for Prices and Incomes.
    Mr. Bruce-Gardyne: As the right hon. Gentleman has said that the Government's disasters of the past three years have been caused, not by soaring wages, but by stagnating production, and also by soaring Government expenditure, is not the effect of the White Paper going to be that when the whole policy explodes it will destroy confidence at home and abroad, quite unnecessarily?
    Mr. Shore: The lesson is clear that the main emphasis of policy must be to get productivity up in this country. The difficulty here, and the reason why the short-term need is so great, is that we cannot get a sustainable substantial increase in productivity year by year over the next 18 months. We can get some increase, but we cannot get an increase of the order that will make it unnecessary to have an incomes and prices policy.
    Mr. William Hamilton: Is it not the ca e that the 3½ per cent. ceiling is by no means rigid, and that the Budget proposals provided for the contingency of an increase of more than that figure?
    Mr. Shore: As my hon. Friend points out, there is an upper case forecast for the increase in production this year. But the policy, as he says, is not a rigid one. In so far as increases in income can be genuinely attributed to increases in productivity, then, of course, they can go through the ceiling. I think that this is a very important and constructive element in the new policy.
    Mr. Patrick Jenkin: Does not the right hon. Gentleman appreciate that it is the appealing complexity of this mass of statutory and non-statutory legislation which will in fact militate directly against that which he has just said is his primary aim—to increase productivity and get expansion going? Does he not realise that he would do much better by listening to many of his hon. Friends, and hon. Members on this side, and scrapping this statutory policy?
    Mr. Shore: I have not heard much wisdom from the other side of the House, though I have heard some interesting suggestions from behind me. Incomes policy and prices policy are complex matters and they remain complex whether one is relying wholly on a voluntary system or on a voluntary system buttressed by statutory powers.
    Mr. Victor Yates: Are the proposals outlined in this White Paper regarded by the Government as a permanent feature of our national life? If not, why is my right hon. Friend seeking powers to renew them at the end of 18 months.
    Mr. Shore: The White Paper makes it clear that we are seeking powers for the next 18 months, which is the crucial period, during which we expect to get this massive switch of resources into the balance of payments. We also say in the White Paper that we are leaving open, and leaving ourselves with, the possibility of renewing all or some of the powers at the end of that 18 months. This, of course, indicates the obvious fact that one cannot be absolutely certain of the time scale at the end of which we shall have achieved this victory in the balance of payments which we are seeking.
    Mr. Iain Macleod: But is the right hon. Gentleman not aware that his predecessor told the House that the previous legislation was for one year and that that was the critical period? Those promises have been broken; why should we believe him?
    Mr. Shore: The right hon. Gentleman knows that, in the intervening period, we have had to face this great problem of devaluation of the £—[HON. MEMBERS: "Why?"] This is not the occasion to go into all the causes of that, but, if we did, a lot would be said about the handling of the British economy by right hon.

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    Gentlemen opposite. I do not know of any independent or serious observer of the British scene who denies that, in this year, after devaluation, we need a prices and incomes policy—and I think that, in their hearts, hon. Gentlemen opposite know it too.
    Mr. Sheldon—
    Mr. Biffen: On a point of order. In order to terminate these unfair Parliamentary blood sports against the Secretary of State, I beg to give notice that I will raise this matter on the Adjournment, in view of that unsatisfactory Answer.

    North-West Economic Planning Council
    Mr. Barnettasked the Secretary of State for Economic Affairs if he will make a statement on the work of the North-West Economic Planning Council.
    Mr. Alan Williams: During the past three years the North-West Economic Planning Council has made considerable progress towards evolving a planning strategy for the economic and physical development of the region. It will shortly be publishing its next report entitled "North-West Strategy II". In addition, the Government have sought and received the Council's advise on a wide range of questions relevant to regional planning.
    Mr. Barnett: But is not the position of the Council impossible while there are three or four Ministries and dozens of councils with executive powers? Therefore, pending the Report of the Royal Commission on Local Government, should we not have a Minister for the region with specific executive powers under one particular Ministry, rather than a series of Ministries, as we have at present?
    Mr. Williams: As my hon. Friend will appreciate, the planning councils are backed by a planning board, which has just this function: it is a single body bringing together the various Departments concerned with the problems of the regions.

    South-East England
    Mr. Bostonasked the Secretary of State for Economic Affairs if he will make a statement about the composition
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    and programme of the body set up by his Department on 20th March, 1968, to coordinate the planning strategy for South-East England.
    Mr. Shore: The composition of the commissioning body for the proposed technical study is set out in my announcement of 20th March.—[Vol. 761, c. 111–113.] Its task will be to reach agreement on the broad scope of the work and the machinery for carrying it out. My hon. Friend will be holding the first meeting shortly.
    Mr. Boston: When is it likely that the proposals arising from this investigation will start to be acted upon? Would my right hon. Friend agree that this body must be involved in some way in the general inquiry into the site of the third London Airport? In that case, how will it be so involved?
    Mr. Shore: There will, of course, be continuing and close liaison between the inquiry into the third London Airport and the body which will be carrying out this further development of the regional strategy for the South-East.

  COMMONWEALTH PRIME MINISTERS' MEETING
  Sir Knox Cunninghamasked the Prime Minister if he is now in a position to give the date proposed for the Commonwealth Prime Ministers' Conference.
  The Prime Minister (Mr. Harold Wilson): No, Sir. Confidential consultations between Commonwealth Governments are still in progress.
  Sir Knox Cunningham: But how have the conversations with Australia and New Zealand about our withdrawal from east of Suez been going? Is it not now urgent that there should be a Commonwealth Conference, since both Commonwealth and foreign countries are being lumped together to be treated by the same Government Department?
  The Prime Minister: The hon. and learned Gentleman obviously does not understand the facts in this matter. Since we—I mean the Commonwealth Prime Ministers—appointed a Commonwealth Secretary-General, the soundings about the timing, place and agenda of

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  a conference are in his hands and not in the hands of the Prime Minister of Britain or of any other Prime Minister. Those soundings are now going on. As to the other question, talks have been held with Australia and New Zealand over a period in December and during this year—most recently, in connection with the S.E.A.T.O. conference—and they have gone very amicably.
  Mr. Heath: The right hon. Gentleman will recall that I recently suggested a Ministerial conference of Commonwealth countries about the problems of citizenship and migration. If he thinks that a full Commonwealth Conference is now likely, can he, either personally or through the Commonwealth Secretariat, institute detailed expert consultations about this subject, rather in the same way as was done in 1947, which led to the British Nationality Act, 1948, and the Commonwealth citizenship legislation which followed?
  The Prime Minister: That is a helpful suggestion, if the right hon. Gentleman will allow me to say so. So far as the Asian and other Commonwealth migration and nationality problems are concerned, as I have said on previous occasions, it is inconceivable that Commonwealth Prime Ministers would meet without this being on the agenda. But I agree that preliminary soundings and consultations to get it all set up for an efficient conference are absolutely right.

  RHODESIA
  Mr. Hooleyasked the Prime Minister if he will seek a meeting with the President of Portugal to discuss the situation in Rhodesia in so far as it relates to the obligations of the United Kingdom and Portugal under the United Nations Charter.
  The Prime Minister: I do not feel this to be necessary, Sir.
  Mr. Hooley: Is it not an absurd situation that our so-called ally in N.A.T.O. and our so-called economic partner in E.F.T.A. should be pursuing a policy deliberately calculated to undermine the Government's policy over Rhodesia? What pressures is my right hon. Friend prepared to bring to bear on Portugal to bring it into line?
  The Prime Minister: I referred to this in the debate on Rhodesia recently, and I do not think that a bilateral meeting would be helpful at this time. As I said in that speech—my hon. Friend will be aware of this, of course—these are matters currently under discussion at the Security Council of the United Nations. I am sure that, in the course of those discussions, Portugal will realise how desirable it is for her not to get out of line with her principal allies or with the vast majority of countries represented at the United Nations.
  Mr. Hastings: When will the right hon. Gentleman respond to the offer of my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) to do everything he can to get negotiations going again?
  The Prime Minister: The right hon. Gentleman, of course, did everything he could on his recent visit to Rhodesia, and I gave the Government's appreciation, after very careful study, of what he brought home. Also, of course, as the hon. Gentleman will recognise, since the visit of the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home), whatever hopes might have been raised, the whole thing was entirely changed by the flouting of the rule of law by the very people with whom he had been dealing.
  Mr. Maudling: My hon. Friend asked when the Government proposed to do something about it.
  The Prime Minister: That seems more a statement than a question. The answer was given by us last week—[HON. MEMBERS: "Answer."]—and I said that we are not prepared to deal on a basis of trust—which is implied, whatever the letter of the agreement—with people who reject and flout the rule of law. When those with whom we can deal have broken with racialism, we shall have a chance of getting a satisfactory settlement.

  SCIENCE AND TECHNOLOGY (CENTRAL ADVISORY COUNCIL)
  Mr. Lubbockasked the Prime Minister on how many occasions the Central Advisory Council for Science and

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  Technology has met since the announcement of its establishment on 17th November 1966; what matters the Committee has considered; and when a report on the work of the Committee will be published.
  The Prime Minister: Since I announced the membership and terms of reference of the Central Advisory Council for Science and Technology on 17th January, 1967, the Council has met 13 times. A great deal of the advice given by the Council to the Government is confidential; but reports on its work, where appropriate, will be published from time to time.
  Mr. Lubbock: Will the right hon. Gentleman say why, when the Advisory Council which reports to the Secretary of State for Education and Science publishes reports which are extremely informative and which are available to the House and the public generally, this Council, which advises the Minister of Technology, does not divulge one iota of its activities to the public?
  The Prime Minister: This Council is the highest committee of all in this sphere, covering both science and technology. It must, to do its job properly, have highly secret information. However, it intends to publish what can be published and I understand it has already approved a draft outline of its work for 1967–68. I hope, therefore, that a report will be available for publication before long; but it will not cover all of its work, for the reasons I have stated.

  PRIVATE COMPANIES (FINANCIAL AID)
  Mr. Whitakerasked the Prime Minister whether he will give a direction that all Government Departments should only advance financial help to private companies, in return for an equity for the public in any potential profits.
  The Prime Minister: I have nothing to add to the Answer given on 21st November, 1967, by my right hon. Friend the Chief Secretary to the Treasury to a similar Question by my hon. Friend.—[Vol. 754, c. 1110.]
  Mr. Whitaker: If the public risk heavy capital losses on projects such as the
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  Cunarder and Concorde, is it not fair that they should be given an equal stake in any possible profits from and directorships in the companies concerned?
  The Prime Minister: These matters must always be considered on their merits in relation to any particular case. It might have been considered appropriate in the case of the help given to the Cunarder, but I assure my hon. Friend that after the great care taken by the Financial Secretary to the Treasury, who was dealing with these matters, there is no risk whatever of capital losses being made by the Government on the Cunarder project.
  Mr. Ian Lloyd: Since the State already takes about 75 per cent. of the profits of the average company in this country, how far does the right hon. Gentleman think that this limit can be further pushed without it totally destroying the allocative system on which private enterprise economy depends?
  The Prime Minister: Questions of a budgetary nature were debated at length in the four or five days which were spent debating the Budget last month. My hon. Friend's Question deals with the point of where risk money is put up by the Government to help highly desirable enterprises by private firms. My hon. Friend is, I think, making the point that in appropriate cases the Government should not only share in the risk but should also share in the profits. We will do that where it is appropriate so to do, but we cannot have a hard and fast line in all cases.
  Sir R. Cary: Where a particular industry or business achieves an increasing level of productivity, would it not be most unfair to impose any such direction on that industry or business as mentioned in the Question?
  The Prime Minister: The Question deals with cases where, for one reason or another, financial help has been given by the Government very often in the highest national interest; for example, to allow some important national venture to go forward. If productivity results from that, then there could be discussions on how the gains from that project should be shared, but, as I said, I believe that each case must be considered on its merits.
  Mr. John Lee: If we are to continue with this policy of ladling out large quantities of taxpayers' money to private industry, will my right hon. Friend at least ensure that we take a controlling interest in the projects which we support?
  The Prime Minister: That is exactly the position that is being dealt with in the discussion on the Industrial Reorganisation Corporation, in addition to the discussions on the Industrial Expansion Bill which got its Third Reading lastnight—[HON. MEMBERS: "When?"]—which was read a Third time either last night or early this morning.
  An hon. Member: Where were you?
  The Prime Minister: The Leader of the Opposition and I were on other important work, as was the Leader of the Liberal Party. Now that that vote has been secured—[Interruption.]—by whatever majority, hon. Gentlemen opposite, who have done their political demonstration, will realise the value that this will have. They opposed the I.R.C. Measure, bit they will be the first to pay tribute to what the I.R.C. has achieved.

  VIETNAM
  Mr. Whitakerasked the Prime Minister what are the results of his latest efforts to achieve a settlement of the war it Vietnam.
  The Prime Minister: My hon. Friend will be aware of the latest developments in this situation, the statement issued on behalf of Her Majesty's Government yesterday and my own statement last night.
  Mr. Whitaker: While every hon. Member will welcome yesterday's news, may I ask my right hon. Friend to indicate whether in the past the Russians have told him of any pre-conditions on the terms of which they would be willing to reconvene the Geneva Conference?
  The Prime Minister: The position is that the two co-Chairmen and their Governments stand ready to help in any way they can, whether it be in reconvening the Geneva Conference or any variant of it, or in any other way in which we can help the parties to reach a settlement once the parties have agreed that negotiations should begin. That is, I think, the
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  position of both of us. We have felt that it might be right to take the initiative at various times, but our Russian co-Chairman has not agreed. Nevertheless, I am sure that we both stand ready to give all the help that we can.
  Mr. Heath: As the hon. Member for Hampstead (Mr. Whitaker) said, the whole House welcomes the fact that there should have been this reaction from Hanoi to President Johnson's initiative. While recognising that this is a first step, may I ask the right hon. Gentleman to say if he will discuss with the other co-Chairman the possibility of broadening out the basis of discussion so that we may get discussions going rather further than just on the bombing?
  The Prime Minister: I have been in close touch with the Prime Minister of the Soviet Union—indeed, I have been in almost continuous touch—since my visit to Moscow in January. The different posititons of the two Governments are understood. But both of us have a responsibility, from our different standpoints, in trying to bring our respective friends and allies together to get a settlement. At this moment of time and, of course, with the improved hopes—it is obvious that no one must build too much at this stage—resulting from the response to the dramatic and historic declaration made by the President of the United States on Sunday, we must see first what emerges there; but, as I said, we stand ready to further the solution to the still very difficult problem of agreeing on the content of an agreement.
  Mr. Philip Noel-BakerWould my right hon. Friend agree that it would be most desirable, if possible, to have the Geneva Conference reconvened in order that China may be there, since no settlement in South-East Asia can be lasting unless China agrees with it?
  The Prime Minister: There is not exactly universal agreement that China would necessarily make the most constructive of contributions to a settlement. I agree that it is one possibility that there should be a reconvening of the original Geneva Agreement. Others have been suggested. There is the importance of the position of the International Control Commission countries, and there may be other ways of dealing with this. But obviously we must keep our minds very wide open

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  in this matter and keep in close touch, as we are doing, with our fellow co-Chairman, as well as with the United States.
  Mr. Biggs-Davison: Is the right hon. Gentleman in close touch, and, if so, is he keeping in close touch, with the Prime Ministers of Australia and New Zealand?
  The Prime Minister: Yes, Sir. I am in continuing touch with them and with other Commonwealth countries, because many of them have a vital interest in, are vitally concerned with and have strong opinions on this matter. We are in close touch with all of them, but at this moment I thing that it would be better for us to see the response to the initiative of the President of the United States and the response to the proposals made by Hanoi yesterday.
  Mr. Speaker: Mr. Winnick. [HON. MEMBERS: "Hear, hear."]
  Mr. Winnick: I am always pleased to get support. So that the talks between Hanoi and the United States can be as fruitful and constructive as possible, would my right hon. Friend be willing at least to urge on the United States that the bombing of North Vietnam should be stopped completely? Would he further agree that perhaps the biggest stumbling block to the securing of a lasting peace in Vietnam could be the very unrepresentative Government in South Vietnam?
  The Prime Minister: I know the keen desire of my hon. Friend to see a settlement here. I am sure that the right way to achieve it—if my hon. Friend would be content to do this—is that it should now be left to the parties concerned, and to the co-Chairmen if they can provide any valuable help at the request of the two parties. I do not think that it is possible for us to agree on any particular plan and try to impose it on the parties, so that my hon. Friend's proposals are interesting but are not immediately relevant.

  EUROPEAN SCIENTIFIC AND TECHNOLOGICAL COLLABORATION
  Mr. Moormanasked the Prime Minister if he will make a statement on progress in co-ordinating the work of
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  those Departments he charged with the task of preparing the British case for European scientific and technological collaboration.
  The Prime Minister: It is not the practice to make public details of the Government's internal machinery for the co-ordination of policy, but I can assure my hon. Friend that the arrangements in this field, as in others, are working satisfactorily.
  Mr. Moorman: While I appreciate the difficulties involved in making available the evidence of the Inter-departmental Committee, may I remind my right hon. Friend that if we are to retain the credibility and interest of the British case on European science and technology, we should make a statement soon on what we have been doing?
  The Prime Minister: We have done so from time to time and, of course, there was the speech of the Minister of Technology when he visited Strasbourg a few weeks ago. We are now considering what the next proposition should be, particularly in relation to the European Institute of Technology or the European Technological Centre, and I think that my hon. Friend would probably want us to have further discussions with our friends in Europe before we say too much in public.
  Mr. Crouch: Would not the Prime Minister agree that our opportunities for scientific and technological co-operation with the Economic Community would be increased if we took some interim step towards some association with the Economic Community and gave an earnest of our intention to join the Community in such a way?
  The Prime Minister: If the hon. Member means by that Article 238, I have frequently given reasons why I do not think that would be the right answer. In the Benelux proposals which involve contact between us and the Six in advance of negotiation, there is ample opportunity for technological co-operation between us and the Six as a whole.
  Dr. David Owen: Is my right hon. Friend aware that many of us are slightly concerned at the lack of enthusiasm the Government are showing for the proposal for a European laboratory to

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  specialise in molecular biology, and will he look at this closely?
  The Prime Minister: There is not so much lack of enthusiasm, but we are talking particularly in this Question about technological co-operation. There are many important proposals for cooperation in pure science. Some are highly expensive, including the 300 GeV accelerator and other things. It is a question of deciding how our resources are best spent. What we have been trying to stimulate is some interest in a combined European approach to technology rather than necessarily expensive pure research laboratories.
  Mr. Lubbock: Is it not rather a long time since the Prime Minister first made his proposal for a European technological community and surely we have a right to expect that some statement of progress should have been made by now? Will the right hon. Gentleman bear in mind that if a great deal of money is spent on projects like the 300 GeV accelerator that will reduce the amount available for co-operation on technology?
  The Prime Minister: That is what I was trying to imply in my answer to my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) a moment ago. As far as proposals for co-operation on technology are concerned, I first put this forward in November, 1966, and there have been many public statements about it since, but that was on the supposition that we could have full technological co-operation. That could exist and can only exist with in an integrated market. what I put forward last year before the veto was applied in December was rather more limited proposals and we have more recently spelled out what we intend by them. But the responsibility for lack of progress clearly lies on those who applied the veto.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House to state the business of the House for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir. The business for next week will be as follows:
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MONDAY 8TH APRIL—Supply (18th Allotted Day):
Debate on a Motion to take note of the 11th Report from the Estimates Committee, Session 1966–67 and of the 5th Special Report, Session 1967–68 on Prisons, Borstals and Detention Centres.
Lords Amendment to the Education (No. 2) Bill.
Motions on the Matrimonial Causes Order and Rules.
TUESDAY, 9TH APRIL—Remaining stages of the Countryside Bill.
WEDNESDAY, 10TH APRIL—Remaining stages of the Justices of the Peace Bill, of the Sewerage (Scotland) Bill and of the Legitimation (Scotland) Bill [Lords].
Motion on the Foreign Compensation Commission (Egyptian Claims) (Amendment) Rules Approval Instrument, 1968.
THURSDAY, 11TH APRIL—It is expected that the House will meet at 11 a.m., that Questions will be taken until 12 noon, and that the House will Adjourn at 5 o'clock, until Tuesday, 23rd April.
Mr. Heath: Can the Leader of the House give us an undertaking that the House will be able to debate the White Paper on Prices and Incomes as soon as possible after the Easter Recess and before we debate the Bill? Secondly, there has been no response to my request last week that there should be a statement about Forces' pay. Could he ensure that that is made before we rise for Easter? Thirdly, will the Leader of the House be making an announcement before Easter about the composition of his Mark II Cabinet?
Mr. Crossman: With regard to the third question. I think it would not be for me to make a statement. In regard to the second question, I am hoping for a statement next week. In regard to the first question, I am grateful to the right hon. Gentleman. I think we should reflect on this very important White Paper. I shall certainly give time for a full day's debate soon after the Recess.
Mr. Rose: In view of the fact that the war in Nigeria is able to continue only because of the continued supply of British arms, and because of the mounting feeling on this subject, will my right

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hon. Friend provide time for a statement by the Commonwealth Secretary on it?
Mr. Crossman: I do not have to provide time for a statement by the Commonwealth Secretary, but I shall certainly convey to him my hon. Friend's desire for a statement and he will make it if necessary. In the meanwhile, I remind my hon. Friend that he will have opportunities for debating this subject rather narrowly some time next week.
Sir Knox Cunningham: Can the Leader of the House give time before the Recess for a debate on the Government changes and say whether he himself will be in the Mark II version?
Mr. Crossman: I would not like to commit myself, but in what we are going to discuss next week there will, of course, be opportunities under the new Standing Order for the hon. Member to seek to debate something as an emergency on a critical or crisis resolution.
Mr. Winnick: Could the Leader of the House tell us whether there will be a debate on the new Race Relations Bill more or less when we come back after the Recess?
Mr. Crossman: I think I can say definitely now that the Bill will be published on Tuesday next week and we shall have a debate on Second Reading in the first week on the return.
Sir G. Nabarro: Will the right hon. Gentleman confirm that the Finance Bill will be brought in and read the First time before the Easter Recess, and, if so, on what day? Having regard to the fact that only 20 members of the Opposition may sit on the Standing Committee, whereas a very large number of Members will wish to express their views, may we be assured that two days will be allowed for Second Reading of the Finance Bill instead of the customary one day?
Mr. Crossman: I am hoping to have the publication of the Bill on Wednesday next week in good time since we shall be debating it on Second Reading immediately on our return. As for the second question, which is not strictly a question on business for next week, I should have thought that the hon. Member would be raising the issue of the
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amount of time spent on Report stage rather than on Second Reading; but this is something which we can discuss.
Mr. William Hamilton: Can my right hon. Friend say whether a statement will be made next week on the House of Lords negotiations? If not, can he say when the White Paper on this matter will be published?
Mr. Crossman: I think that all I had better do this afternoon is to refer my hon. Friend to the extremely full and detailed statement made by the Prime Minister in answer to the Question on Tuesday.
Sir D. Renton: Is the right hon. Gentleman aware that if the Race Relations Bill is published next Tuesday it will give only that day and the next day before we adjourn for Easter for hon. Members to read and discuss it with each other? Will he therefore be so good as not to have it discussed on Second Reading too soon after we return from the Recess?
Mr. Crossman: In all seriousness, I should have thought that the ability to read does not cease immediately with the Recess.
Mr. C. Pannell: Is the Leader of the House aware that it is now some little time since the Select Committee reported on Privilege and we have to get down to that sooner or later? Will he bear in mind that this might very well be debated soon after we come back?
Mr. Crossman: I agree with my right hon. Friend that this is a very important question. I have not had great pressure to debate the Report, although it is an extremely important report. At least one aspect of the Report is becoming very urgent as a result of the experiment in radio reporting of proceedings, because the whole question of defamation must come up and that aspect we shall have to discuss fairly soon.
Mr. Thorpe: Since the House is often criticised for spending vast sums of money with inadequate debate by hon. Members on both sides of the House, would the Leader of the House give serious reconsideration to the point that we should have at least two days for the Second Reading of the Finance Bill?
Mr. Crossman: I shall certainly give consideration to that, but I think that we had better wait and see the Finance Bill before we judge how long we need to debate it. I should have thought that the one day for Second Reading was adequate, but then we must have adequate discussion in Committee upstairs, then we have Recommittal—and I have given a clear understanding to the House that the Bill will be recommitted with full debate—and then we have Report. I should have thought that the occasion to consider the amount of time is not on Second Reading but on the other stages of the Bill, but I am willing to consider again what I thought before this afternoon was a wise decision.
Mr. Heath: Will the Leader of the House at least keep an open mind on the matter, because I do not think that it is only a question of how much time we use after the Committee stage. Many hon. Members will wish to make their views plain about the details of the Finance Bill to those Members on the Committee before it goes upstairs.
Mr. Crossman: I appreciate the very reasonable way the right hon. Gentlemen are putting this to me. I will reconsider this and discuss it through the usual channels.
Mr. Orme: Will my right hon. Friend consider having a debate next week on the T.U.C. economic statement, which talks about economic growth, and forget a)out the new White Paper on prices and incomes, which will retard growth?
Mr. Crossman: I am not forgetting about it. I am suggesting that we should have a long and careful consideration of it during the Recess so that we improve our understanding of it.
Mr. Boyd-Carpenter: In the reconsideration that the right hon. Gentleman said that he would be good enough to give to the proposal to provide two days for the Second Reading of the Finance Bill, will he have particularly in mind that in a one-day debate it is inevitable that a large proportion of the time is taken up by the two Front Benches, and that that would mean the Bill's going upstairs to Committee without the great majority of hon. Members having an opportunity of putting their views until
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the Report stage, when it may well be too late to influence opinion?
Mr. Crossman: I am very well aware that when we are taking this unprecedented action of putting it upstairs we should reconsider all stages of the Bill very carefully.
Mr. Moorman: As it is clear that we shall not discuss the Report of the Wilson Committee of inquiry on Bristol-Siddeley, will my right hon. Friend indicate what he intends to do about this immediately after the Recess?
Mr. Crossman: I think that I can say in the presence of the Chairman that we hope to receive the Report next week, I think on the 9th. I can give the House a clear assurance that we shall consider it in a full day's debate during the week we return.
Mr. Awdry: Is the Leader of the House aware that the effect of the guillotine Motion on the Transport Bill is that six important Clauses will never be discussed by the Standing Committee? Will he give consideration to another day on the Report stage to make up for that?
Mr. Crossman: I do not think that on the business of next week I can discuss how the proceedings of the Committee are going.
Mr. Heffer: Will my right hon. Friend give the White Paper on prices and incomes even deeper and longer consideration and suggest that we postpone the debate on it until after the Summer Recess?
Mr. Crossman: I am always willing to consider that there must be a kind of medium between one's desires, and I should have thought that we should consider this important White Paper and have a full day's debate on it a reasonably short period after we return from the Recess.
Sir H. Legge-Bourke: Does the Leader of the House recall that his right hon. Friend the Minister of Technology said that he expected to make a statement about the future of the nuclear reactor industry and the Atomic Energy Authority before Easter? Can we expect that statement next week?
Mr. Crossman: I am aware of this and I have discussed it with my right hon.

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Friend. I am afraid that the statement will not now come before the Recess. The hon. Gentleman will appreciate that this is an extremely important decision about a major industry, and I hope that he will also appreciate that there are reasons why it must be postponed till after the Recess.
Mr. Pavitt: In view of recent events, will my right hon. Friend find time to discuss the Early Day Motion in my name and that of several of my hon. Friends which expresses our appreciation to U Thant for his efforts in Vietnam? If he cannot do that, will he convey the message to the Secretary General of the United Nations through Lord Caradon?
That this House welcomes visits to this country by U Thant, Secretary General of the United Nations, and wishes to place on record its admiration and gratitude for his tireless and courageous efforts to end the tragic war in Vietnam.
Mr. Crossman: Yes, Sir.
Mr. John Wells: Will the Leader of the House find time in the near future for the Second Reading of the Customs Duties (Dumping and Subsidies) Amendment Bill, which was not reached last night? This Measure is of considerable importance to agriculture and horticulture, and it is important that it should go forward before the season has passed.
Mr. Crossman: I agree with the hon. Gentleman about the urgency of the Measure, and we shall certainly have it as soon as possible.
Dr. John Danwoody: With regard to the situation in Vietnam, will my right hon. Friend assure the House that if Britain is asked, through her co-Chairmanship of the Geneva Conference, to play a more active part in helping to reach a solution, the House will have an opportunity of discussing the matter?
Mr. Crossman: I listened very carefully to my hon. Friend's words. I can give an affirmative answer to the particular form of expression "if we are asked to help" and say that there will be an opportunity of discussing it in those circumstances. I cannot say that there will be an opportunity of discussing it before any decision is taken.
Sir R. Russell: Will the right hon. Gentleman now answer the question I put to him last week, namely, when the Home
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Secretary will introduce legislation to implement the Littlewood Report?
Mr. Crossman: I wish that I could give a precise answer. I know the importance the hon. Gentleman attaches to the question and I hope that I can give a better answer next week.
Mr. Russell Kerr: In view of the catastrophic fall in the morale of millions of workers and trades unionists following publication of the Government's White Paper on prices and incomes, will my right hon. Friend give us time to have a debate on the subject, if not next week, then in the near future?
Mr. Crossman: I think that I gave my answer to that question before it was put to me.
Dame Irene Ward: Has the right hon. Gentleman seen the Early Day Motion in my name relating to the failure of the Financial Secretary to the Treasury to move his Resolutions last Monday night? Could the Leader of the House kindly let me know whether the Finanical Secretary will make an apology for putting the House to the trouble he did?
[That, in the opinion of this House, on the examination of the Records, the failure of the Financial Secretary to the Treasury to be on the Treasury Bench to move, as was his obligation, his resolutions on double taxation, which were nodded through unexpectedly by a Government Whip as a Treasury Minister, resulted in depriving the hon. Members for Nottingham, West, and Tynemouth from their legitimate parliamentary business and that an apology from the Financial Secretary to the Treasury is due to the House and the hon. Members.]
Mr. CrossmanI hesitate to say this to the hon. Lady, but I gather from hearsay that it was her absence as well as that of my hon. Friend that exaggerated the catastrophe which occurred.
Dame Irene Ward: On a point of order, Mr. Speaker. As the right hon. Gentleman has given me an entirely false answer and it is very well known what happened, what protection have I against the right hon. Gentleman?
Mr. Speaker: I have never known the hon. Lady find it difficult to protect herself.
Mr. Arthur Lewis: In view of the remarks by my right hon. Friend about the White Paper on incomes policy, may I ask him, as it is obvious that the Government would earnestly desire to have a true reflection of the opinion of the House, if he will have discussions through the usual channels to see that we have a completely free vote?
Mr. Crossman: I am now being asked questions about the Orders of the House and the business. As for voting, that is a matter for my right hon. Friend the Patronage Secretary.
Mr. MacArthur: Will the Leader of the House give us an assurance that when the Government reply to the Second Reading debate on the Finance Bill Ministers will pay some attention to questions asked during the debate? Can ht assure us that we shall not again experience the arrogant disregard for points raised by hon. Members that we experienced during the four days' debate on the Budget?
Mr. Crossman: I am really here only to answer questions about next week's business, but I shall pass on to my right hon. Friend the Chancellor of the Exchequer the strictures, which I am sure are unjustified, that the hon. Gentleman has just made.
Mr. Hugh Jenkins: Is my right hon. Friend aware that my right hon. Friend the Parliamentary Secretary to the Treasury artificially terminated a private Members' debate on Friday? Will he request him not to do the same this week or in any other week?
Mr. Crossman: I should not think that I could extend next week's business backwards to last Friday's proceedings.
Mr. Jopling: Is the right hon. Gentleman aware that on present indications the teleprinter news service is likely to disappear from the House within the next few months? In view of the very serious disadvantage that that will place hon. Members in, will he give time for a short debate on this emerging situation and the possibilities of replacing the tape with something else?
Mr. Crossman: I wish that our debates could always produce action and results. This is a matter which the Services Com
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mittee, an all-party Committee, is very much alerted to. It is quite a serious situation for us, as for others outside, and we are very much concerned to get a substitute for Extel.
Mr. Lubbock: When the Select Committee was debating the nuclear reactor industry, it was impressed upon us that we had to arrive at a solution as quickly as possible so that the Government could make up their mind. Yet the Minister of Technology has taken nearly as long to give his reaction to the Report as the Report itself took to produce. Will the Leader of the House make representations to the Minister that a statement should be made before the Easter Recess?
Mr. Crossman: I would not attempt to deceive the hon. Gentleman. There is no prospect of a statement before the Easter Recess. On reflection, I now realise that it would have been better for us to have debated the Report of the Select Committee very soon after its publication in view of the delay involved in ensuring that we get the right answers by the two Ministers. But we have to learn these things by experience, and I have learnt on this occasion.
Mr. Onslow: Is the right hon. Gentleman aware that the inept behaviour of the Patronage Secretary last Friday prevented the Minister of State, Board of Trade—
Mr. Speaker: Order. We cannot have an inquest at business question time. The hon. Gentleman must ask a question about the business ahead.
Mr. Onslow: I shall do so, Mr. Speaker, and I apologise for my preamble. Will the Leader of the House make it possible for the Minister of State, Board of Trade, to make a statement on the question of noise certification, about which I believe he has something to tell the House?
Mr. Crossman: I cannot look back to last Friday, but I suspect that during the course of next week the hon. Gentleman will have an opportunity, if he uses it, to raise his complaint on the Adjournment Motion for the Easter Recess.
Mr. Crouch: Are the Government still considering the question of the Channel tunnel? Can the Minister of Transport make a statement soon?
Mr. Crossman: If the hon. Gentleman wishes me to put that point to my right hon. Friend, I will communicate to her his wish for a statement.
Rear-Admiral Morgan Giles: Can the right hon. Gentleman promise a Government statement about the four British ships which have been detained in the Suez Canal for about 10 months and on the condition of their crews?
Mr. Crossman: I do not think that I can promise a statement, but I will ask my right hon. Friend the Foreign Secretary whether there is any new information which would justify one. Otherwise, there are opportunities for back benchers to raise the matter next week.

SCOTLAND (STORM DAMAGE)
The Secretary of State for Scotland (Mr. William Ross): With your permission, Mr. Speaker, I should like to make a further statement about storm damage in Scotland.
We debated in this House on 7th February the disastrous effects of the storm which struck Scotland on the night of 14th-15th January. I then promised to keep the House informed of the steps taken to rehabilitate the areas affected by storm damage.
As soon as the effects of the storm had been assessed, it was apparent that complete rehabilitation would inevitably be a long progress. The Government's efforts have been directed first towards making temporary repairs, so that the worst hardships were quickly removed; and then to seeing that the work of permanent repair is finished as quickly as is humanly possible.
Unfortunately bad weather has hampered operations. There was a dry and calm spell immediately after the storm, but since then the West of Scotland has suffered three periods of strong gales accompanied by driving rain and snow. It has been necessary on these occasions to divert workmen from permanent repairs to replace temporary roof coverings which had been blown away or penetrated.
Despite these difficult conditions, a great deal has been achieved. All the damaged local authority houses, numbering nearly 200,000—over 70,000 of them
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in Glasgow—were made wind and watertight at an early stage, and over 63,000 of them have now been permanently repaired. Repairs to houses owned by the Scottish Special Housing Association and the four new town corporations are proceeding satisfactorily.
Many owners whose houses are covered by comprehensive insurance are dealing with their own repairs. However, I informed the House on 25th January that I was arranging for local authorities to organise the repair of private houses where this was necessary to avoid delay. These arrangements rested on the provision of capital by the Government, the commissioning and payment of work by the local authorities, and the acceptance by owners of ultimate responsibility for the cost. The most intractable problem has been the repair of tenements in multiple ownership, many of which are inadequately insured.
Outside Glasgow, local councils have made themselves responsible for organising permanent repairs to the roofs of over 14,000 houses. Work on over 2,500 of these has been completed, and the councils assure me that all the roofs will be permanently repaired before the end of the summer.
In Glasgow, the storm damaged the roofs of some 10,000 privately-owned tenements: 5,000 of these were seriously damaged. This meant that some 80,000 households were, or could be, affected. Permanent repairs to these houses were proceeding fairly well until the weekend of 16th-17th March, when another bad storm struck the City, and the temporary patching suffered severely. A labour force of some 700 men, drawn from the Corporation's direct labour force, the Scottish Special Housing Association, and the private contractors' labour force, was set to work.
Under the direction of the General Manager of the Corporation's Building Department, this force has overcome the renewed emergency, and the Corporation and the Master Slaters have agreed to work together to ensure that all private houses in the city are fit to withstand next autumn's weather.
To achieve this, the methods of repair are being modified where necessary: strapping and roofing felt, durable enough to stand up to any weather for several

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years, will be used. My hon. Friend the Minister of State, who discussed these arrangements last Friday in the City, has been assured by all those concerned that the existing labour force is sufficient to ensure that, by September, repairs will be completed which will fully safeguard all the roofs. Labour and finance have been, and are, the two key factors in this whole operation.
From the outset, everything possible has been done by the local and central authorities to assemble and dispose to best advantage the necessary labour force. The Ministry of Labour have combed Scotland for men, and have brought some from England. For Glasgow's needs men have been drawn from the Corporation's staff, from local contractors and from the Scottish Special Housing Association. The men have all worked magnificently, often in very difficult conditions. The work has called for an outstanding degree of trained skill, because of the high pitched roofs of the tenements. Let no one underestimate the danger of this work in the sort of weather we have experienced. I am sorry to say that six lives have been lost.
As to finance, the arrangements which the local authorities have made, with the backing of Government advances, have been deigned to ensure that no repair need be delayed because of lack of means. The private owners and factors have been assured that when local authorities are arranging to recover the costs of repairs they will examine each case individually and ensure that recovery does not cause hardship. Any deficit which a local authority incurs because of this will attract the special 75 per cent. Government grant. These arrangements are being administered flexibly: in urgent cases local authorities are giving instructions for repairs to be undertaken before all the formalities have been completed.
Since the storm there has been close co-operation between the central departments and the local authorities. I would like to pay a special tribute to the Lord Provost of Glasgow, who has shown outstanding qualities of leadership during the City's period of trial.
If I deal more briefly with the damage to agriculture and horticulture it is not because the Government underestimate the severe losses these industries have suffered, but because fewer complications
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have arisen in helping farmers and growers to overcome the difficulties. As an indication of the severity of the damage, I can tell the House that the estimated cost of the work covered in applications made to my Department under the various improvement schemes is now over £1 million.
However, I now expect that the restoration of damage to farm buildings will be completed within three months: in many instances farmers are taking the opportunity of making improvements under the schemes of assistance rather than restoring existing buildings. Repair work to horticultural properties is virtually complete. Where rebuilding of glass-houses is involved some delay has taken place because of the need to concentrate on seasonal work at this time of the year. I am glad to say that labour and materials are not presenting any serious problems either to farmers or to horticulturists.
As regards forestry, I have now considered the Forestry Commission's advice on the report of the Action Group. I am indebted to the Group for the speed with which they did their work. As I announced on 26th March, we have urged local authorities and wood using industries to give preference to home-grown timber whenever possible in the next two years. We are also appealing to private woodland owners to exercise restraint in felling meanwhile, and the Forestry Commission is giving a lead in this direction. In addition we propose to offer assistance in two ways.
First, an allowance for extra cost will be made to assist in the dispersal of sawmill timber to potential markets in other parts of the country. This will help to ensure that there is no glut in local markets which might result in valuable timber being allowed to rot. This assistance will be administered by the Forestry Commission, and will be payable to those bearing the transport charge. The Forestry Commission is working on the details and an announcement will be made early next week.
Secondly, we have given a good deal of thought to the provision of additional heavy machinery which will be needed to extract and handle the windblown timber. The timber trade will no doubt meet some of this requirement themselves. But in view of the temporary need for the

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plant the Government recognise that the trade may not be able to find all the capital for short-term investment on the necessary scale. We are, therefore, arranging for the Forestry Commission to hire out machinery to owners and timber merchants at commercial rates. Full details will be announced by the Forestry Commission.
Mr. Noble: May I thank the Secretary of State for his very long statement. I am bound to admit, though, that I find it deeply distressing to the extent that the length of his statement is not matched by its contents or the indication of any Government action to deal with this very serious crisis. It seems to me that after two and a half months—and I accept what the Secretary of State has said about the weather, although that is not unusual at this time of the year—less than one-third of the council houses have yet been permanently repaired, and outside Glasgow the total is less than one-fifth. This seems to me to be a very slow rate of progress in the circumstances.
In regard to multiple housing, which everybody in our debate on the 7th February realised was a major problem, the Secretary of State has told us that it is intractable. Is there not something he can do, some urgent action he can take, in order to stop these houses deteriorating as they are very fast today? The Secretary of State has told us that the councils assure him that all the roofs will be in some state of repair by September, but does the Secretary of State mean only the council house roofs?—because these are the figures he is giving us and he is saying practically nothing about private housing.
May I turn to agriculture. What I have heard is that there is little or no chance of the agricultural buildings being repaired in three months, as the Secretary of State says he understands to be the case. That is totally different from what the farming community is telling me. It may be that labour and materials are available, but certainly the Government are doing nothing about the cost, and this was a very important part of our debate on 7th February.
In regard to forestry, I would thank the Secretary of State for the promise of help on transport and we shall await the statement that the Commission or the
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Secretary of State—I am not certain which—is to make early next week. But is it possible for the Forestry Commission to supply the extra machinery? Surely, they have an enormous task on their own hands and will need all the machinery they have; and, again, this does not seem to me to meet the demand that was made in our debate. I apologise for the length of my question, but it was a very long statement. May I ask the Secretary of State whether he does not now consider the situation is so serious that it needs the full-time or practically full-time attention of one of his Ministers in the Scottish Office in order to co-ordinate the immediate steps that are needed to prevent the rapid deterioration which is occurring in houses in Glasgow and elsewhere, and is he sure there are no more men available from elsewhere to come and help Glasgow in what is today a really desperate situation?
Mr. Ross: If the hon. Gentleman looks at the figures I have given he will discover that they cover outside of Glasgow not only the local authority housing; and I believe that outside of Glasgow the local authority housing figure is even better than that within Glasgow. I was dealing with both sides there. Of course, we all admit that the multiple ownership of Glasgow tenements is a difficult problem, as the hon. Gentleman will appreciate, where we have six or seven owners and probably, over and above that, a factor who has the control of the unsold properties, all trying to agree in relation to who is responsible; so that it is going to take quite a long time.
I am sorry to say we have found evidence that there is not always cooperation between the factor and the owners. This was one of the reasons why we set up the special arrangements in relation to finance, in order that people could get on with the work and sort out these things later. But I hope the hon. Gentleman does not underestimate the difficulties in relation to that.
The hon. Gentleman said that the Government were doing nothing about cost in relation to the farming community. The only reason that I am able to give the House the figure I have given—over £1 million—is because in respect of this,

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under the farm improvements scheme, the Government are paying between 30 and 38⅓ per cent.
I am sorry I did not make it clear when I spoke of machinery being hired out, in relation to the Forestry Commission, that this is additional machinery which I am authorising the Forestry Commission to purchase so that they will have available extra machinery which we could not expect merchants to procure themselves for a temporary purpose.
Dr. Miller: We appreciate the efforts being made by my right hon. Friend it this matter, and we also appreciate the fact that although we know storms and rain are frequent in February and March in Scotland this does not make the problem any easier. There still remains the problem of how to tackle these difficulties. But is my hon. Friend aware that two problems still remain? The first is that there seems to be, at any rate, a lack of co-ordination, of some kind of co-ordinating committee or influence, to which further damage can be notified.
Mr. Speaker: Order. Questions on this statement must be reasonably brief.
Dr. Miller: I am sorry, Mr. Speaker, but as was indicated, it was a rather long statement. I will be as brief as I can. There seems to be the lack of a co-ordinating committee to which further damage can be reported, so that action can be taken even from a temporary point of view. The second thing that is lacking, from a longer-term point of view, is some kind of communication with the public, some means of indicating to them when their particular building will be permanently repaired.
Mr. Ross: These are very valid points and I would be the first to admit that I have not been satisfied with the coordination achieved in Glasgow. My hon. Friend the Minister of State was there last week and he is there today. He has been having discussions this morning and this afternoon, and I shall be seeing him tonight. I have already arranged for him to inform the corporation that I would like to see it on 19th April, and I will see that this point is really covered.
As regards long-term communication with the public, this, of course, is one of the difficulties. We cannot expect
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people to be other than subjective about this when their own house is either directly or indirectly affected.
I must apologise to hon. Gentlemen for not covering this point, but what is holding us up at the moment is the massive task which is before Glasgow and the number of people with whom we have had to deal. We have combed Glasgow. I saw a statement, I believe by the hon. Gentleman the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), suggesting that there were thousands of people unemployed in the building trade who could assist.
Mr. Edward M. Taylor: That is untrue. My suggestion was that they could be employed on building new houses.
Mr. Ross: I can tell the hon. Gentleman that we looked into this in respect of the whole of Scotland; and the number of unemployed slaters and felters was 33, of whom only six were available for work or able to come to Glasgow to do such work. Their names were supplied to the firms. There has probably been an over-estimate of what Glasgow can do on its own, and that is one of the reasons why we have to make better use of the men and materials available for this semi-permanent repair and why we are combing the whole of the United Kingdom for men. The bottleneck is not money, but labour, but it should not be thought that the difficulty will be easily overcome. However, it follows that we want central control and a discipline of priorities about which work can wait and which cannot.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I must protect the business of the House, I hope that hon. and right hon. Gentlemen will ask reasonably brief questions and give reasonably brief answers.
Mr. Stodart: Is the right hon. Gentleman aware that his statement about forestry compares very unfavourably with the equivalent statement which was made in 1953 in a considerably shorter time? He referred to an allowance for extra cost; can he assure us that it will be no less than the figure of two-thirds which was given in 1953? Is he aware that a growing number of people regard the administration in Scotland as falling very

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far short of that which followed the "Torrey Canyon" incident?
Mr. Ross: The hon. Gentleman is comparing things which are not alike. He will appreciate that 90 per cent. of the windfalls in 1953 were in private forests, whereas on this occasion it was less than 50 per cent., and that marketing is affected by different location. This is a rather complicated scheme, because it relates to the location of the damage and to whether taking the timber to the market is taking it away from its ultimate market. I would rather he awaited the exact details of the scheme.
Mr. Adam Hunter: Should not the policy of giving financial assistance to local authority properties which were not insured be extended to people with private properties who found themselves in exceptional circumstances and who inadvertently were insured for everything but storm damage?
Mr. Ross: I have now made it plain at least three times that if such people have the repairs approved by a local authority, the local authority will be able to assess any hardship and give more time to pay, or allow such people to pay very much less than the cost.
Miss Harvie Anderson: Is the right hon. Gentleman aware that many of us are concerned about multiple ownership in tenement properties and that it is not all within the boundaries of the City of Glasgow? Can he assure the House that, subsequent to 25th January, adequate instructions were issued to local authorities pointing out their responsibility for not only repairing local authority housing, but organising the repair of private property? Was there an instruction other than that contained in Circular 3 of 26th January?
Mr. Ross: There was no instruction, because local authorities cannot be given what is not their statutory duty. All local authorities have accepted this responsibility.
Miss Harvie Anderson indicated dissent.
Mr. Ross: If the hon. Lady has any details, I should be glad to have them. My information is that the local authori
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ties in the smaller areas with a lesser problem are getting on very well.
Mr. Eadie: Is my right hon. Friend satisfied that there has been the maximum expedition in advising and assisting glasshouse horticulturists? Can he tell the House what advance there has been with developments in wind resistant structures so that such a disaster may not recur?
Mr. Ross: In my original statement I drew attention to the kind of buildings which had best withstood the wind. I hope that we shall be able to learn from our experience and to give advice. I understand that there has been close contact between the Department and individual horticulturists whose glass houses have been damaged.
Sir F. Maclean: What does the right hon. Gentleman mean exactly by "wind and watertight"? Many of the tarpaulins which were originally put on are now flapping in the breeze and letting in the rain. Is there not a shortage of slates?
Mr. Ross: I have had no information about a shortage of slates. Eradication of penetration by rain is one of the problems, and many tarpaulins have had to be replaced.
Mr. Dalyell: Is there a shortage of tarpaulins? Is my right hon. Friend aware that, contrary to the general belief expressed on both sides of the House, many people think that both his officials in the Scottish Office and local authorities have done very well in the circumstances and that much of the carping is out of place?
Mr. Ross: The local authorities have done a wonderful job. If the operation were entirely within their control, or could be entirely within their control, we might have a better centrally directed effort, but as many of the building firms in Glasgow are themselves property owners, and so, naturally, tend to deal with their own properties first, such direction has not been possible. The insurance companies have done a very good job and I understand that they have already provided £400,000 in respect of 8,000 claims for the repair of houses in Glasgow.
Mr. James Davidson: I have some questions about storm damage in the rural areas. First, on what percentage basis will grants be decided for farmers who take the opportunity to carry out improvements at the same time as repairing storm damage? Secondly, will the allowance for the extra cost in the dispersal of timber to avoid overloading local saw mills allow for the additional cost arising from the increase in petrol tax and the increase in licence duty?
Mr. Ross: I can assure the hon. Gentleman that it will make due allowance for the total extra cost which would otherwise arise. If farm improvements fall within the scheme, they will attract the appropriate percentage and I have already told the House that we are interpreting that very flexibly.
Mr. Rankin: Is my right hon. Friend aware that in Govan the temporary repairs were quite ineffective? Is he further aware that at the end of two months no permanent repairs had been started? Can ha assure us that something speedier will be on the way very soon?
Mr. Ross: My hon. Friend must appreciate not only the complexity of the operation, but its massive nature. The roofs of Glasgow took generations to build and it will take more than a few months to repair them permanently. We hope to get on very much more quickly with roof felting and then do full repairs with roof slating.
Mr. Wright: I congratulate the Secretary of State on the clarity of his statement, but I emphasise that he has omitted a number of fundamental issues. One, there is no sense in Glasgow of an imaginative lead from Westminster. Two, the people of Glasgow are not sure to whom to make their appeals. The right hon. Gentleman spoke of the general manager of the housing department—
Mr. Speaker: Order. We cannot have a speech now. Hon. Members must ask questions.
Mr. Wright: I apologise, Mr. Speaker. May I make three sharp sentences? First, there is inadequate knowledge of to whom appeals should be addressed. Two, there is inadequate attention to priorities. For instance, I have had a letter from a constituent saying that because she has no
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children, her need is being neglected, although every room in her house is incapable of being lived in.
Mr. Speaker: Every long question cuts out another questioner.
Mr. Ross: The hon. Gentleman will not expect me to be able to deal with individual cases without notice. This is a matter for someone on the spot in Glasgow to sort out. The hon. Gentleman said that people did not know with whom to get in touch to get help. I do not look at television very often, but I heard the Lord Provost of Glasgow announce on television only last Friday night exactly where these appeals should be addressed.
Mr. MacArthur: Does the right hon. Gentleman realise that his statement today will be bitterly disappointing to those whose hopes he raised on 7th February by thoughts of realistic action? Is he aware that forestry interests in Scotland will be shocked by his vagueness about a transport subvention and other questions on which precise decisions were expected today? Further, does he intend to provide no further help for farmers and horticulturists who have to find for themselves up to 87½ per cent. of the losses they have suffered in what we were told was to be treated as a national disaster?
Mr. Ross: As regards forestry, inevitably I could not go into detail today. The details are complicated, but I stated that they would be issued early next week by the Forestry Commission, which will itself administer the scheme.
On the other matters which the hon. Gentleman raised, he should appreciate that the liabilities which the Government are taking on under the Farm Improvements Scheme are very considerable. There are probably many more people who would like to have 38 per cent. of their costs met in this way. Many of these troubles could have been covered by insurance, and by many other people they were.
Mr. Monro: Despite the efforts of the Secretary of State and the local authorities, the people of Scotland do not feel that enough is being done. Will not the Secretary of State take more seriously the suggestion that one of his Ministers should go to Glasgow and stay there,

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taking control, until much more substantial progress is made?
Mr. Ross: No, Sir. I am satisfied with what was done. We did that during the emergency, and we had Ministers there—not necessarily the same Minister all the time—probably every day. We allocated particular staff to deal with the emergency, and they were there. We have allocated staff from the Scottish Office to be there, and they are there even now.
If further action is needed, arising out of the discussions which my hon. Friend the Minister of State is having today, it will be taken in order to strengthen the organisation which Glasgow requires. But I am perfectly certain that the local authorities—I have faith in the local authorities—have shown both outside Glasgow as well as inside how well they can cope with this problem.
Mr. Edward M. Taylor: As a committee of Ministers dealt with the fenland floods in 1957, and a Cabinet emergency committee was set up to deal with the "Torrey Canyon" emergency, why will not the Secretary of State send one Minister to deal with this problem until it is solved? One of the main troubles in Glasgow is a shortage of information and advice. Will not the Secretary of State take the initiative in setting up an office in each affected area to which people can go for legal and technical advice, as lack of it is often what is holding them back from signing the forms to get the work going?
Mr. Ross: We set up a special office in Glasgow. I am surprised that the hon. Gentleman did not know about it. It is not Ministers we want in Glasgow today. We want slaters. Recalling the high, pitched roofs of the tenements in Glasgow, I assure the hon. Gentleman that that is the shortage which is holding things up. We want slaters, more slaters, and we are combing Great Britain for them.

ORDERS OF THE DAY

  AIR CORPORATIONS BILL
  Order for Second Reading read.
  4.23 p.m.
  The President of the Board of Trade (Mr. Anthony Crosland): I beg to move, That the Bill be now read a Second time.
  The object of this Bill is to raise the limit on B.E.A.'s borrowing powers, which now relate mainly to borrowing on capital account, and also to confer a new, but limited, power to borrow to finance a deficit on revenue account.
  In the debate last November on the draft British European Airways Corporation (Borrowing Powers) Order 1967, my hon. Friend the Minister of State explained that the Air Corporations Act, 1962, had set a limit of £110 million on B.E.A.'s borrowings, which could be increased to £125 million by an affirmative Resolution Order. In asking the House to approve that Order, my hon. Friend forecast that B.E.A.'s borrowings would approach the £125 million limit soon after the close of the last financial year. I now estimate that they will reach this limit by about the end of May, and we must, therefore, make additional provision if B.E.A. is to continue to invest in its expanding business.
  The House has debated B.E.A.'s affairs on many occasions and is, therefore, well aware of how this money has been invested over the years. B.E.A.'s operations extend from Norway to the Middle East, from Casablanca to Moscow. They account for two-thirds of the traffic carried on scheduled air services in the United Kingdom; for over 22 per cent. of all passengers carried by air within Europe, making B.E.A. the largest carrier of intra-European traffic; and for a total of nearly 7½ million passengers carried per year, making B.E.A. the sixth largest carrier of air passengers in the world. B.E.A. now has a fleet of about 100 aircraft, including the fleet of 23 Trident I aircraft which has come into operation as the major capacity provider.
  Aircraft constitute about 80 per cent. of any airline's capital investment, but one should not forget the varied and often costly facilities needed on the

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  ground—terminals, ground equipment, workshops and widespread sales organisation. It is for these purposes that B.E.A. has spent the capital which it has borrowed under past statutes. But its future borrowing needs will be considerably higher, for replacing older aircraft and providing for further expansion of traffic. Deliveries have just started of the 15 Trident 2s which will cater for its longer-haul services, and B.E.A. now has about £20 million of payments still to be made on these. Deliveries will start this summer of the 18 BAC 1–11s, which will replace Vanguards with jets, notably on the highly competitive German and Irish services; and about £24 million of payments are still to be made for these.
  As the House knows, B.E.A. has now asked to buy 26 Trident 3Bs at a cost of about £80 million. I have given my approval in principle, but detailed negotiations are not yet complete. The Trident 3B will be a most useful addition to B.E.A.'s fleet, as the longest jet aircraft in its fleet and one with an economic short-range performance. I know that B.E.A. was disappointed when I announced last December that the Government could not support the BAC 2–11 project. But, at a time when we are being urged to restrain the growth of public expenditure, the total cost of this project to the Exchequer would be far more than we could contemplate. True, the success of the RB.2–11 engine in the United States means that we could now deduct the launching costs of the engine from the total cost; but, even so, the BAC 2–11 would still be about four times more costly to launch than the Trident 3B. I note that last October's Report on B.E.A. by the Select Committee said that,
  "the Government has no obligation to B.E.A. to cause the aircraft of B.E.A.'s choice to be developed, if it can be shown that the development of another type will be cheaper, taking into account all the expenses involved".
  Finally, B.E.A. must have in mind the progress payments it will need to make on the airbus, which should come into service in the mid-1970s. We all hope that the European airbus will prove, on performance and cost, a successful contender for orders from B.E.A. and many other airlines.
  In short, civil aviation has been, and will continue to be, a rapidly expanding
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  business, and the capital cost of its main asset, aircraft, continues to rise year by year as technology develops. To keep in the running, B.E.A. must have the additional capital it needs.
  There has been some argument in the past, and some confusion, about the respective rôles of the Corporation and the Government in determining B.E.A.'s capital investment. The Select Committee, in its Report last year, discussed this at some length and greatly helped to clarify the matter. First, it noted that the borrowing limit, which is the subject of this Bill, is a limitation on the Minister's power to lend, not an authorisation to B.E.A. to spend. But since common sense dictates that I should look some five years ahead, I must, naturally, be guided by the forward plans of B.E.A. At this stage, detailed purchasing programmes may or may not exist; but by consultation with B.E.A. I can make a broad assessment of what funds will be required.
  Secondly, within these borrowing limits, the Corporation's major investment proposals require specific Government approval. It is sometimes said that government is slow in authorising the purchase of aircraft and pedantic in insisting on full information and justification. I think the Select Committee disposed of this general criticism. We are dealing with very large sums of public money which can involve the Government in an additional commitment to participate in launching costs. The House would not be satisfied with anything short of a most rigorous examination of the need for the investment and the likely return on it.
  We have now codified for B.E.A. and B.O.A.C. the kind of information that will be required both for the annual investment forecasts and for particular investment proposals. This will enable the two Corporations to follow the same pattern in their internal discussions of projects, and so save time and effort.
  The House will recall that, in August, 1966, the then Minister of Aviation, when he announced that B.E.A. would buy British aircraft for its re-equipment programme, said that the Government
  "… will take steps to ensure that B.E.A. is able to operate as a fully commercial undertaking with the fleet it acquires."—[OFFICIAL REPORT, 2nd August, 1966; Vol. 733, c. 261.]
  We are nearing the end of negotiations on how that pledge will be implemented;

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  and, if I can, I will tell the House the outcome during the passage of the present Bill. I should have preferred it if the present Bill could have dealt with those arrangements also; but B.E.A.'s borrowing powers were running out, and so we found it unavoidable to proceed in two stages.
  I turn now to the Bill itself. Its first object is to increase the limit for borrowings on capital account for five years ahead. To arrive at the right figure for the new limit, we have first to estimate what B.E.A. is likely to spend on capital account over this period, the extent to which this can reasonably be financed from internal resources and so the amount which falls to be met by borrowing.
  The best estimate that I can make is that B.E.A.'s capital spending will amount to some £199 million over the next five years. I have already mentioned most of the items which make up this amount. On one major assumption, which I will explain in a moment, B.E.A. expects to be able to provide £86 million of this from its own resources—from depreciation, sales of aircraft, and so on. Given that its revenue is almost wholly determined by regulated prices, this seems to me a not unreasonable proportion of its capital needs to be met from internal sources. So, we are left with a borrowing requirement of £113 million. Adding this to the £117 million which B.E.A. has borrowed up to the end of March this year, we have a total of £230 million towards the overall limit of £240 million specified in Clause 1(1) of this Bill.
  It is also the practice to set an intermediate borrowing limit, for a date about half-way through these five year periods, which can be exceeded only after a draft Order has been approved by this House. By about the end of 1970, B.E.A. is likely to incur capital outlays of about £126 million: and of this, it is likely to need to borrow £83 million. Again adding this £83 million to the £117 million it has already borrowed, we arrive at £200 million as against the £210 million intermediate limit which is specified in Clause 1(1). I will explain the remaining £10 million in a moment.
  But, first, I refer to the major assumption which I mentioned as underlying the estimate of how much
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  B.E.A. can provide from its own resources. This is that B.E.A. will, on its revenue account, break even when interest has been charged on all loans made to it. I stress that this is only a working assumption. It is entirely without prejudice—in either direction—to what the Government may eventually propose in order to fulfil the pledge of 1966 that B.E.A. should be able to operate "… as a fully commercial undertaking."
  What we do eventually propose may affect some of the calculations which underlie the figures in this Bill. But in practice this would only mean that the period of time which the new borrowing limits would cover would be somewhat different from what we are now envisaging. Given all the other uncertainties of forecasting five years ahead, this is not a matter of great importance. We could, of course, have introduced a Bill which would merely hold the situation for a year or two ahead until further legislation could be introduced; this is in effect what we are doing in regard to the deficit financing provision to which I shall come in a moment. But when we are discussing capital spending, it is the picture over a period of years which is really relevant. So I thought it was right, and of more help to the House, to try in this Bill to explain and to provide for as best we can, B.E.A.'s capital expenditures over the next five years.
  I now turn to Clause 1(2) of the Bill, which gives B.E.A. a new power to borrow to finance deficit on revenue account. Since it became fully independent financially in 1955–56, B.E.A. has achieved an overall net profit in nine out of the eleven years up to 1966–67. We do not yet know its detailed results for 1967–68; but it has already made it clear in public that it expects to show a loss of about £3 million. It will be able to meet this loss out of reserves.
  It attributes this to a falling-off in traffic growth due to the economic climate throughout Europe generally and the restriction in travel allowance. The growth of intra-European traffic as a whole has fallen seriously below expectations in this past year; for example, traffic in the summer of 1967 increased by only about 4 per cent. over the previous year compared with an average annual growth of 12 per cent. in the five preceding years.

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  I should say a word here about the effects of devaluation on B.E.A. Inward tourism should increase; and B.E.A. is making a strong promotional effort to obtain a growing share of the air traffic that this increase will generate. Outward business traffic will also expand as new export opportunities open up. More directly, devaluation resulted in a rise of 16⅔ per cent. in most of B.E.A.'s international fares, and this will greatly benefit its revenues. As against this, there will be higher operating costs overseas, and a possible reduction in the number of Britons taking holidays a broad.
  On balance, it seems clear that devaluation will benefit both B.E.A.'s total earnings and its foreign currency receipts. But it will take some time for the full benefit to show. In any case, it will rot have much direct impact on its capital expenditure, since it is buying British aircraft; and so the main figures in the Bill are largely unaffected. Its impact will be on its revenue account; but even here the beneficial effect will be outweighed by the continuance of the difficulties which it encountered last year, and to which I have just referred.
  Mr. Robert Howarth: While my right hon. Friend is talking about the effects of devaluation, would he care to comment on the effect of increased airport landing charges on B.E.A.?
  Mr. Crosland: I certainly do propose to comment on that in the course of my speech. I will come to it later.
  There is another factor, discussing the revenue account. In the initial period before B.E.A.'s new aircraft are fully worked in, some net losses may be inevitable, and we are pledged to make financial arrangements to deal with this. I must emphasise that we are not talking about a subsidy to cover the use of inferior aircraft: the BAC1–11 and the Trident 3B should prove excellent aircraft for B.E.A.'s operations. But we need to tide B.E.A. over a period of difficulty, until aircraft and traffic can again match well enough to produce a profitable operation overall. In the longer term we shall do this by implementing the pledge of 1966. Meanwhile, we propose to do it by the holding operation of Clause 1(2) of this
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  Bill. This enables B.E.A. to borrow in order to finance such deficits on revenue account as may accrue up to the end of its 1969–70 financial year, provided that they do not in total exceed £10 million. I estimate that this sum, plus the use of its accumulated reserves, will be fully adequate to hold the position until March, 1970. By then, of course, we shall have introduced the further and more comprehensive legislation to fulfil the pledge of 1966.
  I may add that as part of our negotiations on that pledge we shall consider setting B.E.A. an appropriate new financial target in accordance with last November's White Paper to replace the 6 per cent. target which it has had for the past five years.
  Mr. F. V. Corfield: Returning to Clause 1(2), as I read it it looks as if at any time before 1970, when the accumulated deficit reaches £10 million, it can be borrowed against, and another £10 million accumulated and then the same process gone through again. I cannot believe that is the intention of it, but it certainly reads that way.
  Mr. Crosland: The hon. Gentleman is right in saying it is not the intention. I would ask my hon. Friend who is to wind up to read the Clause even more carefully than I have done, and to give a reply when that point is reached in debate.
  Summarising the present Bill, then, it provides for B.E.A.'s borrowing needs on capital account up to March, 1973, by sanctioning a further £113 million over and above their existing borrowings of £117 million; and it sanctions £10 million in respect of deficits on revenue account up to March, 1970. Adding these together, we get the maximum limit of £240 million specified in Clause 1(1). The intermediate limit of £210 million also includes the £10 million deficit financing provision and is estimated to meet B.E.A.'s capital needs up to about the end of 1970.
  Mr. Tim Fortescue: Could the right hon. Gentle-say what the fleet would be at the end of the ten years when all this borrowed

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  money has been taken up? The fleet will obviously consist of Trident 3Bs and Trident 2s. Will there be any airbuses? How many aeroplanes and of what kind will be flying with that money?
  Mr. Crosland: The fleet, as the hon. Gentleman the Member for Liverpool, Garston has said, will consist mainly of Trident 3Bs and a considerable number of BAC1–11s. The airbus will not be running at the end of the period we are considering, but some progress payments may have been made on it.
  If the hon. Gentleman would like the exact figures of the prospective fleet, I will ask my hon. Friend to give them when he comes to reply.
  I now turn to one or two more general topics, all affecting B.E.A. First, I refer to the decision of the B.A.A. to increase landing charges at Heathrow as from 1st April by 16⅔ per cent. for inter-continental services and 12½ per cent. for other international services. Domestic services, including those to the Isle of Man and the Channel Islands are not affected. No increase in charges is proposed at the other three Authority airports, because with the increasing saturation of Heathrow the Authority wish to induce traffic to move away, and this differential increase represents a modest step to this end.
  The reason for the increases is very simple. Without it, devaluation would have meant a fall in the Authority's direct earnings of foreign exchange of approaching £1 million a year; this increase will largely restore the position. I do not expect it to lead to any fall in demand. It represents no more than 0·25 per cent. on average of British airlines' total operating costs; while most foreign airlines will pay approximately what they paid before devaluation, paying in foreign currency, and so can scarcely complain that they have been hurt. In our present balance of payments situation it makes no sense to sell this important invisible export too cheaply. The Authority is in the same position as an exporter to the United States, for example, who was already selling all he could supply at the pre-devaluation dollar price and so he reacts to devaluation, rightly, by maintaining his dollar price and raising his sterling price by the full amount.
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  This is good business for him and good business for the nation.
  Mr. Cranley Onslow: Could the right hon. Gentleman explain in this analysis which he has given whether the initiative and decisions to rectify the deficiency in foreign exchange earnings was one which came from the Authority or from his Ministry?
  Mr. Crosland: The proposal came from the Authority and was approved by me.
  Mr. Anthony Royle: Would it not be possible to exclude British airlines from paying this, in particular airlines such as British Eagle—although I realise they do not come under this Bill? Surely this could have been done by an application to I.A.T.A. and agreement made. It would have been very beneficial to the British airlines.
  Mr. Crosland: As is often the case with interruptions, I was about to come to exactly that point in my next remarks.
  It is, of course, true that the increase falls equally on British operators of international services at Heathrow. This is unavoidable if we are to honour our international obligation not to discriminate in favour of national carriers. But as air travellers know, devaluation has already brought a rise in international scheduled air fares expressed in sterling terms—a rise on average of 15 per cent. in respect of long haul services and of 12½ per cent. in respect of medium and short haul services. Although I recognise that this very substantial increase in revenue will be partly offset by the higher sterling cost of overseas supplies and services, it still is a very large increase compared with the trifling increase in total operating costs which I have just mentioned.
  I am, therefore fully satisfied that the increased charges are justified in the interests both of the Authority and of the country. And as we are dealing here with export prices, I do not propose to refer the increases to the Prices and Incomes Board.
  Mr. Stanley R. McMaster: Has not the right hon. Gentleman considered the loss of good will by raising prices? Admittedly, the foreign operator would have to pay them, but does this not mean he may cut out Great Britain

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  and we may suffer very considerably by this?
  Mr. Crosland: I recognise foreign operators, many of whom will lose, are not pleased with the increase, and many of them are making indignant statements. When we come to an actual loss of possible traffic if the hon. Member for Balfast. East looks at the figures, however, it is very unlikely indeed this increase will lead to any fall in demand. If one uses the jargon which is used so often in these matters, demand is extremely inelastic to price in this case.
  Next I turn to the very complex question of the minimum prices of inclusive tour holidays by air. The House will recall from my statements in December that, when international air fares were increased following devaluation, I decided that the minimum control prices for charter inclusive tours should remain zit their pre-devaluation levels until the end of the coming summer season which is 31st October. I also undertook to make a thorough review of the whole question of the regulation of minimum inclusive tour prices after that date. I have consulted the air operators and representatives of the travel trade, and the review is now complete.
  For a long time past, the minimum prices of inclusive tour holidays by air have been controlled in order to avoid undermining scheduled services, which have to be operated all the year round. Otherwise the revenues of scheduled service airlines could be seriously affected, and their peak season traffic diverted to charter services.
  These controls are imposed by I.A.T.A. on its members and extended by Provision I of their air service licences to other United Kingdom operators. The minimum prices have also to be acceptable to the other countries concerned.
  For these reasons, I have come to the conclusion that the special arrangements which we made for charter inclusive tour prices this summer should not continue after 31st October, but that we should then revert to the previous basis for controlling these prices.
  But at the same time, the review we have undertaken has shown that we need to make substantial modifications to the minimum price structure for inclusive
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  tours, both on charter and scheduled services, so as to achieve a more even distribution of traffic throughout the year, and also in order to encourage inward tourist traffic. The present price structure on most European routes results in lower minimum prices during the summer peaks than in winter; this makes no economic sense.
  Accordingly, I have approved a tariff under the terms of Provision I for the period from 16th October, 1968, to 30th April, 1969, under which the minimum price for a holiday of eight days will be 50 per cent. of the normal tourist class round trip fare available on the route in question, and 60 per cent. in the case of longer holidays. This tariff will apply to journeys in either direction between the United Kingdom and the member countries of E.F.T.A. and the E.E.C., the Irish Republic, Spain, Morocco, Algeria, Tunisia and Malta. The control prices applicable to Gibraltar, which are governed by the cabotage tariff and to other destinations in Europe are not affected by this decision. Operators are, of course, free to apply for other tariffs to the Air Transport Licensing Board. I have arranged for copies of the new tariff to be laid in the Library.
  Only a very small proportion of inclusive tour holidays are taken in countries outside Europe. But I am anxious that the growth of this market, especially in Commonwealth countries, should not be inhibited by the structure of public fares. Accordingly, I have also approved and alternative tariff which will permit certain reductions in the control prices for tours outside Europe.
  The effect of these measures will be to increase the minimum tour prices on both scheduled and charter services by an average of about 12½ per cent. in the summer of 1969 compared with an expected average increase in costs of at least 7½ per cent. But the control prices next winter will be substantially reduced to levels about 10 per cent. below those applicable in the summer. The longer-term future of these tariffs will, of course, depend on the outcome of the I.A.T.A. tariff Conference in Cannes this autumn.
  I want to say something about air safety. I have now received the report of the special review of this subject which my predecessor announced last June after the accidents to two British aircraft at

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  Perpignan and Stockport. The review was undertaken by the Director of Aviation Safety and the Air Registration Board, with the help of two independent advisers, Sir Frederick Brundett and Captain F. A. Taylor. I would like to express my warm thanks to all those who took part in it.
  The main purpose of the review was to make a rigorous examination of the way in which British operators in practice meet safety requirements. But with the help and encouragement of the independent advisers the review was extended to include an analysis of accidents over the past 10 years, an examination of the effects on safety of the age of aircraft, and a study of the regulatory machinery itself. The independent advisers have added substantial comments of their own.
  My predecessor promised that he would make the conclusions of the review available to the House. But the report is of such general interest and importance that I propose to go further and to publish it in full as soon as it can be reproduced. I hope this will be early next month. It will then be on sale through the Stationery Office, and I shall, of course, place copies in the Library.
  Meanwhile, the House will wish to know that among the conclusions of the review are: first, that there is no evidence that any aircraft operator, currently in possession of an Air Operator's Certificate, is not competent to secure the safe operation of aircraft within the terms of the Certificate; secondly, that there is no evidence that any type of aircraft currently in use is below an acceptable level of airworthiness; thirdly, that as regards older aircraft a policy of retirement at an arbitrarily defined age would not necessarily lead to improved airworthiness overall; fourthly, that the general safety level has improved over the past 10 years, but that there is still room for further improvement which must be sought both from within the industry and by improvement in the regulatory machinery.
  These are, as far as they go, reassuring conclusions, which are fully shared by the independent advisers. But the report emphasises that safety is closely linked with the operational environment and the economic situation of the indus
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  try. I have, therefore, referred the Report to the Edwards Committee, which is studying the industry in all its aspects.
  Meanwhile, I am studying the more detailed recommendations about the regulatory machinery in the context of changes which I am already in process of making. I had already decided to appoint a Director-General to supervise the safety work and certain other professional Directorates. I shall appoint him to exercise the statutory function of Director of Aviation Safety when the present Director retires on 17th April. It will be his task to reorganise the work so as to provide simplified lines of command and greater concentration on training, licensing and the inspection of operations. We shall, of course, be able to discuss air safety in more detail when hon. Members have had a chance of reading the report.
  Finally, I want to say a brief word about the prospects of Britain's aerospace industry, with particular reference to exports, in which, of course, I have a special Departmental interest.
  Mr. R. Gresham Cooke: In all the discussions with the Air Corporations, has the right hon. Gentleman given thought to his duty to those on the ground to ensure that the engines put in the forthcoming Tridents will be as quiet as possible, or quieter than the present generation of engines?
  Mr. Crosland: Like other hon. Members, I have a very strong personal interest in aircraft noise due to where I live in London. Therefore, my instincts are strongly on the side of diminishing noise wherever possible. This is one of the factors we take into account. It cannot outweigh all the other factors, but it is certainly a relevant factor.
  It is disappointing that the Trident 3B is not quieter than it is. The BAC211 would have been quieter, but it is only fair to point out that the Trident 3B will be no more noisy than the Boeing 727, which was the Corporation's original choice. One of the most encouraing things about the sale of the RB211 engines to American airlines is that they belong to the new generation of engines, which will be significantly quieter than the present generation.

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  In 1967, export deliveries by Britain's aerospace industry amounted to just over 0200 million. In the first month of 1968, deliveries amounted to £30 million—an all-time record.
  The civil side of the industry has already taken advantage of the benefits of devaluation. The British Aircraft Corporation's order book for the BAC111 now stands at 151. Orders for 20 of these aircraft, worth £30 million with spares have been won in the last three months; and there is no doubt that devaluation has increased the attractiveness of the aircraft to both home and overseas customers. Hawker Siddeley's orders for the HS125 now total 145, of which 19, worth about £8 million with spares, have been gained since devaluation. Orders for its HS748 now stand at 182, including 129 for export. The Britten Norman Aircraft Company has orders for 116 of its Islander aircraft, of which all but 10 are for export and which include 58 ordered in the United States. And all this is in addition to the splendid news, which the House has already noted and welcomed, of the American order for the RB211 engine.
  On this encouraging though not strictly relevant note, I commend the Second Reading of this Bill.
  Mr. Onslow: I am sure that the right hon. Gentleman would not wish to omit from his list of orders the Handley Page Jetstream. Could he say how that matter stands, because this is another project which we believe has great export potential?
  Mr. Crosland: It was not an intentional omission. I was giving examples rather than an entire list. I will check what that company's order book is at the moment and my hon. Friend will give the position later.
  4.59 p.m.
  Mr. F. V. Corfield: Without disrespect to the Chair. I should like to congratulate the President of the Board of Trade on the amount of material he got within the rules of order under the Title of the Bill. It never occurred to me that we could discuss the wide-ranging matters on which he finished his speech, encouraging as they were. I should like particularly to thank him for his promise that the
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  whole of the Report on safety will be available to the House. This clearly is a matter of vital interest, not merely to hon. Members, but to the public. If I may say so, it emphasises the confidence of the right hon. Gentleman in the system that this should be made available, and this is all to the good from the point of view of public relations.
  On the subject of inclusive tour fares, as I understand it, at the moment, the minimum fare as laid down can be avoided. In other words, it is possible to go a little lower than the minimum fare by flying at night. This is the one thing we ought not to encourage. In many of these structures there is a definite advantage to the operator, if he wishes to offer particularly attractive fares, in taking off during certain hours of darkness, the time of day when it would be better to discourage too much noise interference by air movement. I hope the hon. Gentleman who will reply will be able to assure us that the new structure, which is a little difficult to absorb without seeing the entire schedules, will remove that particular incentive to fly at night.
  Mr. Rankin: Will the right hon. Gentleman in making that statement also keep in mind the large section of the community who cannot easily afford the more expensive fares for day travel and who find the cheapness of night travel a great asset?
  Mr. Corfield: The hon. Gentleman, with due respect, has missed the whole point. Where the right hon. Gentleman the President of the Board of Trade has a certain amount of flexibility in inclusive tours without being rigidly controlled by I.A.T.A., there is not much sense in having a structure of this sort. There is no reason why cheap fares, particularly applying to the smaller airports which are not overcrowded, such as Southend, should not be available at a time when it is more covenient to the surrounding neighbourhood that the airport should be busy. I am not for one moment encouraging anyone to put the prices up and I am sure the right hon. Gentleman did not take it in that way.
  As the right hon. Gentleman reminded us when he opened his speech, only a short time ago, in November, we were

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  discussing similar matters on the B.E.A. Borrowing Powers Order. Our debate on that occasion was a good deal narrower, in that we confined ourselves to projects, payment for which, either in whole or in part, fell to be covered by the relatively modest increase of £15 million which we were then discussing. There is inevitably bound to be a good deal of overlap between the two debates, if only for the reason that some of those payments were progress payments on projects on which there still is money either due or about to become due. I hope therefore, that I need not apologise for reverting to some of the matters which were then considered.
  I would remind the House, as the right hon. Gentleman has already reminded us, that one of the principal matters which concerned hon. Members during that debate, was the then pending decision on the BAC211 and the Hawker Siddeley Trident 3B. The right hon. Gentleman is in a difficult position but it is fairly well known that the contest was between B.E.A. and the President of the Board of Trade on the one hand and the Ministry of Technology on the other. However that may be, I am bound to say he did not entirely convince me that the time was completely passed and that there was no case for looking again at the possibility of reviving the BAC211.
  The winning of the order for the RB211 by Rolls Royce, on which we all constantly congratulate Rolls Royce, must make a substantial difference in that as far as the BAC211 is concerned we are no longer concerned with engine launching costs. The right hon. Gentleman put them at about £50 million, which is approximately 50 per cent., perhaps a little less, of the total launching costs. In addition to that, there was an allowance of £15 million for launching costs for the Trident 3B, and there is a still unknown figure which the Government have promised in principle to B.E.A. as compensation for the increased cost of operating the Trident 3B as compared with their original choice of the Boeing 727.
  I do not imagine that some of the more extravagant figures which have appeared in the Press are accurate, but
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  I hope the hon. Gentleman or right hon. Gentleman who is going to wind up will give us some idea of the magnitude of the figures which the Government think are reasonable. My own feeling is that this must depend to some extent on the attractiveness of the aircraft to the passengers. If it has a particular passenger appeal—and the Trident family have been very popular—then a high load factor is achieved and therefore the difference in the direct operating costs of a less attractive aircraft which may be cheaper per mile may well be very marginal indeed.
  The management of B.E.A. is, however, presumably anxious to have a fairly definite figure in mind so that they know what they are going to get. But it is a very vital figure. If it is at all substantial, and even if it is only half the figure recently published in one of the newspapers, it would appear that the difference in capital cost between the BAC211 and the Trident 3B is very marginal indeed.
  The last thing I wish to do is to denigrate the Tridents or the Trident family. They are fine aircraft and I have no doubt the 3B will be no exception. However, I think we all agree in our heart of hearts that the export potential of an aircraft built round an advanced technology engine such as the RB211 is bound to be much greater than that of the last stretch of a type of aircraft which started its life under unfortunate circumstances, having at the request of B.E.A. been reduced in size in a way which made its export appeal very much less than, with the advantages of hindsight, it need have been.
  On the other side of the account it is fair to say that, because of the difficulties facing the B.E.A. Board in making a firm decision on how many aircraft they want in the next generation there has been a very sharp drop in the curve of the increase in air transport. Devaluation has made it difficult to forecast their requirements, but nevertheless that delay has put Hawker Siddeley in a difficult position. They have had a difficult problem in ensuring that their design and production teams are kept available without uneconomic working for an immediate start on this project when the order comes. In order to retain an immediate capacity to carry on the work, they already have had to put up quite a lot of their own

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  money in materials and arranging for sub-contracts.
  In making this balance sheet some allowance must be made for reasonable compensation to Hawker Siddeley should the decision go the other way. I fully appreciate there is no object in talking about this now unless a decision can be made very quickly. I can see no good reason why a decision should not be made quickly. The basic figures on which one can assess quickly the true difference in capital cost of these two aircraft ought to be available immediately or within a matter of days. We ought to consider this is view of the fact that the adoption of the RB211 by Lockheeds has not only relieved us of the launching costs of that engine but it has enormously boosted the export potential of any British aircraft powered with the same engine.
  I beg the right hon. Gentleman to reconsider this. I know that there are some people who say, "Order; counter-order; disorder". But the situation has changed. I believe that the concept of an aircraft built round the 211 has a tremendous potential and, even at this late stage, it is right that we should look at it again and try and make sure that we have made the proper decision.
  It is also relevant to remember that, when the Hawker Siddeley Trident was in the design stages, it was cut back in size and performance very largely because there happened at that time to be a dip at the curve showing the annual increase in air transport. We have a similar if rather more pronounced dip today. I rust that we have learned the lesson and that B.E.A. and the Ministry will bear in mind that the only sensible way of planning ahead is to do so on the assumption that there will be a resumption of the fairly steady growth which we have known since the war. All the lessons are that we have tended, on the whole, to build too small in terms of both aircraft and engines. It has become increasingly obvious that there are great economies in a large engine rather than a multiplicity of smaller ones in terms of cost and, with modern techniques, in terms of noise, so that all the indications are that we should go for reasonable size.
  That leads one on to a further consideration of the A300 airbus. I do not share the pessimistic view of some hon.
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  Members and some commentators outside the House about the project. I believe that it has a considerable potential. It is almost certainly right that it should be powered by two engines instead of three in the circumstances and in view of the ranges for which it is designed, bearing in mind that there are these economies in large engines and bearing in mind, too, the enormous increase in the reliability of the engines of today as compared with those of even a relatively short time ago.
  I do not accept that the aircraft is in direct competition with the airbus or buses which have been built or conceived in America. By the very nature of things, having three engines, they will be designed for longer routes and are bound to be less economical on the routes for which the A300 is designed.
  There are still a number of question marks over the project. The first problem is the agreement of a specification between the three airlines concerned. I have had the privilege of visiting Hawker Siddeley recently and of talking to the Chairman of B.E.A. As I understand it, Hawker Siddeley and Sud-Aviation have endeavoured to collaborate fairly closely with the three national airlines, Air France, B.E.A., and Lufthansa, and it appears that the airlines are a long way from agreeing a common specification. To some extent the position is complicated by B.E.A.'s different approach towards flight crew from that of the other two airlines. B.E.A. insists on three pilots as opposed to two and a flight engineer, and that makes quite a substantial difference in the specification of the cockpit layout and so on.
  However, if it is true that we are some way off an agreed specification and the chances of getting firm orders for at least 75 aircraft from the three airlines which the Ministry of Technology has made a prerequisite for continuing with the project are diminished, I hope that the right hon. Gentleman will use his influence to persuade his right hon. Friend that we should not stick too rigidly to the demand for firm orders for 75 aircraft, particularly if they are to come from the three airlines to which I have referred. My information leads me to believe that the orders will not be forthcoming by July, and to some extent that takes us back again to the 211, because

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  there is no doubt that B.E.A. would regard a delay with the A300 as the result of a failure to agree a specification with a great deal more equanimity if it had the 211 than it would be able to do otherwise.
  I suppose that it might be argued that, if we resurrected the 211, that the French would retaliate by vetoing the co-operation with the airbus. It is doubtful if that would be so, because it seems that Air France is the keennest of the three airlines. But if that was the case, it is time that we asked ourselves whether a cooperative effort based on the threat of a veto of that sort is the type of co-operation which offers us the advantages which we have always claimed for European cooperation.
  There is a disturbing report in the Financial Times today which, since it refers to military aircraft, takes me even further away from B.E.A. than some of the right hon. Gentleman's remarks. It makes the point that the Germans and the Dutch are anxious to carry on without us with the present project plans in relation to the advanced combat aircraft. That is disturbing because, having done a good deal of work on it, we have considerably more expertise. As I understand it, both in this and the V.T.O.L. concept, we have endeavoured to co-operate with the Germans to our utmost, and the news must put a question mark over the long-term success of some of these co-operative ventures, sad as it may be.
  In this rapidly changing world of the airlines, I have always doubted the wisdom of insisting on the 75 order as a prerequisite. I say that basically because airline managements do not operate in this way in present conditions. I have referred already to the falling off in the growth of traffic. There is a tremendous temptation for the airlines to wait as long as they can to see what is on the market nearer the time when they have a need for this type and size of aircraft.
  I do not suggest for a moment that the British aircraft industry has been a failure in the past, but, if we are to make a real success of it in the sense of fully exploiting the considerable potential market in the next ten years, both Government and industry have to be much more sophisticated in studying the market making assessments and backing their
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  commercial judgment. The game will not be won by playing safe. There is grave danger of our being beaten by a concept which is no better but which has simply got off the mark quicker. That applies particularly at the present time when there is not only a fall in passenger transport but when cargoes are dipping, as they have been in recent months.
  In this context, I add my congratulations to those of the President of the Board of Trade to B.E.A. for its efforts to build up a greater volume of tourist traffic to Britain from Europe. I hope that it will be remembered that the independents also have a substantial potential in these operations, and that we shall be assured that the Government will do everything to assist them as well in their licensing and other policies. In the past, the independents have afforded a substantial stimulus to the Corporation in the realm of inclusive tours. It is in everyone's interests that they should be enabled to continue.
  I turn briefly to the point which I regard as the most controversial of the matters on which the right hon. Gentleman has touched, namely, the increased landing fees at Heathrow. It seems to me that they are largely contrary to the Government's exhortations about devaluation.
  We hear a great deal about the advantages of devaluation. In my view we hear too little about the corresponding disadvantages, and the problems that flow from it. Basically, the only real advantage of devaluation is that one's prices become more competitive abroad in terms of foreign exchange. But they do that—and this applies to both visible and invisible exports—only if they remain the same in terms of sterling. If the sterling price is increased to match devaluation, there is no increased competitiveness.
  What I do not understand about this is that the Government have been urging the British Motor Corporation and other great exporters to cash in by holding their prices at the original sterling rates, or only marginally above them, to take advantage of the lower prices which they now command in terms of the foreign currencies in which they are exporting, while here the B.A.A. is doing the opposite.
  Mr. Eric Lubbock: There is this difference. The B.M.C. can vastly increase its output, and thereby take advantage of the reduced costs in the United States, but the British Airports Authority has only a fixed quantity of output, which it cannot vary.
  Mr. Corfield: The hon. Gentleman is wrong. It has a fixed quantity of output which could decrease if it played its hand badly. I find it difficult to follow the logic of this. My hon. Friend has kindly collected a copy of the Act from the Library. Section 2 sets out the functions of the B.A.A. Its basic function is to manage certain domestic airports. Its expenditure in doing so is domestic, and is payable in sterling, and its costs do not include anything that has increased as a result of devaluation, other than such imported items as have affected us all. I cannot see that, purely as a result of devaluation, the B.A.A. requires any additional income.
  In short, the B.A.A. has cashed in—and the right hon. Gentleman was frank about this—on its monopoly position. I did not know that it was an accepted theory teat monopolists were entitled to exploit a monopoly so long as some of their customers were foreigners, but, even if this is so, we have a right to consider the views of, and the effect on, our British airlines who, when all is said and done, are bigger potential foreign exchange earners than the B.A.A. is ever likely to be.
  It is true that because of the I.A.T.A. agreements the airlines have been forced to put up their fares, and B.E.A. amongst them. They have had no option but to do that. They maintain substantial overseas operations of one sort or another, the costs of which have gone up in terms of sterling because of devaluation. They, at least, have a sound excuse. In fact, they have no option, but none of this applies to the B.A.A., and I think that it makes a great mistake if the B.A.A. regards itself as being in a monopoly position.
  Heathrow has not some divine law which gives it a pre-eminent position in North Europe as the principal port of call for inter-Continental foreign services. For many reasons it has become less attractive. There is considerable congestion, there are more restrictions on
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  night flying, because of the noise nuisance, than there are at many other airports, and there are a number of possible switching operations to other North European airports which will be open to quite a number of foreign airlines on a number of routes. If this happens, it will be damaging to our foreign exchange position. What is curious is that this is one of the principal arguments which is pressed over and over again by those who say how urgent the third London airport is, and the leading exponent of this is the B.A.A. Yet here we have action which seems likely to have precisely the same effect.
  There are two deplorable aspects to this. One is the apparent complete lack of consultation with B.E.A. and other British airlines, and the other is the position of the right hon. Gentleman himself. I am sorry to introduce this controversial note, because the right hon. Gentleman introduced the Bill with particular charm and clarity, but this seems to me to be an important point. The Board of Trade remains the sponsoring Department both of B.A.A. and of the two airline corporations. In matters affecting either Government policy, or the policy of one of these authorities which affects one of the others, representations to the President of the Board of Trade are the sole means of appeal, whichever of the three is involved.
  His responsibility for the Air Corporations is no whit less than his responsibility to the B.A.A., and if the right hon. Gentleman is to fulfil his duties, which have been imposed on him by Parliament in the national interest, he must be in a position to look at any dispute between these corporations in a quasi-judicial capacity. He must not only do that, but he must be seen to exercise a quasi-judicial function when doing so. In my view, in this matter, he has wholly failed to give that appearance. Indeed, all the appearances are that he was either persuaded, or he readily approved—and we know that the Chairman of the B.E.A. has a persuasive personality. Nevertheless, it does not appear that there was any consultation with the airlines, and it does not appear that the decision was postponed for long enough for the corporations to make representations which could be considered in a quasi-judicial way, even if the right hon. Gentleman was then in a position to do that.
  Mr. Crosland: On the question of consultation, perhaps I might tell the House that before I approved the B.A.A. proposal I was aware of the objections being made to it. With respect, the hon. Gentleman has not answered the main difficulty which was raised by the hon. Member for Orpington (Mr. Lubbock), which is that if I had not approved this increase, there would have been a significant loss to the British balance of payments. I must repeat my analogy, and ask the hon. Gentleman to comment on it. This is like a manufacturer who is exporting at a pre-devaluation price in dollars at which he could sell almost all that he could supply. If he lowers his price he loses us foreign exchange pointlessly. If he increases his selling price, he is at least maintaining his foreign exchange earnings.
  The hon. Gentleman mentioned the question of consistency. I must say that whenever we have given advice to exporters on price policy following devaluation, we have said that under these circumstances the case is strong for their raising their selling prices, and keeping their prices constant in foreign exchange.
  Mr. Corfield: I appreciate the difficulty. If someone has a commodity in respect of which he has an immense hold in a foreign market, it is far to ask what the market will pay, so long as he does not thereby induce domestic competition in the long term. But this is a more difficult problem, because the actual assessment of whether one loses foreign exchange is much more difficult for the President of the Board of Trade to do until at least a year has passed. I say that because this issue is affected by increased fares, and, therefore, increased foreign exchange earnings, for the same service, which the airlines are obliged to charge under the I.A.T.A. agreement. I doubt whether, if we total the whole of the devaluation increase in the air transport industry, even leaving aside the B.A.A. increases in landing fees, there will be this real overall loss resulting from devaluation.
  There might be a loss resulting from other things, notably the falling-off of American tourists coming to this country, and the traffic they bring. The right hon. Gentleman has many more facilities for making this calculation than I have, but I shall be glad to see the breakdown
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  which assures him that he is facing a loss in foreign exchange overall. I would have thought this a very difficult thing to assess even with all the resources available.
  I am glad that I gave the President of the Board of Trade the opportunity to intervene—and perhaps he will say more when he winds up—in order to deny the charge that there were no consultations and to say that he was aware, as I think he said, of the Opposition, because it is certainly felt among the airlines, both nationalised and non-nationalised, that they were presented with a fait accompli at the time when they could make representations to the President—and he was the only person to whom they could make representations—because the decision had already been made and there was therefore no opportunity to make effective representations. The right hon. Gentleman will probably agree with me that appearances could have been better, what ever his motives. This is important because we constantly argue the merits of leaving these nationalised corporations, particularly the airlines, to make their own commercial judgments. Nevertheless, they are in a perculiar relationship with their sponsoring departments and it is of the utmost importance that that relationship should be one of mutual confidence and respect.
  Finally, I go back to what I said by way of conclusion at the beginning of our debate in November, and say once again that the Opposition attach as great importance to the contribution that has been made and is being made to our economy by our airlines, whether they be nationalised or independent, as does anybody else, and of course we recognise, in the context of this debate, that it requires money as far as B.E.A. are concerned to keep pace with their equipment programme as regards both long-term traffic needs and the developments which are constantly being offered to them by the ingenuity of the air-frame, air-engine and systems engineers of this country and others.
  Of course they need the money, and it would be quite wrong for us to quibble unduly at a Bill of this sort, but there are matters on which we should have better answers than we have had. In particular, I hope that the right hon. Gentleman who winds up will not dismiss out of hand the prospect of looking again

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  at the 211 in the light of what has happened in the past week, and also at the procedure by which the matter of landing charges was dealt with, and consider again whether there is not more merit in what I have said, that there is some danger of driving foreign airlines to other airports in other parts of Northern Europe. There is no doubt, reading the papers this morning and seeing that some 50 airlines are refusing to pay, that we have not made ourselves popular. I have never thought that popularity was the most important thing, but I am not sure that at the moment a few friends across the water would not be rather valuable.
  5.34 p.m.
  Mr. Robert Howarth: I welcome the Bill, because I believe it indicates the continuing growth of B.E.A., Europe's foremost airline, as they rightly claim in their advertising. Obviously it is not controversial, and, despite the fact that large numbers of hon. Members are not clamouring to enter the debate, I will speak very briefly and confine my remarks to the problems of re-equipment for B.E.A.
  I start with the order for Rolls Royce engines for the Lockheed 1011. It is relevant to contributions that have already been made by my right hon. Friend and by the Opposition spokesman. It is particularly relevant because the Opposition spokesman made a very mistaken plea to the President of the Board of Trade to reconsider whether the Government should support the development of the BAC211 with the Rolls Royce RB211 engines. I would put the contrary point of view very strongly, which I have held for a long time, and would link it with the decision by certain American airlines to order the Lockheed 1011 with the Rolls Royce engines by pointing out to the Opposition spokesman that what I think he has not appreciated is that the Boeing 747 and the Lockheed 1011 and, starting from this summer, the European airbus, are the first of the family of large-fuselaged aeroplanes—the at least 10-abreast and possibly 12-abreast seating aircraft.
  We are beginning to move away, and it is a definite step in the progress towards very large aircraft, from the six-abreast fuselage. That was the fatal flaw in the BAC211. This was an aircraft which, if
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  it had been started four years ago, would have made commercial sense and might have had the sort of sales which are now being taken up by the Boeing 727 200. But this is not the case, and to suggest that a British manufacturer should be commencing at this point in time the construction of an aircraft with a six-abreast fuselage only is to misunderstand where we are in the growth of traffic and the size of aircraft.
  Mr. Corfield: I would not dissent from much that the hon. Gentleman has said, but I would remind him that there is always an intermediate stage and there are always other routes. As the intermediate stage on the busiest routes is surpassed, there are other routes for which these aircraft are suitable. I am sure he would not advocate using the largest aircraft on the Birmingham to Manchester route, for instance.
  Mr. Howarth: That is precisely the dilemma that faced the Government, and they made the choice on the difference in cost between the Trident 3B and a completely new aircraft with a time-scale longer than the Trident 3B, as represented by the 211. I think the decision was right and, contrary to what the right hon. Gentleman was saying, I think that the order for the Lockheed 1011 with the Rolls Royce engines makes the case in support of the Government decision stronger. I believe it indicates that American airlines from the early '70s and undoubtedy European airlines from the mid-'70s will be operating these large aircraft, and the sort of aircraft of which we have been speaking will have a very limited life indeed.
  I want to make a number of brief comments about the decisions that have been taken by B.E.A., first of all to order the BAC111 500 and then, albeit after a great deal of time and trouble for everyone, to order the Trident 3B. I join the hon. Gentleman in saying that I hope that the decision will soon be taken. Indeed, every week that passes presents problems both to B.E.A. and to Hawker Siddeley themselves and possibly delays the introduction of the 3B. I know the view taken by B.E.A., that until they clear up the discussions they are having with the Board of Trade they are loathe to place the firm order for the Trident 3B, but I hope the decisions will be taken very quickly.

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  This brings me to a point I have looked forward to making. As has been said by the Opposition spokesman, I think it is most unfortunate to see Press reports giving quite fantastic figures of sums of money which it is said B.E.A. are claiming for the operation of the BAC111 500 and the Trident 3B. I was horrified a couple of weks ago to see a front page story in The Times headed, "Bill £75 million for flying British". This story alleged that this was the sum of money that was being claimed by B.E.A. It must be a ridiculous figure. Considering that the BAC111 500 is now picking up orders from independent commercial airlines, this aircraft must obviously have good economics and must offer, particularly since devaluation, a very attractive alternative to the Boeing 737. The Trident 3B has also been assisted by devaluation, because the American alternatives have increased in price. The economics offered by both these aircraft are now very attractive.
  Although I appreciate that this might not be B.E.A.'s first choice, I greatly regret the sort of scare headlines which have appeared, such as those which I quoted. It is most unfortunate that a newspaper with the national and international reputation of The Times should peddle this sort of nonsense. I wrote to the editor of The Times; what I thought was a reasoned letter, challenging this figure and pointing out the damage which this sort of story could do to the prospects for British export of aircraft, not only the two aircraft concerned, but all British aircraft.
  I said that I thought that the following day every Boeing and McDonnell Douglas salesman would have had a copy of that article on the desk of every aviation operator throughout the world and that one could imagine the effect which this would have. Unfortunately, The Times did not see fit to publish my letter. They choose some amazing subjects on which to publish letters, but when they receive one—they may have received others, for all I know—which, I hope, presented a reasonable viewpoint and tried to defend the British aviation industry against nonsensical articles such as this one, they choose not to publish it. This is most unfortunate—
  Mr. Corfield: The hon. Gentleman may be assured that, through what he said, his speech will be fully reported in tomorrow's The Times, to judge from my past experience in these matters.
  Mr. Howarth: I hope so, anyway.
  It would be possible to go on to a number of items arising from the fact that the debate is going rather wide and that we seem to have all day in which to hold it, the few of us who are here. I look forward to the time when we shall be debating the Edwards Committee's Report and its effect on B.E.A.—and, of course, on B.O.A.C.—but that is something for the future.
  I would appeal to B.E.A. to consider its all-important decision to announce in advance when it is to have an all-jet fleet. On a recent visit to the United States, I was greatly impressed by the constant advertising by all the major airlines, I think without exception, that they had all-jet fleets. There was no doubt that very few of the average American air travellers would consider travelling by propellor-driven aircraft any more. They are used as "back-up" aircraft, perhaps in the mountains, but no one thinks of operating anything but jets on the normal trunk and important routes between cities.
  The sooner that B.E.A. justifies its claim to be Europe's foremost airline and begins to offset the advertising of a number of European airlines, which are now beginning to introduce the theme that they are all-jet airlines, the better it will be and the more easily it will win and possibly increase its share of European traffic. This is important. B.E.A. is operating a number of fleets of older aircraft, and the sooner it plans for replacements the better. I know that it is doing this, but it is a very slow process.
  I would like to raise the question of an associated or subsidiary company, British Air Services, through which B.E.A. has interests in a number of semi-independent operators. I am referring particularly to B.K.S., which, it is reported, it contemplating ordering American aircraft. I hope that this will be viewed very closely by the Board of Trade, as it will presumably have to go through the Board of Trade if B.E.A. has a controlling interest in this company.

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  I hope that the Department will be as firm on this as it has been with B.E.A. itself, and will decide that, if almost every British independent operator can find the right aircraft from British manufacturers, a subsidiary of B.E.A. should not he allowed to break this principle by ordering American Boeing 737s. One would have hoped that the pattern of the company's traffic could have been met by one of the variants of the BAC111. It is interesting that certain independents are ordering the 500. The Rumanian airline is ordering the 1–11 400 series and I cannot understand why it is thought necessary that B.K.S. should order an American aircraft.
  I hope that what the hon. Member for Gloucestershire, South (Mr. Corfield) said is correct and that my strictures on The Times will appear in one form or mother. I hope also that B.E.A. will continue with the good work which it has been doing. I appreciate its difficulties and I welcome the Bill because it shows the progress which the Corporation is making.
  5.47 p.m.
  Mr. Eric Lubbock: The hon. Member for Bolton, East (Mr. Robert Howarth) commented on the thin attendance of this debate. That may be because some of us who are interested in aviation were up rather late yesterday discussing Concorde, rather than because of any lack of interest in the affairs of B.E.A. At any rate, I hope so, because other debates in which I have taken part on the affairs of the Corporation have always been reasonably well attended.
  As for his remarks about The Times, this is a disappointment which we all suffer occasionally and I am certain that his speech this afternoon will be given its proper attention and the importance that it deserves. I thought that he had much to say of sound common sense, particularly on the re-equipment of B.E.A.
  The hon. Member for Gloucestershire, South (Mr. Corfield) made his principal criticisms of the Bill from the point of view of the increased charges being imposed by the British Airports Authority. It is clear that the hon. Gentleman has been talking to the Chairman of British European Airways, because much of
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  what he said was quotations from the Chairman's page in the B.E.A. magazine, which I have studied since it came through my letter box this morning.
  Of course I have given the remarks of Sir Anthony Milward the attention which they deserve and I have studied his case carefully. What he said—I tried to intervene to point this out to the hon. Member, but he did not give way then—was that his complaint was that there was not proper consultation. He did not complain that there was not any consultation, and his criticism was not directed against the President of the Board of Trade but against the Airports Authority.
  If one expects the nationalised industries to behave as commercial organisations, as the hon. Gentleman said he would like them to, it would be better for the consultations to be directly between the Airports Authority and the airlines which are using its services rather than through the intermediary services of the President of the Board of Trade. Surely that would be more convenient.
  I would have said that it was impossible for the Airports Authority to consult all the hundreds of airlines which use Heathrow and that it would probably have needed several months to collect all the views, if that was the policy. I have no doubt that Sir Anthony Milward was properly informed of the intentions of the Airports Authority before the final decision. He devoted a great deal of space to this in the magazine, but the amount concerned is not all that great. It is only £200,000 in the coming year on his international routes, which is not a very high percentage of his total expenditure during the course of the year.
  He says that he would not mind paying such an increase if he were to receive immediate benefit in the shape of improved airport services, but the British Airports Authority has a substantial capital expenditure programme of its own, and this will be increasingly important as the amount of traffic coming through Heathrow increases and as the number of passengers per aircraft increases.
  When one sees the bedlam and chaos in the concourse of London Airport after

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  one of the present generations of subsonic jets arrives, one dreads to think what it will be like when several 747s arrive in the course of the same hour. It is for this reason that the Authority is to spend a considerable sum over the next few years on the provision of facilities for processing passengers' luggage and getting passengers quickly from the aircraft into the Customs Hall and then on their way by various means of transport to central London or other destinations.
  Mr. Onslow: I do not dispute what the hon. Gentleman is saying, but this need is not advanced by the Airports Authority as a reason for taking this action.
  Mr. Lubbock: No, it is not. I am not saying that it is. I am merely pointing out that the Chairman of B.E.A. says that he would not mind paying an increase of £200,000 in the coming year if he were to see something for his money. I am saying that he will see something for his money, perhaps not in the coming year, but between now and the 1970s when the much larger aircraft are introduced.
  It is fair to expect him to pay something in advance, just as he does for new equipment. He does not complain because he has to make a down payment for the Trident 3B or the BAC111 500 series which he is shortly to introduce into service, and he has no grumble about helping a little to meet the capital charges of the Authority which are being incurred in the course of the construction of these enormous capital facilities.
  The arguments for increasing the landing charges stand out by themselves, even without the expenditure which the B.A.A. is incurring. I agree with the President of the Board of Trade about this. It would be commercial madness not to charge the going rate. If the foreign air lines operating into Heathrow are not to pay any more in terms of their own currencies, they have no right to complain. Nor do I agree with the hon. Member for Gloucestershire, South that the increase is likely to drive foreign air lines away from Heathrow. Our experience over the last few years is that traffic has grown at a substantial rate. If one extrapolates that rate, it is frightening to see what number of aircraft will be coming into the airports around
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  Greater London by the early 1970s, and that, of course, is the justification for the third London airport. All Peter Masefield may have done by imposing these increases is to moderate the rate of increase in the amount of traffic coming into Heathrow, and that would not be a bad thing if it were so.
  As for the diversion of these foreign air lines to other destinations in Northern Europe, to the extent that those other destinations were elsewhere in the United Kingdom, this would be a very good thing. The hon. Member for Glasgow, Govan (Mr. Rankin) will agree with me that there are not nearly enough direct services from Scotland to the Continent. Not long ago the A.T.L.B. refused Caledonian Airlines permission to fly a direct inclusive tour service from Glasgow to Majorca—I cannot think why—but the ostensible reason was that there was a perfectly good inter-change service available at Heathrow and Gatwick.
  I should welcome the initiative of any air line which offered to fly passengers direct from Glasgow to the holiday destinations of Europe—or from Manchester, Birmingham and so on. To the extent that the 16⅔ per cent. increase in the charges for Heathrow will divert airlines to other places in the United Kingdom, it will have the beneficial effect of evening out traffic over the United Kingdom as a whole.
  I tend to agree with what the hon. Member for Bolton, East said about the re-equipment programme of B.E.A. The Trident 3B will be an extremely good aircraft and it is more sensible to go for it than to spend a great deal of money, and it would be very substantial, on developing the BAC211. It would be interesting to know how much of the £120 million which the BAC211 would have cost to develop would have been attributable to the airframe and how much to the engines.
  Mr. Crosland: It might save time if I gave the answer now, because the hon. Member for Gloucestershire, South (Mr. Corfield) gave the wrong figure. £30 million would have been attributable to the engines.
  Mr. Lubbock: That is interesting and I am grateful to the right hon. Gentleman, because it enables us to compare

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  the figure of £90 million which would remain for the airframe with only £15 million which it will cost to develop the Trident 3B.
  It has to be remembered that only limited resources are available in this country and if we were to spend this colossal sum on developing the BAC211, the effect on other aircraft programmes would be serious. I have always been inclined to favour the Trident 3B against the BAC211, because we will have our work cut out for years to come with our share of the European airbus. I hope that we shall and that the work will be running out of our ears in the early 1970s as we struggle to build up the programme of a large rate of output of the European airbus. If we had taken on the burden of the BAC211, it would have tied up the resources of the aircraft industry.
  I think that the hon. Member for Gloucestershire, South will agree that it would also have been a psychological mistake to go for that aircraft, because it would have been an indication to our European friends, the French and the Germans, that we were not interested in co-operating with them in the development of the A300. They might envisage a situation in which we decided to drop the whole thing and go straight from the BAC211 to the Lockheed 1011, particularly as it now has British engines. That might have been a strong temptation to some future President of the Board of Trade or Chairman of British European Airways.
  We have been perfectly right to develop the Trident 3B and it will not be nearly as expensive to operate as some of the irresponsible commentators have suggested. We have it on record from the President of the Board of Trade himself in his statement on B.E.A. aircraft re-equipment that:
  "… after devaluation the Trident 3B is as attractive in terms of running costs as the Boeing 727, for which the Corporation originally asked in July, 1966."—[OFFICIAL REPORT, 15th December, 1967; Vol. 756, c. 780.]
  I do not see that there is any question of a vast subsidy being given to the Corporation for operating this aircraft in reference to the Boeing 727 and I hope that there will be an early decision to place a firm order.
  I have one or two questions about the figures which the right hon. Gentleman
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  gave. He said that capital expenditure over the next five years would amount to £199 million, of which £86 million would be met by depreciation, sales of aircraft and so on. It would be convenient to have a breakdown of those figures, particularly as B.E.A. has a substantial fleet of older aircraft which, presumably, it will be getting rid of over this period. There are the Vanguards, Viscounts and perhaps some of the Comet IVBs. I would be interested to know if it is the intention of B.E.A. to continue operating its Argosy fleet during this five-year period.
  The growth of B.E.A's freight traffic has been substantial, even in the last year when passenger traffic has stagnated. Will B.E.A. be asking the President of the Board of Trade during this period to discuss the re-equipment of its freight-only fleet with a much larger type of aircraft than it now possesses? If so, that will mean an additional sum on both sides of the equasion; substantial additional capital expenditure, but also the proceeds from the sale of the Argosys, which will have a second-hand value.
  Mr. Onslow: Does the hon. Gentleman envisage that that would require the development of a new or variant of an existing major jet type or does he think that B.E.A's freight requirement might be met by, for example, converting the Britannias?
  Mr. Lubbock: I understand that it is possible to convert the Vanguard but that it has the disadvantage of not being able to accommodate the pallet sizes to meet the new international standard which is being agreed. Perhaps B.E.A. will wish to have an aircraft with a larger cross-section than the Vanguard.
  It would also be interesting to know whether, in the discussions with the French and Germans, there has been any mention of a freighter conversion of the A300. If freight is growing at a substantial rate—as it has been in the last few years; faster than the passenger growth—we should be thinking of a pure freighter for European routes so that we are not obliged to buy this type of aircraft from the United States. I suggest that there would be a considerable market for a pure freighter conversion of the A300. This is something that should be borne in mind when considering B.E.A's

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  capital expenditure programme, although I accept that this may not have to be done in the next five years.
  Mr. Robert Howarth: Is the hon. Gentleman aware that from the start Boeing has been developing a freighter version of the 747 which, I assume, will have good sales?
  Mr. Lubbock: The hon. Gentleman reinforces my argument. If we could develop a pure freight conversion of the A300 there would obviously be a market for it, and the research and development, tooling costs and so on could be amortised over a longer production run, resulting in the price of each aircraft being reduced.
  Is there any thought of extending B.E.A's helicopter operations? I cannot remember how long ago B.E.A. bought the S61 s for an experimental service to the Scilly Isles. I understand that this service is still running at a substantial loss, while B.E.A's helicopter operations for North Sea gas rigs have become extremely profitable in the last year or two. Will B.E.A. extend its scheduled helicopter operations and, in any event, will it make every effort to cater for the increased business which is bound to be available from the operations of oil companies in the North Sea?
  The Minister said that the 1967–68 loss of B.E.A. was about £3 million. I am disappointed in this, but I understand it because of the stagnation of traffic in the last year, for the reasons given by the President of the Board of Trade. The restrictions on overseas spending, with probably fewer Americans coming to Europe, and the general economic situation has prevented B.E.A. from attaining the rate of traffic growth which we would have expected from the experience of the last few years. What is the outlook for 1968–69? Is it too early to give an estimate of the rate of passenger and freight growth respectively? Presumably by now B.E.A. is about to do its annual budgeting. A rough idea of these figures must be known and I hope that they will be given to hon. Members.
  It is sad for the Corporation to run through a period of losses, but I believe that the new fleet which it is acquiring will enable it to be in good shape to
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  compete with any European airline at the beginning of the '70s. I wish B.E.A. well. The Bill is valuable and the increased borrowing powers are justifiable on the basis that B.E.A. will be doing a really excellent job for Britain at the beginning of the '70s.
  6.5 p.m.
  Mr. John Rankin: I agreed with a good deal of what the hon. Member for Orpington (Mr. Lubbock) said towards the end of his speech. I regret that I was not able to be in my place during the earlier part of his remarks.
  Yesterday evening, on a visit to Southend Airport, we were told about the bus-stop services which fly between Southend and Aberdeen, stopping at Edinburgh and various other places en route. The airport manager assured us that these services were well patronised and extremely successful. Projects like this should be explored, not merely between Britain and the Continent—although we must always bear that type of market in mind—but also from the point of view of Scotland. There is now a great travelling market for the intermediate type of service; that is, a flight which takes a passenger to stops between Glasgow and London, and for this reason we should not all the time think in terms of the Glasgow-London demand. The same can be said of freight services.
  My hon. Friend the Member for Bolton, East (Mr. Robert Howarth) will agree—because he was one of the hon. Members on that visit to Southend Airport—that every half hour an aeroplane arrived at Southend Airport and that, at a similar interval, one took off. I was assured that these services were profitable. There is, therefore, still a wonderful avenue for aircraft operators to explore in the United Kingdom—always bearing in mind the larger avenue of the Continent and the world in general.
  It is important for us to begin to think about the future of London Airport. I use this airport twice a week. Already the number of passengers being handled there is presenting a problem. When one thinks of the situation that will arise when the new 400-seater turbo-jets come into service, the problem will be even worse. The airport is in a state of perpetual change, with work going on in

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  almost every part of it. If, in addition, we have supersonic aircraft landings there, the problem will be virtually insuperable. Not only is there a lack of manoeuvring space but an insufficiency of runways. If that is the case now, what will it be like in the future? Last Monday the aircraft in which I was travelling was held up and had to circle for half an hour before being able to land.
  I agree with the hon. Member about increasing flights to and from Scotland. That has been a long felt want and the demand has been made for a long time, but nothing much has been done to meet it. It was a pity that the request, made over so many years, for a service embracing Dundee was regularly refused by B.E.A. Now, when a private operator has decided to come in, the venture merits success. I could never see any reason for refusing this type of service to meet the intermediate demands of London, Edinburgh, Dundee, Aberdeen and so on.
  That should be met particularly when we see that on the western side of Scotland Prestwick is getting nervous about its future. It is feared that Abbotsinch is attracting too much traffic and therefore Prestwick is suffering. It is a pity tat that feeling should be created at a time when there is a clamour for more services in Scotland. Prestwick on the western side could be used in a similar sort of bus-stop plan as exists in the east.
  I hope that my hon. Friend will note that the numbers and problems at London Airport are increasing. Traffic is increasing. That will make the need for the third London Airport even more urgent. I hope that there will be no undue delay in getting ahead with the inquiry into the Stansted question because time is no longer on our side. In the interests of the expansion of aviation and of the aircraft industry in Britain, the third airport is a pressing necessity. I hope d ere will be no unnecessary delay in coming to a conclusion on this matter at the earliest possible date.
  The aim of this Bill is to provide British European Airways with finance to buy the new equipment which it must have. That, of course, includes aircraft, but it does not appear to comprehend engines. The Minister put it very euphemistically when he said that B.E.A.
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  has asked to buy the Trident 3B. That is where Ministerial imagination enters the field. All of us know, although one does not actually say so, that B.E.A. was told what it had to buy. It was not the Corporation's preference. The engine it wanted was not the 3B but the Rolls Royce 211.
  Mr. Robert Howarth: My hon. Friend is not going back far enough. Originally B.E.A. wanted an American aircraft. It started by wanting an American aircraft with American engines.
  Mr. Rankin: I am fully aware of that. My only reason for not going back to that was because I want to deal with the problem as it faced us here in Britain. I am well aware of the merit and truth of my hon. Friend's interruption. B.E.A. was told that it could not have that aircraft and no reason was given for the refusal. Many believed that it had something to do with the engine. Now we hear the praises of the 211 sung across the Atlantic. It is still the same engine. In view of the fact that the qualities which it carries are witnessed by this £100 million sale, surely, as time is still on our side, we might think again about the Trident's power unit.
  We are proposing to provide B.E.A. with £115 million, or rather with the right to draw on that sum of money. The question of profitability is one of the items always raised when the aircraft operator asks for aid, particularly when the request comes from B.E.A. or B.O.A.C., with whom we have come now to a sort of final composition. I wonder if the Government have given any thought to striking a similar composition with B.E.A. and, instead of going on with this financial business, thinking of giving a loan at a fixed interest rate, or following the pattern of creating an Exchequer dividend capital account. I do not see why they should continue on the existing basis which is not always satisfactory; which becomes recurrent, instead of trying to reach a new pattern of investment which seems very practical and to be operating quite successfully with B.O.A.C. I fail to see why it could not operate equally well with B.E.A.
  When we talk about profitability in this industry, in fairness to the operators we should realise that it is a very variable type of business. The competition is

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  intense. I ask my hon. Friend to think again about the present set-up in awarding routes.
  The Air Transport Licensing Board has been functioning for quite a time and in my view not always effectively. For example, it decided that competition on the London-Glasgow route would be a good thing. B.E.A. was doing well on the route so the Board said that there would be room for a competitor. No one—and I was a user myself—could make any legitimate complaint about the efficiency of B.E.A. in serving the route. Nevertheless, a competitor was introduced.
  The assumption was that, automatically, the number of passengers would increase because another airline was serving the route and, therefore, no penalty would be involved for B.E.A. But the Board was not satisfied with that. It introduced a third airline on the route—B.U.A. Whether it was partially because of that or not, B.U.A. I believe has now gone more or less bankrupt. Whether its competition was effective or not, I am not sure.
  However, despite all this competition on the route, the number of passengers has not increased sufficiently to give an operating profit both to B.E.A. and British Eagle. The consequence is that there is a tendency for B.E.A. passengers to be reduced in number. The same thing is happening to British Eagle, although in its case the reduction might not be so evident because it is running more modern aircraft.
  As the hon. Member for Orpington said last night when we were discussing the Concorde, putting a new aircraft on a route means that, because of its newness, people will be attracted to it away from the older aircraft. But this was an unfair position to create on the London-Glasgow route. The Minister of State should have another look at the functioning of the Board and consider whether or not he should keep it in existence. As I see it, the Minister himself is quite competent to deal with the problem. He knows it in a way the Board cannot. He is more informed about the factors surrounding the operation of aircraft than the Board. So he is fitter to deal with the problem of licensing. We must recognise the increased
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  competition, not just what we ourselves have created for our major operator on domestic routes but what it has to face outside the United Kingdom.
  The other problem airline an operator must face is that, although he may plan for a certain rate of growth, as he must, saying, "We want X more passengers next year and will do this and that to get them" as there may be internal changes—for example, the Budget—which affect his profitability and upset his plans. Government intervention in the national interest can impose severe handicaps on the operator.
  Another factor over which the operator has little control is the premature obsolescence of an aircraft. We have seen this happen in our own services. It has happened with the Vanguard, which has been made obsolescent because of the speed of development of new aircraft. It is a turbo-prop in a jet age. This is a very big change and can severely affect the operations of an airline.
  Mr. Robert Howarth: I apologise for interrupting my hon. Friend twice. Referring to the competition on the London-Glasgow route, he made a remark about B.U.A. which, on reflection, he might wish to reconsider. While it is true that the company had some difficulties, it is now beginning to pull out of them and this has been exemplified by the fact that it has just ordered five new BAC111s. As far as one can see, the airline is quite viable and, indeed, is increasing its fleet.
  Mr. Rankin: I thank my hon. Friend warmly for that intervention. Perhaps at the time I was thinking of events of a few weeks ago, when in the aviation group we were very much concerned, for it seemed that B.U.A. was about to face financial difficulties. I am sorry to have created a wrong impression and I accept fully what my hon. Friend has said.
  I have here the economic review presented to us by B.E.A. for the year ended 31st March last year. We should consider what it says because it is very important. We are investing money in B.E.A. and should look at what is happening, because this reinforces what I have been saying about its difficulties. There was a profit of £5,095,027 before payment of interest on total capital borrowings and excluding the loss on the

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  Scottish Highlands and Islands services. They give certain comparisons as to the revenue yield per L.T.M. cost per C.T.M. and overall load factor. I mention that merely to go on to say that the significant change between last year and this year was a fall in load factor despite the fact that this change also happened to be quite small. It was this small drop in load factor from 60·2 per cent. to 59·3 per cent. which caused B.E.A.'s net profit to fall by £575,429. That is only a fractional fall in load, and yet it represented a fall in actual money profit of over half a million pounds; and therefore it emphasises the importance of the load aspect and what can derive from competition which in my view is unnecessarily prejudicing the Corporation that carries the flag. I do hope, therefore, that my hon. Friend will think very seriously about this problem and also about the other problem which B.E.A. carries.
  Part of B.E.A.'s contribution to community services is represented by what it does on the Western Isles. For that it has already incurred this year a loss of over a quarter of a million pounds. This is a service to the community and I feel that the Government must in one way or another face up to this fact. Are they prepared to give some consideration to British European Airways which have been responsible for this social service for so many years? It has performed it well and has borne without complaint the loss on financial outturn which it causes to B.E.A., standing always as it does with the accusation before it that it is not making as big a profit as it might wall do.
  I know that my hon. Friend has often had this issue presented to him, and that hi; Department has lived with it for a long while; but I want merely to remind him that it is still there and in my view there is no reason why the community should shelve on to B.E.A. a burden which is a community burden. I therefore see, no reason why the Government should not give special consideration to this problem, in financial terms, in order to assist British European Airways in bearing that burden.
  6.35 p.m.
  Mr. Stanley R. McMaster: It gives me particular pleasure tonight to follow the hon. Member for Glasgow, Govan (Mr. Rankin) who
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  speaks so well for Glasgow and Scotland, as I speak for Belfast and Northern Ireland.
  I believe it was the hon. Member for Bolton, East (Mr. Robert Howarth) who remarked that this debate was sparsely attended, probably because many of us were still debating at 2 o'clock this morning another aspect of the aircraft industry. It seems to me, looking round, that we still have in the House today very much the same team as were in the House at that time.
  The hon. Member for Govan will perhaps remember that in Standing Committee C in 1960 we debated the Air Transport Licencing Board. I am not surprised to hear him take the attitude he does and almost to regret the fact that B.E.A. has introduced jet aircraft in one of its services. I can see him perhaps suggesting that it would be better to have no competition at all so that B.E.A. could go on operating turbo-prop aircraft services until the year dot. But I take a very different view from the hon. Gentleman's.
  Mr. Rankin: I must correct the hon. Gentleman. I did not intend to give the impression that I regretted advance in any quarter. I want to see advance, but I want to see it all round, and I do not want to see the national airline handicapped in any way whatsoever in its advance.
  Mr. McMaster: I do not wish to spend too much time on this point. The hon. Gentlemen spent some time on it, and what he said is on record. He concluded his speech on that point, and I take a very different view from him about the operation of the Air Transport Licensing Board.
  I travel almost weekly by B.E.A. through London Airport to Northern Ireland, and I find the efficiency of B.E.A. not quite as good as it has been in the past. I am sure the hon. Gentleman must have noticed it. I have noticed it myself and it has been commented upon to me by many passengers. Only a week ago, while travelling home on an urgent call to my constituency, I wished to change to an earlier flight and I met with considerable opposition in trying to get on an earlier flight. In the end, I was reluctantly put on one, and then found to my surprise that there were several empty seats. This means that the staff

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  at London Airport, operating as they do under difficulties, of course, are not as much on their toes as staff in some of the independent companies who have been given a licence to operate a very limited service in competition with B.E.A. As I see it, B.E.A. has virtually a monopoly position. On many of the routes within the United Kingdom, the Air Transport Licensing Board seems to have been motivated by excessive conservatism.
  In the case of the Air Transport Licensing Board granting a frequency to an independent line, there is a right of appeal and the final appeal goes to the Minister, which, perhaps, is unfortunate because the Minister is the protector of the public purse and is responsible for the expenditure by B.E.A. of the money we are debating tonight and, therefore, must protect the investment. The operation of the Air Corporations Act over the past eight years has had the effect of limiting very strictly the competition which British United Airways and British Eagle have been able to offer, so that their services have been hardly viable; and the hon. Gentleman is right in commenting on the financial difficulties into which British Eagle and British United have passed.
  I have seen British European Airways failing to operate a frequency at a time that many of the travelling public would have liked and B.U.A., on being granted a frequency, immediately duplicating it with faster aircraft. This is competition of the very finest type. But I feel that the hon. Gentleman went too far in suggesting that B.E.A. suffers from this competition. It has the giant slice of the cake. The dice are very much loaded against the independents.
  Mr. Russell Kerr: Perhaps the hon. Gentleman will go on to tell us that the main objection of B.E.A. is about independents being allowed to come in and cream off the main trunk routes—those which are the most profitable. The position is not as he suggests.
  Mr. McMaster: I am going on to deal with this point. The service within the United Kingdom, particularly to Northern Ireland, offered by B.E.A. is gradually falling behind that of similar services
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  offered in other countries. The hon. Member for Govan, referring to the ordering of aircraft, said that he would not venture to America. If he did he would see the type of services offered by airlines there and, when he compared them with those offered by B.E.A., which has a virtual monopoly in Britain, he would have some surprises.
  The hon. Member for Orpington (Mr. Lubbock) said that in many airlines in the United States only jet services were offered. They no longer operate turboprops. In many of its continental services, where it faces much stronger competition, B.E.A. operates almost exclusively with jets. Only we in Britain are left with slow, less efficient, turboprops. There is considerable room for improvement, and more competition would cause B.E.A. to improve its service.
  Loading and unloading of planes and the "bus-stop" service were referred to. There is a "bus-stop" service, which has been operating for a long time, in the United States. Passengers can walk straight on to the aircraft. I have not seen the statistics but I suggest that B.E.A. might carry out a survey. It might be found that 70 per cent. to 80 per cent. of the travelling public has travelled before. The ticket is pre-booked. I do not see why a passenger who knows the ropes should not walk straight through the building at London Airport and reduce congestion by going straight out on to his aircraft instead of changing his ticket at the desk and having another voucher issued, which is again changed as he gets into the bus. One operation would save time.
  Only one or two girls would be necessary, instead of the 12 who take the luggage or advise those who have never travelled before. We do not need a whole row of them at London Airport. I remember that a few years ago I made a suggestion to the right hon. Gentleman, the present Chancellor of the Exchequer, about running buses direct from the side of the aircraft to London. I also passed this on to Mr. Milward as he then was, the Chairman of B.E.A., and was delighted when he accepted the idea. This is not a new idea, but it might well be used to the advantage of the British travelling public. We spend vast sums of money—and an example is to be found in this

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  Bill—in increasing the efficiency of the service by introducing jet aircraft which cut perhaps 10 minutes off the flight to Belfast. This is at great cost to the airlines. We then waste the same amount a time, or perhaps double or treble, hanging about London Airport.
  It is a little pointless buying faster aircraft at higher prices and then not paying the same attention to the loading and unloading of passengers and luggage. I would also encourage more passengers to carry their own luggage on to the aircraft. This would reduce costs.
  Sir Knox Cunningham: Would my hon. Friend agree, speaking of the method of conveying passengers to planes at London Airport, that what used to be an easy operation for elderly persons is now highly dangerous? One is put into one of these buses and taken at high speed, standing up. One has a considerable amount of difficulty in keeping one's feet. Is this not something which could be improved?
  Mr. McMaster: Yes. I would like to see much more progress being made with the direct loading at one level into the aircraft, of passengers and luggage. One could go out alongside one of the jets and, instead of going right down, like the Duke of York, marching his men up to the top of the hill and down again, one could walk straight on at the same level. This method is adopted in the United S sates and progress is being made in this direction at London Airport, but it is painfully slow. I agree that those buses running out without any seats are a real hazard for elderly people, or people with children, or any other infirmity. [Interruption.] I will not rephrase that sentence; I think the House takes the point.
  The Government have lost an important opportunity in the ordering of the now aircraft to re-equip B.E.A. We have been delighted to see that Rolls-Royce has sold its 211 engine to Lockheed. I very much regret that the Government did not see fit to go ahead with the B4C211. This aircraft would be ideally suited for the route to Belfast. We do not want the airbus to Belfast, it is too big, we would only have one or two services in a day. We do not want the small Trident 3B because this service referred to in the Bill is a busy one, increasing between 12 per cent. per annum and 14 per cent.
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  per annum. It is a wonderful service, making a profit when others were making a loss. An aircraft that would fit into the slot, as the manufacturers say, such as the BAC211, seems ideal.
  The Minister should look at this again. We are manufacturing this RB211 engine for Lockheed and we hope to manufacture a down-graded version of it for the airbus, the A300, when that comes along. We are not sure that it will come along, and even if it does, there seems to be a gap between the Trident 3B, which has a very small export potential, and the airbus. Britain should be manufacturing an aircraft between the BAC111, which is a very fine aircraft, and the airbus. We should be designing something. Perhaps by now the BAC211 is out of date, but we could use this advanced-technology engine in a newly-designed aircraft, even better than the BAC211, but along those lines, to fill this slot. The Minister would do well to follow the suggestion of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) and reopen this whole question.
  There has been a very sharp rise in the fares on the services within the United Kingdom, particularly to Northern Ireland. It seems only four or five years ago that B.A.C. received great support in Northern Ireland following an advertisement for peak fares to London in winter of £3. If one was lucky enough to get on to the flight standby and save the fare, one could fly from Belfast to London for £2—a remarkably low fare for that distance, but not out of line with some of the fares charged in America and other parts of the world for similar distances. Now the standard fare has been raised by 10 per cent. If one includes the bus fare, it costs almost £20 to fly return in winter on an ordinary flight from London to Belfast. This very sharp rise has caused a great deal of discontent among passengers.
  It might be said that I am taking extreme cases, and not comparing like with like, but off-peak flights with the standard flights. As to the standard flights I have received many complaints, as a Member for Belfast, on the sharp increase in fares to Northern Ireland. I say this with some strength, because one notices in paragraph 27 of the decision of the Air Transport Licensing Board in

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  July last year the remark that "B.E.A. are making a profit on the Belfast flight". If they are making a profit and have made a continuous profit on this flight, why is it they need to put up the price? Are B.E.A. doing what the Minister suggested in opening this debate—maximising their profit? Are they milking the profitable routes in order to pay for the less profitable ones or the ones that are making a loss, for instance, the Highlands and Islands? How does this fit in with the Government's regional plan?
  I suggest that this service to Northern Ireland is a vital lifeline. We are in a peculiar position in Northern Ireland, in that we have a sea barrier. This has an effect on our efforts to develop and encourage new industry to come to Ulster. As a result of this, our industrial development has lagged behind the rest of that of the United Kingdom. Our unemployment rate, even with the recent decrease, is still over 7 per cent., which is almost three times the national average.
  One of the ways in which we can improve our industrial development in Northern Ireland is by improving our transport links. This is where an air service is the ideal type of service for business men travelling between the South of England and Northern Ireland. They do not have to trouble with trains and boats. It is therefore essential, if this industrial development in Northern Ireland is to go ahead quickly, that we should have a good, economic, cheap air service between Belfast and London and other cities in the British Isles.
  I feel very strongly that the Minister should re-examine the fare structure between Belfast and London and consider whether the fare has not been raised too much, to see what effect this will have in building up traffic, remembering what I said a few moments ago about the monopolistic position of B.E.A. on the route.
  If there are services such as the Highlands and Islands services which are making a loss and the Government feel that it is socially desirable that B.E.A. should continue to operate the services, the Government should be prepared to subsidise them out of public funds in the same way that certain railways are
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  now subsidised. It is not fair to the travelling public to Northern Ireland to expect them to pay more on a service which is making a profit in order to subsidise other services in the rest of Britain. It also seems to be directly contrary to the Government's economic policy and industrial development policy which should, if anything, encourage the State air corporation to reduce its fares in order to encourage industrial development in Northern Ireland.
  I should like to mention the aircraft which have been referred to already. The Minister, in opening the debate, referred to orders for British aircraft which had been placed: the Trident 3B, BAC111, series 500, and the airbus. The hon. Member for Orpington mentioned the need for a freighter aircraft to be operated by the air corporations. The air corporations should look particularly at the type of aircraft which are being produced in Northern Ireland. It was suggested that they could look to America because of the system of palletising loads, but we have a small freighter produced in Northern Ireland—the Short Sky-van—which seems ideal for the uses of B.E.A. This aircraft is now being sold to the United States, and it will be somewhat contradictory for B.E.A. to look to the United States for a freighter or develop the Vanguard, which will not take a pallet, when it could order such aircraft as the Short Sky-van to serve this function.
  These planes can take a pallet, could fly directly to London or to other towns in the United Kingdom, and would also be of great use in furthering the industrial development of Northern Ireland. They could offer a first-class service to manufacturers setting up new industries in Northern Ireland—a quick, inexpensive service to the main industrial centres of the United Kingdom. This alone, with a policy of cheaper air fares, would do a great deal to improve the industrial development and build up the air traffic between Belfast and the rest of the United Kingdom and, indeed, the rest of Europe, particularly if we entered the Common Market.
  The subject of airports has also been mentioned today. I feel very strongly that the British Airports Authority was ill-advised to increase the landing fees at British airports following devaluation. I

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  would refer the Minister in this context to a recent article in a South African magazine called Prospect. The Minister spoke of an analogy when referring to the British Airports Authority increase in tariffs. This magazine pointed out how a manufacturer of machine tools had sent a short note, following devaluation, to a purchaser in South Africa advising him that as a result of devaluation, the manufacturer could charge 16 per cent. more for the machine tools but that he was only going to charge 14 per cent. to the South African purchaser. The South African purchaser was understandably irate about this. He immediately sent a letter to the manufacturer in Britain saying "Thank you for nothing" and got in touch with the Japanese to see what their rates were for machine tools. I suggest it is very bad business to raise tariffs just because we are in a position to charge more, and this applies equally to our airports. It is important for the industrial development of this country—and I should like to put this Bill into the background of our general economy policy—to encourage trade and commerce.
  We will soon have a third airport for London, and when we do we will want to encourage more traffic to the United Kingdom from the Continent and from America. This policy of the Government—without any consultation, without warning and apparently without economic justification—in raising the landing fees by an arbitrary amount to get the maximum from the operators can do nothing but create much These operators will frequently have a choice, particularly on inter-continental flights, in whether they wish to use the airports in this country or not.
  We want to build up airports. At the moment Heathrow is overloaded, but once we have another airport—whether it is Stansted or elsewhere—we will want to increase the traffic and, with better methods of air traffic control, we will be able to build up the frequency.
  The aim of the Government in this Bill and in its airport policy should be to reduce tariffs as far as possible in order to build up greater trade and commerce and encourage more airlines to fly to London and, through London, to the United Slates and elsewhere.
  6.59 p.m.
  Mr. Cranley Onslow: I susspect that more hon. Members might have sought to catch your eye, Mr. Speaker, if we had been aware in advance how far we might range in this debate and still remain within the rules of order. But, perhaps it is just as well that advertisements to this effect are not circulated to hon. Members. You have heard a good deal about aircraft within the last week, Mr. Speaker, and you may share my wish that we could achieve the status of a specialist committee on aviation matters, so that we might discuss these things more fully in our expertise and perhaps disagree more deeply within the somewhat restricted membership of those closely concerned with aviation affairs.
  It is not my intention on this occasion to try to prove what I might call "Bence's law", that "speeches expand to fill the time available for their completion", so I will touch only briefly on one or two points made by speakers in the debate.
  The hon. Member for Bolton, East (Mr. Robert Howarth) is not with us at the moment, and perhaps I may leave him to read in HANSARD my advice to him on the trouble he has had with The Times, which is to cancel his subscription and to take the Daily Telegraph instead. That should ensure my being reported in both newspapers.
  I should like to return later to the points which the hon. Member for Orpington (Mr. Lubbock) made about the landing charges at Heathrow. I find it very hard to accept his argument that it was impossible for there to be consultation with the airline operators before these charges were brought into operation. Today's newspapers carry a report of a meeting of the Heathrow Airport Airline Operators' Committee at which 40, I believe, of the 43 airlines represented, including those from Eastern Europe as well as North America, united in their opposition to the charges. If there could indeed not be proper consultation, it is very important that some means should be found to enable proper consultation to take place in future.
  The hon. Member for Glasgow, Govan (Mr. Rankin), who is not at present in the Chamber, made some valid points about crowding at Heathrow, although there are those who believe that air traffic control procedures could be developed

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  to a higher pitch which would enable more landings and take-offs to take place there. However, I should like to take this opportunity of putting to the Minister a point concerning general aviation flights at Heathrow. Small, taxi executive aircraft are, I am glad to say, becoming increasingly popular. But we must recognise that when they make use of a major international airport they take up slots in the landing or take-off pattern which might be put to much greater passenger benefit if instead of a 10-seater aircraft using them a 100-seater aircraft were allowed to come into the traffic stream.
  There is also a good deal of evidence of the risk entailed by allowing general aviation flights in the area of a major international airport. The Minister will probably have seen some figures on this subject in this week's edition of Flight. If he has time to touch on this point, I should be glad to know whether he is in agreement with the Chairman of the British Airports Authority, or whether he sees any prospect of developing for general aviation purposes the airport at Northolt, of which the R.A.F. can hardly be making saturation use.
  The hon. Member for Govan also referred to the pressing need for the mounting of the inquiry into the third London Airport. He might not have listened to speeches made on this subject from this side of the House some months ago in which we stressed the urgency of this need. The whole House is glad that the Government have at last accepted it. It would be of general interest if the Minister could tell us tonight what progress is being made on setting up the inquiry.
  The hon. Member for Govan suffered the unusual experience of being accused by his hon. Friend the Member for Bolton, East of not going back far enough in time, which he must have found a somewhat new charge. I was also a little sceptical about his proposal to instal the RB211 engine in the Trident, which I should have thought would create a surplus of power. Perhaps the hon. Gentleman was not at his most serious when he made that point.
  It was very mischievous of the hon. Gentleman to suggest that B.U.A. was on the verge of bankruptcy. If he were present, I should ask him to withdraw that
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  statement. Independent airlines, indeed all airlines, have faced a difficult period, but the evidence which we have had recently, with the considerable orders placed by B.U.A. for new British aircraft and the major part which the Air Holdings Group played in securing the RB211 order by putting down a bid of their own for 50 airbuses, should indicate that this is by no means a bankrupt concern. It is very much a go-ahead, determined and enterprising concern. To throw allegations of that kind around the Chamber is the height of irresponsibility.
  My hon. Friend the Member for Belfast, East (Mr. McMaster) made a useful contribution, as he always does, particularly by virtue of his being a regular airline traveller. It is worth remembering that travelling experience by air is not confined to those fortunate enough to be able to take frequent trips abroad. The communications by air which exist between the various parts of the United Kingdom are an integral part of our society. They provide a service which might well be developed and expanded in certain other areas of Britain, notably the South-West. We are often insufficiently air-minded as a nation, and when we consider transport and communication problems we are very slow in appreciating the part which aviation can and should play in bringing the various parts of this quite small island closer together.
  Another absentee whom I must mention is the hon. Member for Feltham (Mr. Russell Kerr), who made an intervention concerning competition. He seemed to cast scorn on the idea that the introduction of independent operators to some of the domestic scheduled flights had been to the public disadvantage. He spoke of "creaming off" the most profitable sectors. This is a very narrow attitude. The right way in which to gauge these matters is in terms of providing more cream for the customer. If we want more choice, better flights and more modern aircraft, competition is the way to introduce them and the customer is the person who will benefit, I have no sympathy for narrow points of view of that kind.
  My hon. Friend the Member for Belfast, East reiterated the plea of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) about reconsideration of the BAC211. I should like

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  to clarify one point with the Minister. My hon. Friend quoted £50 million as being the figure which had been estimated for the engine element in the development of the BAC211. The Minister intervened to say that the correct figure was £30 million. I am puzzled about this, because it is at variance with the evidence given to the Select Committee xi Nationalised Industries reported in paragraph II 36 on page xxiv of its second Report, in which it says:
  "… the Ministry of Technology put the launching costs at £60 million or more for the aircraft itself and £50 million or more for the engine".
  Perhaps this is all water under the bridge, but some of us in the past have felt inclined to accuse the Government of using an elastic slide-rule in doing their calculations on projects which they do not want to support. I should not necessarily condemn the Minister for that, but if we are to be able to reassess past decisions with a view to getting similar decisions right next time, it is important that there should not be an element of doubt about £20 million left in the history of the venture.
  The Minister said that he was sorry that the Bill had to be brought forward in this form. The House shares his regret, because we had looked forward to getting the financial structure of B.E.A. resolved for the next 10 to 15 years. We know how hard it is to find places in the legislative queue for Bills of this kind. We should have welcomed an opportunity to get the matter right and to be fairly certain that for 10 or 15 years we should not need another Air Corporations Bill.
  I was not clear from what the Minister said about precisely why the timing had gone against him. I understood him to say that discussions were far advanced and that he could not reveal the nature of the financial arrangements he was contemplating, but that he believed that the discussions were nearing their end and that he hoped to be able to tell hon. Members during the further stages of the Bill what the proposals were.
  If the arrangements can be finalised in time for the Bill to be amended, is it the Government's intention so to amend it? It seems to me unlikely that we shall get into Committee before Easter, and therefore we have a certain amount of time to play with. We have a month before we can expect to reach the Com
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  mittee stage. Is there no possibility of getting the discussions cleared up in that time? Sir Anthony Milward, Chairman of B.E.A., writes in the current issue of BEA Magazine:
  "I know from my discussions with the President and his staff that they are as anxious as we are to get this cleared up quickly and honourably."
  I know that there is not an easy process to be gone through, but there is good evidence of good will on both sides and I very much hope that it will be possible, with co-operation between the Board of Trade, B.E.A. and the manufacturers, to get this settled and enable the House to clear up the whole thing.
  I make this point with slightly more emphasis because I am not certain that Clause 1(2), which authorises the Board to borrow £10 million against the revenue deficit, has very much to do with the purchase of the Trident 3B. It seems to me to be designed, sensibly perhaps, to deal with the short-term financial difficulties which B.E.A. may face if—as is possible, although we hope that this may not happen—it finds itself running into fairly substantial annual losses, not just this year but next year as well. It is conceivable that B.E.A. could lose about £10 million if air operations become an uneconomic sector in a relatively short period. This contingency fund will guard it against the consequences of that, but I do not see how it will help it to finance the costs of introduction of the Trident 3 and provide it with any element by way of compensation for such financial penalties as it may incur on its operation.
  There are one or two other items on which B.E.A. may have to spend money and which the Minister did not mention. One is hotels. The right hon. Gentleman knows how important it is that when people have been flown into this country they should have somewhere to stay. There are those who believe that the shortage of hotel beds is one of the main limiting factors in international air travel, and there is certainly evidence of a need to provide more hotel facilities. I do not know whether there is any intention that B.E.A. should be responsible for their provision, and I am not sure that I am wholly in favour of B.E.A.'s doing so. So long as there are other people who can do this, I do not see that it is a necessary adjunct of air line operation.

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  The other and very important project on which money must be spent is the electronic data processing of air freight and the development of the new cargo terminal at Heathrow, which should have considerable effects in saving costs of both exports and imports. That is not to be despised.
  I return to the question of landing charges. I share the unease of my hon. Friend on this subject. One thing which came out in the exchanges during the Minister's opening speech which does not make it any easier for me to understand the situation, is why the initiative in the question should have come from Mr. Peter Masefield. I cannot see anything in the Airports Authority Act, 1965 which obliges the Chairman of the British Airports Authority to take into account considerations of foreign exchange. I am not wholly in favour of chairmen of nationalised authorities exceeding their briefs. It is particularly undesirable that they should do so unless the Minister responsible takes the initiative in suggesting that they should do it.
  If the Minister had told us that he proposed to the chairman of the Airports Authority that he should consider this matter and submit recommendations to him, I should have found it easier to understand the way in which the matter has come about. But we have been told that the Authority took the initiative in this and I am puzzled to see how what has happened wholly squares with the evidence which Mr. Masefield gave to the Select Committee on Nationalised Industries. I quote from page 98 two exchanges, in the first of which Mr. Masefield says, speaking of landing fees.
  "If we wanted to alter them, we would have to go to the Board of Trade; I think we would have to go to the Prices and Incomes Board."
  The President of the Board of Trade told us that for some reason which is not wholly clear, this did not have to go to the Prices and Incomes Board. I am not sure that he has explained why.
  The second answer Mr. Masefield gave is even more interesting in a way. Asked about the basis on which the fees are fixed, he replied:
  "As I understand it, there were three basic factors taken into consideration. Number one,
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  and I think the primary one, was charging what the traffic would bear. Number two was achieving an adequate return on capital. Number three was to have one simple single fee which would embrace everything instead of these rather complex charges of all sorts of things which happens in some other places."
  The third of those criteria has gone to some extent, because we now have what we did not have before, a differentiation between the domestic and international landing fee. If I am correct in my understanding, these were previously the same and the inter-continental fee was more heavily weighted. There are now three instead of two, so there is more complexity.
  I suppose that it could be said that we are now receiving a greater return on capital, but there is no evidence that fees previously represented an inadequate return. So I come back to the question of what the traffic can bear. The President of the Board of Trade should have taken greater pains to see that there was full consultation on this, and he should have heard evidence from both sides. Sir Anthony Milward is very critical of the increase, and the foreign operators have been very critical. I see nothing in their reaction which leads one to suppose that they are likely to try to divert traffic in the direction of this country. I know that the foreign operators will not be paying any more than they were before, but although they have been denied an uncovenanted bonus as a result of devaluation, B.E.A. will certainly pay £200,000 a year more on their international routes, on top of the extra £100,000 which will be the cost to it, direct or indirect, of the latest Budget.
  Here we have another £300,000 a year being put on B.E.A.'s shoulders at a time when we are already aware that it stands in danger of making a loss of £3 million. This is not likely to make its task of providing air services any easier, and I do not believe that it is likely to make its staff morale any better. It is a fairly reasonable proposition that people who work for a firm that is not making money have a lower morale than those who are working for a firm that is making a profit. It is important that the morale of a Corporation like B.E.A. should remain high, because so much depends on all members of the staff doing their tasks with great diligence and responsibility.

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  I turn to the question of aircraft noise. I think that there is an obvious connection here. We are being asked to vote large sums of money for the purchase of aeroplanes for expanding air operations, and to a great many members of the public that will simply turn itself into a proposition that we shall buy them more noise in the sky. I do not regard these matters in that way, but the Minister knows that there are many people who feel as the hon. Member for Putney (Mr. Hugh Jenkins) feels, that noise is an abomination, and there are some who would go as far as the hon. Gentleman sought to do last Friday, which is to ground every jet aircraft in current airline service at the end of five years, and, incidentally, throw many people out of work and lose a lot of money.
  Mr. Hugh Jenkins: I sought to do no such thing. In any event, I was prevented from doing anything at all half way through the proceedings by the Chief Whip.
  Mr. Speaker: Order. The hon. Gentleman is prevented tonight from debating the ending of Friday's debate.
  Mr. Onslow: Were I in order, I should most emphatically dispute the hon. Gentleman's first assertion but unquestioningly accept his second. The serious feature of what happened was not that I was prevented from making one of the best speeches I have never delivered but that the Minister was denied the opportunity of giving certain information to the House which I believe that he was ready to give and which I think the House would have been glad to hear.
  Mr. Speaker: Order. The hon. Gentleman complimented the Chair on being so generous tonight. He must not abuse its generosity.
  Mr. Onslow: I would never seek, Mr. Speaker, to abuse your generosity. The Minister may be equally anxious this evening to give us certain information. May I leave the thought in the mind of the Chair that when we talk about spending large sums of money on buying aeroplanes, the people who live underneath them would be glad to hear a statement from the Minister on certain proposals he may have in mind.
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  We know there is an intention in the Board of Trade to introduce noise certification. We have waited some time to hear precisely what these proposals might be. They were first outlined to the House very roughly almost exactly a year ago, on 17th April, 1967, by the then President of the Board of Trade. We understand and appreciate the complexity caused by the need to obtain international agreement. Nevertheless, if we can be told anything about proposals for introducing noise certification, the public will most heartily welcome greater information being provided to them, as they should always welcome information which helps them to understand the peculiar problems of aviation and air operation.
  Incidentally, it is time that a more up-to-date copy of the Ministry's pamphlet on aircraft noise was produced. It was printed in May, 1965, and it is still in current circulation. Much has happened since. This whole subject is one on which there ought to be a White Paper, and indeed there ought one day to be a proper debate. I am grateful to you, Mr. Speaker, for your generosity.
  Mr. Speaker: The hon. Member has misunderstood. Noise is in order but the circumstances of the ending of Friday's debate are not in order.
  Mr. Onslow: I am afraid that I did misunderstand you, Mr. Speaker, but that paragraph will join my collection of speeches never delivered.
  I turn now to labour relations, a matter which was not mentioned by the Minister but which is relevant in the immediate context of the operation of B.E.A. and, slightly more obviously, of B.O.A.C. We have an unpleasant threat of another Easter strike. I very much hope it will not happen. The travelling public resents being held to ransom in this way. Any trade unionist misguided enough to take it out of the travelling public on bank holiday cannot expect to receive much sympathy or support.
  On a more general matter, I ask the Minister to give us a short comment on the Pearson Report of the Court of Inquiry into the dispute between B.O.A.C. and the British Air Line Pilots Association, which deals tangentially with B.E.A. particularly in the third of the conclusions

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  of the inquiry, on page 36 of the Report, which reads as follows:
  "There is strong dissatisfaction among the pilots about access to the level of decision, about status and about consultation at the appropriate management level, and in our view there is some foundation for this dissatisfaction."
  That is founded on the full Report, paragraph 79 of which states:
  "Something has gone wrong with the relations between the pilots and the management in the two corporations."
  We know and welcome the fact that B.A.L.P.A. have returned to the N.J.C. I hope the Minister can tell us that something has been done to restore the unfortunate breach in labour relations between pilots and employers. This is a matter of great importance to the travelling public, the pilots and the corporations. We have not had a reaction on this from the Government side, although I realise this is directly the responsibility of the Ministry of Labour and not that of the Minister himself.
  May I comment briefly on two points made by the Minister? The House will be delighted to know that he has decided to publish the Air Safety Review. He has for some time been pressed to say how far it had gone, and we shall certainly want to debate it. Meanwhile considerable reassurance is to be derived from the conclusions he has outlined to us. There should be no further cause for the kind of alarmist comment which was set off by the unfortunately coincident crashes which took place last year.
  When the Minister comes to consider the changes in the regulatory procedure, I would ask whether an increase in staff will be required. I assure him that, if it does, I shall not object. I had a Question down to him some time ago which showed that there had been an increase of 19 per cent. in passenger miles flown and an increase of three in the staff of the Air Safety Department. This suggests an imbalance which I hope can be rectified. I have also had correspondence with the Minister of State on the subject of type certification of pilots and I hope this matter can be tidied up when the regulatory procedure is being revised.
  The Minister did not touch on accident inquiry procedure. I do not know if this was covered by the inquiry. The Minister of State will remember that we
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  had an adjournment debate about it, and he expressed certain uneasiness, which echoed my expressed uneasiness, about the procedures we have at the moment. He told us then that he did not have a ready answer. I am not pressing him to produce an answer out of his hat, but, the progress of the Stockport inquiry has to some extent underlined the uneasiness I expressed. Since this is still sub judice, I will say no more now than that the inquiry has taken a somewhat erratic course, and it is possible to conceive that it might have been conducted with greater expedition and at less expense if it had taken a somewhat different course at the outset.
  The Minister ended his speech by giving a review of the export prospects of the industry, and these, as I am sure the House will agree, were highly creditable and most encouraging. They are a vindication to any Member of the House who is prepared to say, as I am, that our aircraft industry is one of our most important export industries, and that it has an enormous potential. The Government can help. The Government have helped and nobody is denying that the Government are helping now. Perhaps the Government will be expected to help more in the future.
  The main credit still goes to the industry; so much for Plowden. The events of the past few years and the successes achieved by the British aircraft industry make the Plowden Report look even less convincing in retrospect than some of us felt it looked at the time it was produced. Anyone who believed there would be a major redeployment out of this industry into other sections of the British economy will be very surprised when the effects of these latest orders and the implementation of the Concorde project come to be felt. Perhaps the Ministry of Technology could be persuaded to drop their inquiry into redeployment from the aircraft industry and mount an inquiry about redeployment into the aircraft industry.
  The only anxiety we can have is whether there will be adequate capacity for all the work now coming in, whether there will be adequate capacity at Rolls Royce to develop the RB207 engine for the airbus. One of the secrets of maintaining initiative in this field is to reinforce success. With the RB211 we have

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  had enormous success, which must be reinforced. Efforts must be concentrated on it. I have the uneasy suspicion that in the process, inevitably, Rolls Royce will not be able to devote the attention to the RB207 which might be needed for it to be ready in time to fulfil the airbus requirement which has been set upon it.
  I end by re-emphasising what my hon. Friend said. Aviation is an expanding industry, in aircraft manufacture and in aircraft operation, and we on this side of the House believe it is one in which Britain has in the past held a leading rôle and must at all costs now retain it.
  7.29 p.m.
  The Minister of State, Board of Trade (Mr. J. P. W. Mallalieu): Several hon. Members have remarked that, for various reasons, the debate has been thinly attended. Certainly it has not been thin in content or in quality. If you will allow me to say so, Mr. Speaker, at least part of the credit for that lies in your own lap, because you have allowed us considerable freedom to discuss a wide variety of topics which are related to the Bill without being integral to it.
  In those parts of the speeches which have been directed to the Bill, there has been general approval of its provisions. Speaking for myself, I found it extremely helpful to hear the wider aspects of aviation debated, and I shall make sure that the Edwards Committee is well seized of the points which have been raised today.
  One or two of them were very much matters for that Committee. My hon. Friend the Member for Glasgow, Govan (Mr. Rankin) and the hon. Member for Belfast, East (Mr. McMaster) made some criticisms of the licensing system. That is very much in the sphere of the Edwards Committee and will be considered by it.
  My hon. Friend also brought up what is an old subject in this House when he referred to the Highlands and Islands and the "losses" that B.E.A. suffers there. He asked about the prospects of a subsidy to cover the losses. It is extremely difficult, however, to say that these social service activities result in a loss. One sees a loss in the accounts, but what one does not see is the profits from inter-lining which may result from those activities. This, too, is a subject
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  which the Edwards Committee is considering at present.
  Not for the first time, the hon. Member for Belfast, East complained a good deal, and again he referred to the A.T.L.B. and services to Belfast. B.E.A.'s licence contains no restriction on the number of flights which it can run between London and Belfast, and it is up to its commercial judgment to decide how many it shall run. However, it has not a monopoly on the route. B.U.A. runs services to Belfast from Gatwick. Its licence is a restrictive one, but it has an application in to the A.T.L.B. to have its frequencies increased. Of course, I cannot comment on the prospects of that application.
  In what was a particularly helpful speech, the hon. Member for Woking (Mr. Onslow) mentioned the subject of noise. Although we have responsibility in the Board of Trade for helping to see that the airlines prosper, independents and public corporations alike, we have a direct obligation to the people underneath the glide paths and elsewhere who suffer from noise. In the course of years, we have taken a great many steps to mitigate what undoubtedly is a nuisance. Some of them, about a limitation on night flights, and so on, are just in mitigation.
  The real means of combating noise clearly lies in engine design. A tremendous amount of research has been done already, with very fruitful results, into ways and means of getting quieter engines with silencers, suppressors, and so forth. The latest results have reduced what is known as jet roar so far that we are beginning to be annoyed by the compressor noise which was hidden by it. It is the ghastly whistle which jet engines have as aircraft come in to land. Research is going on into it both in private industry and in Government establishments.
  Ever since the meeting of the International Noise Conference and the Wilson Committee, we have been in close discussion and negotiation with the United States and France about the possibility of bringing in some form of noise certification. With your permission, Mr. Speaker, I can tell hon. Members that the discussions have gone forward so fast and so successfully that we are now in a position to introduce legislation in

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  the House, subject to the one qualification that there is a slight difficulty about the propriety of adding a new Clause to a Bill which is going through its Second Reading. However, that is probably a matter which can be discussed fruitfully with the Opposition. So far as we are concerned, we hope to proceed with the legislation.
  Mr. Onslow: If the hon. Gentleman is referring to the Civil Aviation Bill, that has gone through its Second Reading and now awaits Committal to a Standing Committee. I should be extremely interested to have discussions with him, however, to see how any obstacles might be ironed out.
  Mr. Mallalieu: I am grateful to the hon. Gentleman.
  Mr. Lubbock: Surely the suggestion is one for the House as a whole to consider and should not be left to the usual channels.
  Mr. Mallalieu: That is a procedural point. Whether we should have a whole day's full-scale debate and whether or not it is proper, I would not know, but—
  Mr. Speaker: Order. We had better get back to this Bill.
  Mr. Mallalieu: In whatever form it comes, the legislation will initially and primarily be to do with the new generation of engines. We hope that it will be possible to reduce the noise in new engines by anything up to half that of existing ones. In addition, we have to consider engines which are now flying or in the pipeline. Obviously there are immense difficulties. If planes which still have plenty of service in them are grounded, questions of compensation may arise. But there may be other ways of doing it by still better silencers on existing engines or even by re-engineing in some way. Therefore, in the legislation that we propose to introduce by one means or another, we shall have power to deal with engines which already exist, though we may not necessarily be able to use them.
  A good many hon. Members have referred to the increased landing charges. I was a little disturbed by the point put
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  by the hon. Member for Gloucestershire, South (Mr. Corfield) about consultation. The procedure is that the British Airports Authority normally would give six months' notice of any increase. That would permit time for consultations with and protest by all the airlines. It was not done in this case, but my right hon. Friend made sure that the proposed increase which the Authority wanted to make immediately was delayed for about two months.
  There comes a point in my right hon. Friend's position as arbiter when he has to watch the interests of the airport authorities as well as those of the airlines, just as he has a mixed duty when it comes to aircraft noise. Though the Authority put forward its proposal for an increase mainly on the basis of its own finances, when my right hon. Friend was considering the proposal he had to consider also the national interest, and of course the national interest was very much concerned with the balance of payments side of the issue, and with getting foreign exchange.
  The Authority's point of view is that although, on the face of it, its figures look pretty good, they are not nearly as good as they seem because of the work that the Authority is having to do. The last published figures represented a return on assets of about 12½ per cent. About 5 points of that 12½ per cent. come back to the Exchequer in terms of interest, and still more goes off in Corporation Tax. What is left is not a great deal with which to finance the developments which the Authority now faces. In the Board of Trade we are under constant pressure from Scottish Members, or at least from some of them, to do something about Turnhouse, to improve the facilities there, and to put in a new runway. This is only one of the many projects to which the Authority will have to contribute substantially in terms of finance.
  The hon. Member for Gloucestershire, South quoted from the Bill and said that one part of it meant giving continuous subsidies within this figure of £10 million. My right hon. Friend explained that that was not the intention, and nor is it. There is no question of the deficit being written off. It will remain on the accounts, and can be extinguished only by later profits.

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  The hon. Member for Orpington (Mr. Lubbock) raised the question of the profits of the B.E.A. beyond this year and next. My right hon. Friend said that it looked as though the current loss would be about £3 million, and he was asked how much it would be in the following year. According to the present estimates, it will not be less than it will be in the current year. Beyond that I am not prepared to forecast.
  My hon. Friend the Member for Bolton, East (Mr. Robert Howarth) raised a point about the possible purchase of foreign planes by a subsidiary of B.E.A., by B.K.S. We are aware of various proposals, and we are watching them with even more than our customary care.
  I propose, now, to say a few words about the constitution of the B.E.A. fleet at the end of the period about which we are talking. It is virtually certain that the air bus will not be flying in the B.E.A. fleet at the end of 1973. Assuming that orders are placed for it—and I have every reason to assume that they will be—the air bus should come in shortly after then. In 1973 there will not be any air buses. but there will be 23 Trident 1s, 15 Trident 2;, on present estimates, 26 Trident 3s, or perhaps a few more, and 19 BAC111s. Those planes will mainly constitute the fleet. There may be older planes still in service, but I do not want to go into detail about that, first, because I do not know, and, secondly, because it might tend to prejudice the position of the B E.A. if by any chance the Corporation proposes to put them up for sale.
  Mr. Lubbock: Will the hon. Gentleman deal with the B.E.A.'s plans for freight operations over this period?
  Mr. Mallalieu: The proposal mentioned across the Floor of the House was to convert its Vanguards. So far five have been converted to freighters. When they are converted, they can take a pallet. According to the advice which we have received, these converted Vanguards do a freighter's job extremely effectively.
  Mr. McMaster: What is the seating capacity of this Trident? Is it not small compared with existing Vanguards, and does not this mean that for the next four or five years the number of seats in the Trident 3B will be insufficient to meet the needs on domestic flights?
  Mr. Mallalieu: I do not carry these figures in my head, though perhaps I should. They are about the same as the Vanguard, and there ought to be an increase with the stretched version. The hon. Gentleman is justified in saying that there is a gap between the size of these aircraft and the airbus.
  Incidentally, I ought to thank the hon. Gentleman for his suggestion about land buses which he made to the Corporation. His idea was adopted, and has proved to be a good one.
  Hon. Members have suggested that we should look again at the question of the BAC211. I shall not go into the old history about who was in favour of this plane and who was not. I think that the time has come to make a decision, and I believe that this is very much the view of the B.E.A. The Corporation is worried, not about the quality of either the Trident or the BAC211 compared with American planes, but about the delay in approval for it to go ahead and re-equip its fleet. It is this delay which, to a substantial extent, is likely to cause losses in coming years when the Corporation is in competition with other lines which have not been subjected to the same kind of delay.
  The BAC211 is not the responsibility of the Board of Trade. It is much more the responsibility of the Ministry of Technology, but we should not hesitate to go back to that Ministry, and indeed to the Treasury, if we felt that after such a long delay it was in the best interests of the airline and of the country that we should go ahead with it, but I cannot at the moment hold out any hope about that.
  Mr. Corfield: I see the difficulty. We do not want to make confusion worse confounded, but I think that it would be useful to have the true difference in the capital costs as it now exists, bearing in mind the effect of the Rolls Royce order on the launching costs of the engine.
  Mr. Mallalieu: It would be difficult to give an exact estimate of what the cost of further delay would be—which would be an element in it—but I shall consider the point made by the hon. Gentleman.
  My hon. Friend the Member for Glasgow, Govan mentioned the difficulties about Abbotsinch and Prestwick and was suggesting that the latter might

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  possibly be used as part of a bus service. The Airports Authority and Glasgow Corporation have come to a reasonable and firm understanding about the relationship of these two airports—that they are both going to be necessary and are complementary; that Prestwick is for long-haul traffic, primarily North Atlantic, and Abbotsinch is for medium and short-haul traffic. We hope that agreement will be maintained.
  The hon. Gentleman the Member for Gloucestershire, South raised a question about inclusive tours and the cheaper fares for night flights. I think this is a good point. I do not know whether we can do something about it, but I will ask the Authority and my right hon. Friend to have a look at that and see if we can make some suggestions.
  The hon. Gentleman the Member for Orpington also raised the question of B.E.A. and helicopters. The position is that B.E.A. are awaiting delivery of a fifth S.61 and this will join two of the other S.61s which are at present operating between Beccles and the North Sea drilling rigs. The Scilly Islands service, which lost money for several years, has broken even during the past year and will, of course, continue. B.E.A. had the idea of running a helicopter service between the three airports and this was dependent on their having a heliport somewhere around this part of London. I think that the whole House of Commons, and certainly the Board of Trade, looked on this prospect with a good deal of alarm, as did the G.L.C. also, and so far nothing more has been heard of that proposal.
  On general aviation, there was a question as to whether it would be possible to take the light aircraft away from Heathrow and put them into Northolt. I should have thought that was a question of air traffic control. There might be difficulties, but I see the point and will look at it.
  I think it is clearly the opinion of the House that this present Bill is one that we should pass, but of course it does not presume to deal with the whole position of B.E.A., still less with the position of civil aviation as a whole. In the course of the next 18 months, the Government will have to take some very
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  important decisions about the future course of civil aviation as a whole, and indeed of B.E.A., B.O.A.C. and the independents, and this we shall do in the light of the Edwards Report. One thing remains certain: that the network of air services built up and sustained by our main flag-carriers—B.O.A.C. and B.E.A.—will remain, and for that they are going to need the best aircraft, and preferably the best British aircraft, they can get. B.O.A.C. were looked after in the Air Corporations Act of 1966 and were set on a new and, I hope, a sure course. I am glad to say that under the chairmanship of Sir Giles Guthrie they have overcome their troubles. They are now making handsome profits and are paying worthwhile dividends, and I hope they will go on doing so. Now it is B.E.A.'s turn and the present Bill is just the start. It will enable the position to be held until we again come to Parliament with a fully considered and, I hope, agreed measure to put B.E.A. on the right track.
  Mr. Rankin: My hon. Friend said that this was to hold the position until the time came "to put B.E.A. on the right track". What right track—financially or operationally?
  Mr. Mallalieu: I mean mainly financially. The Air Corporations Act of 1966 dealt with B.O.A.C. finances and we must now proceed to deal with B.E.A. finances, probably on the same or similar lines.
  Obviously Parliament will not wish to have presented to it a series of civil aviation Measures, each modifying the previous one. At the same time, I am sure we want to see implemented as early as possible the eventual financial agreement with B.E.A. I cannot forecast the course of events precisely, but I want to assure the House that it is not our intention to allow B.E.A. to run into a decline while waiting for Edwards. B.E.A. are themselves very much alive to the problems ahead and we shall expect them to put their own house in order and to earn the aid they receive.
  In this connection, I was delighted to hear a tribute paid by an hon. Member to the way that B.E.A. are now turning to the idea of I.T. tours, and so on, and the drive they are putting into getting tourists from abroad to come to this country.

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  With the assurance that B.E.A.'s situation is not viewed with any complacency, either in B.E.A. or in the Board of Trade, and that we shall come back to Parliament with a considered measure of aid to B.E.A. as soon as that is practicable, I invite the House to give a Second Reading to this Bill. What is in the Bill has not proved particularly controversial. It is more what is not in the Bill that is the subject of controversy. However, I hope what I have said tonight and what my right hon. Friend said in opening will persuade everybody that this Bill is the right measure for us to adopt now as the first step towards setting B.E.A. on a sound course for the future.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Grey.]
  Committee Tomorrow.

  AIR CORPORATIONS BILL

    AIR CORPORATIONS [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of present Session to raise the limits on the amounts which the British European Airways Corporation may borrow, it is expedient to authorise any increase in the sums falling to be paid out of or into the National Loans Fund or the Consolidated Fund which is attributable to provisions of that Act—

    (1) raising the limits imposed by section 22(1) of the Air Corporations Act, 1967 on the amounts which the Corporation may borrow from £110 million or such greater sum not exceeding £125 million as may be specified by the Board of Trade to £210 million or such greater sum not exceeding £240 million as may be so specified;

    (2) authorising the Corporation to borrow from the Board of Trade, within the limits aforesaid, any sums which are required by the Corporation for the purpose of financing any accumulated deficit of the Corporation on revenue account which has accrued at any time before the end of March, 1970 to the extent to which that deficit does not exceed £10 million) and any sums required to repay sums borrowed from the Board of Trade for that purpose.—[Mr. P. W. Mallalieu.]

  REDUNDANCY FUND (NATIONAL LOANS FUND ADVANCES)
  8.0 p.m.
  The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): I beg to move,
  That the Redundancy Fund (Advances out of the National Loans Fund) Order 1968, a draft of which was laid before this House on 25th March, be approved.
  If the House approves this Order, it already having been approved in another place, my right hon. Friend will thereby be empowered, in agreement with the Treasury, to receive temporary loans to the Redundancy Fund up to a maximum of £15 million. The House will know, because it debated the issue several times before, that Section 35 of the Redundancy Payments Act enables my right hon. Friend to borrow originally from the Consolidated Fund and now from the National Loans Fund. The Act itself makes provision for borrowing up to a limit of £8 million, which may be increased to a maximum of £20 million if both Houses approve Orders authorising additional amounts, and it is that approval for which I ask this evening.
  Since the Act became law, two changes have already proved necessary to maintain the Redundancy Fund's solvency. The first was an increase in the weekly contribution from 5d. and 2d. for men and women, respectively, to 10d. and 5d. This change came into force in February 1967. On 24th July last year, the House approved a second change, an increase in the borrowing power limit from £8 million to £12 million, when I told the House why the greater borrowing powers were necessary. Tonight, I ask, for similar reasons, for a further increase, and, with the permission of the House, I intend to outline those reasons.
  The House knows that when the contributions were increased to 10d. and 5d., it was the Minister's view that a contribution level of 1s. and 6d. would provide a more certain safeguard for the Fund's solvency. Had those figures been presented to and accepted by the House, a weekly income of about £830,000 would either have kept the Fund in balance or have returned it to surplus before the end of this year. Certainly, this Order would not have been necessary, nor would the Order of 24th July, but, as it was, the

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  lower figures of 10d. and 5d. were proposed and approved.
  Of course, the responsibility for that smaller figure and its approval is the Government's and the Government's alone, but we made our recommendation knowing that the view of both sides of industry, both the T.U.C. and the C.B.I., was that a weekly contribution of 10d. and 5d. would be adequate, and that both preferred it to the higher figure. We accepted their suggestion in the knowledge that, in a very real sense, the Redundancy Fund is industry's fund. Industry finances it entirely. Both sides benefit from its existence and their views on the level of contributions which are demanded to keep it in balance deserve proper recognition.
  We also knew that if increases to 10d. and 5d. proved inadequate, temporary borrowing was possible. In the long run, of course, the Fund must be self-supporting. Contributions must cover the Fund's permanent outgoings, but borrowing powers were intended to make allowances for temporary short falls in revenue and we seek tonight to take further advantage of those powers.
  The House will recall that in his Budget statement the Chancellor of the Exchequer said that the Government intended to increase the employer's contribution to the Fund by 2d. and 1d. from 2nd September onwards. It is our aim that the fund will move into surplus within 18 months or two years from that date, but, in the meantime, its solvency must be preserved and safeguarded.
  The weekly income from the present contributions is £690,000. In exceptional weeks, payments from the Fund have amounted to over £1 million. Over the last nine months, the average weekly payment has been £799,000. As a result of this constant imbalance, the Fund now has a deficit of £11 million, and simple prudence demands that we should safeguard the Fund's position between now and September by allowing for the possibility that the deficit will rise beyond the £12 million ceiling which is at present allowed—
  Mr. John Page: On what date was the £11 million deficit recorded? I missed the date.
  Mr. Hattersley: It rose to £11 million some time during last month. The actual week, because these things are calculated on a weekly basis, I cannot tell the hon. Gentleman, but it was certainly during March—
  Mr. Nicholas Ridley: Could the hon. Gentleman tell us some time—perhaps he is coming to it—at what level the costs of outgoings from the Fund are now running?
  Mr. Hatterlsey: The hon. Gentleman clearly missed the point when I made it. I told the House just now that, in exceptional weeks, outgoings have been over £1 million. In the last nine months, the average figure has approached £800,000, at a level of £799,000.
  Nine months ago, I told the House that the £12 million borrowing limit would probably not be reached, and I said just now that the Fund is already over £11 million in deficit. Since that means that the £12 million figure may well be passed, I am sure that the House will expect to be told what has happened since I made that forecast, which has proved manifestly incorrect.
  I must make it absolutely clear that the increased calls on the Fund do not result from unemployment having reached a higher figure or having been at a constantly greater level than we estimated. Nor does our request for extra borrowing powers imply that we expect the fall in unemployment during the next five months to be less than we originally hoped. The level of unemployment alone does not determine the outgoings from the Fund. Payments vary according to the men and women made redundant as well as according to the numbers of redundancies at any one time. Their age, length of service in their last job and the pay which they received all determine how great their redundancy payments should be.
  All these factors influence the size of each redundancy payment and complicate the forecasting of outgoings from the Fund with any accuracy. For example, 10 men under 40 with six years' service and average earnings of £20 per week receive from the Fund less than one-third of the payment made for 10 older men with 15 years' service, and average

  705
  earnings of £24 a week. To forecast with any accuracy the calls on the Fund, we would need to predict not only the number of new redundancies but the ages, service and wages of those men who become redundant. This is one of the factors which has not only made predictions impossible but results in the fluctuations in the weekly outgoings from the Fund and in a figure which may be of the average of £799,000, but can fluctuate widely from that to an amount of over £1 million.
  It is important to understand that the necessity to ask for approval for this new borrowing ceiling makes one thing very clear—that is, the fallacy implicit in the doctrine of the permanent pool of unemployed. Were the men who are unemployed this month the same as those unemployed two months ago, we should be making many fewer redundancy payments than now. What is clear from the pattern of redundancy payments is that there is movement both on to and away from the unemployed register. This is known as redeployment. The House has many times asked for evidence that redeployment exists, and I am happy to provide it from the Redundancy Fund this evening.
  Finally, the need for increased borrowing powers in no way stems from calls on the Fund which amount to abuses of its provisions. Of course, a fund of this size and complexity runs the risk of occasionally making payments which are thy; result of fraudulent or semi-fraudulent claims, but this could not possibly account for more than a tiny fraction of the total expenditure. Many of the critics of the Fund who might attribute our need to raise the borrowing limit to £15 million to misuses of the Fund do so because they misunderstand the Fund's purpose and the scheme's value.
  I should be out of order in dwelling on either of those two mistakes which are constantly made by critics of the Fund. All I can seek to do is ensure that its solvency is preserved until September in the intention that, after then, contributions will more than cover the payments which the Fund must meet.
  Mr. Kenneth Lewis: Will the increased contributions take into account past debt and pay off that?
  Mr. Hattersley: Indeed, we are required to do that under the Act. In the long term, the scheme must be self-sufficient and preserve its own solvency. When I say that it is our aim that the Fund will move into surplus within 18 months or two years from September, when the increased contributions are made, it is our clear aim that it will do two things—first, that the contributions will more than cover the weekly outgoings, and, second, that the surplus of weekly income over outgoings will wipe out the present deficit of £11 million.
  8.10 p.m.
  Mr. John Page: I was proposing to begin by saying that this must be a sorrowful and embarrassing occasion for the Parliamentary Secretary. Instead, in view of his remarks, I must call this a shocking occasion for the House, hon. Members having been told that the Fund has now run into a deficit £11 million.
  The Parliamentary Secretary, with as much self-confidence as he could muster and with his usual debonair charm, presented this news to the House, but that was not enough to overlay the really dismal results which the Government have shown through the whole of their redundancy policy in the last few years. The arguments adduced by the hon. Gentleman were identically repetitive, apart from the figures, with the speeches he made in the previous debate. The same can be said of the remarks of his right hon. Friend on previous occasions. I do not see how hon. Members, the public or employers can have confidence in the hon. Gentleman's optimistic predictions about the future of the Fund.
  The Government are tonight in the position of a man going to his bank manager to seek an extension of overdraft facilities. Like the prudent bank manager, my hon. Friends and I must ask some probing questions, such as why the new facilities are needed and, even more important, why the confident predictions made previously have been shown to be so inaccurate. The Order increases the aggregate amount that may be outstanding from £12 million to £15 million for the period up to 25th April, 1968. It was only eight months ago, in July, 1967, that the Parliamentary Secretary asked for the then

  707
  available ceiling to be raised from £8 million to £12 million. On that occasion he said:
  "I emphasise again that any problems of tiding over difficulties are in a sense hypothetical. Certainly they are hypothetical in terms of a £12 million ceiling. My right hon. Friend believes that that £12 million ceiling will never be reached. It is certainly possible that the existing ceiling of £8 million may prove adequate, but I am sure that the House will agree that prudent management of the Fund requires us to make sure that sums are available to bolster and buttress the Fund to keep it out of deficit."—[OFFICIAL REPORT, 24th July, 1967; Vol. 751, c. 275.]
  Eight months ago the hon. Gentleman confidently predicted that the ceiling of £12 million would never be reached. Having risen from a deficit of £5,300,000 at that date, we now have the staggering revelation that it was £11 million at mid-March. I was anticipating a figure of £8 million to £9 million, but I had no idea that it would be as high as £11 million.
  Was the hon. Gentleman sincere in what he said tonight and does not he think that the Fund will be knocking on the door of £15 million within another eight months? I do not see why there should be a dramatic change in pattern—and this is the weakness of his argument—when the proposed increase from September will be 2d. for a male worker and ld. for a female worker, since the Fund has gone galloping on and accelerating into deficit after the payments had been more than doubled, from 5d. to 10d. and from 2d. to 5d. Can we be given an estimate of the highest figure at which the hon. Gentleman expects the Fund to be within the next 12 months?
  Returning to the analogy of the bank manager, he would ask what steps the customer proposed to take to get his overdraft back into balance. The completely inadequate answer given by the Parliamentary Secretary is that the Fund will be brought into balance again by further and greater contributions from the patient mulch-cow of the business community. Although I am not a farmer and while I do not represent a farming constituency, I suggest that this industrial mulch-cow will soon be getting dry and that the butterfat content of what it is able to give will be getting low. I would also not be surprised if this patient milchcow did not start kicking out a bit when
  708
  the icy-fingered milkmaid from the Ministry in St. James's Square puts in her next appearance. The increase in the income of the Fund must be made up by new contributions from employers. They have been doubled once, in February, 1967, and now they are to be increased again.
  The hon. Gentleman made great play with the fact that the real trouble was that his right hon. Friend had given way to the C.B.I. and T.U.C. representatives in agreeing that the figures should be 10d. and 5d. at the last increase, when he really wanted it to be 1s. and 6d. He tried to make out that if he had not given way quite so easily the Fund would not have run into debt in this way. But that is not what his right hon. Friend said. Having discussed in detail the 10d. and 5d. contribution, his right hon. Friend said:
  "On the basis of forecast levels of expenditure, these increases should be sufficient to reverse the present adverse trend and bring the Fund into balance in the early part of 1968 and build up a small reserve about a year later."—[OFFICIAL REPORT, 15th November, 1966; Vol. 736, c. 373.]
  With all the information at his disposal, with a doubling of the contribution from employers and with the advice of the statistical department of the Ministry behind him, the Minister of Labour thought in November, 1966, that by now the Fund would be in balance.
  It is at this point that we come to the speech of the Parliamentary Secretary. There has been a fashion in recent times for hon. Members to quote from their own speeches. That happened frequently in the Budget debate. I will, therefore, humbly quote from an intervention I made in the previous debate. I said:
  "The Order and the speech of the Minister this evening are a frank admission of the colossal failure of Government planning and the complete punch-drunkennees of the Government."—[OFFICIAL REPORT, 15th November, 1968; Vol. 736, c. 382.]
  Those were prophetic words and they have proved absolutely true.
  The Chancellor of the Exchequer in his Budget, and the hon. Gentleman tonight, threw away rather carelessly this new impost on all businessmen and employers of the country. It is a 20 per cent. increase in the contributions they have to make to the Redundancy Fund, resulting—I should like my mathematics to be correct on this—in a further increase of £4 million on the overheads of

  709
  businessmen. This is at a time when the Government are introducing new controls on incomes, prices and dividends. This is the kind of action which makes businessmen weep for the failures of the present Government.
  Mr. Roy Roebuck: Rubbish.
  Mr. Page: Hon. Members on this side of the House have constantly queried the philosophy behind the operation of the redundancy scheme. Those of us who have an appreciation of the intellectual qualities of the Parliamentary Secretary hope that he is carrying out in the Ministry some alternative thinking on the whole philosophy of the scheme. The scheme provides a golden or a silver handshake to people when they are made redundant, but there is absolutely no—[Interruption]
  Mr. Deputy Speaker (Mr. Sydney Irving): Order.
  Mr. Page: I do not need your protection, Mr. Deputy Speaker, from the hon. Member for Harrow, East (Mr. Roebuck). In the scheme there is no gauging of the need of the recipient. It is right that we on this side of the House, on an occasion when a vast new borrowing power of many millions is being requested, should be able to protest. We should be entitled to query the reasons for which it is used.
  Mr. Deputy Speaker: Order. The hon. Member cannot discuss the principles of the main Act on this Order. He can confine himself only to the reasons for the increase of £3 million.
  Mr. Page: I will keep carefully to that, Mr. Deputy Speaker. One of the reasons for the increase is the obvious squandering of redundancy payments where they are not necessary. Very few hon. Members on either side of the House believe that we should make redundancy payments, which cost the Fund a considerable amount—possibly £500,000 or more—to the staff of I.T.V. companies recently, when they had merely lost a weekend between one employer and another and their employment was completely assured under the contract with their new employer. It is fair that this should be mentioned because payments like this, which, of course, are in accordance with
  710
  the Act, cause such a run on the Fund that it gets into the state it has reached.
  I hope that I shall be in order in asking whether, under this new borrowing power, the position of dock workers is being considered. Dock workers are one of the few groups of workpeople not covered by redundancy schemes, even though their employers pay contributions. In the docks redundancy schemes are urgently needed.
  That brings me to the end of this disappointing little post mortem on the blatant bad management by the present Government in handing out large sums to individuals when they do not need it, which means—
  Mr. Deputy Speaker: Order. The hon. Member, I am afraid, is transgressing the rules of order by getting on to a discussion of the principles of the main Act.
  Mr. Page: I take your reproof, Mr. Deputy Speaker. I hope that the Ministry of Labour will take a long, cool, reappraising look at the past performance of the Redundancy Fund, at where present policies are going and, if necessary, have the courage to come to the House with amendments which will completely change and revolutionise and make unnecessary debates such as this in future.
  8.26 p.m.
  Mr. Kenneth Lewis: We are having an extremely good night in spending Government money. Prior to discussing this Order we were considering the nationalised Air Corporations Bill and the Minister told us that there is a prospect that he will be writing off the debts of B.E.A. to an unspecified tune. By this Order, like the National Plan, like Budgets introduced by the present Government and promises by hon. Members opposite, the money goes fast and furiously down the drain. The only consolation is that the Prime Minister is tonight apparently involved in discussions about reshuffling his Cabinet. The more of them who are made redundant the better. We would not be concerned if a certain amount of payment were made for redundancy of the Ministers involved by this kind of expenditure.
  Mr. Deputy Speaker: Order. I am afraid that none of these interesting matters is referred to in the Order. The

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  hon. Member must come to the terms of the Order.
  Mr. Ridley: Does not my hon. Friend think that the Government have brought this Order forward in anticipation of the heavy drain on it—
  Mr. Deputy Speaker: Order. Mr. Lewis.
  Mr. Lewis: We have only just been told by the Minister tonight the amount of this expenditure. The House is not very full at present, but that is understandable, for when this Order was laid, although it suggests an increase in borrowing powers up to £15 million, no one knew that the Minister would tell us that £11 million or more had already been spent. If the House had been given warning of this, certainly if the Opposition had been warned, there would have been many more present to deal with the Minister.
  We on this side of the House accept that redundancy can be valuable and that redundancy payments are helpful to deal with it if the Fund does what the Minister suggests it is doing. Those of us who were involved in dealing with the Act when it was before the House expected that redundancy would assist in the redeployment of labour. The Minister tried tonight to suggest that much of this expenditure was caused by redeployment, and that it was not creating unemployment. I beg to differ. He probably believed what he said, but I do not see how he can tell.
  Unemployment has been marginally going down anyway, and, looking at the figures of unemployment on the one hand and at the retraining situation on the other, I do not see that that can possibly be true, because if the £11 million or more had been spent in making redundancy payments available to people being redeployed the Government's retraining facilities would have had to be expanded to deal with the situation. Everyone knows that the retraining facilities available through the Government are limited, that their development has been slow, and that the numbers of people in their thirties and forties coming forward for retraining are too few.
  The truth is that the Fund is being used to make redundancy payments to
  712
  people in their fifties, in many cases in their late fifties. The Minister rightly said that there was very little question of die use of the money in a fraudulent way. We accept that. People are not fraudulently misusing the Fund; they are simply getting round the rules. They are taking advantage of the rules the Government laid down, and the Government should have anticipated this. My hon. Friend the Member for Harrow, West (Mr. John Page) mentioned the use of the Fund to make payments to staff of the independent television companies who were paid off by one company. They were made redundant although they were then taken on by another company. Their contracts were honoured and they were continuing in the same employment, but simply because the name of the company was changed at the head of the notepaper they received redundancy payments.
  But that does not apply only to I.T.V. It was taking place in the shipyards some months ago, when the shipyards were without work and the order book was a bit thin—
  Mr. Deputy Speaker: Order. The hon. Gentleman is really discussing the principles of the original Act, and he cannot do that on the Order.
  Mr. Lewis: I take the point, Mr. Deputy Speaker. But I am pinpointing the way in which the increased money to be borrowed will be used in the same way unless the Government do something about it. I am trying to cite an example—
  Mr. Deputy Speaker: Order. The hon. Gentleman is challenging the principles of the main Act, and he cannot do that on the Order.
  Mr. Lewis: I accept that, Mr. Deputy Speaker. I return to the Order. The shipyards were using money from the Fund, and others will do it again, to pay off people aged 56 or 57, when the Parliamentary Secretary knows perfectly well that there is the peak payment under the Fund, a few years in advance of pension. Beyond that, the payment disappears altogether. The £11 million has been reached so quickly because many firms have been paying off people at that age. They have taken them on again within a matter of months. Their

  713
  pension rights have therefore been kept intact and in due course they have retired on their pensions. The Government should look into this. They know perfectly well that this happens and it is not right that they should ask for borrowings of this kind when they know that that is going on.
  I also ask the Government to look at the nationalised industries. I would guess that the same kind of thing is happening there. It is important to re member that it is completely useless to the country to spend as much money as this on redundancy payments to people of that age. Exceptionally, it can be justified because it helps the individual. But if it is happening on a large scale, we are not getting the retraining which the Government want. It is, therefore, not in keeping with what was expected when we passed the Act. The money is being misused. It is my guess that if this goes on the hon. Gentleman will have to come back to the House and have the sum increased from £15 million to £20 million. That is what we want to try and avoid.
  This is in keeping with the lack of economic control. We have more Treasury Ministers than ever. We have more Ministers at the Ministry of Labour than ever. We have a Prime Minister who is supposed to be concerned with our economic affairs. Yet here is a little fund, a tiny little fund. The hon. Gentleman said it was concerned only with the employers. If that is so, the Government are being taken for a quick ride.
  I can see how the Government have been taken in after the Budget we have had to suffer, with increases in taxation of £950 million, but I object as a taxpayer to being taken for a ride, and I am sure that everyone outside objects as well. The hon. Gentleman may think that I am making heavy weather of this.
  Mr. Hattersley indicated assent.
  Mr. Lewis: I accept that he does so. But he must understand that this kind of thing is duplicated in every Government Department. It is because of the additions of £1 million, £2 million, £3 million, piled one upon the other in a multiplication of deficits and debts, that we are in the state we are today.
  8.37 p.m.
  Mr. Nicholas Ridley: My hon. Friend the Member for Harrow, West (Mr. John Page) and my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) have been a little hard on the Joint Parliamentary Secretary to the Ministry of Labour in one respect, and only in one respect. In that respect, I want to thank him for coming to the House and taking this small extra borrowing—it is only £3 million—and not apply for the whole of the tranche of £8 million that he could have asked for by Order. We should also thank him in that when he last came to the House for more money, again he only took a small tranche—£4 million. This attitude at least gives the House an opportunity to check the progress of this rake, to check on the deterioration of the Fund which is taking place week by week.
  When the Fund started, I began a graph. I marked the levels of expenditure and income two years ago. But the deficit curve went off the bottom right-hand corner long ago and the graph is of little use to me now because the scale on which I started was hopelessly inadequate to deal with the way in which the financial transactions of the Fund have developed.
  I will go over this remarkable story. First, we were told that expenditure from the Fund would be approximately £350,000 per week—all these figures are in thousands of pounds a week. When it started in April, 1966, it cost approximately £450,000 a week; in November, 1966, the Minister increased the contribution from 5d. to 10d. and told us at the time that the cost was £650,000 a week. He said that it would drop to £600,000 a week and then would drop more until we would be in surplus. In July last year, he said that it was costing £700,000 a week. Last week he said that it was running at nearly £800,000 a week.
  In consequence we had to increase the contribution. It started at 5d. per man, is now 10d. and, under the Budget, is to go up to ls. This is really the most appalling piece of estimating and it is not just the first time, for on no less than three occasions the Government have been absolutely haywire. How can they come along here without even an apology to the House? The hon. Gentleman admitted that his forecast

  715
  had been wrong, but he did not seem to have any spirit of due humility about the magnitude of the error the Government have made; and I thought it was a bit mean of him to blame industry for this. He said it is the fault of industry, that it is for industry to keep it solvent, that industry thinks the fund is marvellous and therefore industry will be only too keen to support it.
  Who makes the rules? Who decides on what scale payments are to be made? Who decides about stopping up the abuses which my hon. Friend has mentioned? Who is the arbiter of what is a fair situation in which to pay redundancy and what is not? Is it industry? No, it is the Government; it is the right hon. Gentleman himself. From these benches there have been pressures to stop this or that loophole and to deal with abuses, and we have been told all the time that it is absolutely wrong to do so and that we should not question this marvellous piece of legislation. There is an additional loophole which my hon. Friend did not mention, the example of Rootes when the older workers came to the management and said, "You are going to shorten things. There will be short-time working this winter. Will you give us the sack first so that we can get our redundancy pay and we will come back as soon as trade picks up if we may?"
  Then there was the transfer from one subsidiary to another, with firms transferring workers from subsidiary A to subsidiary B, quite often at the request of those workers so that they could cash in on their redundancy entitlement. There was a great deal of connivance with examples of people leaving of their own accord and the employer saying he had sacked them so that they became eligible for the entitlement. The crowning argument was the hon. Gentleman's statement that this was very good evidence of redeployment, showing that redeployment was really taking place. But it is a mirage. We have been told all the time that there is to be a Promised Land of solvency and that the Fund will break even. Every time the hon. Gentleman comes back to the House he tells us that the oasis with its waters and surrounding palm trees is another few miles further on across the desert, and he has
  716
  invited us to soldier on for a longer time. He says that in 18 months after September next the Fund will be in the black. That is two years from now. The oasis is a long way off and some of us are begining to believe that it does not exist at all.
  The reason is that in creating this system we made available to everybody a retrospective extra amount of pay for every year's work they have then done. We put a price on the head of every man in the country who had been in employment; so we cannot blame them if they find ways of cashing in on the capital sum each of them is carrying. Indeed, I have every sympathy with them. But we have our priorities wrong now, because this scheme is costing £51 million a year. At the present rate of expenditure it may be a little more, but that was the figure the hon. Gentleman gave the last time he spoke about it.
  The whole of the earnings-related supplement only costs £15 million a year. One could have had three and a half earnings-related supplements for one redundancy pay scheme. The priorities are not in order. This money for which the right hon. Gentleman is asking would be better spent in other ways, and there are many good causes for which the Ministry is short of money—retraining, unemployment supplement, many parts of the policy of mobility of labour where the money could well be used. To come to the House and to say: "I want to spend £51 million and I want a chunk of it now for redundancy payments", is a classic example of getting priorities wrong.
  I do not propose anything drastic, but I hope that the Government will learn from what has happened, will listen to the points made by my hon. Friends, and will reconsider whether this is the right way to spend the money. The tone of the House after a stiff week will, I hope, convince them that there are some of us who still feel that Government expenditure should be scrutinised, questioned and criticised in this way when it is out of control, as this clearly is.
  8.47 p.m.
  Mr. Hattersley: If I may speak again, with the leave of the House, and attempt to answer some of the questions; virtually the opening words of the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) were "that this was a

  717
  good night for spending Government money". I do not know to what other issues he refers, but if he thinks that the Order which we are debating and the Fund of which this Order may form a substantial part is involved, he is mistaken. We are not concerned with spending Government money at all. The essential feature of the Redundancy Fund is that it is and must remain self-sufficient. All I am asking the House to do is to preserve its solvency between now and September. Increased contributions from industry will then make it self-sufficient again.
  Whatever the rights and wrongs of the Government's case, and the Opposition criticisms, our debate is not concerned with Government spending in any way. A much more relevant question is that which all hon. Gentlemen have asked, and which I sought to answer in my brief introduction. This was whether the Government could legitimately have been expected to estimate outgoings from the Fund with a greater degree of accuracy and success. I have clearly made the point insufficiently clear, but I have already told the House that the outgoings from the Fund for each week over the last few months have averaged about £799,000. There have been exceptional occasions when outgoings have been as high as £1 million in one week. From those figures the House will see that there are very great fluctuations, which are not correlated simply with the numbers made unemployed, made redundant, in each week, but correlated with a number of factors which it was not possible and never could be possible for the Government to know.
  These are concerned with the age of the men made redundant, with the time the men have spent in their last jobs and their average wage. To say that any Government should be able to predict with anything like accuracy, not simply the level of unemployment, in say the first week in April, 1968, but the level of new unemployment, the level of redundancies, and in addition the average wage paid to these men, their average length of service and their average age, is asking far too much of the Government—more than any Government could hope to do.
  Mr. John Page: In what way has the pattern changed during the period in
  718
  which the scheme has been running? I would have thought that it would have been running long enough for some kind of pattern to emerge to give some guide lines enabling the Parliamentary Secretary and his right hon. Friend to stop having to make predictions which are later found to be completely false. Why is the pattern not more fixed?
  Mr. Hattersley: There is a rough and crude pattern, but it is not a pattern that has a picture so specific that it enables us to predict within close tolerances. The hon. Gentleman will, I am sure, understand when I say that during the last two months the net figure of unemployment—I do not refer to the seasonally-adjusted figure—has fallen, but there is not an equally substantial reduction in the outgoings for the Redundancy Fund. It is not possible to make that sort of precise prediction.
  Having said that, and knowing that from the inception of the scheme the Government prepared for this specific contingency by enabling my right hon. Friend to borrow, should that prove necessary, during periods of abnormally high outgoings, the hon. Gentleman was wrong to say the Government are in the position of a suppliant going to his bank manager and asking for yet another loan. At worst, we are in the position of a man going to the bank manager and saying "We always knew or always feared, or were always prepared and we told you we were prepared, to ask for £20 million. We were prepared for it because we were a prudent customer of this bank. However, we are not asking for that full sum but for something appreciably short of that maximum. It is not a maximum of which you are not aware; it is a maximum which we told you about at the inception of the scheme."
  Mr. Kenneth Lewis: This is an interesting point. In the first place, the hon. Gentleman said I was wrong in suggesting this was Government money. He would not be discussing it tonight if this were not Government money. The Government are borrowing; the hon. Gentleman has accepted that. If he borrows more and comes back for more after this, clearly the only way he can recoup is by getting it back either from the employee, or the employer, or the taxpayer.
  Mr. Hattersley: As a statement of the obvious truth I cannot argue with that, but as a statement relevant to what I have just said it is a good deal easier to argue with.
  If the Fund remains in permanent deficit, two alternatives are open to my right hon. Friend: one is to increase the borrowing limit to £20 million. It is not open to him to go beyond because the Act specifies that sum. The second is to increase the contribution. The second alternative is the one we are going to take—the alternative which my right hon. Friend has said we were going to take during the Budget speech.
  This leads me to the third question which amounts to the suggestion that since our estimates have fallen so short in the past, since we have had to ask the House twice for additional borrowing powers—I am obliged to the hon. Gentleman who reminded the House of the convenience of asking for a lot at one time rather than minimum sums twice; I am sure he agrees with me that the Government did the right thing on both occasions in asking for the minimum when they thought necessary—how can the House accept my assurance that no further sums will be needed? The answer is this: Even during the period of maximum outgoings the average over the past six or eight months has been £799,000 a week. By 2nd September, when the increased contributions are due, the weekly income will be £830,000 per week. Even if outgoings persist at their present level, which I am sure the House will agree is an unlikely eventuality, there will be a weekly surplus on the fund.
  What I am suggesting to the House is that by offering the knowledge that the contribution is to increase, I am offering the certainty that the borrowing powers at present asked for will pay the Bill until that time.
  The only part of the entire debate to which I take violent exception is the suggestion by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that in some way I blamed industry for the deficiencies in the Fund and the necessity to ask for greater borrowing powers. I was careful in my original statement to express the simple and obvious fact that the responsibility for the contribution being at its present level rather than at the level of 1s. and 6d. was the responsi
  720
  bility of the Government and the Government alone. I have taken that responsibility and have accepted that blame, if "blame" is the right word.
  I go on to say that in my view we were absolutely right, first of all, to discuss the level of contribution with industry and, secondly, pay great heed to what they strongly recommended. The House will know that at the National Joint Advisory Committee some months ago we again discussed with both sides of industry the level of contribution to the Fund. I have no doubt at all that in the knowledge that were our predictions to prove incorrect, and were the new contributions to prove inadequate, borrowing was available to provide temporary cover, we were right to agree to the smaller contribution and to the smaller outgoing from industry. Since the Fund is solely financed by industry, and since most of the benefits of the scheme flow to one side of industry or the other, it is no less than just that their voices should be almost paramount in deciding how the Fund is financed and raised.
  Mr. Ridley: Does the Fund pay interest to the National Loans Fund on the borrowings we are discussing?
  Mr. Hattersley: Of course, it does. Otherwise it would not be possible for me to say that this was not a charge on the public purse. The National Loans Fund and the Redundancy Fund are in something like a commercial relationship.
  I turn, with some difficulty, to the allegation that the exercise is, in part, necessary because of payments which amount to abuses of the Fund's spirit, intention and, sometimes, its rules. I say "with difficulty" because of the rules of Order covering the consideration of this matter. However, two things must be said. First, clearly we are asking for increased borrowing powers for the Fund as it exists, not for the Fund with additional sectors, like the docks, included or for the Fund changed out of recognition by amendment and alteration. Secondly, as I said originally, if there are abuses, if there is some system whereby men are receiving payments to which they are not entitled in law, those abuses and illegal payments are so infinitesimal that they do not influence the total outgoings from the Fund to any appreciable extent.

  721
  Many people who say that the Fund is liable to abuse do so because they mistake its purpose and intention. Since we have heard at some length about what was described by the hon. Member for Cirencester and Tewkesbury as "the Rootes loophole", I possibly have the right, and almost the obligation, to comment on it and to tell him whether I think that a loophole of that sort and perhaps of that size is making a contribution to the deficit which we are discussing.
  If there is a company—and I refer not to Rootes but to a hypothetical motor company—which discovers that it can produce in 1968 as many motor cars as it produced in 1965 with a smaller work force, and if it is in the national interest that it should do so and that that reduction in work force should be carried out with a minimum of industrial friction and a total absence of industrial dispute, and if when that reduction in work force is made a number of men say, "We will not resist redundancy, as we might have done, because we know that at our age, on our salary and with our length of service there will be a substantial redundancy payment", and if they go on to say, "If somebody is to be redundant, I hope that it is me", does the lion. Gentleman think that that is a payment which is not in the national interest? I believe that it is a payment which could be a help to the company and to the economy and a positive boon to the national industrial interest.
  Mr. Ridley: Would the hon. Gentleman deal with the case in which there is an added condition that when trade picks up they will be the first men taken on again? That is the loophole to which I refer, not the one to which the hon. Gentleman is referring.
  Mr. Hattersley: The rules of order again prevent me from describing the complications of making it impossible for that situation to come about. But, having hypothesised that far, I hope that the hon. Gentleman will consider the alternatives. In that situation in which a reduction in the work force is necessary and there is no means by which the redundancy can be cushioned and by which the blow can be softened, the balance of industrial advantage comes down fairly and squarely on the side of having a redundancy payment.
  722
  But that is not the only advantage and benefit which we get from the existence of the Fund and from the need to increase the borrowing limit to £15 million. This is the second debate in which I have spoken on this subject and, if my memory serves me right, it is the second debate in which hon. Gentlemen opposite have said hard things about the Fund, but have not found it in their hearts to say a word about the advantages which accrue to many hundreds of thousands of redundant men who have found redundancy less painful because of the existence of this Fund.
  The hon. Member for Rutland and Stamford asked what conclusions can be drawn from these employment and redeployment figures. He suggested that I was over-stating the case when I said the evidence of the Fund suggested that redeployment was a reality and not a political slogan. Over the last six weeks to two months, the simple unemployment figures, not the seasonally adjusted figures, have been falling. If it were simply a matter of a few of the unemployed men entering new jobs and the rest remaining permanently or semi-permanently unemployed, no redundancy payment would be made. The redundancy payments have continued to average £799,000 a week over the last months. Substantial numbers of new redundancies have occurred. If substantial numbers of new redundancies have occurred, although the overall figure for unemployment has remained the same, the conclusion we must draw is that a substantial number of recently redundant men have found new occupations.
  If redeployment does not mean leaving one job and, after a short period of unemployment, taking on a different job, I do not know what the definition of that word is. That is clearly what it is, and all the evidence presented by the Redundancy Fund shows that this is so.
  Mr. Kenneth Lewis: I appreciate the attempts of the hon. Gentleman to answer the arguments I have put. He was not suggesting the case of a man leaving one job, receiving a redundancy payment and going into another job of the same type. This is not what he was suggesting happened. It is not what should happen; it is not what we want to happen. We want the man to retrain. The point I

  723
  am making is that the men may be getting redundancy payments, and they may be getting other jobs in the same category, but they are not being retrained.
  Mr. Hattersley: I look at you, Mr. Deputy Speaker, with apprehension as I endeavour to answer the question. The hon. Gentleman has fallen into error again when he assumes that men moving from one job to another must be retrained after the first job and before the second. More often than not, in a ratio of thousands to one, men are re-trained after entering the second job. If training is necessary for redeployment, that training may be carried out when the man is re-employed.
  Clearly, the House is in agreement that solvency must be, and clearly is, the Government's principal concern. The £15 million ceiling will preserve that solvency. The new rate of contribution in September will make solvency permanent. I hope we all agree that our intention to maintain solvency with minimum borrowing powers is the right step to take.
  Question put and agreed to.
  Resolved,
  That the Redundancy Fund (Advances out of the National Loans Fund) Order 1968, a draft of which was laid before this House on 25th March, be approved.

  ANTI-DUMPING (SILICONE SURFACTANTS)
  9.5 p.m.
  The Parliamentary Secretary, Board of Trade (Mrs. Gwyneth Dunwoody): I beg to move,
  That the Anti-Dumping Duty Order 1968 (S.I. 1968 No. 384), dated the 14th March, 1968, a copy of which was laid before this House on 18th March, be approved.
  This Order has been made under the Customs Duties (Dumping and Subsidies) Act, 1957. It imposes an anti-dumping duty of 5s. 9d. per lb. on silicone surfactants—the detailed chemical formula is set out in the duty Order—originating in the United States of America and produced by the Union Carbide Corporation or the Dow Corning Corporation. Silicone surfactants are used in the manu
  724
  facture of polyurethane foam for upholstery and similar purposes.
  The House will be aware that, before duties can be imposed under this Act, the Board of Trade must be satisfied that dumping is taking place, that it is causing or threatening material injury to a British industry, and that anti-dumping action would be in the national interest.
  In this case, an application under the Act was received on 11th December from Imperial Chemical Industries Limited, which is the major British producer of this material. On the evidence presented by I.C.I., the Board of Trade decided that there was a prima facie case of dumping and of material injury to the British industry, and a public announcement that the Board was considering the application was made on the 22nd December, 1967, inviting representations from interested parties.
  After careful consideration of all the evidence submitted, my right hon. Friend was satisfied that imports of silicone surfactants originating in the U.S.A. were being sold at dumped prices: and, secondly, that dumped imports from the Union Carbide Corporation and the Dow Corning Corporation had caused material injury to the British industry and threatened it with still further injury.
  The House will, I know, understand that I cannot give detailed reasons for these findings because they are based on commercial and financial information given to the Board in strict confidence. But I can assure the House that we investigated the case very carefully, including the facts of dumping and the costs and the return on capital of the British manufacturer.
  We also considered the national interest, including the consumer interest. Two firms told us that the United States product was more satisfactory for their needs than the British product. We considered their representations and came to the conclusion that there was no overriding technical difficulty about the use of the I.C.I. material for nearly all purposes. However, we appreciated that action against the American suppliers would put I.C.I. into a very strong market position. Accordingly, we sought two assurances from I.C.I., which it gave to us very readily. The first was that it would not, without our consent, increase its

  725
  prices above the level ruling at the time of its application in December, when its prices were already depressed by the clumping. The second was that it had more than enough capacity to supply all potential United Kingdom customers with their requirements in 1968. We consider that these assurances adequately protect the consumer interest.
  The procedure that we have followed h reaching a decision on this case, as in other cases, was in conformity with tie provisions of the Anti-Dumping Code which was agreed as part of the Kennedy Round negotiations.
  The Board of Trade is often criticised Ear the time that it takes to consider anti-dumping applications. In this case, vie took anti-dumping action in 3 months from the receipt of the application. This can hardly be described as undue delay.
  The duty on silicone surfactants took effect from the 19th March, 1968, and, for the reasons I have given, I hope that the House will approve the Order.
  9.8 p.m.
  Mr. Patrick Jenkin: I am sure that the House is grateful to the hon. Lady for her very full explanation of this relatively simple Order.
  Having spent some time in the industry, perhaps I am in a better position than she is to pronounce the names of the chemical which appears in the Schedule, but that is about as far as I can claim to go. Certainly I do not intend to read the Schedule to the House.
  On the face of it, this is a clear case of dumping, and one might say that this instance offers an almost model case for the operation of the 1957 Act. Here was a company seeing a market for a new product developing in about 1960 in the rapidly expanding sphere of flexible polyurethane foams. It wanted to get into it, but it had no suitable product.
  It was refused a licence for the product b y the American manufacturer and, therefore, it set out by research and development to discover its own. It was costly, but it was successful, and the company w as able to break into the market. By the end of 1967, I.C.I. had achieved a 50 per cent. penetration of the British market and had also achieved a flourishing export business which was greater in
  726
  volume than its home market, and this is a very significant fact.
  During this period the price of the product had fallen substantially due to the strenuous competition which existed. Indeed, eventually the price of the material came down to the level at which the imported material was being dumped within the definition of the Act, even though it had protection of only a 10 per cent. duty.
  It is something surprising that a material of this sort, which, by its chemical definition, contains carbon atoms, is not a synthetic organic material qualifying for protection at the higher rate. I think, however, that this is outside the terms of the Order, and I shall not expect the hon. Lady to comment on it.
  A second company, Dow Corning, then came in and undercut an already low price. This provoked the domestic manufacturer, I.C.I., into approaching the Board of Trade to seek protection against the dumping. The complaint was followed by a prima facie case and the usual advertisements, and the Order was made. I should like to reinforce what the hon. Lady said about the speed with which her Department acted in this case. This has attracted favourable comment, not only from the firm concerned, and indeed not only from the industry, but from industry generally. I hope that it is a foretaste of things to come, and that as experience of operating this Act, which is a complicated piece of legislation, develops, the Board of Trade will be able to match, and indeed improve upon, the speed with which it worked in this case.
  Last night, because of the timetable, we were precluded from debating the Amendment Bill which, if it had been in force, would have empowered the Board of Trade to impose a provisional duty once it is discovered that a prima facie case had been made out, and then retrospectively to confirm that if, in the end, it was satisfied that dumping and material damage had been done. It is interesting to note that the three months' period for the provisional duty is the main period built into that Bill, and that if it reaches the Statute Book in its present form it will just about cover the period which elapsed between the application

  727
  being made and the Order being published.
  The hon. Lady referred to the assurances which she received from I.C.I. about capacity, and one would have thought that this was justified. It runs an 800-ton plant, and expects to commission a 1,200-ton plant by the end of the year. Equally, the undertaking about price seems to be appropriate, the firm having undertaken not to increase the price as a result of the anti-dumping duty—and it is important to make this proviso—above the level operating when the application was made. If costs should rise substantially for any reason, naturally the firm will feel free to take such action as it considers appropriate.
  I was not wholly satisfied with what the hon. Lady said about the question of quality. It is clear that the surfactant with which we are dealing is a critical cost component in the costs of manufacturing the polyurethane foam into which it goes. Not only is it a major cost item, but the specification of the material that is used is equally critical, and from information which I have been able to gather it appears that there are different grades of surfactants which are used in different qualities of foam. They have different properties, and it cannot be said that one grade is suitable for all purposes, or that a grade which does for one will do for another. I was interested to hear the hon. Lady say that there were two manufacturers facing this problem.
  For part of the output of one manufacturer, material supplied by I.C.I. will not suffice, unless the firm succeeds in changing its process. This is a quite important factor. This particular foam requires a surfactant which is non-hydrolisable. This means that it must not absorb water, must not undergo any chemical change if it is mixed with water. This is very important, because in making this particular type of foam the surfactant is mixed with water. Furthermore, it has to be mixed with water to enable it to be stored for a long time, partly to get the benefit of bulk deliveries and partly to ensure that the material is chemically stable. The United Kingdom material does not meet these requirements, therefore the firm in question is going to have to continue for the time being to use the
  728
  imported material, on which they will have to pay the anti-dumping duty at 5s. 9d. in the £. In the meantime it is their intention to try and adjust their process to see if it is possible to switch to the I.C.I.-produced material.
  I should like to make one point on this and to ask the hon. Lady if she would answer one question. It cannot be assumed that the imposition of a dumping duty, even in so clear-cut a case as this, is going to be an entirely painless operation. Somewhere along the line somebody is going to find himself in difficulties. We all support the antidumping legislation: it is an essential part of a trade framework within which one hopes that trade is steadily getting more and more liberalised, but it does not necessarily mean that nobody is going to get hurt.
  The question I want to ask is what attitude the Board of Trade takes to a case such as this, in which there is a genuine point of substance raised by one or more of the users of the material relating to the specification, the quality or type of material they are able to use. Has the Board of Trade considered the possibility of making a limited exception for material that meets a certain specification so that, where the importing firm cannot buy it from the domestic manufacturer, it can nevertheless import the material for this limited purpose, meeting this much narrower specification, from the overseas source? It seems to me that there is a danger that one is imposing an unnecessary cost which may hinder the firm in its operations and, although the dumping duty is as eligible for drawback as any other duty, this could impose additional burdens on an industry without giving any additional protection to the United Kingdom manufacturer because he could not meet a demand for the material to that specification.
  Having said that, if the Parliamentary Secretary can give me some answer to the question I have just posed, I see no reason why we should not allow this Order to go through.
  9.18 p.m.
  Mrs. Gwyneth Dunwoody: I should like to comment on one or two of the points raised by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). The

  729
  user interest is one of the most important factors we take into account in considering the national interest. I think the hon. Member knows that our antidumping legislation is unusual in having this national interest criterion.
  In this case, as I have said, there are two consumers, not one, who claimed that they needed the American material for technical reasons. I understand that non-hydrolisable material can also be used with a different type of lubricant, and we cannot make limited exceptions for users, but we do make drawback provision for export.
  The other point about non-hydrolisable material is that we believe it is only required because of storage problems and are convinced that these can be overcome with I.C.I.'s help. A case was made to us by both the users and we felt that one failed to present a good case while, as regards the other, I.C.I. felt that they could meet the user's needs subject to minor changes, with which I.C.I. would help them considerably. The user did not satisfy us that the domestic product could not meet his needs with a little goodwill and give and take. In any event, anti-dumping duty does not prevent the user buying the American material, as the hon. Gentleman said, at an undumped price, although this means
  730
  that he would pay a price much more like that paid by the American consumer, which is a distinct increase on the price which they have been paid.
  But the valid argument, which the hon. Gentleman himself made, is that the purpose of this legislation is to protect industries which make up a valid case to the Board of Trade and reason that we have brought this form of legislation into play is that we were convinced that this was a clear case of dumping. It was carefully investigated by the Department and we felt that, although there were certain limits within which some of the users might have felt that they would face difficulties, those difficulties could be overcome, and that, therefore, the order should go ahead.
  Question put and agreed to.
  Resolved,
  That the Anti-Dumping Duty Order 1968 (S.I., 1958, No. 384), dated 14th March, 1968 a copy of which was laid before this House on 18th March, be approved.

  ANTI-DUMPING (SILICONE SURFACTANTS)
    PUBLIC ACCOUNTS
    Colonel Sir Oliver Crosthwaite-Eyre discharged from the Committee of Public Accounts; Mr. John Smith added.—[Mr. Gourlay.]

  GROSVENOR SQUARE (DEMONSTRATIONS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gourlay.]
  9.22 p.m.
  Mr. Peter M. Jackson: I begin by thanking you, Mr. Speaker, for this opportunity of drawing attention to this matter. I have a unique qualification to raise it, in that I believe that I was the only Member present on the occasion. I will not only discuss the events of this rather unhappy Sunday, but also inform my hon. and learned Friend the Under-Secretary of State of the negotiations beforehand between the Metropolitan Police and the officers of the Vietnam Ad Hoc Committee, which organised—or, perhaps, failed to organise—this demonstration.
  My hon. and learned Friend is probably aware that the officers of this organisation made representations to the Metropolitan Police on 5th March, they agreed a route and, on the suggestion of the police, a procedure. I understand that the route agreed at that meeting was from Trafalgar Square up Charing Cross Road, along Oxford Street, up Holles Street into Wigmore Street, down Orchard Street, through North Audley Street and into Grosvenor Square, not in front of the American Embassy, but around the three sides of the Square, and that they would exit from the Square up Upper Grosvenor Street.
  I understand—I have met those concerned—that the police suggested—I think that this was a wholly admirable suggestion—that letters of protest should be handed in and a request was made by the organisers for a list of the participating organisations. This list was given by the organisers, 40 in number, and it was agreed that up to five people would leave the main body of the demonstration at the corner of North Audley Street, would hand in their protest letter to the American Embassy and then rejoin their groups at the corner of South Audley Street. This was excellent and would have given a focus to the demonstration; people would have felt that they had an opportunity to let off steam and make their point.
  732
  As we know, this procedure was not carried out, and I believe that the police have some responsibility in the matter. The line of route was changed at the last minute and, while I do not think that the organisers in any way quarrel with this, it must be remembered that instead of going up Holies Street and Wigmore Street and down Orchard Street, it proceeded along Oxford Street and then turned left into North Audley Street. At the junction of North Audley Street and the Square a great deal of congestion occurred as a result of the police barrier. I believe that this was, to a large extent, responsible for what happened afterwards.
  I have with me a photograph which was obviously taken from the roof of one of the nearby buildings. This picture appeared on page 6 of the Illustrated London News of 23rd March. I draw it to the attention of my right hon. Friend because he will see from it the precise location of the police cordon and the fact that a bottleneck was created at the corner of North Audley Street and the square.
  Give or take five feet, I estimate that no more than 25 to 30 feet were allowed for the demonstrators to get through and march around the Square. That was the great mistake. I should, perhaps, mention that the organisers bear some responsibility in that they did not announce at the meeting in Trafalgar Square the route that should have been taken. It would have been advisable for them to have had stewards on the route announcing over megaphones the route that was to be taken.
  A bottleneck was created and it was impossible for the sea of people stretching along both sides of the street to get through the 25 to 30 feet allowed to them. I was pushed through, as were the vast majority of demonstrators, and I suppose that they felt—I say this because I was not aware of precisely what was happening and I am sure that the same can be said of the vast majority of people there—that they were being denied access to the Square.
  It had been agreed earlier that the leaders of the various participating groups would hand in letters of protest. The leading group was headed by Miss Vanessa Redgrave. She appeared at the head of the march and made a request

  733
  to hand in her letter of protest. I understand that her request was refused by a chief inspector. The vast majority of demonstrators were obviously not aware of this, but I am sure that those who were in the vicinity would regard that occurrence as something of a provocation.
  The demonstrators were eventually pushed through the bottleneck and were given no direction as to the route the demonstration would take. Perhaps, not unexpectedly, they thought that they would disperse into the Square. Had the police been more intelligent on this occasion in handling the demonstration, they could have anticipated this reaction. Although I was not present, I understand that this happened to a demonstration which took place on 22nd October.
  As I am criticising the police, it is incumbent on me to suggest how this situation could have been handled. Naturally the American Embassy must be Protected, but I suggest that the use of foot policemen, and certainly the use of mounted policemen, was not the most effective way of handling it. One way in which it could have been handled would have been for barbed wire barriers to have been placed in front of the Embassy. I have in mind the sort of barriers on light wooden frames that were used during the war. The second way would have been the use of buses. I understand that the police use buses to blockade the entrance to Downing Street. People do not climb over barbed wire and they have no means of scaling buses. This would have been very much less of a provocation and a much more efficient way of protecting the Embassy.
  The demonstrators dispersed into the Square and there an attempt was made to disperse the crowd by mounted police. When this matter first came to the Floor of the House, I said that I regarded it as a provocation. I am not alone in saying this, for it is the view of the National Council for Civil Liberties and a considerable number of my correspondents. I will quote from letters I have received which vividly illustrate the reaction of many participants. One letter said:
  "I witnessed, and I am prepared to testify in court, a mounted policeman who rode his horse out in front of the rest of the police and then charged at full gallop across the Square towards the Embassy some 30 or 40 feet in front of him at a girl 20-years-old who
  734
  was not doing anything. There was no one near her. This policeman galloped straight at her. Luckily it was a glancing blow. I am convinced that had he hit her she would now be dead. I was the first to reach her. I think she was unconscious for about a minute. She lay as one dead. I think well over 100 people saw this incident."
  No one can suggest that those 100 people would react to that display of violence with indifference. I suggest that it was a clear provocation and the demonstrators responded as one could perhaps expect. Flowers and other missiles were thrown. This kind of violence helps to create an atmosphere conducive to violence. Obviously crowds of demonstrators have to be controlled, but I think it quite wrong for mounted police to be used for this purpose.
  Attempts were made by the police to clear the Square, and these, of course, were effective, but one of the consequences was that people were arrested in a very arbitrary manner. I draw the attention of my hon. and learned Friend to two such cases. Doubtless he has had drawn to his attention the letter in The Guardian by Mr. E. Appleby, Justice of the Peace for Blaydon. That said:
  "It has been proved to me beyond all reasonable doubt that it is possible for a person of exemplary character to be convicted of assault in London. As a former magistrate I feel this is a grave situation.
  One case will illustrate. An inoffensive student of exemplary character and integrity, standing some distance from the police, taking photographs, was set upon by four policemen shouting ' Let's get this one! 'He was dragged into a van and told not to use his camera or he `would not see it again '. Next day he was charged by his assailants with assault and summonly convicted. No opportunity had been given him to use a 'phone or to contact his parents. And no time before or after his arrest had he done anything which could be remotely construed as an assault!"
  I also draw the attention of the Under-Secretary to a report which appeared in The Times on 25th March recording the dismissal of one case by the magistrates at Marlborough Street. Referring to a letter written by a defendant, it said:
  "In his letter he says that a number of policemen kicked him and after his arrest he was dragged behind a police coach and cuffed about the head. What made me considerably more anxious, he says, was that a policeman afterwards told him he did not think the accused man was guilty, but he, the policeman, could lay himself open to a charge of wrongful arrest if he did not produce some 'half-truths'.

  735
  The man alleges that he told the policeman he intended to plead Not Guilty. 'Soon after he approached me waving his statement at me and said: "This is much stronger now",' he says in his letter, 'He told me while we were waiting that on many occasions he found it necessary to invent half-truths when giving evidence, since he knew the defendants were guilty, but without these embellishments they would be acquitted. He also suggested that this was common practice in the police force'.
  He adds that although the violence was unpleasant he was considerably more anxious about the behaviour of the policeman since this was of universal importance. The man gives the number of the policeman he says was involved.
  The man appeared at Marlborough Street on Friday. Mr. St. John Harmsworth, the magistrate, dismissing the charge, said that after hearing the defendant from the witness box he was quite sure he was not the sort of man who would come to court and deliberately lie to save his own skin."
  There are various other complaints of this nature. I shall not weary my hon. and learned Friend by drawing his attention to a dossier on the incidents compiled by the National Council of Civil Liberities, which I or the Council will send to him.
  Commander Lawler strongly refuted any charges of police brutality. I shall cite evidence of such brutality, and in particular I draw my hon. and learned Friend's attention to the systematic attempts the police made to destroy any photographic evidence. I shall quote from two letters I have received from participants. The first is from an accredited observer of the National Council for Civil Liberties. He says:
  "The demonstration was being dispersed and moving northwards along Duke Street in a ragged but not disorderly way. I was walking on the right-hand pavement with a few friends and I noticed as we came past the police bus that the police were getting very rough with demonstrators up in the corners of the goods entrance. I stopped momentarily and then observed a superintendent charging across the street towards what I then saw to be a film cameraman who was filming the incidents across the road. Several other policemen were standing around in Barrett Street or Picton Place apparently unconcerned at the cameraman's activity.
  When the superintendent reached the cameraman—with the clear aim of destroying camera and film (and film-maker too if necessary)—about a dozen other people, half police, half civilians, converged on the pair, the former concerned to aid the superintendent and the latter to rescue the camera and cameraman.
  For my own part, I took only two steps forward when I was surrounded by five police
  736
  men, received a knee in the groin, was thrown to the ground and kicked by five or six boots. After a time I was hauled up and according to accounts of witnesses afterwards two attempts were made to arrest me but I was not in a state to respond and in the end was dropped."
  I should now like to quote from a letter by a participant who obviously, due to his situation, could not have committed any violence or provocation against the police. He writes:
  "I joined the march to the U.S. Embassy more out of interest than a fervent belief in the anti-American cause (although I do have strong anti-Vietnam war feelings). I went along at this, my first big demonstration, taking photographs. By the time I reached Grosvenor Square I found I had run out of film and had to buy one from someone for 10s. Then, in order to keep out of trouble in what looked like a potentially dangerous situation, I settled myself in a tree and began taking pictures of the scenes. I was mildly shocked and surprised at some of the actions of our police; such as kicking demonstrators as they lay curled up, defenceless, on the ground …; charging the crowd with horses. As the line of police pushing the crowd back advanced and drew level with my tree, I became suddenly aware of a policeman hacking away at my leg with a long, pointed stick and shouting at me to come down. I took a photograph of this action, at the same time telling the man what I thought of him. I then began to climb down from the tree and what followed shocked me more than anything else has shocked me in my life and caused me to lose completely my previous confidence in the police. A group of at least a dozen policemen stood waiting on the ground. I thought, ' How nice. They are going to catch me as I jump.' Not a bit. I was still six feet from the ground when my foot was grabbed and I was pulled to the ground and kicked and punched and trampled on. I heard one brute say: Get his camera. 'I stumbled to my feet in time to see my valuable film being ripped from the camera and, of course, ruined. Another appeared to think I had another camera in my pocket (it was actually an empty case). So I was again thrown to the ground and the case taken from me."
  Again, I do not think I need quote any more of that letter. There were so many attempts to destroy photographic evidence. Some of this evidence, however, escaped destruction and I hope in due course to show my hon. and learned Friend some of the stills taken by one of the moving film units and certain other pictures.
  Commander Lawler also says that there were no examples of police acting with brutality. Again, I am afraid the evidence does not support him. It would be appropriate at this juncture to draw my hon. and learned Friend's attention to the Associated Press picture which appeared in some of the newspapers. He

  737
  will see Constable C.170 restraining one of his colleagues, who has a truncheon in his hand and is about to beat a girl. Most of the newspapers cut this picture. They did not show the action of Constable C.170, who was attempting to restrain the violent action of his colleague.
  I want to quote from another N.C.C.L. observer on the question of violence. He says:
  "Shortly afterwards, while the mounted police were still trying to clear the gardens but there were still large crowds of marchers in the north east quarter, I saw one major incident of police violence I am able to report. A constable used a heavy truncheon to strike repeatedly two girls and one man…"
  He gives people names, and goes on:
  "As the girls were cowered on the ground and tried to protect themselves from the blows, there seemed to be no justification for this violence whatever. Both girls were streaming with blood when they got away, having cuts on the head."
  He did not see whether the man was injured. He adds that other police were around and tried to prevent other demonstrators approaching.
  There is no doubt the police, when arresting people, acted with violence. I have another letter, to which I shall not d-aw my hon. and learned Friend's attention, from a correspondent who reports the violence to which he was subjected when he was placed in a bus.
  Mr. Cranley Onslow: The hon. Gentleman has made several references to what he calls "accredited observers" of the N.C.C.L. Will he assist us? How many such accredited observers of the N.C.C.L. were sent to this demonstration? I assume that they must have been sent by the N.C.C.L. What were they told to look for?
  Mr. Jackson: I am happy to give the hon. Gentleman the instructions which the N.C.C.L. gave to its 25 accredited observers. The letter to them said:
  "You will appreciate that we are not concerned with the objectives of the demonstration and that we shall in no sense be acting on behalf of the organisers or participants. Our job is to ensure that the right of peaceful protest is not interfered with. If incidents do occur instigated either by the marchers or by the police they should be noted."
  The purpose of the observers was merely to observe and in no way to participate.
  Mr. Onslow Mr. Onslow rose—
  Mr. Speaker: Order. Interventions prolong speeches. There is, I hope, an opportunity for debate tonight.
  Mr. Onslow: I am most reluctant to prolong speeches, Mr. Speaker. But may I ask the hon. Gentleman how many incidents of brutality not involving the police were reported?
  Mr. Jackson: I have gone through this report very quickly. I cannot give the hon. Gentleman the number but I can tell him that such incidents are reported by the observers.
  Mr. Onslow: Why not give them?
  Mr. Jackson: I should make my position clear. I am not suggesting, nor are the N.C.C.L. or the majority of participants, that the majority of the police acted in this way. The majority of them acted with commendable restraint and I make that clear. But the House must accept that very few people are prepared to speak out for those who were involved in the demonstration. The participants have had an unfair Press. The Press has not, with exceptions, by and large drawn the public's attention to the incidents I am relating.
  Another matter I would like to draw to my hon. Friend's attention is the action of the police in searching the buses containing persons wishing to participate in the demonstration. I am sure hon. Members will know that certain buses were stopped en route to London, taken to London police stations and searched. Certain so-called "offensive weapons" were found and a young man was today fined £15 for having a small packet of pepper in his possession, though I would hardly have thought that pepper was an offensive weapon. Also, paint was found; and ball-bearings which presumably were to be thrown under horses' hooves were also found.
  All these buses were taken to various police stations throughout London but only in the case of the Cambridge bus were any charges preferred against those involved. I have had a report from the contingent from Sheffield and, as I know some of the persons involved very well, I would like to have my hon. Friend's comment on it. The Sheffield bus was stopped on a motorway. The driver had been told in the middle of the week that

  739
  he was to be stopped. Of course, he did not inform the demonstrators of that. He was told that he would be taken to Hendon police station. The right of the police to stop the bus was, of course, challenged by those on the bus and they were advised by Superintendent Hunt of West Hendon Police Station that he had power to act under the Metropolitan Police Act, 1839.
  When I received this letter I took the trouble to look up the Metropolitan Police Act of 1839 and I would like to quote the relevant passage of Clause 66 to my hon. Friend. I feel that the police contravened the powers which they have. The relevant passage, I believe, is this:
  "and every such constable may also stop, search and detain any vessel, boat, cart or carriage in or upon which there shall be reason to suspect that any thing stolen or unlawfully obtained may be found, and also any person who may be reasonably suspected of having or conveying in any manner any thing stolen or unlawfully obtained; and any person to whom any property shall be offered to be sold, pawned or delivered, if he shall have reasonable cause to suspect that any such offence has been committed with respect to such property, or that the same or any part thereof has been stolen or otherwise unlawfully obtained…"
  I am no lawyer, but I have had advice on this and I understand that the powers which the police have in respect of the 1839 Act are to search vehicles, vessels or carriages in respect of property which they suspect may have been stolen. There is no question of there having been anything that had been stolen on these buses, and if one looks at the event it is apparent that the police knew this.
  The police were obviously privy to the intentions of the organisers. The bus company was contacted in the middle of the week in Sheffield and was told that the bus would be stopped and taken to Hendon police station. Nothing was found on the bus, except a tin of paint with a small brush, which it was intended should be used for painting the blank banners brought by the demonstrators. These people were detained in the police station. The police insisted on having their names and addresses, and physical descriptions.
  I would like to ask my hon. and learned Friend whether the police have the power to do this. I would also like to know what happened to this information. These are peaceful demon
  740
  strators, no charges were levelled against them and nothing was found in this bus. Is this information passed on to the local police? I suspect that it probably is.
  I have deliberately given what is possibly a one sided view of what happened on 17th March. It is only right and proper, because we have had a one-sided view, certainly from the other side of the House, and no one has attempted to put the other side. I would like to make my own position clear. I do not in any way condone the violence, whether it took place at the behest of the demonstrators or the police. It is very regret table. Nevertheless, this violence was provoked, and it was likely to happen when force was offered. It was unintelligent of the police to use mounted police with drawn truncheons. If people are to be restrained, and I am not suggesting that they should not be, the restraint should be offered by police on foot.
  Mr. Speaker: Order. I hope that the hon. Gentleman will not think me discourteous, but I would remind him that he has been speaking for 30 minutes. It is a very brief debate, and others have to speak.
  Mr. Jackson: The charges which I have levelled against the police are levelled against a minority. I was present and I felt that the vast majority of the police acted in an exemplary way. Having said this, we should not attempt to whitewash what a minority of policemen did. We should not close our minds to alternative means of crowd control. Obviously the American Embassy has to be protected, as do others. It should be protected not by mounted policemen, not necessarily by policemen on foot, although they obviously should be involved. Physical barriers should be put up, of the type I have suggested, namely buses or barbed wire. I have a great number of letters complaining about the conduct. The National Council for Civil Liberties has prepared a dossier and I very much hope that my hon. and learned Friend will receive a deputation from the Council, when he can perhaps go into this matter in greater detail than is possible tonight.
  9.55 p.m.
  Mr. R. W. Elliott: We are elected to this

  741
  House to defend freedom, the freedom which we know and cherish. It is a freedom of speech, a freedom—a right—to make public or private complaints if necessary. Those of us who switched on our television sets on the night of 17th March had not believed that we should see freedom taken advantage of so much and so badly used as it was by the hooligans who ran riot in Grosvenor Square 01 that Sunday—that most un-British of days.
  The hon. Member for High Peak (Mr. Peter M. Jackson) has taken a long time it this debate to attack the police in their attitude towards those who demonstrated on that day. I think it would be the wish of the vast majority of the people in this country for someone—and it is me at this moment—to stand here now and say to the police who officiated during these disgraceful scenes in Grosvenor Square that we believe they were provoked almost beyond human endurance; that their behaviour that day was wholly honourable and unbelievably controlled; that we admire them in the way in which they controlled that unseemly, disgusting and disgraceful mob, and that we commend them for the work which they did on that day.
  The hon. Member for High Peak said something with which I agree, and it was only one small thing. He said that the organisers of the demonstration bear some responsibility for what happened. No one is going to disagree with him on that. They certainly did. The misguided actress and others who led that procession could quite easily have made their objection in a peaceful way. It would seem from what we have been told this evening that the misguided actress, Miss Redgrave, caused, or those around her caused, trouble when the letter which she wished to hand into the American Embassy was refused. Did she have to carry an envelope? Did she have to make objection with a seething mob behind her, deliberately engendered? Of course she did not. I make no comment at this moment on the rights or wrongs of her cause, but she could have made objections in a hundred other ways.
  Those who demonstrated not only had some responsibility, they had all the responsibility for the disgraceful happenings of that day. Hon. Members on both sides of the House, representing the
  742
  vast majority of the people of this country, would wish to condemn these holligans who demonstrated in this disgraceful way and would wish also to commend the police for their behaviour on that day.
  9.58 p.m.
  Mr. James Wellbeloved: One thing is quite clear. The Members of this House support absolutely the right of British citizens to demonstrate in the streets of this country without interference from the police, provided they are demonstrating in a peaceful manner. The events to which the hon. Member for High Peak (Mr. Peter M. Jackson) has referred do not conform to that definition. This was a demonstration which was carried too far. It was a demonstration, if one can believe the reports that have come into our possession, that one has read in the newspapers and received from other sources, designed to provoke violence by some of the participants, although not all of them. I believe among that vast demonstration the majority of people were setting out to demonstrate peacefully, but there was, within that vast concord of people, a small minority out to provoke that demonstration into the paths of violence. It is incumbent upon us all in the House to condemn that small minority who put in jeopardy the future of free demonstrations in this country.
  I am not a stranger to demonstrations in Trafalgar Square. I can remember demonstrating against my own party in 1948 and 1949 when the then Home Secretary banned a May Day demonstration. I will not go too far into the past, because I am sure Mr. Speaker will bring me back to the present.
  There have been in the past demonstrations in which many of us have participated, and we have always found it is due to the efforts of the Metropolitan Police, in particular those who serve in the mounted section, that those demonstrations proceed in a relatively peaceful manner. It is necessary, when there are thousands of people demonstrating and when there is an organised attempt by a minority to provoke violence, that the mounted police are able to move very rapidly, are able to move into the violent sections of the crowd and remove from demonstrators broken poles from banners that have been destroyed and which are

  743
  used—as I have seen them used—to assault policemen.
  Mr. Peter M. Jackson: Is my right hon. Friend suggesting that the mounted police attacked only that section of the crowd? If so, I can contradict him.
  It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]
  Mr. Wellbeloved: My hon. Friend is a man of great intelligence, and, no doubt, in view of the rumours going about of Cabinet changes, he thinks that coming events cast their shadows before them. He referred to me as his "right hon. Friend". I hope that he is right after the weekend. However, I think that both he and I will be sadly disappointed.
  I can speak only from my experience. I have complete confidence in the mounted section of the police. In large demonstrations like this, there must be occasions when there is provocation on both sides. There is no doubt provocation by some members of the police force who reach the point of exasperation. They have been abused and they have had things thrown at them, and in a moment of temper they do an unwise act. We all condemn unwise acts by a disciplined body—they should not happen—but we must recognise that everyone is human. Certainly policemen are human. There were among the demonstrators reasonable people who were provoked.
  I wish it to go out from this House, and particularly from this side of it, that we have complete and absolute confidence in the Metropolitan Police, who we consider have done a first-class job. We know that they will continue to afford to citizens the opportunity of peacefully demonstrating for political rights.
  10.2 p.m.
  Mr. T. L. Iremonger: I associate myself most warmly with what has been said about the commendable behaviour of the police by the hon. Member for Erith and Crayford (Mr. Wellbeloved) and by my hon. Friend the Member for Newcastle-upon-Tyne, North
  744
  (Mr. R. W. Elliott). The hon. Member for The High Peak (Mr. Peter M. Jackson) has raised a number of points of an administrative nature, as he is perfectly entitled to do, and has made certain very serious detailed allegations against the conduct of members of the Metropolitan Police—some of them named, some of them not identified.
  The House might think that, if these incidents occurred, very serious offences were committed by the police, and it would have been more seemly for the evidence to be given in court, rather than in the House, where it could have been properly upheld or challenged. This House is not the proper place in which to make random attacks against members of the police force for serious breaches of the law, to say nothing of disciplinary offences.
  I am concerned to look a little deeper into the Grosvenor Square incident. I wish to quote a letter which appeared in The Times from Mr. Tariq Ali, who describes himself as the Chairman of the March 17th Ad Hoc Committee. He said in The Times of 21st March:
  "It is interesting to note the hypocritical protestations of Tory and Labour M.P.s who get upset when police horses are hurt, but who remain silent at the mounting violence in Vietnam. It is this attitude we demonstrate against in an attempt to break the silence inflicted on this nation by the two major political parties."
  He goes on to threaten that he will carry out even more violent demonstrations in future.
  The "hypocritical protestations" about the horses certainly had nothing whatever to do with Vietnam, but it is fair to ask: what about the hypocritical protests about Vietnam and against the Americans made by people who are basically anti-American, pro-Communist and pro-Vietcong? What about the hypocrisy of these demonstrators when never a single word is printed, let alone voiced in demonstrations, by them about all the cruelty done elsewhere in the world—the mass murder of the Watutsi, the public hangings of the entire Opposition Front Bench in the Congo, the imprisonment of the Soviet writers, and of Mr. Gerald Brooke, the sacking of the British Embassy in Peking, and the mass murders of civilians in Hue—
  Mr. Speaker: Order. We are getting deeper and wider than the Adjournment subject.
  Mr. Iremonger: I am referring to the unfairness of the allegation of hypocrisy against those who protest against the riots in Grosvenor Square when the hypocrisy of the writer of that letter to The Times in not protesting against other things than Vietnam is so egregious.
  It is worth underlining the point Mr. Tariq Ali made when he said his object was to break silence about Vietnam. He had some time to organise his demonstration, and during that time it would have been quite possible to nominate Parliamentary candidates in Warwick, Dudley, Meriden and Acton where voice could have been given to protests against Vietnam. That was the opportunity to break silence. Why was it not taken? The reason is that the one thing these people are frightened of is the ballot box—apart from the courts of law—which is the one place where justice can b:, done. I often tell these armchair militants among my constituents that their proper method of protest is to stand for Parliament and to oppose me. When I do this they melt away into thin air.
  What is the nature of these protests? I do not believe, apart from the political activists on the Left wing, it has anything much to do with Vietnam or with any particular issue. It is the expression of a deep mood which subsists generation after generation, and is not related to specific political issues. The people demonstrating in Grosvenor Square are the same kind of people who in the 1930s demonstrated against Spain and as members of the Peace Pledge Union.
  Mr. Speaker: Whether they were or not is a wider subject than can be dealt with in this specific debate. We are asking the Home Secretary about something far which he is responsible.
  Mr. Iremonger: We need not take these protestations too tragically or seriously, but there are two things we must take very seriously. The first is that the police should have all our sympathy for the patience they show. The second is that the police should have all our sympathy for the impatience that members of the public show at what seems to them to be over-tolerance by the police in
  746
  dealing with outrageous conduct. Those who protest to me protest against the police not using hoses, and against the police not using more militant and violent methods. I hope the Home Secretary will say to the House that the police methods are right. What these people fear more than the violence they protest against is the decency and tolerance of the British police. That is the most effective weapon in the hands of the forces of law and order, and it is far more dramatic in its effect than more violent methods could be. The tolerance of the police is what is most hated by agitators, and that is why they try to whip up violence, so that the police will be provoked against them.
  Finally, I should like to ask, would the hon. Gentleman give the House information, which his Department should have, of the exact nature of the alien element in the crowd? To what extent was stimulus given to the demonstration by people who came to this country from abroad with the express purpose of giving aid and comfort to the enemies of this country among us? Is the Minister keeping a watch on them and making sure they will not be allowed to enter this country again? The House is entitled to know to what extent they were responsible for the violence and what steps the Government are taking to ensure they will not be able to play a similar part in the future.
  10.9 p.m.
  The Under-Secretary of State for the Home Department (Mr. Dick Taverne): My hon. Friend the Member for High Peak (Mr. Peter M. Jackson) first dealt with the case of the march going wrong and the course it took. He then dealt with a number of specific issues such as the use of horses, method of crowd control and the search of buses. He dealt also with a number of specific incidents. It is not possible for me on this occasion to deal with the specific incidents. They must be investigated, as they will be. Every complaint will be looked at. I share the view of some hon. Members that he has given a distorted picture of what went on. I do not believe anyone would guess from the description he gave of what happened in Grosvenor Square that three times as many policemen as demonstrators were injured.
  Mr. Peter M. Jackson: Would not my hon. Friend agree that many of the injured demonstrators were taken away by their friends?
  Mr. Taverne: Many other people received injuries of various kinds, but three times as many policemen as demonstrators required treatment in hospital. That fact alone speaks for itself.
  When it comes to the examples that my hon. Friend gave, I must confess that one is somewhat suspicious of some of the allegations made when one finds that there has not been a sufficient attempt to check up on facts. Take the point about the presentation of the petition, which my hon. Friend says was one of the major causes. He says that if only Miss Vanessa Redgrave had been allowed to present her petition, all would have been well.
  The fact is that the main body of demonstrators arrived in Grosvenor Square at about 5.30 on that day. At about a quarter to six, Miss Redgrave and a group of members of the Vietnam Ad Hoc Organising Committee arrived at the south-west corner of the Square. They were allowed to pass through the police cordon to hand in a petition at the Embassy. If my hon. Friend had looked a little further, he would have found that that is what Miss Redgrave says herself. Only recently she appears to have told a Daily Express interviewer:
  "I went to the demonstration to deliver a letter. Today I had a polite reply from Ambassador Bruce saying that he had forwarded it to the State Department."
  That is a rather significant pointer to some of the wild allegations which have been made. There may be something in some of them. I do not know. These matters will have to be investigated.
  Let me give the House a picture of what actually happened in the course of the march, because clearly this is very important. I have before me a description given by the officer in command of what happened at the end of the meeting in Trafalgar Square. It says:
  "After the meeting, the head of the procession moved from Trafalgar Square at 3.52 p.m. and the tail moved at 4.17 p.m. Whilst leaving Trafalgar Square, the demonstrators refused to move off in the usual six abreast formation, but linked arms and proceeded to Charing Cross Road and Oxford Street. The procession became a rabble, with demon
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  strators linking arms across the whole width of the roadway and both footpaths. At times, the leaders came to a halt and remained stationary for several minutes before moving off again. Several private motor cars being used by persons unconnected with the demonstration were rocked to and fro by demonstrators for no apparent reason, whilst other demonstrators sat on the bonnets of motor cars and some climbed over stationary motor cars. The German contingent were particularly militant at this stage and occasionally halted in the roadway until there was a clear space ahead, then, holding their banner poles horizontally with each man in the front rank gripping a pole with both hands, they ran forward in step chanting 'Sieg Heil'. Both footways in Regent Street were crowded with pedestrians in an attempt to get out of the way, many being obviously cowed. Police were fully committed in attempting to keep the demonstration moving but it was apparent, even at that early stage, that the organisers had no control whatever over their supporters. Several groups of demonstrators broke away from the agreed processional route. At Cambridge Circus, the demonstrators came to a halt and occupied the whole road round the Circus after breaking through a police cordon. Approaching Oxford Circus, the head of the procession was taken over by a group of anarchists and, at the Circus, some demonstrators sat down in the roadway."
  Then we come to the crucial events in Grosvenor Square, which my hon. Friend attributed to bad management on the part of the police:
  "The first demonstrators, which was the group that had visited Dow Chemicals, entered Grosvenor Square at 5.20 p.m. and followed the agreed route around Grosvenor Square into South Audley Street. At this time, there were about 2,000 supporters of the demonstration and spectators in Grosvenor Square awaiting the arrival of the main body, and at about 5.30 p.m. the main body arrived, coming down North Audley Street and occupying the whole width of the street. The leaders turned east along the north side of Grosvenor Street, but stopped half-way along the road. Their colleagues following behind forced their way into the Square, and extremely serious congestion was caused at the north-west corner. I went to the head of the procession and urged the leaders—there was no sign of organisers or marshalls at that time—to keep moving to relieve the dangerous crowding of their fellow demonstrators. There was a reluctant move for about 20 yards, but the leaders again came to a halt."
  It was, I assure the House, the loss of control by the leaders of the organisations taking part and the failure of the procession to move round the Square and into South Audley Street, as agreed previously with the organisers, that led to the subsequent disturbances.

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  My hon. Friend spoke of provocation by the police, but it is quite evident that there was a deliberate attempt to provoke the police. Some fairly extensive arrangements had clearly been made in advance by some demonstrators to prepare for violence. This came to the notice of the police, and during Sunday morning coaches containing demonstrators were slopped by the police. They were found to contain six bags of marbles, 81 bags of paint—and I cannot believe that 81 bags of paint were only to paint the banners—three bags of flour, four cannisters, and two bags of pepper. At 3 30 p.m. a constable found a motor van parked in Spring Gardens with 13 smoke bombs and 1,000 plastic bags containing red dye.
  My hon. Friend said that not many people were prosecuted. This is right, because in any cases it was not possible to trace particular items to particular individuals, and obviously it would be wrong to prosecute if one could not do so. It was because of these rumours, and this complaint of some sort of violence, that every organisation which had been associated with peaceful demonstrations in the past refused to take part.
  I have dealt with the question of the petitions. Let me come now to the point made about the use of horses, and the methods of containment which my hon. Friend mentioned. First, I must express my agreement with my hon. Friend who said that what is so serious about this kind of behaviour is that it prejudices the peaceful right of demonstration with which it would be totally unjustifiable to interfere. We must not be so blinded by wild behaviour, as the Home Secretary said on the day following the disturbance, as to take measures which will prevent persons from demonstrating in good faith.
  What are the solutions to this kind of problem? Obviously it would be wrong to proscribe particular organisations which are responsible for such demonstrations. The traditional view has always been—and I hope that we shall maintain it—that persons having similar opinions, whatever one's view of those opinions, should have the right to organise themselves and put forward those opinions, provided they do not go beyond the limits set by the law in the interests of the
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  community as a whole. It would be a most dangerous step to proscribe particular organisations. What the law does, quite rightly, is to single out specific actions contrary to the interest of the community, without impairing the right of free speech, of which the right to demonstrate forms a very important part.
  If I might look at that generally, I do not think that it is feasible or practicable to try to restrict demonstrations, as someone suggested to particular places like Hyde Park. The Commissioner of Police of the Metropolis has power to prescribe the route followed by demonstrators, but even there, when there are a large number, and when they are determined not to take part, not the organisers, but the others, in the way that is planned, it is clear that they cannot necessarily be confined to the route, and if one has a group of 10,000, by what means could they be confined to Hyde Park if they wanted to move into nearby streets? It is also impossible to limit in any way the number of persons who are taking part in any demonstration.
  There is the question of the rôle played by certain foreign students. This matter was raised tonight. I think that one should freely allow foreign visitors entry into this country, subject to the usual rules irrespective of their political views, and it has not been the practice to refuse to admit foreign nationals here if they are going to take part in peaceful demonstrations of a political nature. The genuine pacifist who comes here to take part in pacifist business is someone who should be allowed to do so. But this does not mean that we have to admit someone who was known, on reasonable evidence, to be coming here to foment disorder, or to express views which are likely to lead to a breach of the peace, or whose presence would be likely to make it more difficult to maintain law and order. In deciding whether or not we should admit a foreign national we take account of all available evidence, including the record of conduct on occasions such as that we saw on that particular Sunday. The admission of foreign nationals is a matter of discretion for the Home Secretary and, in the light of recent experience, my right hon. Friend will not hesitate to exercise his powers under the Aliens Order in a manner which public interest requires, but one does not want to exclude people

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  from visiting this country if they have adequate financial resources and friends, because of their political views. That would be quite wrong, and I am sure the House would not want the Home Secretary to exclude people on those grounds.
  Mr. Iremonger: Were the police able to get the names of the little red Nazis, who goose-stepped with their banners?
  Mr. Taverne: I would not like to conclude that they were all little red Nazis. There were individuals, whose names were, I think, noted. I cannot speak about this more generally, but there might well be cases in the future in which there would be individuals who would not be allowed entry into this country if it were thought likely that they would abuse the occasion to foment disorder and cause injury and damage.
  Mr. Eldon Griffiths: Could the hon. and learned Gentleman say if he has had any expression of regret from the German Embassy in this country or any indication that they are willing to assist the British authorities in restraining people who are coming here to make trouble?
  Mr. Taverne: I cannot answer that question. I am not aware of anything in the nature of such assistance. It might be very difficult for the Embassy to assist us in controlling the entry of particular individuals. Again, I think it would be quite wrong to regard a particular group of highly organised, highly militant students behaving in a particular way as in any way representative of German students.
  Let me come now to the more particular questions. My hon. Friend has talked about physical barriers, but it is really rather difficult to envisage what certain kinds of physical barriers could do to deal with a crowd of something like 10,000 which is in a fairly disturbed state. It might be possible to put buses there, but the buses might suffer considerable damage as a result of being in the way. The most common suggestion which has been made, particularly by many members of the public, is that the police should use hoses. It seems to me that there is a great deal to be said for not departing from the traditional methods. Indeed, on this occasion,
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  generally speaking, I would have thought that the reputation of the police in the country was higher as a result of their use of traditional methods to contain this particular demonstration than it would have been had hoses been used. It would be a short step from hoses to tear gas, and a short step from tear gas to the use of steel helmets and shields. I would think it best to leave the Commissioner to direct and control his men in well established ways if he is satisfied that in this way control can be maintained, and the officer in charge on this occasion was satisfied that traditional methods could keep things under control, and they did so.
  My hon. Friend has rightly raised the question of the use of horses. It is recognised by the police and the Home Office that mounted police should be used on such occasions only as a last resort. As the Home Secretary explained to the House when he answered Questions on 18th March, the officer in command of the police in Grosvenor Square on the previous day had been very reluctant to use the mounted officers, who had been held in reserve, but the situation became so difficult—and I think everyone could see the nature of the situation from the television reports—that to continue to hold them back would have led to greater damage and greater injuries. That was his view and I do not think anyone is in a position to question the judgment of the officer in charge on that occasion. I can tell my hon. Friend that he mounted police are essentially a reserve force, a highly trained reserve, to restore order and prevent injury, and to do so quickly.
  I come back to my hon. Friend's complaints. Complaints will be investigated, and cannot be dealt with in a debate. I cannot deal with the question of photographers. Photographers did present a difficulty because of the very nature of their work in trying to get action pictures as close to the action as possible, which means that they are bound to get in the way when policemen are rushing from one place to another. But there has been no approach to newspapers to prevent photographs from being published; indeed, were published. The television coverage was clearly elaborate.
  I am glad that my hon. Friend believes that, as a whole, restraint and self-discipline were shown—he has admitted

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  this. This is true of the National Council for Civil Liberties as well. The public reaction is also clear. Of the letters which we have received in the Home Office, an overwhelming proportion have commended the work of the police. Some, indeed, asked for more violent methods of crowd control, but those letters praising the police have outnumbered by more than ten to one those complaining about the police.
  If one compares the way in which this demonstration was handled and was seen to be handled with the scenes which one often sees in other countries of these demonstrations being handled with such aids as shields and helmets, hoses and tear gas, one must conclude that the way in which our police handled this very difficult situation, in which there was bound to be a conflict of evidence and some clash, is something of which the whole nation may be proud.
  10.27 p.m.
  Mr. Albert Murray: It is right that my hon. and learned Friend should have paid that tribute to the police, whose demonstration in the square that Sunday was commendable. There are provocations in these cases. People talk about the provocation of police horses, but I might point out to my hon. Friend the Member for High Peak (Mr. Peter M. Jackson) that some people are
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  provoked by beards, but that does not mean that there has to be counter-violence. The figures of police and civilians injured show where most of the violence was directed.
  Many of us on this side have demonstrated in all sorts of causes and one thing which stands out is the co-operation between police and demonstrators ensuring that things go right. One often feels sorry for police who march beside demonstrations and get footsore but ensure that good humour always prevails.
  I was concerned about the number of weapons found at this demonstration. It seemed that people came armed after seeing some of the posters with, perhaps, a little addition by someone else. Many people might take it, judging from the statements in the Sun on 19th March by Tariq Ali, that they came with violence aforethought because they felt that words were no longer enough.
  It is a good thing that many hon. Members have said that the police did a fine job and that they needed all the support, not only of the House but of the public, to do their job properly for the protection of persons and property.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Ten o'clock.